False Claims Act/Qui Tam/FIRREA

Why Cooley

False Claims Act (FCA) and Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) cases present challenges and risks that go to the core of a regulated institution – and can threaten the operations and credibility of a business. For each Cooley client, we develop a customized, strategic and tactical case-by-case approach utilizing curated teams of litigators and enforcement and regulatory lawyers who know our clients’ industries and have deep experience in false claims defense.

We investigate matters that originate through company hotlines or other open-door communications, and we respond to subpoenas, civil investigative demands (CIDs), and other inquiries from government agencies. We negotiate favorable joint civil and criminal resolutions with the Department of Justice (DOJ), federal agencies and their respective inspectors general offices, and state attorneys general. We defend companies in cases brought by qui tam plaintiffs. We draft corporate fraud and abuse policies and procedures, and we train executives, directors and employees on effective processes and compliance measures.

We also have a team of lawyers with exceptional knowledge of insurance policy coverage – with a consistent record of winning coverage for FCA representations. We serve on AIG and ACE panels, and we have successfully negotiated many agreements with insurers to cover defense costs and settlement contributions.

Selected areas of practice

Life sciences and healthcare regulatory

We have US and global experience representing transformative life sciences and healthcare companies, as well as providing regulatory counseling and advice on regulation by the Food and Drug Administration, fraud and abuse matters, “Sunshine” laws, government program price reporting, healthcare data privacy, and licensure and accreditation issues.

Our FCA practice leverages a deep bench of experience in assessing risk, conducting investigations, responding to government subpoenas and CIDs, and litigating matters to conclusion. In recent years, we have successfully handled numerous matters in the healthcare sector, including Medicare reimbursement for infusion pumps, government reimbursement of pharmacy benefit manager rebates, allegations of hospital overbilling for government programs, reimbursement-related Federal Employee Health Benefits (FEHB) programs, and similar matters.

Government contracts

We defend government contractors against FCA claims alleged by whistleblowers and the federal government, as well as investigate potential violations of the various laws applicable to government contractors that could result in mandatory disclosure obligations or FCA liability. We have successfully defended contractors in FCA litigation, advised contractors that have received internal whistleblower complaints, and conducted sensitive internal investigations. Government contractor clients also rely on us when responding to informal and formal requests for information – including subpoenas and CIDs – from agency inspector general offices, the DOJ and US attorneys’ offices. We also represent company employees during interviews and depositions.

In addition, we work with contractors to develop and implement effective policies, programs and procedures for compliance with government regulatory and contractual requirements for handling and responding effectively to whistleblower complaints, and we conduct in-house training for contractors concerning their obligations.

Financial services companies and banks

Our team has extensive experience representing companies that originate and service loans backed by the US government or sold to the government-sponsored enterprises (GSEs) Fannie Mae or Freddie Mac in investigations by the DOJ, various US attorneys’ offices, and federal agencies and their offices of inspectors general, including the Small Business Administration and the Departments of Housing and Urban Development (HUD) and Veterans Affairs (VA).

Our lawyers successfully resolve FCA and FIRREA claims – and their administrative equivalents under the Program Fraud Civil Remedies Act (PFCRA) – in government investigations. We also litigate cases filed by qui tam relators and conducted internal investigations in concert with the same. We apply our broad knowledge of the statutes, regulations and agency guidelines that govern government-backed lending and servicing – as well as our familiarity with the US government’s process for pursuing these cases – to efficiently and effectively defend and resolve these claims.

Higher education 

Our higher education lawyers develop regulatory compliance plans, and we work with our corporate lawyers and external forensic accountants to establish an appropriate corporate structure to prevent future internal governance and financial control failures. These partnerships have proven invaluable in negotiating resolutions with the Department of Education.

Advice on FCA compliance 

If your product is paid for – directly or indirectly – by any federal healthcare program (e.g., Medicare or Medicaid), if you’re a provider billing federal programs directly, or if you’re a lender or servicer of loans backed by the US government or sold to the GSEs, a robust compliance program is critical to success in the industry. It is never too early (or too late) to think about compliance concerns. Our team is highly skilled at advising early-stage and mature companies on corporate compliance measures, developing and implementing compliance programs designed to manage the most significant industry risks, and advising on audit issues that could turn into larger FCA concerns.

Recent representative matters

• Defended a venture-backed technology company in response to an FCA investigation initiated by the DOJ regarding accounting and timekeeping practices on government grants.
• Convinced the DOJ to drop an 18-month investigation of a provider for alleged false billings to a government healthcare program and alleged receipt of overpayments.
• Successfully defended higher education institutions and their parent company against serial FCA qui tamlawsuits alleging losses to the government exceeding half a billion dollars. 
• Represented a US government prime contractor in an internal investigation, mandatory disclosure and an agency office of inspector general (OIG) inquiry involving potential embezzlement of government funds by company employees in Latin America. 
• Conducted an internal investigation on behalf of a federally funded research and development center regarding potential fraudulent time-charging and invoicing by subcontractors, including negotiations with the DOJ, representing employees in an agency OIG inquiry and mandatory disclosures. 
• Successfully defended and resolved a number of FCA and FIRREA investigations led by the DOJ, jointly with HUD OIG and VA OIG, into the origination and quality control practices of Federal Housing Administration and VA bank and nonbank lenders in settlements that included no admission of liability, no administrative sanction, no prospective relief, and a corresponding administrative release from the agency.
• Represented a Fortune 500 defense contractor concerning potential prosecution arising out of a more than $600 million contract with New York City, leading to a deferred prosecution agreement, a criminal trial of co-conspirators, insurance coverage issues, and advancement of a legal fees dispute with a former employee.
• Successfully defended a pharmaceutical company in an FCA action alleging that the defendants misrepresented its products as “covered outpatient drugs” eligible for Medicaid reimbursement and causing the federal government to pay state Medicaid programs more than $500 million for the products.
• Successfully defended a pharmaceutical company in an FCA action alleging off-label promotion and marketing.
• Represented AHIP as an amicus in a US Supreme Court case concerning FCA liability by arguing against the US Court of Appeals for the Seventh Circuit’s relaxed standard for pleading a FCA claim in the context of alleged contractual/regulatory violations.
• Represented a nonprofit hospital in the US Court of Appeals for the Tenth Circuit by arguing that a physician’s determination of medical necessity cannot be objectively false under the FCA.