On September 17, 2014, in a speech before the Taxpayers Against Fraud Education Fund Conference, Assistant Attorney General (AAG) Leslie R. Caldwell announced a new procedure about how qui tam matters will be handled at the Department of Justice (DOJ). Under the new procedure, the Criminal Division of the DOJ will have immediate access to all new qui tam complaints as soon as the Civil Division sees them.
This new procedure means that individuals and entities defending False Claims Act allegations may face a greater threat of criminal prosecution because early criminal review by the Department of Justice will be standard operating procedure for every new whistleblower matter. The threat of criminal prosecution may change the dynamic regarding how a False Claims Act investigation unfolds, and it will likely influence the tenor of potential negotiations between the government and individual defendants.
In her speech, Ms. Caldwell noted that the DOJ’s Criminal Division’s Fraud Unit employs approximately 100 lawyers. It is divided into specialized units, including a 40 attorney Health Care Fraud Unit. Most health care fraud cases are handled by the Medicare Fraud Strike Force. Ms. Caldwell highlighted the success of the Criminal Division of the DOJ in prosecuting health care fraud matters, and calling particular attention to the Medicare Fraud Strike Force and the increased focus on corporate health care fraud, she noted:
Since the strike force began operating in 2007, nearly 2,000 people have been charged, who were responsible for approximately $6 billion in false billings. Of those 2,000 people, approximately 1,400 have already been convicted through strike force prosecutions, including almost 200 at trial. The strike force has an overall conviction rate of 95 percent – a spectacular rate of success considering the volume of prosecutions. . . . We also are stepping up our prosecutions of corporations involved in health care fraud. Corporate health care fraud cases are a natural fit for us in light of our health care fraud expertise and our prosecutions of corporate cases in the financial fraud and foreign bribery arenas.
In light of the DOJ's Criminal Division's interest in working with attorneys representing relators in False Claim Act cases, any health care provider involved in a government investigation for potential False Claims Act violations should take appropriate steps to evaluate criminal exposure as well as civil exposure.