False Claims Investigation
When a qui tam action is filed, the DoJ will assemble an investigative team, experienced in false claims investigations, determined to have jurisdiction in the case, i.e. DoD, HHS, FBI, Transportation, NASA, Agriculture, etc. It is not unusual for two or more agencies to be involved in the investigation of a false claims if it is multi-jurisdictional in nature. At this point, a preliminary assessment of the case is made based on the information in the complaint and disclosure statement to determine if the allegations are already known to the government, whether the allegations are already under investigation, or possibly, if another qui tam on the same allegations and defendant were already filed.
The Civil Division of the U.S. Attorney’s office will sometimes coordinate the case with the criminal division with a view toward initiating a criminal investigation of the allegations, if warranted. If a decision is made to conduct a criminal investigation – or there is one currently ongoing, the civil qui tam case is suspended until the criminal investigation – usually a Grand Jury investigation, is completed.
If a criminal investigation is not initiated, or there is not one ongoing, then an investigation is conducted to determine the merits of the allegations and provide the DoJ with sufficient information to make an informed decision whether to intervene. It is usually not an easy chore, depending on the complexity of the allegations and the extent of the evidence presented by the relator, to make an informed decision about the merits of a case within the 60 days mandated by the law, thus extensions are made for more time.
The normal first step for the government is to conduct a comprehensive interview of the relator to go over the information in the complaint and disclosure statement and to obtain any additional information. This is usually done in the U.S. Attorney’s office with the Assistant U.S. Attorney, occasionally an attorney from the DoJ, government investigators, and the relator’s attorney present.
The government investigators should take this opportunity to try and provide focus and direction to the investigation, especially if the allegations are complex and involve multiple issues. This process usually includes a thorough review of any documents the relator has provided to support the allegations. Ask the government investigator or attorney ahead of time who specifically will be present during the interview. Sometimes government auditors and/or contract officials are asked to sit in on the interview. Be aware if government contracting officials are going to be present because if there was fraud it happened on his or her watch. They are the government officials who may have acquiesced to the fraud and are most likely to be sympathetic to the defendant.
Once the interview of the relator is completed, an investigative plan is normally prepared with a view toward obtaining enough information within the period of time provided under seal to permit the DoJ to determine whether to intervene. The investigation can take on many forms depending on the issues and the extent of the evidence presented by the relator.
Generally, government investigators will interview any corroborative witnesses provided by the relator, interview government audit and contracting officials, and review documents in the possession of the government. In addition, certain trend and other types of analysis may be conducted of data in the possession of the government or a fiscal intermediary, and interviews will be done of any potential witnesses developed during the course of the investigation.
Inquiries will also be made to determine the extent of government acquiescence and any other problems that could surface in the case. The extent of the investigation will depend on the amount of information that can be obtained without breaking the seal. Some investigators will use their subpoena power to obtain evidence from the defendant or even go to the extreme of executing a search warrant if they think evidence could be destroyed.
Once the preliminary investigation is completed, a report is made to the DoJ who then makes a decision whether to intervene. The result of the investigation will depend on the quality of the allegations and evidence presented by the relator and the ability of the government investigators to focus the preliminary investigation and put together a good investigative plan to obtain enough quality information for the DoJ to make a fair decision.
Since the 1986 Amendments to the False Claims Act, many thousands of qui tam actions have been filed, however, less than 30% result in Department of Justice (DoJ) intervention. Most of the declinations, rightly or wrongly, have related to what DoJ determined to be a lack of merit or sometimes because of politics or a lack of sufficient resources to investigate. Some of the conditions that usually lead to a declination by the DoJ involve:
- Filing a complaint based solely on what the relator said without substantiation.
- A lack of research, substantiation or any type of preliminary investigation prior to filing.
- A lack of any understanding by attorneys of the complicated nature of the allegations and the government procurement or program process.
- Not recognizing the correct fraud scheme.
- A lack of understanding by attorneys of what information is necessary for DoJ to properly investigate and make an informed decision.
- A poorly written complaint and disclosure statement.
- A relator who is not credible or poorly prepared when interviewed by government attorney’s.
- Poor investigation by the DoJ and/or government investigative agency.
- Political pressures by the contracting federal department on the DoJ not to proceed.
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