Monday, October 13, 2014

DOJ Criminal Division's "New Qui Tam Process" - Attempting to Share in the Civil Division's Success

Dear Readers:

Sorry to have been away so long.  There is much to catch up about. 

The recent remarks by Leslie R. Caldwell, Assistant Attorney General for the U.S. Department of Justice's (DOJ) Criminal Division, at the Taxpayers Against Fraud Education Fund Conference, about the "New Qui Tam Process" merit a closer examination than many other blogs or articles have provided. Upon closer examination, AAG Caldwell's invitation to Relators to bring their qui tam cases to the Criminal Division appears to be more an effort by the Criminal Division to share in the success of DOJ's Civil Division than a real effort to increase the criminal enforcement of health care fraud cases that have a parallel qui tam.

  • First, let's be clear: AAG Caldwell is head of the Criminal Division. It is not at all clear what, if any, impact her remarks will have on the Civil Division at the Justice Department or the U.S. Attorneys' Offices throughout the country. I have not heard of complaints by the Civil Division or the U.S. Attorneys' Offices that they wish DOJ Criminal Division would do more or become more involved in qui tams. Rather, her announcement reflects a department that is seeking to share in the successes of the Civil Division.
  • In appealing to Relator counsel, AAG Caldwell states, we "encourage you to reach out to criminal authorities in appropriate cases, even when you are discussing cases with civil authorities." All I can say is, Relator counsel beware! Involving the Criminal Division may slow a government decision on your qui tam case even more than the usual slow pace. Sharing information between DOJ's Criminal and Civil Divisions is often only a one way street: Civil gives to the Criminal Division and not vice versa. And, the agents and assistant U.S. Attorneys working those criminal investigations often slow the civil investigation by asking Civil to wait on the criminal investigation. In turn, defendants and probable criminal targets lawyer-up even more, assert the Fifth, and the civil investigation and any hoped for speedy qui tam recovery can grind to a halt.  
  • So what does AAG Caldwell mean when by "appropriate cases"? She doesn't say. Since the Criminal Division's Fraud Section consists only of "100" lawyers and its Health Care Fraud Section only has "40" lawyers, there are not a whole lot of personnel to devote to the several hundred qui tam cases that are filed each year. Moreover, AAG Caldwell did not announce that the law enforcement agencies -- the people who actually investigate these cases such as the FBI, HHS-OIG, Postal, etc. -- have agreed to devote additional resources and manpower to investigating all these new qui tams. Without those additional investigative resources, it is hard for the Criminal Division or any U.S. Attorney to pursue complex white collar fraud cases requiring investigative expertise. So what is the "appropriate case"? Most likely, this will be an easy to investigate obvious case of wrong doing of a solvent corporation that can actually pay massive criminal fines -- probably like the Big Pharma cases.
  • AAG Caldwell cites the example of the Medicare Fraud Strike Forces operating in several cities throughout the United States that are "hot spots" for Medicare fraud. These Strike Forces really have done a lot to focus on and successfully prosecute what the AAG refers to as the "worst offenders" and the "most pervasive fraud." Yet, based on the example of the Health Care Fraud Unit in the Miami Division of the U.S. Attorney's Office, these strike forces were never intended to take on the lengthy and sophisticated investigations seen in many civil qui tam cases. Rather, they were started to address the worst abuses in the health care industry, many of which could be found among durable medical equipment suppliers and home health care providers in Miami. In turn, at least initially, many of these abuses were uncovered by tracking huge statistical disparities that reflected fraudulent health care billings. In short, the Strike Forces are not really the model for increased qui tam/criminal cooperation and prosecution.
  • AAG Caldwell announces that "executives at health care providers such as hospitals are also a high priority for us" -- woe to the executive who gets caught up in one of these investigations. When agencies make announcements like this, they often look far and wide to make cases to justify their public statements. In the face of invited public scrutiny and pressure, prosecutors and agents can sometimes make really bad judgements, prosecuting cases that never should have been brought or treating defendants far more harshly than they deserve. Hopefully, DOJ's zeal to prosecute executives won't affect their prosecutorial judgment.
  • Finally, I applaud AAG Caldwell's wish to prosecute more health care fraud cases, and she rightfully looks to the whistleblowers and other insiders who often are best positioned to come forward with evidence. Yet, given the few resources that DOJ's Criminal Division really has in attorneys and agents and the already vigorous enforcement of health care cases, both civil and criminal, by the U.S. Attorneys' Offices throughout the country, I do not see how AAG Caldwell's invitation to Relators' counsel will result in more parallel criminal prosecutions or better results for Relator counsel.
A. Brian Albritton
October 13, 2014