False Claims Act in 2014: Implementation Issues LIVE Webcast

Partner Firms:
Speaker Firms and Organization:

Presented By:

Lieff Cabraser Heimann & Bernstein, LLP
Robert J. Nelson
Partner and Chair of the False Claims Act Practice Group
BuckleySandler LLP
Michelle L. Rogers
Partner
Fried, Frank, Harris, Shriver & Jacobson LLP
Jennifer M. Wollenberg
Senior Associate
PwC
Mark Dostal
Director, National Government Contracts Practice
StoneTurn Group, LLP
Joseph Cheriathundam
Managing Director

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January 27, 2014

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January 27, 2014

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January 27, 2014

Partner Firms:

Lieff Cabraser Heimann & Bernstein, LLP, is a sixty-plus attorney AVrated law firm with offices in San Francisco, New York, and Nashville.
Representing plaintiffs in a wide range of federal False Claims Act and
other whistleblower cases, Lieff Cabraser has taken on many of the
world's largest corporations, holding them accountable for their behavior.
Lieff Cabraser also represents plaintiffs in the fields of personal injury
and mass torts, securities and financial fraud, employment
discrimination and unlawful employment practices, product defect,
antitrust and intellectual property, consumer protection, environmental
and toxic exposure, and human rights.

With 150 attorneys in Washington, DC, Los Angeles, New York, and
Chicago, BuckleySandler is among the leading financial services law firms
in the county. BuckleySandler attorneys have a track record of
successfully assisting clients in regulatory, enforcement, litigation,
transactional, and public policy matters. Currently, BuckleySandler
represents the top 10 largest banks in the United States, nine of the top
10 mortgage lenders, the top 10 mortgage servicers, the top 10 credit
card issuers, and numerous community banks and non-bank financial
services companies.

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January 27, 2014

Partner Firms:

From offices located in the world's principal financial centers, Fried, Frank,
Harris, Shriver & Jacobson LLP's lawyers provide advice to clients
regarding their most critical legal and business needs. Fried Frank's False
Claims Act attorneys have extensive experience in every facet of the civil
False Claims Act, and have been on the cutting edge of litigation and
debate about the FCA's interpretation and scope. The Firm regularly
represents financial industry, defense, health care, and other government
contractors in high stakes cases. The Firm's False Claims Act practitioners
also assist and represent entities not normally associated with federal and
state fraud investigations, such as municipal airport authorities, computer
manufacturers, private and state universities, academic medical centers,
import and export companies, major accounting and consulting firms,
magazine publishers, and oil and gas exploration companies.

About PwC US PwC US helps organizations and individuals create the
value they're looking for. We're a member of the PwC network of firms in
158 countries with more than 180,000 people. We're committed to
delivering quality in assurance, tax and advisory services. Tell us what
matters to you and find out more by visiting us at www.pwc.com/US
About PwC's Forensic Services PwC Forensic Services team of
experienced professionals is dedicated to meeting the challenges caused
by fraud allegations, financial crimes and other irregularities. Our portfolio
of services includes: Financial Crime Examinations, Forensic Technology
Solutions, Regulatory Compliance Reviews, Fraud Risk Management and
Fraud Prevention, Dispute Analysis and Litigation Support. The Forensic
Services team also manages the PwC Fraud Forum, an exclusive
community where members can gain knowledge, participate in events and
share important insights on preventing, detecting and investigating fraud,
corruption and economic crime. See
www.pwc.com/us/forensics and http://usfraudforum.pwc.com for more
information.

7

January 27, 2014

Partner Firm:

StoneTurn is a partnership of experienced accountants, economists, and
financial and technology consultants supporting corporate and individual
clients and their advisors, engaged in the most challenging and complex
business transactions, disputes and financial investigations. Our work
ranges from behind-the-scenes advice, to deep financial analysis, to full
service dispute resolution support.

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January 27, 2014

Brief Speaker Bios:
Robert J. Nelson
Robert J. Nelson is a partner at Lieff Cabraser and chairs Lieff Cabraser's False Claims Act practice group. Mr. Nelson has been the
lead lawyer on numerous whistleblower cases, including a $46 million settlement involving Sutter Health in 2013, as well as a $78.5
million settlement involving the University of Phoenix. Mr. Nelson was recognized in 2010 as California Lawyer magazine's Attorney of
the Year for his work on the University of Phoenix case. Mr. Nelson previously achieved the same recognition in 2008 in connection
with a verdict he obtained against Chrysler for $54 million, including $50 million in punitive damages. Mr. Nelson has been courtappointed class counsel in more than two dozen class actions in state and federal courts around the country, and is a frequent lecturer
on class action and whistleblower issues. He is a 1987 graduate of NYU School of Law, where he was admitted to the Order of the
Coif and was an Articles Editor on the NYU Law Review. Following law school, Mr. Nelson served as a judicial clerk to Judge Stephen
Reinhardt on the Ninth Circuit Court of Appeals.

Michelle L. Rogers
Michelle L. Rogers is a partner in the Washington, DC office of BuckleySandler LLP. Ms. Rogers represents institutions in a wide
range of litigation matters, including government enforcement actions, class action litigation, regulatory examinations, and corporate
internal investigations. She currently is representing several financial institutions in ongoing False Claims Act (FCA) and Financial
Institutions Reform, Recovery and Enforcement Act (FIRREA) matters. She has also represented clients in matters involving the
Program Fraud Civil Remedies Act (PFCRA), Truth in Lending Act, Fair Housing Act, Equal Credit Opportunity Act, Civil Rights Act,
and unfair and deceptive trade practices statutes involving the Department of Justice (DOJ), Consumer Financial Protection Bureau
(CFPB), Department of Housing and Urban Development (HUD), Federal Housing Finance Agency (FHFA), federal and state bank
regulators, and state attorneys general.

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January 27, 2014

Brief Speaker Bios:
Jennifer M. Wollenberg is a senior associate at Fried, Frank, Harris, Shriver & Jacobson LLP. Located in Fried Frank’s Washington,
D.C. office, she is a member of the Firm's False Claims Act and Qui Tam practice group. Jenny represents corporations in a variety of
complex civil litigation matters, with an emphasis on cases arising under the civil FCA and, in particular, cases involving the
aerospace, financial, and defense industries. She has been a contributing co-author of FraudMail Alert®, which regularly reports on
significant developments in the FCA arena, and has published articles on various aspects of the FCA. Jenny received her JD from
Cornell Law School and is admitted to practice in the District of Columbia, New York, various United States Courts of Appeals
(Second, Ninth, and District of Columbia Circuits), the United States Court of Federal Claims, and the United States District Court for
the District of Columbia.
Mark Dostal
Mark Dostal is a Director at PwC. He has over 32 years of extensive and diversified experience in government contract accounting
and auditing, including 8 years with PwC, 8 years with another Big 4 national government contracting practice, and 16 years with the
Defense Contract Audit Agency (DCAA). He specializes in the requirements of the Federal Acquisition Regulation (FAR), Agency FAR
Supplements, and Cost Accounting Standards (CAS). Mark began his career conducting DCAA audits, directing field office
operations, and managing Agency responsibilities at large and medium sized defense contractors from locations in the Midwest,
Southwest, and Agency Headquarters. After leaving Federal service, Mark leveraged his unique experiences and relationships to
develop consultative approaches with clients that support compliant, yet practical considerations for meeting government contracting
and cost accounting practices. He has also assisted many commercial market-based clients with transitioning to and navigating the
FAR/DFARS and CAS requirements when entering the federal marketplace. As a member of defense and space industry
associations, he actively promotes open dialogue of perspectives and issues affecting industry and senior government acquisition
officials. Mark is a Certified Public Accountant in Illinois and Iowa, and member of the American Institute of Certified Public
Accountants, National Defense Industrial Association, and National Contract Management Association.

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January 27, 2014

Brief Speaker Bios:
Joe Cheriathundam, a national forensic data analytics leader with the StoneTurn Group, has over 20 years of experience supporting
companies and organizations in matters of conflict, change and regulatory compliance. He has led projects pertaining to the False
Claims Act, anti-fraud consulting, anti-money laundering, mergers and acquisitions, investment/trading improprieties, and international
business compliance in industries as diverse as finance, retail, life sciences/healthcare, automotive, and real estate. Joe recently
earned an Advanced Business Analytics Certification from the Kelley School of Business at Indiana University and has frequently
written and spoken on the topic of Forensic Data Analytics.

► For more information about the speakers, you can visit:

http://www.knowledgecongress.org/speakers_2014_False_Claims_Act.html

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January 27, 2014

With record recoveries, the Department of Justice, qui tam whistleblowers, and state Attorneys General
have continued to step up their enforcement efforts in False Claims Act cases. Armed with enhanced
legislation and stricter enforcement tools, DOJ and others are able to more easily identify and act on
fraud. Now, more than ever, government contractors in various industries including defense, aerospace,
healthcare, and financial services, must be mindful of this powerful statute and vigilant about compliance
or face stiff penalties.
The Knowledge Group has assembled a panel of key thought leaders and practitioners to help business
executives, consultants, auditors, and attorneys understand the most significant issues and recent
developments with respect to the increased risks associated with the False Claims Act.

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January 27, 2014

Featured Speakers:

Moderator:

SEGMENT 1:

Robert J. Nelson

Michelle L. Rogers
Partner
BuckleySandler LLP

Partner and Chair of the False
Claims Act Practice Group

SEGMENT 2:

SEGMENT 3:

Senior Associate

Mark Dostal
Director, National Government
Contracts Practice
PwC

Fried, Frank, Harris, Shriver &
Jacobson LLP

SEGMENT 4:
Managing Director

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January 27, 2014

Moderator:
Robert J. Nelson


Introduction
Robert J. Nelson is a partner at Lieff Cabraser and chairs Lieff Cabraser's False Claims Act practice group. Mr. Nelson has
been the lead lawyer on numerous whistleblower cases, including a $46 million settlement involving Sutter Health in 2013,
as well as a $78.5 million settlement involving the University of Phoenix. Mr. Nelson was recognized in 2010 as California
Lawyer magazine's Attorney of the Year for his work on the University of Phoenix case. Mr. Nelson previously achieved the
same recognition in 2008 in connection with a verdict he obtained against Chrysler for $54 million, including $50 million in
punitive damages. Mr. Nelson has been court-appointed class counsel in more than two dozen class actions in state and
federal courts around the country, and is a frequent lecturer on class action and whistleblower issues. He is a 1987
graduate of NYU School of Law, where he was admitted to the Order of the Coif and was an Articles Editor on the NYU
Law Review. Following law school, Mr. Nelson served as a judicial clerk to Judge Stephen Reinhardt on the Ninth Circuit
Court of Appeals.

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January 27, 2014

Moderator:
Robert J. Nelson


Part I: Overview

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January 27, 2014

Moderator:
Robert J. Nelson


Background
•

Signed by President Lincoln during the height of the Civil War to combat rampant profiteering

•

“For sugar [the government] often got sand; for coffee, rye; for leather, something no better than
brown paper; for sound horses and mules, spavined beasts and dying donkeys[.]” United States ex
rel. Newsham v. Lockheed Missiles & Space Co., 722 F. Supp. 607, 609 (N.D. Cal. 1989) (quoting
Tomes, Fortunes of War, 29 Harper’s Monthly Mag. 228 (1864)).

•

The FCA’s reach has since extended to Medicare, Medicaid, Social Security, and other federal
programs

16
January 27, 2014

Moderator:
Robert J. Nelson


General Structure
•

Private/public partnership

•

Cases may be initiated by whistleblowers, and the government has an opportunity to investigate and
intervene

•

If successful, the whistleblower may recover a portion of the government’s damages

17
January 27, 2014

Moderator:
Robert J. Nelson


Why Whistleblowers?
•

Congress has long recognized that the government, with limited resources, is overmatched in the
fight against fraud. U.S. ex rel. Marcus v. Hess, 317 U.S. 537, 560 (1943) (Jackson, J., dissenting)

•

The bill is predicated on the “old-fashioned idea” of “setting a rogue to catch a rogue.” Cong. Globe,
37th Cong., 3d Sess. 955-56 (1863) (remarks of Sen. Howard).

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January 27, 2014

Moderator:
Robert J. Nelson


What is the Whistleblower’s Role?
•

Whistleblowers gather evidence and organize the case

•

Whistleblowers bring potential fraud cases to the government’s attention

•

Cases are filed under seal in order to give the government a chance to investigate (and potentially
intervene in the litigation)

19
January 27, 2014

Moderator:
Robert J. Nelson


What Is the Government’s Role?
•

The government has unique tools to investigate potential claims

•

If the government formally joins the litigation by intervening, it bears primary responsibility for
prosecuting the action. See 31 U.S.C. § 3730(c)(1).

•

The government can also dismiss the action or settle the lawsuit over the whistleblower’s objection.
See 31 U.S.C. § 3730(c)(2).

20
January 27, 2014

Moderator:
Robert J. Nelson


What Do Parties Stand to Gain?
•

The government may recover treble damages and significant statutory penalties

•

Whistleblowers may obtain a percentage of the government’s damages

21
January 27, 2014

Moderator:
Robert J. Nelson


Part II: Navigating the Statute

22
January 27, 2014

Moderator:
Robert J. Nelson


Who is Liable Under the FCA?
•

In general, any person who knowingly submits a false claim to the government

•

Any person, such as a subcontractor, who causes another to submit a false claim to the government

•

Any person who knowingly conceals or avoids an obligation to pay money to the government
(“reverse false claims”)

•

Individuals who conspire to violate the False Claims Act

23
January 27, 2014

Moderator:
Robert J. Nelson


Key Term: “False Claim”
•

Any “request or demand, whether under a contract or otherwise, for money or property” that is
“presented to an officer, employee, or agent of the United States” or to a contractor working on a
government program. See 31 U.S.C. § 3129(b)(2).

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January 27, 2014

Moderator:
Robert J. Nelson


Five Most Common Types of Civil False Claims Act Cases
•
•
•
•
•
•
•
•
•
•
•
•

The “mischarge” case
“Upcoding”
Double-billing
The “fraud-in-the-inducement” case
Bid rigging
Kickbacks
The “false certification” case
Express and implied
“Materiality” questions
The “substandard product or service” case
Common in procurement, health care cases
The “reverse false claim case”

25
January 27, 2014

Moderator:
Robert J. Nelson


Most Common Federal Programs Affected by the FCA
•
•
•
•
•
•

Medicare
Medicaid
Social Security
Defense Procurement
Federal Loan Guarantees/Mortgage Fraud
Other government programs involving federal grants (e.g., USAID, Department of Education grants,
etc.)

26
January 27, 2014

Moderator:
Robert J. Nelson


Key Term: “knowingly”
•
•
•
•

Actual knowledge,
Deliberate ignorance of the truth, or
Reckless disregard of the truth. See 31 U.S.C. § 3729(b)(1)(A).
No need to prove specific intent to defraud. See 31 U.S.C. § 3729(b)(1)(B).

27
January 27, 2014

Moderator:
Robert J. Nelson


Damages Explained
•
•
•

Statutory penalties: an automatic fine of $5,500 to $11,000 for each and every false claim
Treble damages: if the government suffers any damages due to the fraud, the amount of damages is
tripled
Recent development: “Gross” or “Net” Trebling? See United States v. Anchor Mortg. Corp., 711 F.3d
745, 748-49 (7th Cir. 2013)

28
January 27, 2014

Moderator:
Robert J. Nelson


Calculating the Whistleblower’s Share
•
•
•
•

If the government intervenes: 15-25%
If the government chooses not to intervene: 25-30%
The whistleblower’s share may be lowered if the whistleblower participated in the fraud
Recent development: the whistleblower may not recover more than 10% if the suit was primarily
based on a public disclosure

29
January 27, 2014

Moderator:
Robert J. Nelson


Key Term: “Public Disclosure Bar”
•
•
•
•

Until recently, courts did not have jurisdiction to hear cases that were based on “public disclosures,”
which were broadly defined. 31 U.S.C. § 3130(e)(4)(A).
Recent development: the FCA now defines the term “publicly disclosed” narrowly.
Facts learned during state-court litigation or federal litigation between private parties may now be
used as the basis for a whistleblower suit.
Recent development: dismissal is no longer automatic.

30
January 27, 2014

Moderator:
Robert J. Nelson


Key Term: “Original Source”
•

•

Even if a whistleblower suit is based on facts that are publicly available, the lawsuit may proceed if
the whistleblower can show that he or she was the “original source” of the information. 31 U.S.C. §
3130(e)(4)(B).
Recent development: A whistleblower once needed to demonstrate “direct and independent
knowledge” of the information underlying the allegations. Now, a whistleblower need only
demonstrate “knowledge that is independent of and materially adds to the publicly disclosed”
information. Id.

31
January 27, 2014

Moderator:
Robert J. Nelson


Key Term: “First to File” Rule
•
•
•

The False Claims Act provides that “no other person other than the Government may intervene or
bring a related action based on the facts underlying the pending action.” 31 U.S.C. § 3730(b)(5).
This “first-to-file” rule encourages whistleblowers to report fraud as soon as possible
At the same time, whistleblowers must conduct a thorough investigation and put forth detailed factual
allegations, otherwise the case will be dismissed

32
January 27, 2014

Moderator:
Robert J. Nelson


Anti-Retaliation Provisions
•

•

It is illegal to discharge, demote, suspend, threaten, harass, or in any other manner discriminate
against employees because of their lawful efforts to bring a whistleblower claim. See 31 U.S.C. §
3130(h).
An employee’s remedies include reinstatement, double back pay (plus interest), and compensation
for any “special damages” (including attorneys’ fees). Id.

33
January 27, 2014

Moderator:
Robert J. Nelson


Part III: Recent Amendments

34
January 27, 2014

Moderator:
Robert J. Nelson


Fraud Enforcement and Recovery Act of 2009 (“FERA”):
•
•
•
•

Broadens the definition of a “false claim”
Lowers the threshold for proving intent
Strengthens the FCA’s anti-retaliation provisions
Increases the Department of Justice’s power to investigate fraud

35
January 27, 2014

Moderator:
Robert J. Nelson


Elimination of “Presentment” Requirement
•

•

Expands the scope of potential FCA liability by eliminating the “presentment” requirement (overruling
the Supreme Court’s opinion in Allison Engine Co. v. United States ex rel. Sanders, 128 S. Ct. 2123
(2008)).
Now, a subcontractor may be liable for defrauding a contractor using federal funds; there is no need
to show a subcontractor’s intent to defraud the government

36
January 27, 2014

Moderator:
Robert J. Nelson


FERA: Intent Redefined
•
•

No longer necessary to prove intent to defraud
Plaintiffs are only required to show that the false claim was “material,” meaning that it was capable of
influencing payment on a claim. 31 U.S.C. § 3129(b)(4).

37
January 27, 2014

Moderator:
Robert J. Nelson


FERA: Anti-Retaliation Provisions
•

Now, in addition to employees, contractors and agents are protected from retaliation for lawful efforts
to initiate or investigate whistleblower claims. 31 U.S.C. § 3130(h).

38
January 27, 2014

Moderator:
Robert J. Nelson


FERA: Civil Investigative Demands
•
•
•

•

A subpoena duces tecum may compel production of documents, but a CID is broader
A CID may require the recipient to answer interrogatories (formal questions) or to give oral testimony
under oath
The government may issue a CID whenever there is “reason to believe that any person may be in
possession, custody, or control of documentary material or information relevant to a false claims law
investigation.” 31 U.S.C. § 3733.
Authority delegated to each of 93 U.S. Attorney’s Offices; Attorney General’s approval no longer
necessary

39
January 27, 2014

Moderator:
Robert J. Nelson


The Patient Protection and Affordable Care Act of 2010 (“PPACA”)
•
•
•
•
•

Narrows Public Disclosure Bar
Broadens Original Source Requirement
Statutory Anti-Kickback Liability
Includes Overpayments
Health Care Exchanges

40
January 27, 2014

Moderator:
Robert J. Nelson


PPACA: Narrower Public Disclosure Bar
•
•
•

Dismissal is no longer mandatory
No longer bars a lawsuit based on facts discovered during state court litigation
No longer bars a lawsuit based on facts discovered during federal litigation between private parties

41
January 27, 2014

Moderator:
Robert J. Nelson


PPACA: Original Source Expanded
•
•

Previously, an original source must have had “direct and independent knowledge of the information
on which the allegations are based.”
Now, an original source is one who has “knowledge that is independent of and materially adds to the
publicly disclosed allegations or transactions.” See 31 U.S.C. 3730(e)(4)(B).

42
January 27, 2014

Moderator:
Robert J. Nelson


PPACA: Overpayments
•

The FCA now imposes liability on health care providers who receive Medicare/Medicaid
overpayments (accidentally or otherwise) and fail to return the money to the government within 60
days

43
January 27, 2014

Moderator:
Robert J. Nelson


PPACA: Anti-Kickback Statute
•

•

•

The Anti-Kickback statute prohibits anyone from knowingly or willfully paying or receiving
remuneration in exchange for referrals or the purchase of any item or service that may be paid for by
a federal health care program.
A claim to the government is now automatically rendered “false” for purposes of the FCA if the
medical services or items were furnished in violation of the Anti-Kickback Statute. 42 U.S.C. §
1320a-7b(g).
Even unintentional violations of the statute can give rise to liability.

44
January 27, 2014

Moderator:
Robert J. Nelson


Part IV: The View From 10,000 Feet

45
January 27, 2014

Moderator:
Robert J. Nelson


Statistics – Overview of Qui Tam Actions
Total Qui Tam Actions from 1987 – 2013 = 9,244
Total Qui Tam Actions in 2013 = 753

46
January 27, 2014

Moderator:
Robert J. Nelson


Total Qui Tam Settlements and Judgments from 1987–2013 = $27,201,587,782
Total Settlements and Judgments in 2013 = $2,979,370,977

47
January 27, 2014

Moderator:
Robert J. Nelson


Amount that has been paid to Whistleblowers
Total Amount Paid to Relators from 1987 – 2013 = $4,272,156,638
Total Amount Paid to Relators in 2013 = $387,825,711

48
January 27, 2014

Moderator:
Robert J. Nelson


Total Settlements for HHS from 1987–2013 = $20,941,742,791
Total Settlements for HHS in 2008 = $969,313,659
Total Settlements for HHS in 2013 = $2,615,643,504
49
January 27, 2014

Moderator:
Robert J. Nelson


Total Settlements for DOD from 1987–2013 = $2,717,816,264
50
January 27, 2014

Moderator:
Robert J. Nelson


Total Settlements for Non-DOD, Non-HHS from 1987–2013 = $3,542,028,797

51
January 27, 2014

Moderator:
Robert J. Nelson


Recent Trends
•
•

“Mini-FCAs”: At least 32 states have passed statutes mirroring the Federal False Claims Act
The SEC, IRS, and CFTC have also created whistleblower programs

52
January 27, 2014

Moderator:
Robert J. Nelson


Recent Trends: Off-Label Marketing
•
•
•
•
•
•

Off-label marketing consisted several of the largest cases of 2013:
Johnson & Johnson (Risperdal) – $2.2 Billion
Amgen (Aranesp) – $762 Million
Wyeth (Rapamune) – $491 Million
Nevertheless, the Second Circuit recently held that the First Amendment protected off-label
marketing. See United States v. Cariona, 09-cr-5006 (2d Cir. 2012).
GlaxoSmithKline recently banned the practice of paying physicians to promote its drugs.

53
January 27, 2014

Moderator:
Robert J. Nelson


Recent Trends: Mortgage Insurance Fraud
•
•
•
•
•

The 50-state, $25 billion mortgage settlement relating to mortgage fraud contained claims for relief
under the False Claims Act; six whistleblowers collectively recovered over $225 million
United States v. Bank of America/Countrywide (E.D.N.Y.): Bank of America agreed to pay $1 billion
as part of the 50-state global settlement
United States v. Deutsche Bank & MortgageIt (S.D.N.Y.): Settled for $202.5 million
United States v. CitiMortgage, Inc. (S.D.N.Y.): Settled for $158.3 million
United States v. Flagstar Bank (S.D.N.Y.): Settled for $132.8 million

54
January 27, 2014

Moderator:
Robert J. Nelson


Recent Trends: Implied Certification
•
•
•
•

Implied Certification: when an entity falsely certifies that it has complied with a statute, regulation, or
contractual term that is a prerequisite for payment
FERA imposed a new “materiality” standard, but courts are divided as to its implementation
Question of law?
Question of fact?

55
January 27, 2014

Moderator:
Robert J. Nelson


Future Trends: the False Claims Act and State Health Care Exchanges
•
•
•
•

The Affordable Care Act creates state-run health care exchanges intended to provide a marketplace
for individuals to compare insurance policies.
Section 1313 of the Affordable Care Act specifies that any payments made “by, through, or in
connection with” a state insurance exchange are subject to the FCA if they fail to comply with federal
regulations. See 42 U.S.C. § 18033(a)(6)(A).
Any damages may be multiplied by six. See 42 U.S.C. § 18033(a)(6)(B).
In sum: Health insurers that participate in state insurance exchanges will be subject to close scrutiny
for potential violations of the False Claims Act.

56
January 27, 2014

Moderator:
Robert J. Nelson


Conclusion: Whither the FCA?
•
•
•

Last year, the DOJ recovered $2,979,370,977 in whistleblower cases under the False Claims Act.
The DOJ also recovered $829,912,477 in non-whistleblower claims brought under the False Claims
Act.
What new developments will 2014 bring?

57
January 27, 2014

SEGMENT 1:
Michelle L. Rogers
Partner
BuckleySandler LLP

Introduction
Michelle L. Rogers is a partner in the Washington, DC office of BuckleySandler LLP. Ms. Rogers represents institutions in
a wide range of litigation matters, including government enforcement actions, class action litigation, regulatory
examinations, and corporate internal investigations. She currently is representing several financial institutions in ongoing
False Claims Act (FCA) and Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) matters. She has also
represented clients in matters involving the Program Fraud Civil Remedies Act (PFCRA), Truth in Lending Act, Fair Housing
Act, Equal Credit Opportunity Act, Civil Rights Act, and unfair and deceptive trade practices statutes involving the
Department of Justice (DOJ), Consumer Financial Protection Bureau (CFPB), Department of Housing and Urban
Development (HUD), Federal Housing Finance Agency (FHFA), federal and state bank regulators, and state attorneys
general.
Ms. Rogers is a frequent author and speaker about matters involving the financial fraud enforcement statutes, including the
False Claims Act.

58
January 27, 2014

SEGMENT 1:
Michelle L. Rogers
Partner
BuckleySandler LLP

Financial Fraud Redefined: How the Government Is Using the
False Claims Act To Target Financial Services Providers

59
January 27, 2014

SEGMENT 1:
Michelle L. Rogers
Partner
BuckleySandler LLP

Overview






Context: Financial Fraud as Government Priority
Financial Fraud FCA Enforcement
Evolution of FCA Cases
Trends and Predictions
Mitigating Risk

60
January 27, 2014

SEGMENT 1:
Michelle L. Rogers
Partner
BuckleySandler LLP

Financial Fraud as DOJ Priority


During FY 2012, DOJ secured more than $1 billion in
settlements from 5 financial institution settlements
–



Excluding the $25 billion mortgage servicer settlement
from February 2012, which also included FCA claims

For FY 2014, DOJ sought a $55 million budget increase “to
support the Department’s investigation and prosecution of the
broad range of illegal conduct that fall under the definition of
financial fraud. . .”
–

This increase includes a request for 184 additional
attorneys

61
January 27, 2014

SEGMENT 1:
Michelle L. Rogers
Partner
BuckleySandler LLP

Financial Fraud as Government Priority






Est. 2009, the FFETF coordinates activities between DOJ, SEC, the
states, OIGs, and regulators
Includes fraud working groups for RMBS,
Mortgage, and Securities and Commodities
Actively seeking whistleblowers:

62
January 27, 2014

SEGMENT 1:
Michelle L. Rogers
Partner
BuckleySandler LLP

Financial Fraud FCA Enforcement: Brief Background


Imposes civil liability for knowingly presenting a false claim to the government, or making a false
record/statement material to a false claim
–

Broadly defines “knowingly” to include deliberate ignorance and reckless disregard for the truth
or falsity

–

Statute of limitations: Generally 6 years, up to 10 years; subject to the Wartime Suspension of
Limitations Act (WSLA)


–

Treble damages and civil penalties of $5,500 to $11,000 for each claim; subject to the decision
in U.S. v. Anchor Mortgage Corp.


–

Discussion to come.

Discussion to come.

Whistleblower recovery: 15-30%, depending on whether US intervenes

63
January 27, 2014

SEGMENT 1:
Michelle L. Rogers
Partner
BuckleySandler LLP

Financial Fraud FCA Enforcement: Brief History



FCA actions of 2011 and early 2012 relied on a recklessness standard based on compliance failures
Recent expansion includes use of FCA to target long-time program participants for less egregious
conduct and conventional loan sales to the GSEs by relying on the Fraud Enforcement and Recovery
Act’s (FERA) FCA amendments
–
Allows FCA liability for indirect receipt of government funds
–
Expands potential “reverse” FCA exposure by:
 Imposing liability when one “knowingly conceals or knowingly and improperly avoids or
decreases an obligation to pay or transmit money or property to the Government”
 Adding a broad definition of “obligation” to retention of any overpayment

64
January 27, 2014

SEGMENT 1:
Michelle L. Rogers
Partner
BuckleySandler LLP

Evolution of Financial FCA Cases

65
January 27, 2014

SEGMENT 1:
Michelle L. Rogers
Partner
BuckleySandler LLP

Trends and Predictions









Increased suits against corporate officers and employees
Increased filing of qui tam suits
More filings in the SDNY to take advantage of the large FCA
settlements and fast intervention decisions
Increased likelihood of DOJ settlements including admissions of
misconduct
Increased number of suits with non-governmental victims
Increased coordinated initiatives

66
January 27, 2014

SEGMENT 1:
Michelle L. Rogers
Partner
BuckleySandler LLP

Mitigating Risk


Knowledge is power.
–

Employees

–

Business

–

Customers



Culture is key.



Policies and procedures matter.
–
–



Internal reporting
Protections for whistleblowers

Think strategically when issues arise.
–



Independence and speed are both important

Self report when appropriate.
67
January 27, 2014

SEGMENT 1:
Michelle L. Rogers
Partner
BuckleySandler LLP

For More Information, Contact:
Michelle L. Rogers
Partner
202-349-8013
mrogers@buckleysandler.com

BuckleySandler LLP
1250 24th Street NW, Suite 700
Washington, DC 20037
www.buckleysandler.com
www.infobytesblog.com
68
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

Introduction
Jennifer M. Wollenberg is a senior associate at Fried, Frank, Harris, Shriver & Jacobson LLP. Located in Fried Frank’s
Washington, D.C. office, she is a member of the Firm's False Claims Act and Qui Tam practice group. Jenny represents
corporations in a variety of complex civil litigation matters, with an emphasis on cases arising under the civil FCA and, in
particular, cases involving the aerospace, financial, and defense industries. She has been a contributing co-author of
FraudMail Alert®, which regularly reports on significant developments in the FCA arena, and has published articles on
various aspects of the FCA. Jenny received her JD from Cornell Law School and is admitted to practice in the District of
Columbia, New York, various United States Courts of Appeals (Second, Ninth, and District of Columbia Circuits), the United
States Court of Federal Claims, and the United States District Court for the District of Columbia.

69
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

False Claims Act Exposure: Recent Developments Regarding
Statute of Limitations, Damages, and Penalties

70
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

Overview
1.The Wartime Suspension of Limitations Act Threatens the FCA's Statute of Limitations
2.The Seventh Circuit Takes On the Overreaching “Gross Trebling” Approach to FCA Damages
3.
Constitutional “Excessive Fines” Analysis May No Longer Offer the Same Penalties
Protection

71
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

FCA Statute of Limitations / Statute of Repose
• Language of the FCA:
§ 3731. False claims procedure
(b) A civil action under section 3730 may not be brought—
(1)

more than 6 years after the date on which the violation of section 3729 is
committed, or

(2)

more than 3 years after the date when facts material to the right of action
are known or reasonably should have been known by the official of the
United States charged with responsibility to act in the circumstances, but
in no event more than 10 years after the date on which the violation is
committed, whichever occurs last.

• Six-Year Statute of Limitations and Ten-Year Statute of Repose
• Recent Development: DOJ and Relators Attempt to Invoke Wartime Suspension of Limitations
72
Act
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

Wartime Suspension of Limitations Act (“WSLA”)
• Brief History of the WSLA
• Current Language of the WSLA (18 U.S.C. § 3287):
When the United States is at war or Congress has enacted a specific authorization for the use of
the Armed Forces, as described in section 5(b) of the War Powers Resolution . . ., the running
of
any statute of limitations applicable to any offense (1) involving fraud or attempted fraud
against the United States or any agency thereof in any manner, whether by conspiracy or not,
or (2) committed in connection with the acquisition, care, handling, custody, control or disposition
of any real or personal property of the United States, or (3) committed in connection with the
negotiation, procurement, award, performance, payment for, interim financing, cancelation, or
other termination or settlement, of any contract, subcontract, or purchase order which is
connected with or related to the prosecution of the war or directly connected with or related to the
authorized use of the Armed Forces, or with any disposition of termination inventory by any war
contractor or Government agency, shall be suspended until 5 years after the termination of
hostilities as proclaimed by a Presidential proclamation, with notice to Congress, or by a
concurrent
resolution of Congress.
73

January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

Concerns with Application of the WSLA
•

WSLA-FCA Application Concerns
o Full Defenses Against Application:


Only applies to Title 18 “offenses”



Not all modern-FCA violations require “fraud”

o Partial Defenses Against Application:



Meant for the Government, not relators


•

Statute should be limited to conduct involving wartime contracting/fraud

Statute of repose

Other Concerns with WSLA Application (not limited to FCA context)
74
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

WSLA and the FCA
•

Important, Recent WSLA-FCA Decisions

o

BNP Paribas SA

o

Halliburton/KBR

o

Wells Fargo

• Ramifications of Current Holdings
o
repose

Effectively eviscerate the FCA’s statute of limitations, and potentially also the statute of

o
industry

Would affect a wide-range of FCA claims, beyond wartime contracting and the defense

o

Could spur increased litigation, including by relators
75
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

Damages Under the FCA
• Language of the FCA:
o

31 U.S.C. § 3729(a)(1)

o

“[A]ny person who [violates the FCA] is liable to the United States Government for…3 times
the amount of damages which the Government sustains because of the act of that person.”

• Treble Damages are a Key Feature of the FCA
o

Important to DOJ, relators, and defendants

o

Trebling required if liability found, absent timely voluntary disclosure (then doubling)

o

Multiplier a component of any FCA settlement

• Recent Development: Question of Which “Damages” – Net or Gross – are Multiplied
Revisited
76
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

“Gross Trebling” Approach
• Prevailing Method: “Gross Trebling”
o First trebling the claim amount and only then deducting the value of goods or services provided
• Advocated and Employed by DOJ, Relators, and Courts
o

In a variety of contexts

o

Relying primarily on Supreme Court decision in United States v. Bornstein (1976)
 “[D]amages should be [multiplied] before any compensatory payments are deducted, because
that method of computation most faithfully conforms to the language and purpose of the Act.”

• Key Concern with “Gross Trebling” Approach
o

Distorts Government’s actual damages because severely diminishes the value of any benefit
77
obtained by the Government
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

Recent “Net Trebling” Decision
• United States v. Anchor Mortgage Corporation (7th Cir. 2013)
o Found proper approach to be “net trebling”


Accounts for benefit to the Government prior to multiplying

o Ruled DOJ’s position unsupported by statutory language or policy
o Found DOJ’s position based on misreading of Bornstein
 Bornstein footnote re contract measure of loss
 Third party settlement payments should be subtracted after applying the multiplier
o Relied on several post-Bornstein appellate decisions
• Potential Circuit Split: United States v. Eghbal (9th Cir. 2008)
78
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

Practical Differences Between “Gross Trebling” and “Net Trebling”
• In Anchor Mortgage example, Government paid $131,643.05 on the guaranty of loan and recovered
$68,200 on the subsequent sale of the mortgaged property
Gross Trebling Approach

Net Trebling Approach

Treble the Payment

$131,643.05 x 3 = $394,929.15

Subtract the Credit

$131,643.05 - $68,200 = $63,443.05

Subtract the Credit

$394,929.15 - $68,200 = $326,729.15

Treble the Balance

$63,443.05 x 3 = $190,329.15

Trebled Damages

$326,729.15

Trebled Damages

$190,329.15

• Gross trebling approach rejected by the Seventh Circuit resulted in $136,400 greater FCA damages
• Just a single example—imagine difference when applied across all claims in a case
79
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

Penalties under the FCA
• FCA Penalties
o Between $5,500 and $11,000 for each false claim (31 U.S.C. § 3729(a)(1))
• Excessive Fines Analysis
o Generally understood that the total penalty assessment has been subject to the Eighth
Amendment’s Excessive Fines Clause
o FCA cases have borrowed “grossly disproportionate” test from 1998 Supreme Court forfeiture case
o Key component of test has been economic comparison
 Need for some correlation between total penalties and damages
• Recent Development: Appellate Court Decision Granting $24MM Penalties Where No FCA
Damages
80
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

Recent FCA Penalties Decision
• United States ex rel. Bunk v. Gosselin World Wide Moving, N.V. (4th Cir. 2013)
o District Court decision
o Fourth Circuit decision
• Fourth Circuit Missed Opportunity
o Potential tie to economic factors but focus on subjective “deterrence” factor
o No repeatable methodology for “grossly disproportionate” analysis
• Primary Concern With Fourth Circuit Decision
o FCA not intended to be a penalty-only statute
 See United States v. McNinch, 356 U.S. 595 (1958); Marcus v. Hess, 317 U.S. 537 (1943)
81
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

Other Concerns With Fourth Circuit’s Penalty Decision
• Raises Additional Issues
o Could lead to a groundswell of penalties-only qui tam cases
 Already an extraordinary amount of qui tam complaints filed every year
o Would enabling relators in this way be prudent or viable?
 In penalties-only FCA world, relator and Government interests diverge
 Article III standing question when vindicating “public rights” rather than proprietary injury
 Article II Appointments and Take Care clauses
 Fourth Circuit gave this issue little attention
82
January 27, 2014

SEGMENT 2:
Senior Associate
Jacobson LLP

FCA Exposure Recent Developments: Lay of the Land and What to Watch
• Statute of Limitations
o Application of WSLA
o Halliburton/KBR case
• Damages
o “Net Trebling” methodology
o Potential circuit split
• Penalties
o Not “excessive fines” violation even where no damages
o Impact of Fourth Circuit’s decision
83
January 27, 2014

SEGMENT 3:
Mark Dostal
Contracts Practice
PwC

Introduction
Mark Dostal is a Director at PwC. He has over 32 years of extensive and diversified experience in government contract
accounting and auditing, including 8 years with PwC, 8 years with another Big 4 national government contracting practice,
and 16 years with the Defense Contract Audit Agency (DCAA). He specializes in the requirements of the Federal
Acquisition Regulation (FAR), Agency FAR Supplements, and Cost Accounting Standards (CAS). Mark began his career
conducting DCAA audits, directing field office operations, and managing Agency responsibilities at large and medium sized
defense contractors from locations in the Midwest, Southwest, and Agency Headquarters. After leaving Federal service,
Mark leveraged his unique experiences and relationships to develop consultative approaches with clients that support
compliant, yet practical considerations for meeting government contracting and cost accounting practices. He has also
assisted many commercial market-based clients with transitioning to and navigating the FAR/DFARS and CAS
requirements when entering the federal marketplace. As a member of defense and space industry associations, he actively
promotes open dialogue of perspectives and issues affecting industry and senior government acquisition officials. Mark is a
Certified Public Accountant in Illinois and Iowa, and member of the American Institute of Certified Public Accountants,
National Defense Industrial Association, and National Contract Management Association.

84
January 27, 2014

SEGMENT 3:
Mark Dostal
Contracts Practice
PwC

Discussion Topics


Compliance with primary business systems and processes - a defense to limit FCA exposure



Areas of potential violations that are commonly alleged by qui tam realtors



Understanding your threats and risks to potentially resolve allegations before it becomes a FCA case



Challenges in successfully defending against allegations

.

85
January 27, 2014

SEGMENT 3:
Mark Dostal
Contracts Practice
PwC

Business Systems, Controls, and Processes


Contractor business systems and internal controls - the first line of defense against waste, fraud, & abuse



Weak control systems increase the risk of unallowable and unreasonable costs on Government contracts

−

Proposal Estimating and Contract Management

−

Cost Accounting, Labor Timekeeping, and Billing

−

Others depending upon nature of business (e.g., Material Management/Accounting, Purchasing, Property)



Compliance management to provide reasonable assurance that controls are working and can be relied upon:

−

Establish processes that are carried out and executed by knowledgeable employees

−

Develop appropriate management review and approval at prescribed levels within the Company

−

Verify/monitor controls over processes and formally remediate findings

−

Conduct periodic Internal Audit evaluations, follow-ups, and reporting; follow through with corrective actions

−

Provide regular employee training; emphasize individual ethics and compliance responsibilities

86
January 27, 2014

SEGMENT 3:
Mark Dostal
Contracts Practice
PwC

Sources of FCA Allegations


Allegations can surface from many sources, but most are from qui tam relators

−

Labor Charging, Material Transfers

−

Overbillings / Billing Errors

−

Truth in Negotiations Act (Defective Pricing); Certification of Cost or Pricing Data at price agreement

−

Proposal Certifications – Pricings, Requests for Equitable Adjustments, Incurred Costs, Termination Settlements

−

Failure to Perform Work / Defective Workmanship

−

GSA Schedule Contracts and Price Reduction Clause



Look to issues likely being affected by management influence and disgruntled employees



Consider possible motivation behind the allegation to uncover evidence and information about the issue



Determine “appearance” or perception that Company is “ripping off” the government



Manage FCA risk by identifying exposures to supplement business systems controls

.
87
January 27, 2014

SEGMENT 3:
Mark Dostal
Contracts Practice
PwC

Sources of FCA Allegations
•

Overbillings
– Knowledge of a false claim or reckless disregard of the truth will give rise to an FCA violation. No specific intent
to defraud is required (see U.S. v. TDC Management Corp., Inc., U.S. Court of Appeals, District of Columbia
Circuit, 39 CCF ¶76,670, No. 92-5369, June 3, 1994, 24 F3d 292).
– Negligent recordkeeping that leads to overbilling can be construed as a false claim (see Miller v. U.S., 23 CCF
¶81,036, 213 CtCl 59, 550 F.2d 17, 1977).

•

Violations of Truth in Negotiations Act (Defective Pricing)
– P.L. 87-653 - “A prime contractor or any subcontractor shall be required to submit cost or pricing data … and
shall be required to certify that, to the best of his knowledge and belief, the cost or pricing data he submitted was
accurate, complete and current.”

•

Requests for Equitable Adjustment
– False certifications in a request for equitable adjustment give rise to a cause of action under the FCA (see U.S.,
ex rel. Patrick Wilkins v. North American Construction Corp., el al., U.S. District Court, S.D. Texas, 44 CCF
¶77,656, No. H-95-5614, June 13, 2000, 101 F.Supp.2d 500)

•

Failure to Perform / Defective Work
– Submission of cross-sections and quantity surveys that did not accurately reflect work actually performed was a
false statement under the False Claims Act (see Commercial Contractors, Inc. v. United States, 42 CCF ¶77,374,
U.S. Court of Appeals, Federal Circuit, No. 97-5005, September 4, 1998, 154 F.3d 1357)
88

.

January 27, 2014

SEGMENT 3:
Mark Dostal
Contracts Practice
PwC

FCA Damages “Would Have Paid” Model
• Applies to cases involving overcharges
• Base damages = Amount paid less the amount that would have been paid absent the overcharges
– FCA damages for a defective military helicopter were the difference between the market value of the unit
as promised and the market value as delivered (see United States, ex rel. Brett Roby v. Boeing Co., 46
CCF ¶77,962, U.S. Court of Appeals, Sixth Circuit, No. 00-4157, September 12, 2002, 302 F.3d. 637)

• Key issues
– Amount paid vs. price offered
– Use of original pricing assumptions vs. most current actual information
– Extent of re-pricing (limited to fraudulent assertions vs. all pricing factors)

.

89
January 27, 2014

SEGMENT 3:
Mark Dostal
Contracts Practice
PwC

Recognizing and Mitigating Threats of FCA Violations


Seek appropriate counsel and other professional help and advice



Consider nature of the industry and applicable government regulations (i.e., A&D, Healthcare,
Pharma, Non-profits)
–
–
–

Maturity of Company – traditional vs. nontraditional government contractor
Contract types, solicitation process, and negotiation/award circumstances
Funding levels, billing terms, withholdings, rescinding invoices, provisional payments



Determine supporting documentation requirements, quality, and availability



Understand which government organizations may be involved (e.g., Contracting Officer, Agency
investigative services or divisions, government auditors, FBI, DOJ)



Consider potential for offsets to mitigate cost impact/harm to government:
–
–

Underestimating, errors and omissions, negotiation concessions
Discounts, repayments, billing adjustments, undercharging on other contracts

.
90
January 27, 2014

SEGMENT 3:
Mark Dostal
Contracts Practice
PwC

Challenges in Defending against Allegations


Assemble Company documentation supporting its understanding of compliance with the RFP/Solicitation,
proposal response, negotiation results, required contract clauses, and terms/conditions

−

Determine operational and administrative understanding of the meaning of solicitation and SOW, contractor response
to the solicitation and described work scope, and acceptance of contract clauses



Support appropriate context around cost accounting data and records:

−

Determine compliance with internal cost accounting and contract administration polices and procedures, including
supplemental email correspondence; develop key information that refutes or supports the allegation

−

Perform comparisons of proposal with actual contract performance and contract administration records

−

Perform reconciliations of recorded job cost data to General Ledger and disclosed cost accounting practices for
charging costs to government contracts



Document contract interpretations; FAR 31.201 reasonableness and prudent person definition is subjective

− Contractor’s motion to dismiss a qui tam False Claims Act action was denied in part because the relator’s allegations
supported an inference the contractor acted with at least reckless disregard or willful ignorance of whether its
interpretation of a contract clause was correct (see United States, ex rel. Karen Chilcott v. KBR, Inc., et al., 57 CCF
¶80,187. U.S. District Court, C.D. Illinois, No. 09-cv-4018, October 25, 2013)

•

Objective reviewers and investigatory resources are essential
91
January 27, 2014

SEGMENT 4:
Managing Director

Introduction
Joe Cheriathundam, a national forensic data analytics leader with the StoneTurn Group, has over 20 years of experience
supporting companies and organizations in matters of conflict, change and regulatory compliance. He has led projects
pertaining to the False Claims Act, anti-fraud consulting, anti-money laundering, mergers and acquisitions,
investment/trading improprieties, and international business compliance in industries as diverse as finance, retail, life
sciences/healthcare, automotive and real estate. Joe recently earned an Advanced Business Analytics Certification from
the Kelley School of Business at Indiana University and has frequently written and spoken on the topic of Forensic Data
Analytics.

92
January 27, 2014

SEGMENT 4:
Managing Director

Data Analytics in the Life-Cycle of False
Claims Act
January 27, 2014

Joe Cheriathundam

93
January 27, 2014

SEGMENT 4:
Managing Director

Number of New Matters by Year

94
January 27, 2014

SEGMENT 4:
Managing Director

Settlement and Judgment Amounts by Year

95
January 27, 2014

SEGMENT 4:
Managing Director

Data Analytics in the Life-Cycle of the False Claims Act
•

Question: A company is seeking a General Services Administration (GSA) contract to sell to
government customers. When should they start involving their Data Analytics Team?
a) When they begin negotiating
b) When they win the contract
c) When they begin selling via the contract
d) When the government performs an audit
e) When an FCA issue is identified
f) What is Data Analytics?

96
January 27, 2014

SEGMENT 4:
Managing Director

•

Data and Auditability – Examples of things to consider during negotiations
 Do your technology systems capture all of the data necessary to retroactively confirm the
appropriate pricing of product?
a) If contract based on agreed upon discounts, are you capturing the standard prices from
which discounts are applied?
b) If pricing is based on an Most Favored Customer (“MFC”) provision, are there
mechanisms in place to ensure that the prices to government customers are not
surpassed by other customers?
c) If Commercial Sales Practices Format (“CSPF”) presents exceptions, concessions,
discounts to pricing plan, can the data systems track these occurrences?
d) Can you easily identify purchases made under the GSA schedule? (e.g., some
government entities will not purchase from the GSA schedule, but rather will negotiate
their own deal)

97
January 27, 2014

SEGMENT 4:
Managing Director

•

Data Analytics during contract activity
 Do your technology policies and procedures maintain the auditability and test for anomalies of
the contract?
a) When making new technology implementations, are the required data in the legacy
system maintained?
b) Do you store the relevant data throughout the term of the FCA statute of limitations?
c) As changes occur to relevant data (e.g., billing rates or list prices), can these changes be
recreated across time as opposed to being replaced in the system.
d) If there is a Basis Of Award (“BOA”) customer, can you periodically/continuously test their
purchasing activity against government customers

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January 27, 2014

SEGMENT 4:
Managing Director

•

Data Analytics during an issue
 Are your technology teams equipped to handle an audit/investigation/conflict?
a)
b)

a)

Do you have internal teams who are familiar with the relevant data systems?
When do you use Internal vs External Teams for Analysis?
1. Privilege
2. Bandwidth
3. Capability
4. Experience
5. Industry
6. Legal Understanding
7. Cost
8. Data access
How do you make decisions on when to use complete data versus
sampling/extrapolation?
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January 27, 2014

Q&A:

Moderator:

SEGMENT 1:

Robert J. Nelson

Michelle L. Rogers
Partner
BuckleySandler LLP


SEGMENT 2:

SEGMENT 3:

Senior Associate

Mark Dostal
Contracts Practice
PwC

Jacobson LLP

SEGMENT 4:
Managing Director

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► Questions will be answered in the order they are received.

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January 27, 2014

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False Claims Act in 2014: Implementation Issues LIVE Webcast

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