False Claims Act

The federal False Claims Act (FCA) has become an increasingly utilized enforcement tool for whistleblowers, the US Department of Justice (DOJ) and state attorneys general. In today’s regulatory and enforcement climate, billions of dollars and corporate reputations are at stake when these matters arise, and skilled, experienced counsel is more critical than ever. Hunton Andrews Kurth LLP’s FCA team provides clients with comprehensive representation, deploying lawyers from across the firm’s practices to develop aggressive, appropriate strategies for FCA defense. Our team offers clients substantial experience in these complex and high-stakes matters, employing a collaborative and comprehensive approach to our representation.

Successful resolution of FCA matters requires both subject-matter expertise and an appreciation of the client’s industry and specific business. Depending upon the unique facts and circumstances of each matter, we will deploy members of the firm’s white collar, securities litigation, labor & employment, competition & antitrust, capital finance and litigation teams to provide tailored solutions to the matters at hand. These teams not only are familiar with the intricacies of the False Claims Act, but offer industry-specific solutions that take each client’s distinct business and legal aims into account. Our team mobilizes quickly to address the many facets of FCA compliance, investigations and suits. We immediately assess the whistleblower’s allegation, analyze our client’s exposure and engage with the government regarding intervention. From the beginning we prepare to successfully litigate actions, be they civil or criminal, pursued by whistleblowers or the government. We also prepare clients for issues that may arise following an FCA investigation, such as securities litigation, fraud investigations, class actions or other claims. We also offer compliance counseling to clients to reduce the likelihood of FCA violations, including development of employee counseling programs, performing audits to assess areas of vulnerability and monitoring of statutory changes and circuit court decisions.

The team has experience on both sides of FCA matters, drawing upon its government experience and more recent work for clients. Some of the matters we have worked on recently include:

Representing Government Contractors in False Claims Act Actions

• Representing major construction company in FCA action related to the filing with the Department of Justice of allegedly false records related to maintenance of housing on its portfolio of over 50 military bases throughout the United States.
• Conducted internal investigation for government contractor to address whistleblower allegations of change in labor violations and false certifications to the government. Provided advice on response options, remedial actions and improvements to training policies and procedures.
• Represented chief executive officer and vice president of global firearms manufacturing company as individuals in an investigation by the FBI and DCIS involving allegations of bribes and kickbacks to government employees and potential liability under the FCA. Following proffer sessions and cooperation with the government, the matter was resolved with no action taken against the officers or the company.
• Conducted internal investigation and liability assessment for government contractor to address allegations of kickbacks provided by a subcontractor and potential time mischarging associated with direct and indirect contracts with the government. Represented client on disclosure to the Department of Defense, Inspector General and Department of Justice to obtain a global resolution of civil and administrative liability associated with the overpayment.
• Represent ship husbanding company in FCA investigation involving submission of costs for port services to US Navy. This ongoing matter has required substantial document production, internal investigation and analysis of government contracts and related regulations.
• Representing a global supplier to the nuclear power industry and that supplied materials used in the construction of a nuclear power plant. From 2008–2014, we conducted an internal investigation for the client to address federal agencies’ allegations of providing worthless goods and making false claims and certifications to the government as to compliance with contractual specifications and nuclear regulations; provided thousands of documents in response to subpoenas; defended numerous witness interviews; and engaged in extensive settlement negotiations with the DOJ. We learned in 2014 that a relator had filed a qui tam lawsuit in December 2013. The lawsuit remains sealed and the government investigation is still open.

Representing Health Care Entities in False Claims Act Actions

• Defended a health care consulting firm in a qui tam action filed under the civil False Claims Act alleging more than $300 million in upcoding and violations of the Stark Law and anti-kickback statute. The matter was concluded with a zero-liability determination by the government for the company, and a nominal settlement for relator on employment claims only.
• Represented a health care provider in criminal investigation and civil forfeiture action based on allegations of dispensing of controlled substance without a legitimate medical purpose, and fraudulent urinalysis testing and upcoding under the FCA. We negotiated a global resolution that resulted in a sentence of probation and a civil forfeiture.
• Represented a health care provider initially identified as a target in an investigation by the FBI involving improper billing practices and violations under the FCA; successfully resolved the matter for the provider to be treated as a witness and no charges were ever filed against the provider.
• Representing home health provider in parallel qui tam action and criminal investigation involving allegation of loans as kickbacks for referrals.
• Representing chief operating officer for home health company identified as a target in federal investigation of Medicaid fraud based on allegations of FCA violations for false certification of aides, inflated plans of care and improper billing of respite hours.
• Conducted internal investigation and audit for hospital system to address potential liability under the civil FCA based on improper billing practices and lack of documentation. Advised client on a direct disclosure to DOJ and currently negotiating a global resolution of civil and administrative liability associated with the overpayment.
• Conducted internal investigation and audit for hospital system to address potential liability under the civil FCA based on allegations that cardiac stenting procedures were performed without medical necessity.
• Advised client on a direct disclosure to DOJ regarding facility claims and currently negotiating a global resolution of civil and administrative liability associated with overpayment.
• Conducted internal investigation and audit for health care provider related to potential civil FCA liability related to time increments billed to federal health insurance provider.

Other False Claims Act Representations

• Represented forfeiture issue for major hospital system in relation to a real estate transaction where the Department of Justice was alleging that a company that sold a hospital to the system was involved in a scheme to defraud HUD when it secured a loan for the original purchase.
• Represented student loan company in FCA action brought by relator challenging classification of student loans and securitizations backed by those loans and subsidies paid by the government.
• Representing a major oil company in a multi-jurisdiction docket that includes FCA cases, direct actions by states, various governmental investigations, claims of fraud, unjust enrichment and breach of contract by numerous states. The core allegation is that the oil company received money from both its insurers and various state underground storage tank (UST) funds for the same costs associated with certain environmental liabilities.
• Conducted internal investigation for utility company relating to environmental compliance issues and certifications to state and federal regulatory agencies. Provided assessment of criminal, civil and administrative liability — including false statements liability under the FCA — and made recommendations on response options and remedial actions.

Internal Investigations

• Represented special committee of directors of Freddie Mac and ultimately federal government in internal investigation of derivative claims relating to collapse of Freddie Mac.
• Represented company in internal investigation related to whistleblower complaint alleging various accounting irregularities.
• Represented special litigation committee of the Board of Directors of CarMax, Inc. in its investigation and evaluation of shareholder derivative claims.
• Represented company and its senior executives in defense of confidential SEC investigation into alleged securities law violations arising from disclosures.
• Represented Fortune 1000 corporation in investigation by the SEC and DOJ into alleged violations of the Foreign Corrupt Practices Act.
• Represented executives of former servicer and investor in subprime mortgage assets in SEC investigation into alleged violations of the federal securities laws.