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The Federal False Claims Act (FCA) is a primary enforcement tool used by the U.S. Department of Justice (DOJ) to prevent fraud on the government relating to federal programs.

The statute imposes both criminal and civil penalties for violation of standards governing making claims on the government for payment. The statute permits the DOJ as well as qui tam relators (sometimes known as whistleblowers) – individuals who claim to have direct and independent knowledge of fraud – to bring civil suits against government contractors, health care providers, medical device and pharmaceutical manufacturers, financial institutions, and other federal program participants to recover damages and penalties. In most cases, the DOJ (often with the assistance of agency inspectors general (IGs)) conduct extensive investigations about potential false claims allegations (including those filed under seal by whistleblowers) prior to litigation. In some instances, the government also may conduct parallel criminal investigations or seek to pursue solely a criminal investigation and bring criminal indictments for FCA violations.

As compensation for the risk and effort of filing a complaint, a whistleblower may be awarded a portion of the recovered funds, typically between 15 and 25 percent of the recovery if the DOJ intervenes in the whistleblower’s litigation and takes over defense of the case, and between 25 and 30 percent if the DOJ does not intervene. The DOJ intervenes in approximately 22 percent of the FCA cases filed, but a whistleblower may continue to pursue a case even without DOJ intervention. Whistleblower recoveries under the FCA exceeded $1.2 billion for fiscal years 2009-11.

FCA enforcement activities are sharply increasing, creating greater risks for government contractors and federal program participants. The DOJ recovered more than $3 billion under the FCA in 2011. From 2009 to 2011, the DOJ recovered a total of $8.9 billion under the FCA, the largest three-year total in the department’s history.

These enforcement activities are not limited to the federal realm. At least 36 states and the District of Columbia have enacted state false claims acts. Other major municipalities have promulgated similar laws. Over the next several years we anticipate significant increases in investigations and litigation under state and local false claims acts.

Practice Overview
K&L Gates has extensive experience investigating and defending FCA matters. We have more than 30 lawyers across the United States who focus on representing companies, officers and directors, and individuals in every phase of FCA matters, including conducting internal investigations, defending DOJ and IG investigations relating to FCA allegations, designing and implementing remedial measures and compliance programs which may be required as a result of such allegations, and of course defending FCA actions. Our team includes seasoned trial lawyers from our government enforcement and white-collar crime practices, with substantial experience in related substantive areas of the law such as government contracts, health care/FDA, and financial institutions, as well as dedicated compliance practitioners. This combined experience enables the firm to anticipate and respond to the many demands created by FCA allegations and the related investigations and proceedings that often accompany such allegations. As a result, our clients are able to navigate the otherwise daunting process of investigating, litigating, and settling FCA claims while continuing to compete in the global marketplace.

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Showing 21-30 of 32 results
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Health Care and FDA
Defended an anesthesia practice in qui tam case brought by U.S. Attorney’s office and North Carolina Medicaid Fraud Control Unit. Civil case was settled after criminal and civil declinations.
Defended a Fortune 350 diversified medical device manufacturer in FCA litigation in the Western District of Oklahoma relating to its pricing under contracts with the U.S. government, persuading the DOJ to decline to litigate the matter, and then settling with a qui tam relator for a very nominal sum
Defended a multibillion academic medical center and affiliated medical school during an investigation conducted by the DOJ regarding allegations by a whistleblower that one of the departments had inappropriately billed the government under the FCA The matter was concluded after the government declined to intervene.
Financial Institutions
Defended major mortgage lenders in FCA litigation in multiple jurisdictions involving allegations of fraudulent statements in connection with federally subsidized mortgage loans.
Defended companies in connection with governmental audits, investigations, and enforcement proceedings, before, among others, HUD, VA, DOJ, and FTC with specialties involving defense of FCA, Mortgage Review Board, and RESPA enforcement matters.
Defended a major mortgage lender in a DOJ investigation and qui tam litigation in the Northern District of Georgia involving alleged violations of the FCA in conjunction with a VA mortgage refinancing program
Specific Case Citations
United States ex rel. Folliard v. Hewlett-Packard Co., 272 F.R.D. 31 (D.D.C. 2011). Successful motion to dismiss FCA qui tam complaint alleging fraud and violations of the Trade Agreements Act.
United States ex rel. Folliard v. Synnex Corp., 2011 WL 2836372 (D.D.C. 2011). Successful motion to dismiss civil FCA case against Fortune 10 IT contractor.
United States ex rel. Crennen v. Dell Marketing L.P., 711 F.Supp.2d 157 (D. Mass. 2010). Successful motion to dismiss FCA qui tam complaint in which K&L Gates represented HP but argued the motion on behalf of all 10 industry defendants.
United States ex rel. Roberts v. EMC Corp., No. 09-628 (E.D. Va.. 2009) Co-counsel for successful motion to dismiss a DOJ FCA complaint alleging kickback and defective pricing claims