the Ford case, the DOJ’s Trade Fraud Task Force as well as attorneys within the Civil Division’s National Courts Section and International Trade Field Office were credited for their assistance on the matter. Ford ultimately settled civil violations of 19 U.S.C. § 1592, the primary authority under which Customs regulations are enforced. On the other hand, the Homestar case, handled by a regional USAO, involved alleged violations of the FCA, a law applicable in cases where parties have knowingly avoided payment of import duties owed to the government. We have extensively discussed the applicability of the FCA in Customs and trade matters in a previous article.The Ford and Homestar cases involve the resolution of civil, as opposed to criminal, violations. Importantly, each of the laws implicated in the Ford and Homestar cases have parallel criminal provisions, namely 18 U.S.C. § 541, which penalizes false classifications for imports and the failure to pay the proper amount in duties, and 18 U.S.C. § 287, which penalizes the submission of false or fraudulent claims to a government officer.In other cases, parties engaged in illicit import practices have been criminally charged under adjacent federal laws. For example, in 2021, the USAO for the Southern District of New York charged George Iloulian, the CEO of an apparel company, with one count of falsely effecting the entry of goods into the U.S. under 18 U.S.C. § 541 as well as one count of conspiracy to commit wire fraud under 18 U.S.C. § 1343. The charges concerned Mr. Iloulian’s involvement in a double-invoicing scheme to avoid payment of customs duties and were accompanied by civil claims brought under the FCA.In 2023, a Florida couple faced criminal charges for violations of customs laws related to their facilitation of plywood imports and evasion of customs duties, including anti-dumping and countervailing duties, through the use of shell companies, illicit shipping practices, and submission of false classifications and country o

bmission of Medicare or Medicaid claims or bills to any individual, third party payor, or other entity for designated health services furnished pursuant to a prohibited referral. Stark Law violations can result in significant financial penalties and exclusion from federal healthcare programs.The AKS is a criminal statute that prohibits the knowing and willful offering, paying, soliciting, or receiving of remuneration to induce or reward referrals of items or services reimbursable by a federal health care program, including, but not limited to, Medicare, Medicaid, and TRICARE. “Remuneration” includes the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind. Similar to the Stark Law, AKS violations can result in significant financial penalties, exclusion from federal healthcare programs, and even imprisonment. Violation of the AKS or Stark Law could also lead to potential federal False Claims Act liabilities. See 31 U.S.C. §§ 3729–3733; see also 18 U.S.C. § 287 (criminal false claims statute).Both the Stark Law and AKS have certain statutory exceptions that permit financial relationships that would otherwise be prohibited under those laws. The exceptions are designed to promote beneficial arrangements while preventing fraud and abuse.New Exceptions under the Consolidated Appropriations Act, 2023Section 4126 of theConsolidated Appropriations Act, 2023 (Public Law No: 117-328) introduced new Stark Law and AKS exceptions for physician wellness programs. These exceptions allow healthcare entities to provide certain mental and behavioral health programs to physicians and other clinicians.The Stark Law exception, which will be located at 42 U.S.C. § 1395nn(e)(9), permits certain healthcare entities to offer bona fide mental health or behavioral health improvement or maintenance programs to physicians for the primary purpose of preventing suicide, improving mental health and resiliency, or providing training to promote the mental health and resilie

Tax Court in Brief” covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.For a link to our podcast covering the Tax Court in Brief, download here or check out other episodes of The Freeman Law Project.Tax Litigation: The Week of March 6th, 2022, through March 10th, 2023Estate of Kalikow v. Comm’r, T.C. Memo. 2023-21 | February 27, 2023 | Thornton, J. | Dkt. No. 14436-10.Estate of Spizzirri v. Comm’r, T.C. Memo 2023-25 | February 28, 2023 | Urda, J. | Dkt. No. 19124-19Dawveed v. Comm’r, T.C. Memo. 2023-28| March 6, 2023 |Lauber, J. | Dkt. No. 19385-21LSummary: In this collection due process (CDP) case, Mehlek Dawveed sought review of the determination by the IRS to uphold a notice of Federal tax lien (NFTL) and a notice of intent to levy for 2010. The IRS took these actions to facilitate collection of restitution it had assessed against Dawveed following his criminal conviction. In 2016 Dawveed was indicted on counts of violating 18 U.S.C. §§ 287 (false claims) and 1343 (wire fraud), and section 7212(a) (obstructing administration of the internal revenue laws). The indictment alleged that Dawveed had engaged in a fraudulent scheme to obtain a tax refund of $977,558 for 2010. In 2012 Dawveed again attempted to file a false amended return for 2010 aiming to secure an additional refund. In 2018, Dawveed pleaded guilty to one count of violating 18 U.S.C. § 1343 (wire fraud). He was sentenced to 36 months in prison, followed by 3 years of supervised release. Also, the court ordered, pursuant to 18 U.S.C. § 3663(a)(3), that Dawveed pay restitution of $788,991 to the IRS for unrecoverable losses resulting from his fraudulent scheme.Dawveed was released from prison early, and the court entered a consent order of forfeiture, reciting Dawveed’s agreement to forfeit all property derived from proceeds traceable to his offense, including $788,991 and certain real property. Thereafter, an IRS special agent assigned to Dawveed’s case complet

As Dr. Nick Oberheiden, founding partner of the False Claims Act defense firm Oberheiden P.C., says, “The civil penalties and program exclusions that generally come with False Claims Act violations form a powerful tandem that frequently puts a defendant healthcare provider out of business.”Criminal ChargesUnder 18 U.S.C. § 287, FCA defendants can also face criminal sanctions for knowingly making a false claim for compensation from a government program. These criminal convictions carry a significant fine, as well as up to five years in prison.

Accordingly, the DOJ plans to use its “civil enforcement tools” to identify government contractors who “fail to follow required cybersecurity standards.”The civil initiative does not preclude parallel criminal enforcement actions. For example, 18 U.S.C. § 287 criminalizes the making of false, fictitious, or fraudulent claims upon the United States or conspiring to do so. It is not uncommon for those U.S. attorney’s offices that intervene in False Claims Act cases to assign criminal AUSAs to parallel investigations, so contractors and grant recipients who face a False Claims Act case or investigation should be aware of the possibility as they engage with the government.TakeawaysReview your cybersecurity practices and protocols, including related regulations and your government contracts, to make sure your practices comply with federal law.

It is not uncommon for the DOJ to initiate criminal proceedings based off the same factual allegations underlying qui tam complaints and DOJ civil fraud investigations, especially as the FCA shares elements in common to criminal statutes where there is criminal intent. For example, 18 U.S.C. § 287, criminalizes making false, fictitious or fraudulent claims upon the United States or conspiring to do so. As a result, this Civil Cyber-Fraud Initiative could lead to increased coordination between the criminal and civil divisions in the cyber arena.

Penalties can include hefty fines and jail time for individuals.23 And as with government contracts, false statements in connection with reimbursement from federal funds can be treated as criminal fraud with substantial criminal penalties (18 U.S.C. § 1001 (false statements); 18 U.S.C. § 287 (false claims); 18 U.S.C. § 1031 (major fraud allegations)) and subject the entity to fines and treble damages under the False Claims Act (31 U.S.C. §§ 3729-3733).ConclusionThe expanded use of DPA authority to mobilize and accelerate the immunization effort has the potential to disrupt existing business plans and commitments to meet the national emergency.

However, many company executives, small business owners, and other individuals are also likely to face allegations of making false statements to the SBA and other federal crimes based solely upon submitting false information in their PPP loan applications. Depending on the specific circumstances involved, individuals targeted in SBA loan fraud investigations during the COVID-19 crisis could face federal charges under statutes including:False Claims Act (31 U.S.C. §§ 3729 – 3733)False Statements to the Government (18 U.S.C. § 1001)Making False Statements to the SBA or an FDIC-Insured Bank—Loan or Credit Applications (18 U.S.C. § 1014)Bank Fraud (18 U.S.C. § 1344)Wire and Mail Fraud (18 U.S.C. § 1343)Aggravated Identity Theft (18 U.S.C. § 1028A)Tax Evasion (26 U.S.C. § 7201)Attempt (18 U.S.C. § 1349)Conspiracy to defraud the United States (18 U.S.C. § 371 and 18 U.S.C. § 1349)Making False, Fictitious or Fraudulent Claims (18 U.S.C. § 287)Misrepresentations to the SBA (15 U.S.C. § 645(d))When targeted in an SBA audit or a federal criminal investigation, it is essential to respond with a comprehensive, cohesive, and proactive defense. This is true whether the audit or investigation is still ongoing, or a criminal complaint has been filed and an indictment is pending.

6 Since the 1996 amendment, Section 1345 has remained substantively unchanged.Section 1345 Injunctions to Stop Fraudulent ActivitiesAs its moniker indicates, Section 1345 allows DOJ to request a temporary or permanent injunction in a civil action to stop current or potential fraudulent schemes. These schemes could be any federal fraud described in Chapter 63 of the U.S. Code, including mail fraud, wire fraud, bank fraud, health care fraud, securities and commodities fraud, as well as certain criminal activity outside of Chapter 63, including false claims under 18 U.S.C. § 287, conspiracy to commit fraud under 18 U.S.C. § 371, banking law violations as defined in 18 U.S.C. § 3322(d), and health care offenses, as defined in 18 U.S.C. § 24.7 Injunction proceedings under Section 1345 follow the statute’s dual civil and criminal structure, which requires that the Federal Rules of Civil Procedure be followed, unless an indictment has been returned, which would then require discovery to proceed pursuant to the Federal Rules of Criminal Procedure.8 This distinction is an important consideration for prosecutors seeking Section 1345 injunctions.

See also, https://dredf.org/wp-content/uploads/2020/05/Joint-Letter-Opposing-CA-Immunity-Executive-Order.pdf.20 See, e.g., False Claims: 18 U.S.C. §287; False Statements/Healthcare Programs: 18 U.S.C. §1035; False Statements in Connection with a Claim: 42 U.S.C. §1320a-7b(a); Kickbacks: 42 U.S.C. §1320a-7b(b); Healthcare Fraud: 18 U.S.C. §1347; Misbranding: 21 U.S.C. §331, 333; Mail and Wire Fraud: 18 U.S.C. §§1341 and 1343; Money Laundering: 18 U.S.C. §§1956 and 1957; False Statements: 18 U.S.C. §1001; Obstruction of an “Official Proceeding”: 18 U.S.C. §1512(c).21 Nursing Home Reopening Recommendations for State and Local Officials, CMS, guidance available at https://aboutblaw.