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Building on attempts in recent years to strengthen the Department of Justice’s (DOJ’s) white collar criminal enforcement, on September 15, 2022, Deputy Attorney General Lisa Monaco announced revisions to DOJ’s corporate criminal enforcement policies. The new policies, and those that are in development, further attempt to put pressure on companies to implement effective compliance policies and to self-report if there are problems. Notably, the new DOJ policies set forth changes to existing DOJ policies through a “combination of carrots and sticks – with a mix of incentives and deterrence,” with the goal of “giving general counsels and chief compliance officers the tools they need to make a business case for responsible corporate behavior” through seven key areas:…
Continue Reading DOJ Further Revises Corporate Criminal Enforcement Policies: Focusing on Individual Accountability, Corporate Responsibility, and Additional Demands on Chief Compliance Officers

On April 20, 2022, the Department of Justice (DOJ) announced a nationwide coordinated enforcement action targeting COVID-19-related fraud involving charges against 21 individuals across nine federal districts, and over $149 million in alleged false claims submitted to federal programs.[1]

This marks the first significant DOJ enforcement action since Attorney General Merrick Garland named Associate Deputy Attorney General Kevin Chambers as the Director for COVID-19 Fraud Enforcement on March 10, an appointment President Biden previewed in his State of the Union address on March 1.
Continue Reading DOJ Announces Enforcement Action Involving “Largest and Most Wide-Ranging” COVID-19 Fraud Detected to Date

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On February 1, 2022, the U.S. Department of Justice (DOJ) released its annual False Claims Act (FCA) enforcement statistics for fiscal year (FY) 2021.[1]

With collections amounting to $5.6 billion, FY 2021 marks DOJ’s largest annual total FCA recovery since FY 2014, and more than twice the $2.3 billion received in FY 2020. FY 2021 was also a record-shattering year for DOJ as it relates to health care fraud enforcement; over $5 billion (90% of the total) was obtained from cases pursued against individuals and entities in the health care and life sciences industries.
Continue Reading DOJ Releases FY 2021 False Claims Act Recoveries: A Record-Shattering Year for Health Care and Life Sciences Enforcement, with Over $5 Billion Collected

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The Department of Justice (DOJ) announced on January 12, 2021, the first civil settlement to resolve allegations of fraud against the Paycheck Protection Program (PPP) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.[1] SlideBelts Inc. and its president and CEO, Brigham Taylor, have agreed to pay the United States a combined $100,000 in damages and penalties for alleged violations of the False Claims Act (FCA) and the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).[2]

The CARES Act was enacted in March 2020 to provide emergency financial assistance to individuals and businesses affected by the COVID-19 pandemic.[3] The CARES Act established the PPP, which provided $349 billion in forgivable loans to small businesses in order to assist in job retention and business expenses.[4] Since March 2020, Congress has authorized an additional $585 billion in PPP spending to be distributed under the Small Business Administration (SBA).

SlideBelts operates as an online retail company, and filed a petition for relief under Chapter 11 of the Bankruptcy Code in August 2019. Between April and June of 2020, while its petition was pending in the U.S. Bankruptcy Court for the Eastern District of California, SlideBelts and Taylor allegedly made false statements to federally insured financial institutions that the company was not involved in bankruptcy proceedings in order to influence the institutions to grant, and for SBA to guarantee, a PPP loan. SlideBelts received a loan for $350,000 based off of these purported false claims, which SlideBelts repaid in full to the PPP.

The government was able to recover damages and civil penalties from SlideBelts under the FCA for submitting alleged fraudulent claims for payment to the government and under the FIRREA for violations of federal criminal statutes that affect federally insured banks. This settlement is the end result of the first, but not the last, of many civil investigations and, ultimately, litigations relative to the CARES Act in the coming months and years under the FCA. In fact, during a June address to the Chamber of Commerce, Principal Deputy Attorney General Ethan Davis stated, “Going forward, the Civil Division will make it a priority to use the False Claims Act to combat fraud in the Paycheck Protection Program.”[5]

As the SBA prepares to issue a second round of PPP loans, the DOJ is likely to continue to use the FCA and the FIRREA to pursue entities receiving funds on the theory that those entities intend to exploit for their benefit these federal programs.[6]…

Continue Reading First Reported FCA CARES Act Settlement Announced

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After U.S. Attorney General, William P. Barr[1] and the Federal Bureau of Investigation issued warnings this week regarding potential fraudulent schemes that are being perpetrated in the nation’s response to the COVID-19 pandemic, on Sunday, March 22, 2020, the U.S. Department of Justice (DOJ) filed its first enforcement action to shut down COVID-19-related fraud.  DOJ attorneys moved in federal court in Austin, Texas for a temporary restraining order against operators of a website, coronavirustestingkit.com, alleged to have engaged in a wire fraud scheme by offering consumers access to “free” World Health Organization (WHO) vaccine kits in exchange for a shipping charge, which required consumers to enter credit card information on the website.[2] The website stated that the kits “only” required water to administer the vaccine and provided testimonials from “recent users.” The government alleged that claims made on the website are false, as the WHO is not offering free vaccine kits and there is not yet a scientifically proven vaccine, and that the intent of the website is to gain access to consumer credit card information.

On March 16, 2020, U.S. Attorney General Barr directed in a memorandum to U.S. Attorneys that “[e]very U.S. Attorney’s Office is thus hereby directed to prioritize the detection, investigation, and prosecution of all criminal conduct” related to the COVID-19 outbreak.[3] Attorney General Barr advised, “the pandemic is dangerous enough without wrongdoers seeking to profit from public panic,” and therefore, such criminal conduct will not be tolerated.…

Continue Reading First Federal COVID-19-Related Enforcement Action Filed as DOJ and FBI Commit to Preventing Fraud in the Nation’s Response to the COVID-19 Pandemic