While she dodged a bullet, the case jolted lawyers handling health care fraud investigations, which are more typically civil cases under the False Claims Act.

Yet also last week, prosecutors succeeded in convicting Raj Rajaratnam for insider trading. Wall Street’s hedge fund industry took note of the government’s use of investigative tools such as recorded phone calls.

The post Fraud Enforcement Adds Teeth by Pursuing Individuals Allegedly Responsible for Organizations’ Frauds appeared first on Whistleblower Lawyer Blog.

This discussion is part of a fascinating gathering this April in South Beach–the OffshoreAlert Conference. As the brochure promises:

Where else could tax collectors mingle with tax minimizers, asset tracers with asset protectors, regulators with the regulated, whistleblowers with their former employers and crooks with prosecutors?

How to protect whistleblowers from criminal and civil liability was a topic my panel discussed at the 2010 IRS Whistleblower Boot Camp in Washington. Because we had the IRS Chief Counsel’s Office participating in that discussion, we were unable to discuss directly what went wrong for Birkenfeld as he brought important information about tax evasion to the attention of the IRS, but ended up serving a prison sentence of 40 months. (We have written previously about Birkenfeld’s errors revealed in the court record.)

At the OffshoreAlert Conference discussion this year, I will moderate the panel discussion about what can be done to protect whistleblowers from criminal and civil exposure. Joining me are former Justice Department official and former General Counsel of the U.S. Department of Homeland Security Joe D. Whitley; former prosecutor and now whistleblower attorney Marc Raspanti; and federal and international tax attorney Richard Rubin.

The program description is reprinted below:

Avoiding the Mistakes of the UBS/Birkenfeld Case: Protecting Whistleblowers from Criminal and Civil Liability

Time: 1:15 PM – 2:30 PM
Date: Tuesday, April 5, 2010
Keywords: Money Laundering & Compliance
“Swiss banker turned whistleblower ended up with a prison sentence” read one headline. How did UBS whistleblower Bradley Birkenfeld end up being prosecuted for a felony, and serving a forty-month prison sentence–even though the IRS found his information essential to its $780 million settlement with UBS? How can other whistleblowers minimize their risks of facing criminal and civil liability when they report substantial financial violations?

This panel of a former senior U.S. Department of Justice official, other former criminal prosecutors, and an international tax attorney will discuss what the UBS whistleblower apparently did to subject himself to criminal prosecution-and the steps a whistleblower must take to avoid that fate. The whistleblower lawyers on the panel will discuss the “ground rules” for minimizing the risks to whistleblowers of criminal and civil liability, both in the United States and other countries.

•Michael A. Sullivan, Whistleblower Lawyer, Finch McCranie (Atlanta)

•Marc S. Raspanti, Whistleblower Lawyer and Former Prosecutor, Pietragallo Gordon Alfano Bosick & Raspanti, LLP (Philadelphia)

•Richard R. Rubin, Federal and International Tax Attorney, Rubin Law (Johannesburg/Atlanta)

•Joe D. Whitley, former U.S. Acting Associate Attorney General and former General Counsel of U.S. Department of Homeland Security, Greenberg Traurig, LLP (Washington, D.C. & Atlanta)

The post Offshore Alert Conference: Protecting Whistleblowers from Criminal and Civil Liability appeared first on Whistleblower Lawyer Blog.

Now, whistleblowers may also receive rewards for reporting violations of the Foreign Corrupt Practices Act (FCPA), thanks to the new whistleblower provisions of the Wall Street financial reform law. Announcements like Merck’s recent SEC filing that it is now the subject an FCPA investigation involving other Pharma companies should become common, as corruption will now be increasingly exposed in a new wave of SEC Whistleblower cases.

The recent 10-Q filing of Merck & Co., Inc. stated in part:

The Company has received letters from the DOJ and the SEC that seek information about activities in a number of countries and reference the Foreign Corrupt Practices Act. The Company is cooperating with the agencies in their requests and believes that this inquiry is part of a broader review of pharmaceutical industry practices in foreign countries.

As we have followed through its development, the Dodd-Frank financial reform law created the new SEC Whistleblower and CFTC Whistleblower programs, which will include FCPA cases.

The FCPA, as we have discussed previously, prohibits bribery of foreign government officials in international business transactions, and false entries in books and records of those companies within the statute. Whistleblowers who assist the SEC recover monetary sanctions in FCPA cases now have an enforceable right to a monetary award of 10-30%.

Pharma’s exposure for any bribes and kickbacks abroad are a ripe subject for FCPA enforcement.

Since the late 1980s, our lawyers have worked with the nation’s major whistleblower law, the False Claims Act. We have represented whistleblowers who reported fraud and false claims in many government procurement programs, including contractor fraud in Iraq reconstruction, other military contracts, NASA programs, Hurricane Katrina and other disaster relief, research grants and cooperative agreements, and Medicare/Medicaid fraud and other federal healthcare fraud.

Ever since the start of the new IRS Whistleblower Program, our whistleblower lawyers at Finch McCranie, LLP also have represented whistleblowers in the new program. We have represented clients with IRS Whistleblower claims in the hedge fund industry, other financial services industries, real estate, manufacturing, and many other businesses, as tax fraud, tax evasion, and other tax violations are not limited to one industry.

In the drafting of the new SEC Whistleblower provisions in 2010, we were also contacted by the Senate Banking Committee staff for ideas on how the new SEC Whistleblower program should work, and have already been contacted by whistleblowers to represent them in pursuing SEC Whistleblower claims.

For a free consultation about a potential whistleblower claim, please call us at 800-228-9159, or email us HERE.

The post Merck and Other Pharma Companies Probed by DOJ and SEC in Foreign Corrupt Practices Act (FCPA) Investigation appeared first on Whistleblower Lawyer Blog.

This approach to qui tam cases allows the government to leverage its limited resources by calling on the resources provided by private attorneys. This is essentially a “joint prosecution effort, ” in which the government counsel and investigators can rely on Relator’s counsel at each stage,

–from the beginning of its investigation,

–to obtaining input for preparation of subpoenas for documentary evidence from the defendants,

–to review of evidence compiled by the government in response to subpoenas,

–to evaluation of the responses and explanations that defendants provide,

–to providing analyses and summaries of evidence rebutting the defendants’ factual arguments,

–to performing research that ultimately will be used by the government to rebut the defendants’ legal arguments,

–to performing damages calculations and marshaling arguments in support,

–to consulting with the government on negotiation strategies and steps to be taken to resolve the matter,

–and, finally, to try the case, or otherwise resolve the case.

The taxpaying members of the public are the beneficiaries of this joint effort, which allows the government both to stop and recover damages for fraud, as well as to make those who steal from taxpayers think twice.

Since the late 1980s, our attorneys have worked with the nation’s major whistleblower law, the False Claims Act. We have represented whistleblowers who reported fraud and false claims in many government procurement programs, including contractor fraud in Iraq reconstruction, other military contracts, NASA programs, Hurricane Katrina and other disaster relief, research grants and cooperative agreements, and of course Medicare/Medicaid fraud.

Ever since the start of the new IRS Whistleblower Program, our whistleblower lawyers at Finch McCranie, LLP also have represented whistleblowers in the new program. We have represented clients with IRS Whistleblower claims in the hedge fund industry, other financial services industries, real estate, manufacturing, and many other businesses, as tax fraud, tax evasion, and other tax noncompliance are not limited to one industry.

We were also contacted by the Senate Banking Committee staff for ideas on how the new SEC Whistleblower program should work, and have already been contacted by Wall Street whistleblowers to represent them in pursuing SEC Whistleblower claims.

For a free consultation about a possible whistleblower claim, please call us at 800-228-9159, or email us HERE.

The post How Whistleblower Lawyers Work Alongside Government Lawyers In Successful Qui Tam Cases Under the False Claims Act appeared first on Whistleblower Lawyer Blog.

Both in 2009 and 2010, Congress has removed obstacles to whistleblowers’ use of this anti-fraud statute to address Medicare and Medicaid fraud, as well as fraud affecting every other federal program. As we have written about previously, the Fraud Enforcement and Recovery Act of 2009 (“FERA”) overruled key judicial decisions that had undermined the the False Claims Act’s effectiveness.

This year, the landmark health care bill, the Patient Protection and Affordable Care Act (“PPACA”), limited the FCA’s “public disclosure” bar, including by allowing the government to prevent dismissal of cases that it believes should proceed.

The post Health Care Industry and 2009-2010 Changes to False Claims Act appeared first on Whistleblower Lawyer Blog.

Civil investigative demands allow to government to require any person believed to have documents or information relevant to a False Claims Act investigation to do the following:

(A) to produce such documentary material for inspection and copying,

The post Greatest Impact of 2009 False Claims Act Amendments–“Civil Investigative Demands” appeared first on Whistleblower Lawyer Blog.

I am pleased to be on the panel discussing “False Claims Act Developments,” moderated by Jack Boese of Fried Frank. This will be a particularly interesting year for this annual meeting, as Congress enacted major changes to the False Claims Act that took effect on May 20, 2009.

In addition, the “Health Care Fraud Enforcement Act” pending in the Senate would enhance further the government’s tools used to investigate and remedy Medicare and Medicaid fraud. This bill would remove any question that all payments made pursuant to illegal kickbacks are “false” for purposes of the False Claims Act.

Among the significant 2009 changes to the False Claims Act made by the Fraud Enforcement and Recovery Act are the following:

1. The amendments expanded the definition of “claim,” and fraud directed against government contractors, grantees, and other recipients is now plainly covered by the False Claims Act.

2. Funds administered by the United States government (e.g., in Iraq) are now protected.

3. Retaining overpayments of money from the government is now a stated basis of liability, which is a source of concern for health care providers, among others.

4. Liability for “conspiracy” to violate the Act is now broader.

5. Protection of whistleblowers and others against “retaliation” now extends not only to “employees,” but also to “contractors” and “agents”; and persons other than “employers” potentially may be liable for retaliation.

6. In investigations, the government now has authority to use “Civil Investigative Demands” more broadly, and to share information more with state and local authorities and with whistleblowers/relators.

7. A standard definition of what is “material” now applies in False Claims Act cases.

8. The statute of limitations has been clarified for when the government asserts its own claims, after the whistleblower (or “relator”) has filed a qui tam case under the False Claims Act.

The full agenda for tomorrow’s “SOUTHEASTERN HEALTH CARE FRAUD INSTITUTE” is below:

SOUTHEASTERN HEALTH CARE FRAUD INSTITUTE
DECEMBER 17, 2009

State Bar of Georgia Headquarters 104 Marietta St. NW Atlanta, GA

Co-Sponsors:
Health Law Section, State Bar of Georiga
Presiding:
Joe D. Whitley, Program Chair, Greenberg Traurig LLP, Atlanta & Washington, DC Paul B. Murphy, Program Co-Chair, King & Spalding LLP, Atlanta
7:45 REGISTRATION AND CONTINENTAL BREAKFAST (All attendees must check in upon arrival. A removable jacket or sweater is recommended.)

8:20 WELCOME AND PROGRAM OVERVIEW Joe D. Whitley Paul B. Murphy
8:30 FEDERAL AND STATE–HEALTH CARE FRAUD INITIATIVES Moderator:
Paul B. Murphy
Panelists:
Randy S. Chartash, Assistant United States Attorney, U.S. Attorney’s Office for the Northern District of Georgia, Atlanta Charles M. Richards, Director, State Health Care Fraud Control Unit, Tucker Kirk Ogrosky, Deputy Chief for Health Care Fraud, U.S. Department of Justice, Fraud Section, Criminal Division, Washington, DC Paul J. Fike, Supervisory Special Agent, Federal Bureau of Investigation, Atlanta
9:30 BREAK
9:45 FEDERAL AND STATE-FALSE CLAIMS ACT DEVELOPMENTS Moderator:
John T. Boese, Fried Frank, Washington, DC
Panelists:
Christopher J. Huber, Assistant U.S. Attorney, U.S. Attorney’s Office for the Northern District of Georgia, Atlanta Michael A. Sullivan, Finch McCranie, LLP, Atlanta Marlan B. Wilbanks, Wilbanks & Bridges, Atlanta Paul N. Monnin, DLA Piper US LLP, Atlanta
10:45 ANTI-KICKBACK STATUTES and STARK ENFORCEMENT Moderator:
Gabriel Imperato, Broad & Cassel, Ft. Lauderdale, FL
Panelists:
Robert M. Keenan III, King & Spalding LLP, Atlanta Charlene L. McGinty, McKenna Long & Aldridge LLP, Atlanta Jacqueline C. Baratian, Alston & Bird LLP, Washingtion, DC
11:45 LUNCHEON (Included in registration fee)
“Looking Forward: Professionalism in 2010”
Amy Levine Weil, The Weil Firm, Atlanta; Former Chief, Appellate Section, U.S. Attorney’s Office, Northern District of Georgia, Atlanta
12:45 Health Care providers: general counsel ROUNDTABLE Moderator:
Joe D. Whitley
Panelists:
Jay D. Mitchell, Executive Vice President and General Counsel, Piedmont Healthcare, Inc., Atlanta Jane E. Jordan, Deputy General Counsel/Chief Health Counsel, Office of the General Counsel, Emory University, Atlanta Paul Justice, Vice President and General Counsel, Saint Joseph’s Hospital, Atlanta
1:45 before the government knocks: internal investigations and voluntary disclosure Moderator:
R. Joseph Burby, IV, Bryan Cave LLP, Atlanta
Panelists:
Christopher C. Burris, King & Spalding LLP, Atlanta Mark P. Schnapp, Greenberg Traurig LLP, Miami, FL Don J. DeGabrielle, Fulbright & Jaworski LLP, Houston, TX
2:35 after the government knocks: handling a health care fraud case (emphasis on parallel proceedings)
Moderator:
Anthony L. Cochran, Chilivis, Cochran, Larkins & Bever, LLP, Atlanta
Panelists:
Glenn D. Baker, Assistant U.S. Attorney, U.S. Attorney’s Office for the Northern District of Georgia, Atlanta Richard H. Deane, Jones Day, Atlanta Michael L. Brown, Alston & Bird LLP, Atlanta
3:25 BREAK
3:40 Office of inspector general initiatives Moderator:
Nancy E. Taylor, Greenberg Traurig LLP, Washington, DC
Panelists:
Kenneth E. Hooper, Hooper Cornell PLLC, Boise, ID Julie L. Nielsen, Health Care Litigation & Investigations Consultant, Tampa, FL Jonathan Diesenhaus, Hogan & Hartson LLP, Washington, DC
4:30 ADJOURN

The post Health Care Fraud Lawyers Gather to Discuss Amendments to False Claims Act and Other Whistleblower Developments appeared first on Whistleblower Lawyer Blog.

After a Senate Judiciary Committee hearing Wednesday on “Effective Strategies for Preventing Health Care Fraud,” Senators Leahy, Kaufman, Specter, Kohl, Schumer, and Klobuchar sponsored the new anti-fraud measure.

Excerpts of the Senate announcement follow:

The bill makes straightforward but critical improvements to the federal sentencing guidelines, to health care fraud statutes, and to forfeiture, money laundering, and obstruction statutes, all of which would strengthen prosecutors’ ability to combat this particularly destructive form of fraud. These improvements include:

o Increasing funding: Money spent on health care fraud prevention and enforcement is returned manifold through costs savings and civil and criminal recoveries. This bill authorizes a modest, yet significant, increase in federal antifraud spending of $20,000,000 per year through 2016.

The new bill would add to legislation earlier this year to strengthen law enforcement statutes aimed at fraud, the Fraud Enforcement and Recovery Act.

Of particular importance to qui tam whistleblower cases under the False Claims Act, the nation’s major whistleblower law, the new bill removes any ambiguity that “kickbacks” violate the False Claims Act. The official summary discusses kickbacks in section 2(c):

Section 2(c). Kickbacks
All too often, health care providers secure business by paying illegal kickbacks, which needlessly increase health care risks and costs. When a doctor’s independent judgment is compromised by a kickback, the patient faces the risk that the doctor is making decisions that are not in the patient’s best interest. In addition, excessive payments to doctors increase health care costs, may result in unfair competition, and may compromise medical research independence and the standards of scientific integrity.

This section remedies the problem by amending the AKS to ensure that all claims resulting from illegal kickbacks are false, even when the claims are not submitted directly by the wrongdoers themselves. (Notably, in such circumstances, neither AKS nor FCA liability will lie against an innocent third party that submitted the claim but lacked the requisite intent required under those statutes.)

The full text of the bill is below:

HEN09A48 S.L.C.
111TH CONGRESS 1ST SESSION S. ll To improve health care fraud enforcement.
IN THE SENATE OF THE UNITED STATES llllllllll Mr. KAUFMAN (for himself, Mr. LEAHY, and Mr. SPECTER) introduced the following bill; which was read twice and referred to the Committee on llllllllll A BILL To improve health care fraud enforcement.
1 Be it enacted by the Senate and House of Representatives2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ”Health Care Fraud 5 Enforcement Act of 2009”.
6 SEC. 2. ENHANCEMENTS TO CRIMINAL LAWS RELATING TO 7 HEALTH CARE FRAUD.
8 (a) FRAUD SENTENCING GUIDELINES.-
9 (1) DEFINITION.-In this subsection, the term 10 ”Federal health care offense” has the meaning given 2 HEN09A48 S.L.C.
1 that term in section 24 of title 18, United States 2 Code, as amended by this Act.
3 (2) REVIEW AND AMENDMENTS.-Pursuant to 4 the authority under section 994(p) of title 28,
5 United States Code, and in accordance with this 6 subsection, the United States Sentencing Commis7 sion shall-
8 (A) review the Federal Sentencing Guide9 lines and policy statements applicable to per10 sons convicted of Federal health care offenses;
11 (B) amend the Federal Sentencing Guide12 lines and policy statements applicable to per13 sons convicted of Federal health care offenses 14 involving Government health care programs to 15 provide that the aggregate dollar amount of 16 fraudulent bills submitted to the Government 17 health care program shall constitute prima facie 18 evidence of the amount of the intended loss by 19 the defendant; and 20 (C) amend the Federal Sentencing Guide21 lines to provide-
22 (i) a 2-level increase in the offense 23 level for any defendant convicted of a Fed24 eral health care offense relating to a Gov25 ernment health care program which in3 HEN09A48 S.L.C.
1 volves a loss of not less than $1,000,000 2 and less than $7,000,000;
3 (ii) a 3-level increase in the offense 4 level for any defendant convicted of a Fed5 eral health care offense relating to a Gov6 ernment health care program which in7 volves a loss of not less than $7,000,000 8 and less than $20,000,000;
9 (iii) a 4-level increase in the offense 10 level for any defendant convicted of a Fed11 eral health care offense relating to a Gov12 ernment health care program which in13 volves a loss of not less than $20,000,000;
14 and 15 (iv) if appropriate, otherwise amend 16 the Federal Sentencing Guidelines and pol17 icy statements applicable to persons con18 victed of Federal health care offenses in19 volving Government health care programs.
20 (3) REQUIREMENTS.-In carrying this sub21 section, the United States Sentencing Commission 22 shall-
23 (A) ensure that the Federal Sentencing 24 Guidelines and policy statements-
4 HEN09A48 S.L.C.
1 (i) reflect the serious harms associ2 ated with health care fraud and the need 3 for aggressive and appropriate law enforce4 ment action to prevent such fraud; and 5 (ii) provide increased penalties for 6 persons convicted of health care fraud of7 fenses in appropriate circumstances;
8 (B) consult with individuals or groups rep9 resenting health care fraud victims, law enforce10 ment officials, the health care industry, and the 11 Federal judiciary as part of the review de12 scribed in paragraph (2);
13 (C) ensure reasonable consistency with 14 other relevant directives and with other guide15 lines under the Federal Sentencing Guidelines;
16 (D) account for any aggravating or miti17 gating circumstances that might justify excep18 tions, including circumstances for which the 19 Federal Sentencing Guidelines, as in effect on 20 the date of enactment of this Act, provide sen21 tencing enhancements;
22 (E) make any necessary conforming 23 changes to the Federal Sentencing Guidelines;
24 and 5 HEN09A48 S.L.C.
1 (F) ensure that the Federal Sentencing 2 Guidelines adequately meet the purposes of sen3 tencing.
4 (b) CRIMINAL OFFENSE.-Section 1347 of title 18,
5 United States Code, is amended-
6 (1) by inserting ”(a) IN GENERAL.-” before 7 ”Whoever knowingly”; and 8 (2) by adding at the end the following:
9 ”(b) WILLFUL CONDUCT.-For the purposes of this 10 section, a person acts willfully if the person acts volun11 tarily and purposefully to do what the law forbids and the 12 person need not have actual knowledge of the law or spe13 cific intent to violate the law.”.
14 (c) KICKBACKS.-Section 1128B of the Social Secu15 rity Act (42 U.S.C. 1320a-7b) is amended by adding at 16 the end the following new subsection:
17 ”(g) In addition to the penalties provided for in this 18 section or section 1128A, a claim for items or services that 19 are provided in violation of this section constitutes a false 20 or fraudulent claim for purposes of subchapter III of chapter 21 37 of title 31, United States Code.”.
22 (d) HEALTH CARE FRAUD OFFENSE.-Section 24(a)
23 of title 18, United States Code, is amended-
6 HEN09A48 S.L.C.
1 (1) in paragraph (1), by striking the semicolon 2 and inserting ” or section 1128B of the Social Secu3 rity Act (42 U.S.C. 1320a-7b); or”; and 4 (2) in paragraph (2)-
5 (A) by inserting ”1349,” after ”1343,”;
6 and 7 (B) by inserting ”section 301 of the Fed8 eral Food, Drug, and Cosmetic Act (21 U.S.C.
9 331), or section 411, 501, or 511 of the Em10 ployee Retirement Income Security Act of 1974 11 (29 U.S.C. 1111, 1131, and 1141),” after 12 ”title,”.
13 SEC. 3. SUBPOENA AUTHORITY RELATING TO HEALTH 14 CARE.
15 (a) SUBPOENAS UNDER THE HEALTH INSURANCE 16 PORTABILITY AND ACCOUNTABILITY ACT OF 1996.-Sec17 tion 1510(b) of title 18, United States Code, is amended-
18 (1) in paragraph (1), by striking ”to the grand 19 jury”; and 20 (2) in paragraph (2)-
21 (A) in subparagraph (A), by striking 22 ”grand jury subpoena” and inserting ”subpoena 23 for records”; and 24 (B) in the matter following subparagraph 25 (B), by striking ”to the grand jury”.
7 HEN09A48 S.L.C.
1 (b) SUBPOENAS UNDER THE CIVIL RIGHTS OF IN2 STITUTIONALIZED PERSONS ACT.-The Civil Rights of 3 Institutionalized Persons Act (42 U.S.C. 1997 et seq.) is 4 amended by inserting after section 3 the following:
5 ”SEC. 3A. SUBPOENA AUTHORITY.
6 ”(a) AUTHORITY.-The Attorney General, or at the 7 direction of the Attorney General, any officer or employee 8 of the Department of Justice may require by subpoena 9 access to any institution that is the subject of an investiga10 tion under this Act and to any document, record, material,
11 file, report, memorandum, policy, procedure, investigation,
12 video or audio recording, or quality assurance report relat13 ing to any institution that is the subject of an investiga14 tion under this Act to determine whether there are condi15 tions which deprive persons residing in or confined to the 16 institution of any rights, privileges, or immunities secured 17 or protected by the Constitution or laws of the United 18 States.
19 ”(b) ISSUANCE AND ENFORCEMENT OF SUB20 POENAS.-
21 ”(1) ISSUANCE.-Subpoenas issued under this 22 section-
23 ”(A) shall bear the signature of the Attor24 ney General or any officer or employee of the 8 HEN09A48 S.L.C.
1 Department of Justice as designated by the At2 torney General; and 3 ”(B) shall be served by any person or class 4 of persons designated by the Attorney General 5 or a designated officer or employee for that 6 purpose.
7 ”(2) ENFORCEMENT.-In the case of contu8 macy or failure to obey a subpoena issued under this 9 section, the United States district court for the judi10 cial district in which the institution is located may 11 issue an order requiring compliance. Any failure to 12 obey the order of the court may be punished by the 13 court as a contempt that court.
14 ”(c) PROTECTION OF SUBPOENAED RECORDS AND 15 INFORMATION.-Any document, record, material, file, re16 port, memorandum, policy, procedure, investigation, video 17 or audio recording, or quality assurance report or other 18 information obtained under a subpoena issued under this 19 section-
20 ”(1) may not be used for any purpose other 21 than to protect the rights, privileges, or immunities 22 secured or protected by the Constitution or laws of 23 the United States of persons who reside, have re24 sided, or will reside in an institution;
9 HEN09A48 S.L.C.
1 ”(2) may not be transmitted by or within the 2 Department of Justice for any purpose other than to 3 protect the rights, privileges, or immunities secured 4 or protected by the Constitution or laws of the 5 United States of persons who reside, have resided,
6 or will reside in an institution; and 7 ”(3) shall be redacted, obscured, or otherwise 8 altered if used in any publicly available manner so 9 as to prevent the disclosure of any personally identi10 fiable information.”.
11 SEC. 4. ADDITIONAL AUTHORIZATION OF APPROPRIATIONS 12 TO THE DEPARTMENT OF JUSTICE FOR 13 CRIMINAL AND CIVIL ENFORCEMENT OF 14 HEALTH CARE FRAUD.
15 (a) AUTHORIZATION.-There is authorized to be ap16 propriated to the Attorney General, to remain available 17 until expended, $20,000,000 for each of fiscal years 2011 18 through 2016 for the purposes of investigations, prosecu19 tions, and civil or other proceedings relating to fraud and 20 abuse in connection with any health care benefit program,
21 as defined in section 24(b) of title 18, United States Code.
22 (b) ALLOCATIONS.-With respect to each of fiscal 23 years 2011 through 2016, the amount authorized to be 24 appropriated under subsection (a) shall be allocated as fol25 lows:
10 HEN09A48 S.L.C.
1 (1) For the offices of the United States attor2 neys, $10,000,000.
3 (2) For the Criminal Division of the Depart4 ment of Justice, $5,000,000.
5 (3) For the Civil Division of the Department of 6 Justice, $5,000,000.

The post New ‘‘Health Care Fraud Enforcement Act of 2009’’ Includes Health Care Whistleblower Provisions Aimed at Kickbacks appeared first on Whistleblower Lawyer Blog.

Building on past enforcement efforts, in May 2009 the government announced its Health Care Fraud Prevention and Enforcement Action Team (HEAT), as part of what is now a Cabinet-level battle against Medicare fraud. To date in FY 2009, the Department of Justice has recovered close to one billion dollars in health care fraud cases, and has obtained 300 convictions.

Last week, the government announced that its Medicare Fraud Strike Force has charged twenty California defendants with $26 million in Medicare fraud from the sale of durable medical equipment (DME). That same week, the government charged six Houston area residents with participating in a scheme to submit claims to Medicare for medically unnecessary DME.

The post Health Care Fraud Strike Force Targets Medicare and Medicaid Fraud appeared first on Whistleblower Lawyer Blog.

Important changes to the nation’s primary anti-fraud statute, the False Claims Act, took effect on May 20, 2009, when the Fraud Enforcement and Recovery Act of 2009 became law.

Among the most significant changes, Congress clarified and corrected the False Claims Act by legislatively overruling certain court decisions that sought to limit the scope of the Act, including Allison Engine Co. v. United States ex rel. Sanders, 128 S. Ct. 2123 (2008); United States ex rel. Totten v. Bombardier Corp., 380 F.3d 488 (D.C. Cir. 2004), cert. denied, 544 U.S. 1032 (2005); and United States ex rel. DRC, Inc. v. Custer Battles, LLC, 376 F. Supp. 2d 617 (E.D. Va. 2005), rev’d, 562 F.3d 295 (4th Cir. 2009).

These important 2009 changes to the False Claims Act include the following:

1. The amendments expand the definition of “claim,” and fraud directed against government contractors, grantees and other recipients is now plainly covered by the law.

2. Funds administered by the United States government (such as in Iraq) are now protected.

3. Retaining overpayments of money from the government is now an explicit basis of liability, which will be a source of concern for health care providers, among others.

4. Liability for “conspiracy” to violate the Act is broader than before.

5. Protection of whistleblowers and others against “retaliation” now extends not only to “employees,” but also to “contractors” and “agents”; and persons other than “employers” potentially may be liable for retaliation.

6. In investigating, the government now has authority to use “Civil Investigative Demands” more broadly, and to share information more with state and local authorities and with whistleblowers/relators.

7. A standard definition of what is “material” now applies in False Claims Act cases.

8. The statute of limitations has been clarified to allow the government to assert its own claims, after the whistleblower (or “relator”) has filed a qui tam case under the False Claims Act.

Click here for a detailed discussion of the False Claims Act and the wave of new State False Claims Acts.

The amended False Claims Act is reprinted below, in its entirety:

31 U.S.C. § 3729
3729. False claims
(a) Liability for certain acts.–

(1) In general.–Subject to paragraph (2), any person who–

(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;

(B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim;

(C) conspires to commit a violation of subparagraph (A), (B), (D), (E), (F), or (G);

(D) has possession, custody, or control of property or money used, or to be used, by the Government and knowingly delivers, or causes to be delivered, less than all of that money or property;

(E) is authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and, intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true;

(F) knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Government, or a member of the Armed Forces, who lawfully may not sell or pledge property; or

(G) knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government,

is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note; Public Law 104-410), plus 3 times the amount of damages which the Government sustains because of the act of that person.

(2) Reduced damages.–If the court finds that–

(A) the person committing the violation of this subsection furnished officials of the United States responsible for investigating false claims violations with all information known to such person about the violation within 30 days after the date on which the defendant first obtained the information;

(B) such person fully cooperated with any Government investigation of such violation; and

(C) at the time such person furnished the United States with the information about the violation, no criminal prosecution, civil action, or administrative action had commenced under this title with respect to such violation, and the person did not have actual knowledge of the existence of an investigation into such violation,

the court may assess not less than 2 times the amount of damages which the Government sustains because of the act of that person.

(3) Costs of civil actions.–A person violating this subsection shall also be liable to the United States Government for the costs of a civil action brought to recover any such penalty or damages.

(b) Definitions.–For purposes of this section–

(1) the terms “knowing” and “knowingly” —

(A) mean that a person, with respect to information–

(i) has actual knowledge of the information;

(ii) acts in deliberate ignorance of the truth or falsity of the information; or

(iii) acts in reckless disregard of the truth or falsity of the information; and

(B) require no proof of specific intent to defraud;

(2) the term “claim”–

(A) means any request or demand, whether under a contract or otherwise, for money or property and whether or not the United States has title to the money or property, that–

(i) is presented to an officer, employee, or agent of the United States; or

(ii) is made to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government’s behalf or to advance a Government program or interest, and if the United States Government–

(I) provides or has provided any portion of the money or property requested or demanded; or

(II) will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded; and

(B) does not include requests or demands for money or property that the Government has paid to an individual as compensation for Federal employment or as an income subsidy with no restrictions on that individual’s use of the money or property;

(3) the term “obligation” means an established duty, whether or not fixed, arising from an express or implied contractual, grantor-grantee, or licensor-licensee relationship, from a fee-based or similar relationship, from statute or regulation, or from the retention of any overpayment; and

(4) the term “material” means having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.

(c) Exemption from disclosure.–Any information furnished pursuant to subsection (a)(2) shall be exempt from disclosure under section 552 of title 5.

(d) Exclusion.–This section does not apply to claims, records, or statements made under the Internal Revenue Code of 1986.

[(e) Redesignated (d)]

31 U.S.C. § 3730 3730. Civil actions for false claims
(a) Responsibilities of the Attorney General.–The Attorney General diligently shall investigate a violation under section 3729. If the Attorney General finds that a person has violated or is violating section 3729, the Attorney General may bring a civil action under this section against the person.

(b) Actions by private persons.–(1) A person may bring a civil action for a violation of section 3729 for the person and for the United States Government. The action shall be brought in the name of the Government. The action may be dismissed only if the court and the Attorney General give written consent to the dismissal and their reasons for consenting.

(2) A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the Government pursuant to Rule 4(d)(4) of the Federal Rules of Civil Procedure. The complaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders. The Government may elect to intervene and proceed with the action within 60 days after it receives both the complaint and the material evidence and information.

(3) The Government may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under paragraph (2). Any such motions may be supported by affidavits or other submissions in camera. The defendant shall not be required to respond to any complaint filed under this section until 20 days after the complaint is unsealed and served upon the defendant pursuant to Rule 4 of the Federal Rules of Civil Procedure.

(4) Before the expiration of the 60-day period or any extensions obtained under paragraph (3), the Government shall–

(A) proceed with the action, in which case the action shall be conducted by the Government; or

(B) notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action.

(5) When a person brings an action under this subsection, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.

(c) Rights of the parties to qui tam actions.–(1) If the Government proceeds with the action, it shall have the primary responsibility for prosecuting the action, and shall not be bound by an act of the person bringing the action. Such person shall have the right to continue as a party to the action, subject to the limitations set forth in paragraph (2).

(2)(A) The Government may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the Government of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.

(B) The Government may settle the action with the defendant notwithstanding the objections of the person initiating the action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances. Upon a showing of good cause, such hearing may be held in camera.

(C) Upon a showing by the Government that unrestricted participation during the course of the litigation by the person initiating the action would interfere with or unduly delay the Government’s prosecution of the case, or would be repetitious, irrelevant, or for purposes of harassment, the court may, in its discretion, impose limitations on the person’s participation, such as–

(i) limiting the number of witnesses the person may call;

(ii) limiting the length of the testimony of such witnesses;

(iii) limiting the person’s cross-examination of witnesses; or

(iv) otherwise limiting the participation by the person in the litigation.

(D) Upon a showing by the defendant that unrestricted participation during the course of the litigation by the person initiating the action would be for purposes of harassment or would cause the defendant undue burden or unnecessary expense, the court may limit the participation by the person in the litigation.

(3) If the Government elects not to proceed with the action, the person who initiated the action shall have the right to conduct the action. If the Government so requests, it shall be served with copies of all pleadings filed in the action and shall be supplied with copies of all deposition transcripts (at the Government’s expense). When a person proceeds with the action, the court, without limiting the status and rights of the person initiating the action, may nevertheless permit the Government to intervene at a later date upon a showing of good cause.

(4) Whether or not the Government proceeds with the action, upon a showing by the Government that certain actions of discovery by the person initiating the action would interfere with the Government’s investigation or prosecution of a criminal or civil matter arising out of the same facts, the court may stay such discovery for a period of not more than 60 days. Such a showing shall be conducted in camera. The court may extend the 60-day period upon a further showing in camera that the Government has pursued the criminal or civil investigation or proceedings with reasonable diligence and any proposed discovery in the civil action will interfere with the ongoing criminal or civil investigation or proceedings.

(5) Notwithstanding subsection (b), the Government may elect to pursue its claim through any alternate remedy available to the Government, including any administrative proceeding to determine a civil money penalty. If any such alternate remedy is pursued in another proceeding, the person initiating the action shall have the same rights in such proceeding as such person would have had if the action had continued under this section. Any finding of fact or conclusion of law made in such other proceeding that has become final shall be conclusive on all parties to an action under this section. For purposes of the preceding sentence, a finding or conclusion is final if it has been finally determined on appeal to the appropriate court of the United States, if all time for filing such an appeal with respect to the finding or conclusion has expired, or if the finding or conclusion is not subject to judicial review.

(d) Award to qui tam plaintiff.–(1) If the Government proceeds with an action brought by a person under subsection (b), such person shall, subject to the second sentence of this paragraph, receive at least 15 percent but not more than 25 percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to the prosecution of the action. Where the action is one which the court finds to be based primarily on disclosures of specific information (other than information provided by the person bringing the action) relating to allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government [FN2] Accounting Office report, hearing, audit, or investigation, or from the news media, the court may award such sums as it considers appropriate, but in no case more than 10 percent of the proceeds, taking into account the significance of the information and the role of the person bringing the action in advancing the case to litigation. Any payment to a person under the first or second sentence of this paragraph shall be made from the proceeds. Any such person shall also receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs. All such expenses, fees, and costs shall be awarded against the defendant.

(2) If the Government does not proceed with an action under this section, the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and damages. The amount shall be not less than 25 percent and not more than 30 percent of the proceeds of the action or settlement and shall be paid out of such proceeds. Such person shall also receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs. All such expenses, fees, and costs shall be awarded against the defendant.

(3) Whether or not the Government proceeds with the action, if the court finds that the action was brought by a person who planned and initiated the violation of section 3729 upon which the action was brought, then the court may, to the extent the court considers appropriate, reduce the share of the proceeds of the action which the person would otherwise receive under paragraph (1) or (2) of this subsection, taking into account the role of that person in advancing the case to litigation and any relevant circumstances pertaining to the violation. If the person bringing the action is convicted of criminal conduct arising from his or her role in the violation of section 3729, that person shall be dismissed from the civil action and shall not receive any share of the proceeds of the action. Such dismissal shall not prejudice the right of the United States to continue the action, represented by the Department of Justice.

(4) If the Government does not proceed with the action and the person bringing the action conducts the action, the court may award to the defendant its reasonable attorneys’ fees and expenses if the defendant prevails in the action and the court finds that the claim of the person bringing the action was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.

(e) Certain actions barred.–(1) No court shall have jurisdiction over an action brought by a former or present member of the armed forces under subsection (b) of this section against a member of the armed forces arising out of such person’s service in the armed forces.

(2)(A) No court shall have jurisdiction over an action brought under subsection (b) against a Member of Congress, a member of the judiciary, or a senior executive branch official if the action is based on evidence or information known to the Government when the action was brought.

(B) For purposes of this paragraph, “senior executive branch official” means any officer or employee listed in paragraphs (1) through (8) of section 101(f) of the Ethics in Government Act of 1978 (5 U.S.C. App.).

(3) In no event may a person bring an action under subsection (b) which is based upon allegations or transactions which are the subject of a civil suit or an administrative civil money penalty proceeding in which the Government is already a party.

(4)(A) No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.

(B) For purposes of this paragraph, “original source” means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information.

(f) Government not liable for certain expenses.–The Government is not liable for expenses which a person incurs in bringing an action under this section.

(g) Fees and expenses to prevailing defendant.–In civil actions brought under this section by the United States, the provisions of section 2412(d) of title 28 shall apply.

(h) Relief from retaliatory actions.–

(1) In general.–Any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, or agent on behalf of the employee, contractor, or agent or associated others in furtherance of other efforts to stop 1 or more violations of this subchapter.

(2) Relief.–Relief under paragraph (1) shall include reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees. An action under this subsection may be brought in the appropriate district court of the United States for the relief provided in this subsection.

31 U.S.C. § 3731 3731. False claims procedure
(a) A subpena requiring the attendance of a witness at a trial or hearing conducted under section 3730 of this title may be served at any place in the United States.

(b) A civil action under section 3730 may not be brought–

(1) more than 6 years after the date on which the violation of section 3729 is committed, or

(2) more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed,

whichever occurs last.

(c) If the Government elects to intervene and proceed with an action brought under 3730(b), the Government may file its own complaint or amend the complaint of a person who has brought an action under section 3730(b) to clarify or add detail to the claims in which the Government is intervening and to add any additional claims with respect to which the Government contends it is entitled to relief. For statute of limitations purposes, any such Government pleading shall relate back to the filing date of the complaint of the person who originally brought the action, to the extent that the claim of the Government arises out of the conduct, transactions, or occurrences set forth, or attempted to be set forth, in the prior complaint of that person.

(d) In any action brought under section 3730, the United States shall be required to prove all essential elements of the cause of action, including damages, by a preponderance of the evidence.

(e) Notwithstanding any other provision of law, the Federal Rules of Criminal Procedure, or the Federal Rules of Evidence, a final judgment rendered in favor of the United States in any criminal proceeding charging fraud or false statements, whether upon a verdict after trial or upon a plea of guilty or nolo contendere, shall estop the defendant from denying the essential elements of the offense in any action which involves the same transaction as in the criminal proceeding and which is brought under subsection (a) or (b) of section 3730.

31 U.S.C. § 3732 3732. False claims jurisdiction
(a) Actions under section 3730.–Any action under section 3730 may be brought in any judicial district in which the defendant or, in the case of multiple defendants, any one defendant can be found, resides, transacts business, or in which any act proscribed by section 3729 occurred. A summons as required by the Federal Rules of Civil Procedure shall be issued by the appropriate district court and served at any place within or outside the United States.

(b) Claims under state law.–The district courts shall have jurisdiction over any action brought under the laws of any State for the recovery of funds paid by a State or local government if the action arises from the same transaction or occurrence as an action brought under section 3730.

(c) Service on State or local authorities.–With respect to any State or local government that is named as a co-plaintiff with the United States in an action brought under subsection (b), a seal on the action ordered by the court under section 3730(b) shall not preclude the Government or the person bringing the action from serving the complaint, any other pleadings, or the written disclosure of substantially all material evidence and information possessed by the person bringing the action on the law enforcement authorities that are authorized under the law of that State or local government to investigate and prosecute such actions on behalf of such governments, except that such seal applies to the law enforcement authorities so served to the same extent as the seal applies to other parties in the action.

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