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False Claims Act Statistics, News & Analysis

  • 22
  • December
  • 2016

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Happy Holidays

LLB is taking next week off for the holidays. We will return refreshed and ready to continue sharing with you all the FCA statistics and FCA law you can handle. Until then, happy holidays and safe travels, LLB readers!

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Fifth Circuit Reaffirms that Speculative Penalty Exposure Does Not a "Reverse False Claim" Make

In the context of an environmentally-based FCA case, the Fifth Circuit held last week that a contingent penalty cannot create reverse false claim liability because it is not an “obligation” to pay the government. This holding marks at least the third time in as many months that a circuit court has addressed the FCA’s reverse false claim provision and is the second of those decisions construing the definition of “obligation” under the FCA as amended by the 2009 Fraud Enforcement and Recovery Act (“FERA”). The two decisions resulted in different outcomes, however: one handed the defendant a resounding victory, and the other breathed life back into the relator’s case. Is this yet another circuit-split and potential fodder for Supreme Court review? Not so fast.

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Silver Linings for FY16: DOJ FCA Stats Tough on Pharma and Banks, but Defense Pipeline Narrowing

The Department of Justice released its annual FCA recovery statistics on Wednesday, touting over $4.7 billion in settlements and judgments for fiscal year 2016. Just after the numbers were released, on Lincoln’s Law Blog (LLB) we explored how these results compared to our projections, noting where our numbers deviated from DOJ’s and why. Now that the data sets have been updated and we have had a few days to reflect, today’s post takes a closer look at the numbers as a whole, how they fit into the big picture of FCA recoveries over the years, and what it could mean for FCA enforcement going forward.

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Rare FCA Jury Verdict Finds $92 Million in Damages Caused by "Shadow" Mortgage Offices and Reckless Underwriting Policies

A Houston federal jury in United States v. Allied Home Mortgage Corporation, et al., 4:12-cv-02676-GCH (S.D. Tex.) returned a verdict on November 30 in favor of the government on all counts, finding two mortgage brokers and their CEO liable for over $92 million in damages for violations of the False Claims Act (“FCA”) and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”). The government started off its fiscal year 2017 of FCA recoveries with this huge victory before a jury, at a time when FCA jury trials are becoming increasingly rare. The hefty damages figure here could balloon much further yet: Factoring in potential treble damages and penalties under the FCA, the FCA price tag alone could hover close to $300 million. And adding FIRREA penalties to the mix could potentially push the total to $1 billion or more. The verdict hit the crescendo in a more than five-year litigation battle and five-week trial against defendants Americus Mortgage Corp. (formerly Allied Home Mortgage Capital Corporation or “Allied Capital”) and AllQuest Home Mortgage Corp. (formerly Allied Home Mortgage Corporation or “Allied Corporation”) (collectively “Allied”) and their president and CEO, Jim C. Hodge.

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How Could Something So Wrong Be So Right: LLB vs DOJ FCA Stats

Released just yesterday evening, DOJ’s annual FCA brag sheet for recoveries proclaimed a whopping $4.7 billion in civil FCA recoveries for FY 2016. That’s a full $1 billion more than LLB’s count in our inaugural year. How could our “polling” have been so wrong? Well, it turns out, it wasn’t. Despite first appearances, LLB’s stats were mostly on track with the DOJ reports – with one major exception that made all the difference.

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