False Claims Act Developments: 2020 Year in Review
The past year has been historic for many reasons, including but not limited to a once in a lifetime pandemic, a dramatic election season, and the transition to a new Presidential administration. Along with these major events, there have been consequential developments for the False Claims Act (FCA). In 2020, the Department of Justice (DOJ) recorded a total of $2.2 billion in recoveries resulting from False Claim Act actions, which brings the total to $64 billion since the 1986 amendments.[2] The DOJ notes that $1.8 billion was related to healthcare fraud schemes such as paying kickbacks to doctors, improperly utilizing co-pay foundations, and billing for medically unnecessary procedures.[3] The DOJ also highlighted other substantial recoveries involving procurement fraud in which federal contractors overbilled for labor and violated contractual requirements.[4] Further, $1.6 billion of this $2.2 billion came from actions brought by whistleblowers under the FCA’s qui tam provisions.[5]
We are tracking FCA settlements, and we predict this number will increase due to the unprecedented economic crisis connected to the COVID-19 pandemic and the government-spending bills passed to combat it. On March 29, 2020, Congress passed the nearly $2 trillion CARES Act, and recently, the DOJ announced the first FCA settlement regarding CARES Act fraud in the Eastern District of California.[6] In this case, Slidebelts, Inc. agreed to pay $100,000 to settle allegations that they defrauded the government by submitting false statements to banks that indicated they were not in bankruptcy in order to receive payment from the Paycheck Protection Program (PPP).[7] In addition to this $100,000, they returned their entire $350,000 PPP loan.[8] There will certainly be more CARES Act settlements to come, and with the new administration (and President Biden’s proposed American Rescue Act), there is likelihood that Congress will pass another significant package soon.[9] In response to this, TAFEF has established a COVID-19 Anti-Fraud Task Force that works with federal and state governments in order to identify COVID-19 fraud trends, and increase capability to tackle fraud schemes head on. As more cases come to light, we will keep our members and the general public up to date on these developments.
2020 has also been extremely busy on the litigation side of the False Claims Act. Through the year, TAFEF played a key role, filing 11 amicus curiae briefs on issues ranging from the FCA’s knowledge standards to the public disclosure bar and original source exception. These briefs were filed with the help of many of our members on the Amicus Committee. Below, we dive further into these topics and highlight major developments in case law in various District and Circuit Courts around the country, along with emerging trends such as issues regarding the government dismissal authority and third-party litigation funding. Thank you to all who helped make 2020 a successful year, and we’re looking forward to seeing what 2021 has in store.
Download the full review.
[1] Edited by Jacklyn DeMar.
[2] https://www.justice.gov/opa/pr/justice-department-recovers-over-22-billion-false-claims-act-cases-fiscal-year-2020
[3]Id. “Health Care Fraud”
[4]Id. “Procurement Fraud”
[5]Id. “Recoveries in Whistleblower Suits”
[6] https://www.natlawreview.com/article/first-reported-fca-cares-act-settlement-announced?link_id=6&can_id=d0194dbcaba9cd8b48be0d76bc0fe6eb&source=email-false-claims-act-recovers-22-billion-in-fy2020&email_referrer=email_1051446&email_subject=first-reported-fca-cares-act-settlement-announced
[7] https://www.justice.gov/usao-edca/pr/eastern-district-california-obtains-nation-s-first-civil-settlement-fraud-cares-act
[8]Id.
[9] https://www.whitehouse.gov/briefing-room/legislation/2021/01/20/president-biden-announces-american-rescue-plan/
