DOJ resolutions under False Claims Act rise in H1

The U.S. Department of Justice’s resolutions under the False Claims Act, which totaled more than $500 million during this year’s first half, have outpaced activity in the comparable period in 2021, but many of them have been “relatively modest,” says a law firm in a report issued Wednesday.

The FCA allows private parties to file whistleblower, or qui tam, actions alleging that defendants defrauded the federal government.

Gibson Dunn & Crutcher LLP reported more than $393 million in resolutions in its comparable mid-year 2021 report.

The law firm says in this year’s report that “it remains to be seen whether DOJ will match the recoveries obtained during 2021, which included blockbuster settlements stemming from the opioid crisis.”

The U.S. Department of Justice said it obtained more than $5.6 billion in settlements and judgments from civil cases involving fraud and false claims against the government under the FCA for the fiscal year ended Sept. 30, 2021.

Gibson Dunn said some of the most notable settlements this year reflect continued fallout from COVID-19, and a new DOJ initiative around cyber fraud.

These include:

- In February Arlington, Virginia-based Zen Solutions Inc. agreed to pay $31,000 in damages and civil penalties to settle DOJ allegations it violated the FCA, by obtaining more than one Paycheck Protection Program loan in 2020.

- The DOJ said in April that Tampa, Florida-based Physician Partners of America LLC and its chief medical officer would pay $24.5 million to resolve allegations they had violated the FCA by billing federal healthcare programs for unnecessary medical testing and services, paying unlawful renumeration to its physician employees and making a false statement in connection with a loan obtained through the Paycheck Protection Program.

- In March, Cape Canaveral, Florida-based Comprehensive Health Services LLC said it would pay $930,000 to resolve allegations it violated the FCA by falsely representing to the U.S. State Dept. and the Air Force that it had complied with contract requirements related to the provision of their medical services in Iraq and Afghanistan.

The DOJ said in its statement this was the first resolution of a FCA case involving cyber fraud since the launch of its Civil-Cyber-Fraud initiative.

In July, the Justice Department said rocket engine maker Aerojet Rocketdyne agreed to pay $9 million to resolve allegations it misrepresented its compliance with cybersecurity requirements in federal contracts, under FCA litigation filed by a whistleblower.