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False Claims Act Statistics, News & Analysis

Time to Take Your Medicine: Fifth Circuit Decision Diagnoses Problems with Causation Arguments

Last month, we covered United States ex rel. King v. Solvay Pharmaceuticals, Inc. on the issue of the FCA’s public disclosure bar pre-Affordable Care Act. Today, we explore another aspect of that same opinion — the causation requirements necessary to sustain a fraudulent inducement FCA claim. The Fifth Circuit delivered relators a dose of bitter medicine in its opinion, affirming the district court’s grant of summary judgment to the defendant pharmaceutical company on the grounds that relators failed to demonstrate a causal link between the alleged false statements and any actual false claims.

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A Roll of the Dice: FCA Jury Verdict Finds Over $115 Million in Damages

After betting it all on a federal jury in Florida, four defendants in a non-intervened qui tam FCA action now face more than $347 million in damages. The jury returned a verdict for $115 million, which the court then trebled and tacked on more than $2.4 million in penalties. In United States and Florida ex rel. Ruckh v. CMC II, LLC, et al., 8:11-cv-1303 (M.D. Fl.), the four corporate defendants—CMC II LLC, Salus Rehabilitation LLC, 207 Marshall Drive Operations LLC, and 803 Oak Street Operations LLC—were found to have submitted, or caused to be submitted, false claims to Medicare and Medicaid for patient care that was unneeded, or not supplied at all, at 53 skilled nursing facilities (“SNFs”) in Florida. In rare jury verdicts like this and the verdict we covered last year, the jury’s verdict is only the first bad draw for defendants: trebling, penalties, attorney’s fees, reasonable expenses, and costs are all part of the second wave of misfortune when an FCA defendant loses at trial.

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War Dogs Brings the False Claims Act to the Silver Screen, Offers Lessons to Government Contractors

While we here at LLB toiled away at our FCA mapFCA statistics, and FCA case law analysis in preparation for our August launch, we did poke our heads out of our cave long enough to notice that the FCA had just hit the big screen! No, we are not talking about the highly acclaimed FCA video that now appears on LLB. In August, mere weeks before we launched, the movie War Dogs hit theatres across the U.S., recounting the (highly-)dramatized but true tale of two twenty-somethings who cashed in on enormous profits by contracting to support military operations in Afghanistan and Iraq. Operating as AEY, Inc., the unlikely duo, working from their Miami apartment, won a $300 million ammunitions contract for the U.S. Army, and—allegedly—violated the FCA along the way.

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Home Sweet Home: FHA Mortgage Insurance Carries Heavy False Claims Act Risks for Mortgage Originators

Banks are no strangers to complex regulatory schemes and close government scrutiny. That is especially true for banks originating and underwriting mortgages insured by the Federal Housing Administration (FHA), a sub-agency of the Department of Housing and Urban Development (HUD). FHA issues mortgage default insurance to lenders for more than a third of mortgages issued each year, but imposes very specific underwriting and quality control measures upon loan originators seeking FHA insurance. The scrutiny is even greater for mortgage originators authorized to issue the insurance without FHA approval. What might surprise these mortgage lenders, however, is that even seemingly small deviations from those FHA insurance underwriting rules can lead to substantial FCA liability—liability potentially larger than the value of the mortgage defaults the lender seeks to cover through FHA insurance.

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