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Recent Changes in Federal Law and Investigative Tactics Signal Heightened Enforcement Under the False Claims Act

Whistleblower suits under the qui tam provisions of the False Claims Act (FCA) have become increasingly powerful and significant tools used together by private citizens and the U.S. Department of Justice (DOJ) to combat fraud against the federal government. Since 1986, over 4,000 qui tam suits have been filed and FCA recoveries have totaled more than $24 billion. In fiscal year 2009 alone, nearly $2 billion of the DOJs settlements and judgments resulted from qui tam lawsuits.

These figures will likely continue to significantly rise due to recent changes to the FCA. Specifically, in May 2009, the Fraud Enforcement and Recovery Act (FERA) expanded the reach of the FCA, relaxed certain legal requirements, and strengthened the investigative arsenal of federal prosecutors. And, in March 2010, the DOJ invoked its option under FERA to provide all U.S. Attorneys with the authority to issue Civil Investigative Demands (CIDs).

 

CIDs are potent, pre-litigation discovery tools that may be used to compel document production, interrogatory responses, or sworn testimony. The wide scope of information that can be requested under a CID, the fact that they may be issued before the government officially joins a qui tam action, and the broad new authority conferred upon U.S. Attorneys, signals the DOJs intent to issue CIDs more frequently and be more aggressive pursuing FCA claims.

 

The significant changes in the FCA enforcement landscape, especially regarding CIDs, underscores the need for companies and their officers to take concrete and proactive steps to ensure compliance with federal law and be prepared to deal with potential government investigations.

 

Reprinted with Permission ©2010 Thomson Reuters

 


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