DOJ Issues Corporate Self-Disclosure Policy

DOJ Issues Corporate Self-Disclosure Policy

The US Department of Justice (DOJ) released a Voluntary Self-Disclosure Policy that sets a consistent standard for corporate self-disclosures for all US Attorney’s Offices. The policy incentivizes corporations to self-report when they uncover misconduct by offering significant discounts on fines and favorable treatment during plea negotiations, including relating to the decision of whether to implement an independent compliance monitor. According to the policy, “[c]ompanies that voluntarily self-disclose misconduct to the USAO pursuant to this policy will receive resolutions under more favorable terms than if the government had learned of the misconduct through other means.”

The policy was developed pursuant to the Deputy Attorney General’s September 15, 2022 memorandum titled, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group.” Among other things, the so-called Monaco Memo directs each DOJ component to review its policies on corporate voluntary self-disclosures and, where it lacks such policies, draft and publicly share policies.

The Voluntary Self-Disclosure Policy can be found here.

Opening Brief to the Supreme Court Argues that Seventh Circuit Misinterpreted the FCA

On February 17, attorneys for qui tam whistleblowers filed an opening brief with the US Supreme Court in a False Claims Act (FCA) case that will likely resolve a circuit split regarding the FCA’s scienter provisions. Specifically, the Supreme Court will determine whether a defendant who acted in accordance with an objectively reasonable interpretation of the FCA may nonetheless be found to have “knowingly” violated the FCA.

In their opening brief, the whistleblowers argued that the Seventh Circuit Court of Appeals misinterpreted the FCA when it found that a defendant does not knowingly violate the FCA when it relies on an objectively reasonable interpretation of the law. According to the whistleblowers, there is no dispute that defendants, two pharmacies, presented false claims to Medicare and Medicaid that resulted in the government being overcharged for prescription drugs. They argue that the defendant’s subjective understanding when the false claims are presented to the government is a relevant inquiry in evaluating a defendant’s scienter. In other words, they assert, defendants should be subject to liability under the FCA when they submit claims that they believe are false, even if they can identify a reasonable interpretation of the law after the fact that would have permitted their conduct.

The Supreme Court is scheduled to hear oral arguments on April 18, 2023.

The whistleblowers’ brief can be found here.

Senator Grassley Criticizes Recent FCA Holdings, Plans to Introduce Amendments

During a speech at the Federal Bar Association’s annual Qui Tam Conference, US Senator Chuck Grassley (R-IA) stated that he planned to reintroduce legislation that would address what he believes are judicial misinterpretations of the FCA. Senator Grassley referred to recent decisions by the Seventh Circuit Court of Appeals finding that a defendant who made an objectively reasonable interpretation of an ambiguous policy did not violate the scienter requirement of the FCA. Although the Supreme Court will hear arguments on the FCA’s scienter requirement in April 2023, Senator Grassley maintained that he intends to clarify the requirement through legislation.

Senator Grassley has long been a proponent of the FCA, and introduced amendments in 2021 that would make it more difficult for the DOJ to dismiss FCA cases brought by whistleblowers. The 2021 amendments failed to make it to the Senate floor. During his speech, Senator Grassley encouraged stakeholders, including those with differing viewpoints, to offer their views on proposed amendments to the FCA.

Law360’s coverage of Senator Grassley’s speech can be found here.

Former NBA Players Sentenced for Defrauding NBA Players’ Health and Welfare Benefit Plan

Former NBA players Keyon Dooling and Alan Anderson were sentenced to 30 months and 24 months, respectively, for their roles in a scheme to defraud the NBA’s health care plan that provides benefits to current and former players. According to the DOJ, Dooling and Anderson occupied managerial roles in the scheme

The alleged scheme involved the submission of fake invoices from a chiropractic practice and dental office located in California that were run by co-defendants Patrick Khaziran and Aamir Wahab. The government claims that the fraudulent invoices showed that Anderson, Dooling, other co-defendants, and their friends and families received medical and dental care that they did not actually receive. Both Dooling and Anderson are alleged to have submitted fraudulent invoices resulting in approximately $363,000 in reimbursements for Dooling, and $121,000 in reimbursements for Anderson. In addition to submitting their own fraudulent invoices, the government claims that both men facilitated fraudulent claims submitted by other former players and recruited other former NBA players to join the scheme.

In addition to imprisonment, Dooling was ordered to forfeit approximately $450,000 and pay restitution of approximately $550,000, and Anderson was ordered to forfeit $121,000 and pay restitution of $121,000.

The DOJ’s press release can be found here.