The Criminal Division of the U.S. Department of Justice (“DOJ”) will now be reviewing all new qui tam complaints filed under the False Claims Act. A spokesperson for the Criminal Division announced the new procedure on September 17, 2014 at the Taxpayers Against Fraud Education Fund Conference.
Although FCA cases may be reviewed concurrently by the Criminal and Civil Divisions, it is a marked change to assert that the Criminal Division will review all new cases. In practice, this means that the Civil Division and the Criminal Division will share all qui tam cases as soon as they are filed. Then, prosecutors in the latter’s Fraud Section will determine whether to pursue a parallel criminal investigation. The two divisions will have to work together to plan how to effectively pursue the case in tandem.
Before this announcement, the Criminal Division usually would only pursue cases of alleged health care fraud. The DOJ has been vocal that the civil monetary penalties under the civil provisions of the FCA are not enough in certain instances to deter wrongful conduct. Now, the DOJ is encouraging potential qui tam relators and their attorneys to foster discussions with criminal authorities when appropriate, even if they have already begun to pursue a civil remedy.
This new qui tam procedure is noteworthy because it places the current state of the review process in flux. Alleged violators of the FCA will not necessarily know immediately whether the Criminal Division’s review of the matter will actually come to fruition in parallel civil and criminal investigations.