Despite Decrease in 2020 False Claims Act Recoveries, Investigations and Litigation Expected to Rise Under the Biden Administration

Despite Decrease in 2020 False Claims Act Recoveries, Investigations and Litigation Expected to Rise Under the Biden Administration

As previously detailed by Arent Fox, total False Claims Act (FCA) recoveries for the fiscal year ending September 30, 2020 totaled $2.2 billion, the lowest since 2008. However, the increased use of telemedicine and government spending through the CARES Act has provided the Department of Justice (DOJ) with new opportunities for investigation. In fact, the DOJ opened 250 FCA investigations and actions in 2020, which is the highest number of new matters since 1994.[1] These 250 new matters are a dramatic increase from the 148 and 124 new matters DOJ opened in 2019 and 2018, respectively. This rise in new non-qui tam matters indicates that the DOJ is taking a more active role in investigating and pursuing new matters. As a result, Arent Fox anticipates an increase in government investigations and recoveries in 2021.

Additionally, as the Democrats take control of Congress, Arent Fox anticipates Congress will shift its focus from oversight of the previous administration to private sector oversight and that there will be a corresponding increase of congressional investigations into the private sector, particularly with respect to pharmaceutical companies, banks, and other players in the financial industry.

Arent Fox’s Investigations Team, comprised of highly-skilled litigators and regulatory attorneys, can help guide corporations, executives, and public officials through government and congressional investigations. 

[1] The DOJ’s statistics can be found here.

DOJ Obtains First Civil Settlement for PPP Fraud

In the first civil FCA settlement to resolve allegations of Paycheck Protection Program fraud (PPP), SlideBelts Inc., an online retail company, and its president and CEO, Brigham Taylor, agreed to pay $100,000 to resolve allegations that they violated the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). FIRREA allows the government to impose civil penalties for certain federal criminal statutes.

According to the settlement agreement, SlideBelts and Mr. Taylor falsely represented that SlideBelts was not in bankruptcy – despite filing for Chapter 11 bankruptcy in 2019 – in several loan applications to influence federally insured banks to approve a $350,000 PPP loan to SlideBelts, which caused false claims to be made to the Small Business Administration.

Read the DOJ’s Press Release here.

Estate Of Deceased Urologist To Pay $1.75 Million To Settle False Claims Act and Anti-Kickback Statute Allegations

The estate of Dr. Patrick T. Hunter agreed to pay $1.75 million to resolve allegations that Dr. Hunter, who passed away in March 2019, violated the False Claims Act and the Anti-Kickback Statute. According to the settlement agreement, Dr. Hunter performed extracorporeal shock wave lithotripsy, a procedure used to break up kidney stones, on TRICARE and Medicare patients. However, these procedures were not medically necessary because the procedures were either not medically indicated or because the patients did not have kidney stones. The settlement agreement also resolves allegations that Dr. Hunter entered into an illegal kickback arrangement with the Orlando Center for Outpatient Surgery, LP whereby he agreed to perform the extracorporeal shock wave lithotripsy procedures at the Orlando Center in exchange for payments. The settlement agreement does not include a determination of liability.

This settlement agreement resolves allegations initially filed in the United States District Court for the Middle District of Florida by Scott Thompson under the qui tam provisions of the False Claims Act. As the whistleblower, Mr. Thompson will receive $385,000 of the settlement.

Read the DOJ’s Press Release here.

Maryland Woman Sentenced to Thirteen Months for Health Care Fraud 

Janey Olatimbo Akindipe was sentenced to thirteen months in prison and three years of supervised released and ordered to pay $269,808 in restitution for defrauding the DC Medicaid program out of more than a quarter-million dollars. Akindipe was employed by various home health agencies as a personal care aide to assist DC Medicare beneficiaries with daily living activities, such as bathing, dressing, and eating. Akindipe was found to have submitted timesheets for personal care aide services she did not provide and paid kickbacks to the Medicaid beneficiaries in exchange for their signature on these falsified timesheets. On more than 300 occasions, Akindipe claimed to have worked more than twenty hours in a day and claimed she provided personal care aide services on days when she was actually working as a full-time employee at the National Institute of Health, as well as on days when she was not even present in the United States.

Read the DOJ’s Press Release here.