Oct.28.2009On October 27, 2009, the United States District Court for the Southern District of Ohio held that one of the recent amendments to the False Claims Act (FCA), 31 U.S.C. § 3729 et seq., violates the Ex Post Facto Clause of the United States Constitution. See U.S. ex rel. Sanders, et al. v. Allison Engine Co., Inc., et al., C. No. 1:95-cv-970 (S.D. Ohio).BackgroundAllison Engine, a storied qui tam case, involves allegations that defendants: (1) submitted claims for payment for generators used in the construction of naval guided missile destroyers, despite knowing that the generators did not conform to contract specifications or Navy regulations, and (2) withheld cost or pricing data during negotiations with the government, all in violation of the FCA, specifically 31 U.S.C. § 3729(a)(2).With respect to the former allegations, which were tried to a jury, the district court granted the defendants' motion for judgment as a matter of law.

The government declined to intervene as to defendant Medigain, Inc. (“Medigain”).Claims: False claims to Medicare and Tricare in violation of the 1986 and 2009 versions of the FCA for false claims (31 U.S.C. §3729(a)(1)(1986), 31 U.S.C. §3729(a)(1)(A)(2009)); false statements (31 U.S.C. §3729 (a)(2) (1986), 31 U.S.C. §3729(a)(1)(B)(2009)); and conspiracy (31 U.S.C. §3729 (a)(3)(1986), 31 U.S.C. §3729(a)(1)(C)(2009)). The relator also asserted violations of the federal Anti-Kickback Statute (“AKS”) as the basis for an FCA violation.

In a 2017 Executive Order, President Trump estimated that importers lacking US assets had evaded US$2.3 billion in antidumping and countervailing duties for an unspecified period.1 He therefore instructed the US Attorney General and the Secretary of Homeland Security (which includes US Customs and Border Protection or "CBP") to "develop recommended prosecution practices and allocate appropriate resources" to give prosecution of "significant" trade-law violations "high priority."2 CBP can investigate alleged import duty violations relating to antidumping and countervailing duties under the US Enforce and Protect Act ("EAPA"), 19 USC § 1517, and related false statements or omissions in entry declarations under 19 USC § 1592.3But two more recent trends are upping the ante and moving import duty violations into the white-collar space: civil lawsuits brought by whistleblowers under the US False Claims Act ("FCA"), 31 USC § 3729, and criminal enforcement by the US Department of Justice ("DOJ"). We expect both trends to continue, given the Trump administration's focus on trade.The FCA in the trade context—theories of liabilityThe FCA empowers whistleblowers, also known as relators, to file civil FCA claims in the federal courts on the government's behalf when the government has allegedly lost money because of a false claim or a "reverse" false claim.4 Between 2000 and 2016, whistleblowers5 increasingly invoked the FCA to seek the payment of unpaid or improperly reduced duties on US imports.

Although the Cretney-Tsosie and McAree complaints were unsealed some time before the federal government intervened and the parties settled, there was no substantive litigation during the period between unsealing and settlement.Intervention Status: Cretney-Tsosie: intervention-in-part by the United States and State of Nevada;Deaton: intervention-in-part by the United States; McAree: intervention by the United States; West: intervention-in-part by the United States; Wilson: intervention-in-part by the United StatesClaims:Cretney-Tsosie False Claims Act (“FCA”), 31 U.S.C. §3729(a)(1)(A), (a)(1)(B), and (a)(1)(G); Nevada False Claims Act, NRS 357.010 et seq.Deaton FCA, 31 U.S.C. §3729(a)(1)(A) (False or Fraudulent Claims); FCA, 31 U.S.C. §3729(a)(1)(B) (False Statements); California False Claims Act; Iowa False Claims Act: New Mexico Medicaid False Claims Act and New Mexico Fraud Against Taxpayers Act; Nevada Submission of False Claims to State or Local Government; Texas Medicaid Fraud Prevention ActMcAree FCA, 31 U.S.C. §3729(a)(1) (Presentation of False Claims); FCA, 31 U.S.C. §3729(a)(2) (Presentation of False Statements); Payment by Mistake of Fact; Retaliatory Constructive DischargeWest FCA, 31 U.S.C. §3729 et seq.; California False Claims Act, Cal. Gov. Code §12651 et seq.Wilson FCA, 31 U.S.C. §3729(a)(1)(A) (False or Fraudulent Claims); FCA, 31 U.S.C. §3729(a)(1)(B) (False Statements); California False Claims Act; Iowa False Claims Act: New Mexico Medicaid False Claims Act and New Mexico Fraud Against Taxpayers Act; Nevada Submission of False Claims to Stat

Although the Cretney-Tsosie and McAree complaints were unsealed some time before the federal government intervened and the parties settled, there was no substantive litigation during the period between unsealing and settlement.Intervention Status: Cretney-Tsosie: intervention-in-part by the United States and State of Nevada;Deaton: intervention-in-part by the United States; McAree: intervention by the United States; West: intervention-in-part by the United States; Wilson: intervention-in-part by the United StatesClaims:Cretney-TsosieFalse Claims Act (“FCA”), 31 U.S.C. § 3729(a)(1)(A), (a)(1)(B), and (a)(1)(G); Nevada False Claims Act, NRS 357.010 et seq.DeatonFCA, 31 U.S.C. § 3729(a)(1)(A) (False or Fraudulent Claims); FCA, 31 U.S.C. § 3729(a)(1)(B) (False Statements); California False Claims Act; Iowa False Claims Act: New Mexico Medicaid False Claims Act and New Mexico Fraud Against Taxpayers Act; Nevada Submission of False Claims to State or Local Government; Texas Medicaid Fraud Prevention ActMcAreeFCA, 31 U.S.C. § 3729(a)(1) (Presentation of False Claims); FCA, 31 U.S.C. § 3729(a)(2) (Presentation of False Statements); Payment by Mistake of Fact; Retaliatory Constructive DischargeWestFCA, 31 U.S.C. § 3729 et seq.; California False Claims Act, Cal. Gov. Code § 12651 et seq.WilsonFCA, 31 U.S.C. § 3729(a)(1)(A) (False or Fraudulent Claims); FCA, 31 U.S.C. § 3729(a)(1)(B) (False Statements); California False Claims Act; Iowa False Claims Act: New Mexico Medicaid False Claims Act and New Mexico Fraud Against Taxpayers Act; Nevada Submission of False Claims to Stat

In United States ex rel. Adams v. Aurora Loan Servs., Inc., 2016 WL 697771, — F.3d —- (9th Cir. Feb. 22, 2016), the Ninth Circuit found that Fannie Mae and Freddie Mac were not government entities for purposes of the False Claims Act. In so holding, the Ninth Circuit provided further clarity to the distinction between claims under 31 U.S.C. § 3729(b)(2)(A)(i) (claims presented to an officer, employee, or agent of the government) and claims under 31 U.S.C. § 3729(b)(2)(A)(ii) (claims presented to entities that contract with the government and the government’s funds are used to advance a government program). In Adams, the relator alleged that various lenders and loan servicers violated the FCA by making false certifications to Fannie Mae and Freddie Mac that certainloans were free and clear of liens and charges.

The case law that does exist is primarily from district courts and, as the survey of case law contained herein illustrates, there is little guidance from the Circuit Courts or the U.S. Supreme Court.In this chapter, we cover the legislative history of the reverse false claims provision, the impact of the 2009 Fraud Enforcement and Recovery Act’s significant amendments to the reverse false claims provision, a survey of relevant reverse false claims cases, and finally, a discussion of the practical implications of the reverse false claims provision of the False Claims Act for members of the healthcare industry and legal practitioners that represent them.1. Legislative History of the Reverse False Claims Provision A.The 1986 Amendments to the False Claims ActThe False Claims Act (“FCA”), 31 U.S.C. §§ 3729-33, was enacted in 1863 “in order to combat fraud and price-gouging in [Civil War] procurement contracts.” In its original form, the Government could prove a violation of the FCA only where a defendant affirmatively submitted a fraudulent claim to the government for its money or property.

Intervention Status: On March 18, 2016, the United States declined to intervene.Claims: False claims to Medicare in violation of the Civil False Claims Act (“FCA”), 31 U.S.C. §3729 et seq., premised on a false certification of compliance with the Anti-Kickback Statute (“AKS”), 42 U.S.C. §1320a-7b(b). Violation of the Florida False Claims Act, Fla. Stat., §68.081 et seq.Name of Relator: Florida Society of AnesthesiologistsDefendants’ Business: The defendants operate physician practices, anesthesia service companies and ambulatory surgical centers.

In This Issue: Latest Healthcare False Claims Act Roundup and Top 3 Best Practices to Reduce Exposure Guarding Against Bribery When Conducting Clinical Trials Overseas A Look at the Private Option in Arkansas New Risks of "No-Poach" Agreements in the Healthcare Industry? New York OMIG Releases New Audit Protocols CMS Unveils Value-Based Insurance Design (VBID) ProposalLatest Healthcare False Claims Act Roundup and Top 3 Best Practices to Reduce Exposure Authors: Garrett Mott, Associate, Litigation | Katrina Dela Cruz, Associate, Litigation As the legal landscape in healthcare becomes increasingly complex, healthcare companies that receive federal program funds face increasing exposure under the federal False Claims Act (FCA), 31 U.S.C. §§ 3729–3733. Generally, the FCA imposes liability on persons or entities who knowingly (with actual knowledge or reckless disregard) submit "false claims" for payment from federal funds or who improperly retain amounts received from the United States.

United States ex rel. Marcy v. Rowan Cos., 520 F.3d 384, 388 (5th Cir. 2008) (citing Avco Corp. v. U.S. Dep’t of Justice, 884 F.2d 621, 622 (D.C. Cir. 1989)).. Press Release, Justice Department’s False Claims Act Settlements and Judgments Exceed $5.6 Billion in Fiscal Year 2021, Feb. 1, 2022, https://www.justice.gov/opa/pr/justice-department-s-false-claims-act-settlements-and-judgments-exceed-56-billion-fiscal-year. Id.. 31 U.S.C. § 3729(a)(1), 15 C.F.R. § 6.3(a)(3). For 2022, per claim FCA penalties can range up to $23,607.