Articles Tagged with Qui Tam Whistleblower

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iStock-513229490-300x200Pilot training program allegedly falsified enrollment figures to obtain millions in Veterans Affairs funding.

Universal Helicopters Inc. and Dodge City Community College have paid $7.5 million to resolve allegations they violated the False Claims Act by making false statements to the U.S. Department of Veterans Affairs in connection with a training program they jointly run for helicopter pilot flight instructors in Ford County, Kansas and Chandler, Arizona.

Universal paid $7 million, while Dodge City paid $500,000—an amount the U.S. Department of Justice noted was based on Dodge City’s ability to pay.

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Service member wearing Army uniform (ACU) filling real estate related paperwork.Court takes “holistic approach” to materiality, rejecting strict focus on the ultimate “payment decision” in significant win for qui tam whistleblowers and the government.

A few weeks ago, I blogged about United States v. Strock. There, the Second Circuit Court of Appeals determined that the Supreme Court’s decision in Universal Health Services v. Escobarwhich held that misrepresentations regarding compliance with a statutory, regulatory, or contractual requirements “must be material to the Government’s payment decision” to be actionable under the False Claims Act—did not invalidate the “fraudulent inducement” theory of False Claims Act liability. Under that theory, which predates Escobar, a violation of the False Claims Act can be established by showing that the defendant submitted claims for payment under a contract obtained by fraud—even if the subsequent claims for payment under the contract were themselves entirely truthful. The focus in a such a case, the Second Circuit confirmed, still includes the fraudulent statements’ impact on the government’s initial decision to award the contract. Any subsequent payments are “tainted” by that original fraud.

Now—in another key victory for whistleblowers and the government—the Eleventh Circuit has taken a similarly broad view of Escobar’s materiality requirement. In United States ex rel. Bibby v. Mortg. Inv’rs Corp., the court adopted a “holistic approach” to the assessment of materiality under the False Claims Act, rejecting a “strict focus” on the ultimate “payment decision.”