False Claims Act Defense — Civil Investigative Demands
At Elliott Sauter, we understand the business and personal implications of responding to a False Claims Act investigation. We help clients navigate complex parallel criminal and civil investigations, and our experience as former prosecutors gives us valuable insight in preparing defense strategies that allow our clients to minimize criminal exposure and mitigate financial harm resulting from civil enforcement actions.
The False Claims Act (“FCA”) is one of the most powerful tools in the DOJ’s arsenal. Under the FCA, individuals or entities that knowingly or recklessly submit false claims for payment to the government are subject to treble damages and significant penalties for each separate claim submitted.
FCA cases often originate with the filing of a qui tam lawsuit by private individuals. The government incentivizes the filing of such lawsuits by offering a percentage of recovery to the filing relators. The other major point of origination of FCA cases is contractor referral as the result of audit findings or data analytics.
FCA cases are filed under seal, and in most cases, a case will proceed for months or years before the target of an investigation receives notice of the case. Often, when the company does receive notice of an investigation, that notice is indirect – the company may hear that current or former business partners have received visits from federal investigators.
Time is of the essence in responding to FCA investigations. In many instances, prompt corrective action can be taken, and even when that is not possible, establishing early contact with the USAO can help the company avoid problematic procedural developments, like public service of a civil investigative demand, which can cause reputational injury and damage employee morale.
In many instances, FCA allegations result in parallel criminal and civil investigations. It is critical to retain counsel that understand the interplay between these investigations. Missteps in responding to civil process can substantially increase the likelihood of criminal enforcement action, and defendants often have viable procedural mechanisms to delay civil process pending criminal resolution. At Elliott Sauter, we prioritize mitigating or eliminating criminal exposure, and then focus our efforts on achieving our clients’ financial and civil goals.