Congress enacted the False Claims Act (FCA) in 1863 to encourage private citizens to report people or entities who make fraudulent claims for payments to the federal government. In accordance with the FCA, the Department of Justice takes the case to court and rewards a substantial portion of the settlement to the private citizen who disclosed the fraud. While the FCA has been amended several times, it still provides an incentive for people to report false claims.
The law requires the person reporting fraud (referred to as the “relator”) to file a sealed lawsuit in federal court and provide notice to the local U.S. Attorney’s Office (USAO). As part of the Department of Justice, the USAO has the authority to bring civil lawsuits and criminal prosecutions against anyone the USAO believes submitted fraudulent claims to the government. This sealed filing and notice to the USAO permit a federal agent (e.g. the FBI) to investigate the claim and decide whether to bring a civil case for the relator. If the government takes over the case, it is called “intervening,” and the USAO can also bring a criminal prosecution. If the government declines to intervene, however, the relator can still pursue the civil lawsuit, and the USAO can still bring federal criminal charges.
Building a Defense Against a False Claims Act Lawsuit
There is a wide variety of defenses to government civil and criminal investigations of false billing. Addressing all methods in a blog would be impossible, so we will identify the most common methods.
- Invalidating the basis of knowledge. When it comes to civil investigations, it is imperative for the relator to establish a basis of knowledge. Lack of personal knowledge can defeat a civil investigation, and a lawyer skilled in defending criminal investigations can use that lack of knowledge to cause prosecutors and agents to doubt witness reliability and the basis for the investigation.
- Proving the relator used false or inadequate evidence. A relator cannot use publicly disclosed information, such as press or government audit reports. Additionally, if the relator’s facts are not supported by evidence, the civil case can be defeated. A thorough defense investigation can cause criminal prosecutors and agents to question whether sensationalism caused the relator to try and cash in quickly.
- Demonstrating lack of scienter. The government must prove scienter (ie. the intent or knowledge of wrongdoing). In this case, the government will need to prove that the person who filed the claim knew it was false. Failing to prove scienter defeats both civil and criminal investigations. A simple mistake is not enough to give rise to either criminal or civil liability.
- Exposing weaknesses in the allegations. It is important for a defense team to aggressively investigate the allegations and assess the validity of the causes of action. Sadly, we have seen lawyers fail to conduct thorough, meaningful investigations and develop evidence to support valid defenses. The USAO will consider all facts, analyses, and viable strengths available to the defense, as well as the weaknesses in the government’s case. The experience, track record, and abilities of the defense attorney significantly impact how seriously the government will consider the defense and, therefore, the outcome of the case.
Experts estimate that 3% of criminal cases and less than 2% of civil cases proceed to trial. When defendants face the prospect of devastating financial ruin or loss of liberty, an attorney’s level of experience in federal fraud investigations and trials is vital for a favorable outcome.
Have You Been Accused of Filing a Fraudulent Claim? Call Our Firm As Soon As Possible.
At the Law Offices of Horwitz & Citro, P.A., we often hear people ask, “What will the government think if I hire a lawyer?” In our experience as prosecutors, however, we have learned that opinions regarding defendants with or without attorneys are usually along these lines:
- The defendant is smart to have an experienced attorney;
- The defendant has a weak defense if their attorney has a poor reputation; and
- The defendant without an attorney is a fool.
It is imperative to retain experienced counsel from an attorney who knows how federal criminal and civil authorities conduct investigations and prosecutions. Such experience is essential to successfully navigating the perils faced by anyone accused of defrauding the government.
If you believe you are under federal investigation, or if you are an attorney with a client under federal investigation, call (407) 901-5852 to request a free consultationwith the Law Offices of Horwitz & Citro, P.A.