In another False Claims Act settlement involving trade fraud, the owner of New York jewelry wholesaler Anaya Gems Inc. has agreed to pay $415,000 to resolve allegations relating to 
import duty evasion. The former employee who blew the whistle on the scheme by filing a qui tam lawsuit received 22% of the recovery as a reward.
ewards.The increased use of the False Claims Act to combat duty evasion has alarmed importers — as it well should!
Liability under the False Claims Act can be significant — three times damages plus penalties for each false entry document. This is far more severe than the penalties generally awarded in U.S. Customs & Border Protection administrative proceedings. The False Claims Act’s qui tam provisions also incentivize whistleblowers to come forward and expose import fraud by offering awards of up to 30% of the amount recovered. Current and former employees of importers — as well as their competitors — have reaped millions of dollars in awards for filing whistleblower claims.
the way for similar whistleblower claims.The Third Circuit Court of Appeals has ruled that a physician’s judgments and opinions can be considered “false” under the False Claims Act, rejecting the Eleventh Circuit’s “objective falsehood” requirement and creating a Circuit split. In United States v. Care Alternatives, the Third Circuit found that contradictory medical expert opinions as to whether patients were “terminally ill” as defined by Medicare and thus eligible for hospice care benefits raised a triable issue for the jury as to falsity under the False Claims Act and did not warrant dismissal on summary judgment.
The decision conflicts with that of the Eleventh Circuit last year in United States v. AseraCare, where the court ruled that medical expert testimony standing alone cannot prove the falsity of a clinical judgment of hospice care eligibility because “a claim cannot be ‘false’ [under the False Claims Act] if the underlying clinical judgment does not reflect on objective falsehood.”
Guardrail spears driver’s side door of car in Gurnee, IL, in 2013. Harman alleged that the crash involved Trinity’s ET-Plus guardrail.
The anti-fraud bar is focused on the upcoming oral argument in the appeal of the trial verdict in United States ex rel. Harman v. Trinity Industries Inc., calendared for Dec. 7, 2016, before the Fifth Circuit. The $663 million verdict — the largest in the history of the federal False Claims Act — raises questions going to heart of the False Claims Act’s qui tam (whistleblower) provisions. Those provisions enable private parties who have evidence of fraud against the government to bring civil lawsuits for the recovery of damages on the government’s behalf. Successful qui tam whistleblowers receive bounties of 15-30% of what the government receives.
The Whistleblower & Anti-Fraud Blog