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The V&E Report
Insights in Government Enforcement and Investigations

Cisco’s $8.6 Million False Claims Act Settlement Signals Viability of Cybersecurity Claims Under the False Claims Act

On July 31, 2019, Cisco Systems, Inc. (“Cisco”) agreed to pay $8.6 million to settle a False Claims Act (“FCA”) whistleblower allegation that it sold video surveillance equipment to government agencies knowing the equipment was susceptible to cyber-attack.1 The FCA, 31 U.S.C. §§ 3729 – 3733, provides liability for any person who knowingly submits false claims to the government.

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Truth or Cyber-Consequences: Government Contractor Suspended After Suffering Cyberattack and Data Breach

Government contractors that expose government information to cyberattacks may face suspension from doing business with the Federal Government. Perceptics, LLC suffered a highly publicized cyberattack that was revealed in June 2019, and the decision of U.S. Customs and Border Protection (“CBP”) to suspend the company demonstrates the severe consequences that government contractors face if they fail to protect against cyberattacks or to comply with contractual cybersecurity obligations.

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  • 12
  • June
  • 2019

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Opioid Manufacturer Files for Bankruptcy after Settling with DOJ

On June 5, the Department of Justice announced that opioid manufacturer Insys Therapeutics (Insys) agreed to settle the government’s criminal and civil investigations into an illegal marketing scheme for Subsys, an opioid spray used by adult cancer patients. The investigations are part of the DOJ’s escalating efforts to confront the opioid crisis and signal its continued commitment to address the country’s opioid issues.

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Heritage Pharmaceuticals Under Fire, Settles Criminal and Civil Charges with DOJ

On May 30, 2019, the DOJ’s Antitrust Division charged Heritage Pharmaceuticals Inc., a generic pharmaceutical company, for conspiring with its competitors to fix prices, rig bids, and allocate customers. The one-count felony information, filed on May 30 in the Eastern District of Pennsylvania, alleges that from April 2014 to December 2015 Heritage conspired with other individuals and companies to fix and maintain prices of glyburide, a medicine used to treat diabetes.1

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Supreme Court Extends the Statute of Limitations for Claims by Relators

The Supreme Court’s recent decision in Cochise Consultancy Inc. v. United States, ex rel. Hunt,1 has altered the landscape for False Claims Act (FCA) claims by expanding the period for private-party relators to bring FCA lawsuits. Under the Court’s unanimous decision in Cochise, relators can now file a complaint either six years after an FCA violation or three years after the facts of the false claim are known or reasonably should have been known by the government, up to a maximum of ten years after the date of the violation.

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New Guidelines Reward Voluntary Self-Disclosure of FCA Violations and Cooperation with DOJ

The U.S. Department of Justice (“DOJ”) announced this month its latest initiative to incentivize companies to voluntarily self-disclose potential False Claims Act (“FCA”) violations and to cooperate with DOJ during FCA investigations.1 These new guidelines, which have been incorporated into the U.S. Attorney Manual (recently renamed the Justice Manual), formalize DOJ’s established practice of decreasing FCA penalties sought when a company voluntarily discloses and actively cooperates with DOJ’s investigation into its conduct.

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