The False Claims Act (FCA) is a powerful and increasingly utilized Government remedy to address allegations of fraud, waste and abuse and to respond to contractor claims for increased costs. Wiley Rein has the depth of experience and the resources necessary to assist clients in all phases of their defense against civil and criminal FCA investigations and formal legal actions, and other allegations of fraud or misconduct that may arise or become known through internal and external corporate reporting mechanisms, federal and state subpoenas or whistleblower complaints. Our Government Contracts attorneys regularly partner with our colleagues in the White Collar Defense Practice to offer their collective expertise in handling internal investigations, responses to subpoenas, replies to congressional inquiries and coordination matters with federal investigation authorities—all with the goal of resolving investigations and litigation quickly and with minimal disruption to the client. In particular, we have worked closely with law enforcement officials around the country on joint investigations and are able to provide a unique insight into the government's enforcement activity in terms of how it works and where its priorities lie. If the Government or a private qui tam whistleblower pursues civil or criminal claims in federal court, Wiley Rein's experienced litigators are prepared to vigorously defend the client's interests and pursue the most favorable outcome. We are experienced at negotiating favorable settlements prior to government intervention and have successfully defended many actions in which the government has ultimately declined to intervene.
Whether in response to internal reports of misconduct or agency investigations, the first step in addressing allegations of wrongdoing is assessing them and their attendant risks through internal inquiry and investigation. Often internal investigations are conducted under severe time constraints, involving simultaneous interviews, document collection and review, computer forensics and legal analyses as well as securing electronic data and documents. Our attorneys have handled countless internal investigations and are adept at handling matters on a range of issues including alleged violations of company policies, cost mischarging, mishandling of competitor proprietary information and violation of various conflicts of interest and ethics statutes and regulations. Wiley Rein attorneys are experienced in all aspects of conducting thorough and effective internal investigations to enable clients to evaluate fully any potential exposure and to muster defenses to allegations of misconduct. Wiley Rein has been in the forefront in guiding clients regarding the Federal Acquisition Regulation’s (FAR) mandatory disclosure requirements. We work with our clients to identify solutions that are sensitive to the clients' business needs and that comply with contractors' statutory, regulatory and ethical obligations. For example, Wiley Rein has recently conducted internal investigations of government contractors facing whistleblower allegations of cross-charging and overbilling and media reports of fraud and unethical conduct.
Responding to Subpoenas and Government Investigations
A subpoena from an agency Inspector General or the Department of Justice (DOJ) is often the first sign a contractor receives of an ongoing government investigation into potential fraud or of a sealed civil or criminal FCA complaint. Wiley Rein frequently assists its clients in coordinating responses to subpoenas and ensuring clients' compliance with all other aspects of federal investigations including implementation of document protection and related measures. Wiley Rein attorneys have assisted clients responding to subpoenas and audits from numerous agencies and responding to congressional inquiries and investigations. The Firm routinely coordinates the collection of documents from employees in multiple cities and countries, employing a variety of collection channels to keep the transfer of materials secure while minimizing disruption to the business.
Wiley Rein has extensive experience coordinating with federal investigators to narrow the scope of government subpoenas, focus the investigation on particular areas of government concern and ultimately negotiate a resolution on terms that are most favorable for our client. We have also successfully convinced prosecutors to decline prosecution before the investigation of the matter by a grand jury in cases involving allegations in such areas as improper advance access to procurement information, cost mischarging, product substitution, false claims and false statements. For instance, Wiley Rein attorneys represented a large service provider in connection with a broad grand jury subpoena issued in response to a qui tam complaint alleging fraudulent billing practices. Wiley Rein eventually successfully closed the matter without any criminal or civil liability for the company. When litigation could expose the contractor to substantial risk, Wiley Rein is able to negotiate favorable settlements that minimize negative publicity and the potential impact on other contracts. For example, Wiley Rein recently negotiated a favorable settlement of a government investigation of a major contractor facing allegations of seeking reimbursement of unallowable charges.
Defending FCA and Other Procurement Fraud Litigation
Along with our colleagues in the Health Care and White Collar Defense Practices, Wiley Rein has broad expertise in handling FCA litigation. We have represented numerous clients, or individual employees, in civil FCA litigation, grand jury investigations, during plea bargaining and at trial. We have successfully defended clients in FCA litigation in federal court, winning cases at all stages of litigation, including dismissals, summary judgments and verdicts. Our successes in this area include:
- The successful defense and settlement of a large, high-profile action relating to recovery of certain travel costs billed under government contracts.
- The dismissal of a multi-count federal indictment alleging violations of the Anti-Kickback Act by a high-technology aerospace company and its president.
- The dismissal of whistleblower allegations about so-called "alliance agreements" against several IT contractors without government intervention and without settlement.
- The successful defense of a $100 million class-action fraud suit brought against a health care insurer that involved provider discount, coinsurance and civil Racketeer Influenced and Corrupt Organizations Act (RICO) issues.
- The favorable settlement of numerous FCA (including qui tam) actions against Medicare contractors in which the Government declined to intervene: the successful representation of a multi-billion dollar contractor, including convincing the DOJ not to intervene in a qui tam matter and securing dismissal of the underlying qui tam complaint; the successful defense of numerous Medicare fiscal intermediaries and other health care contractors in false claims investigations, resolving the matters before litigation ensued or the Government intervened in a qui tam suit.
- The successful defense of an Architectural & Engineering contractor from allegations by the Defense Criminal Investigative Service (DCIS) of fraud in connection with a high-profile renovation project eventually resulting in an administrative settlement of the matter.
ISSUE: WINTER 2013