ShortTake: Prosecutorial Eyes On All Qui Tam Actions
April 20, 2015
By: Lindsay Simmons
It is always worth repeating developments that impact our readers. As we previously reported here, 2014 was an exceptional year in False Claims Act enforcement, with the Department of Justice (DOJ) announcing a record $5.69 billion in FCA recoveries. In this regard we admonished our readers that 2015 would be even worse – with a notable increase in prosecutorial scrutiny of qui tam (whistleblower) suits. Why? As announced by DOJ last September, (i) the Criminal Division is “stepping up” its commitment to working with qui tam relators and (ii) criminal prosecutors are systematically reviewing all new qui tam actions “to determine whether to open a parallel criminal investigation. And, as if that were not enough, in addition to encouraging relators (whistleblowers) to continue to aggressively file civil qui tam actions, DOJ also is urging them to “reach out to criminal authorities in appropriate cases, even when [they] are discussing the case with civil authorities.” There is little doubt, therefore, we will see more criminal investigations, a rise in grand jury subpoenas, and an increase in Civil Investigative Demands – against and involving corporate defendants, corporate executives and other individuals who may have participated in alleged frauds against the government.
What can you do? Needless to say, government contractors must establish and implement meaningful compliance programs. Compliance plans are particularly important in discouraging qui tam actions. A few other tips – be very careful about who you hire to perform functions such as billing; closely supervise contractors and employees to ensure they are aware of and are following government regulations; create an environment that rewards the reporting of wrongdoing in-house; immediately respond once an offense is detected and act to prevent further wrongdoing; and, if you find that you have received improper payments or that other serious missteps have occurred, you may be criminally liable if you don't report the error –consult an attorney immediately.
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