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Doubling Down, or How to Make the Worst of a Bad Situation
The Sixth Circuit recently affirmed a business man's conviction on seventeen felony tax counts, including a tax obstruction count.
Signs of Increased Prosecution of Executives Illustrate the Yates Memo's Staying Power and Increased Risks for Corporate Owners and Insiders
When originally issued in September 2015, the "Yates Memo" was an effort by the U.S. DOJ and then-DAG Sally Yates to strengthen the Department's commitment to holding executives and other responsible individuals at corporations criminally liable for their companies' malfeasance. Although the Yates Memo's future under the current Administration has been at times uncertain, a series of recent prosecutions of corporate insiders suggests that the principles the Yates Memo embodies are here to stay.
Testing the College Admissions Cheating Scandal Under Pennsylvania's Wiretap Act
On March 12, 2019, the DOJ unveiled "Operation Varsity Blues," its nationwide college admissions bribery and entrance exam cheating investigation. Critical for DOJ is evidence gathered from recorded conversations between William Singer and coaches, his clients, and others while he wore a government wire. I recently examined this aspect of the investigation in an article for PACDL's For the Defense.
Pennsylvania Supreme Court Puts Employers on Notice: You Can Be Liable When Hackers Breach Your Systems
The Pennsylvania Supreme Court has recast two key legal principles that have stood as crucial bulwarks against liability for employers and other businesses that find themselves hacked by malicious third parties. The decision, Dittman v. UPMC, has the potential to usher in a new era of data breach litigation in Pennsylvania. It stands as a strong warning to Pennsylvania employers that they should act now to review and assess the adequacy of their data security.
Opioid Law Creates Addiction-Treatment Kickback Crime That Reaches Commercial Health Insurance
The SUPPORT for Patients and Communities Act, enacted on October 24, 2018 to combat the opioid epidemic, created a new criminal kickback prohibition for addiction treatment-related services. Codified at 18 U.S.C. § 220 and entitled “Eliminating Kickbacks in Recovery Act of 2018," it criminalizes paying for patient referrals or offering inducements to patients receiving addiction treatment services. Each violation is punishable by up to 10 years' imprisonment and a $200,000 fine.
Government Misses Civil Forfeiture Deadline and Must Release Seized Funds, Says Eastern District of Pennsylvania
On November 14, 2018, the District Court for the Eastern District of Pennsylvania in United States v. Goodchild held that the government cannot retain funds that were seized by civil seizure warrant when the civil case was untimely, even if the government has also noticed the property as subject to criminal forfeiture. The court held that this result was compelled by the plain language of the Civil Asset Forfeiture Reform Act of 2000 (CAFRA). The decision serves a reminder to the government of the harsh consequences that can attend failure to meet deadlines and potentially complicates the government's calculus regarding pre-indictment civil forfeiture.
Highlights from IRS Criminal Investigation Division (CID) FY 2018 Annual Report
On November 14, 2018, IRS Criminal Investigation Division (“CIDâ€) released its Annual Report for fiscal year 2018, detailing its enforcement actions for the past fiscal year. CID is the federal enforcement agency with exclusive jurisdiction over federal tax crimes, i.e., Title 26 and 31 offenses.
Eastern District of Pennsylvania Refuses to Keep FCA Qui Tam Complaint Under Seal to Facilitate Government's Settlement Negotiations
On October 16, 2018, the District Court for the Eastern District of Pennsylvania denied the government's requested eleventh extension of the seal in a five-year-old False Claims Act qui tam case. The court ruled that the government's desire to continue settlement negotiations with the defendant, who had been given a copy of the complaint with the court's permission, did not constitute "good cause" to extend the seal, as required by the FCA.
OIG 15-Year Exclusion for False Claims Act Violations by Lab Company and its CEO Sends Warning to FCA Defendants
On August 17, 2018, a Department of Health and Human Services ALJ affirmed HHS OIG's 15-year exclusion of BestCare Laboratory Services, Inc. and its CEO from federal health care programs pursuant to the OIG's permissive exclusion authority. The exclusion was based on BestCare's submission of false claims for mileage reimbursement which violated CMS billing restrictions and formed the basis of a qui tam False Claims Act action, culminating in a $30 million damages award.
Eastern District of Pennsylvania Forms Civil Enforcement Strike Force Adding Resources to False Claims Act Cases
On August 1, 2018, U.S. Attorney for the Eastern District of Pennsylvania William M. McSwain announced the formation of an Affirmative Civil Enforcement (“ACEâ€) Strike Force within the U.S. Attorney's Office Civil Division. The ACE Strike Force's mission is to bring "additional firepower" to investigations and lawsuits that “prosecute fraud and abuse against government programs, including healthcare and procurement fraud,†as well as to enforce federal civil rights statutes and "combat the opioid crisis." The ACE Strike Force will initially include five Civil AUSAs and a team leader.Â
Individuals Can Revoke Consent to Law Enforcement Searches, Third Circuit Holds
Criminal suspects and subjects of investigations frequently are asked by law enforcement to consent to searches of their possessions, such as vehicles and bags during traffic stops, and even their homes. Trying to be cooperative, many initially agree, but later change their minds when officers' actions go beyond their comfort or expectations. Although it has long been settled that an individual can limit the scope of a consensual search, perhaps surprisingly, whether that consent could be revoked was an open question in the Third Circuit until recently. On August 1, 2018, the court answered that question in the affirmative.
Fighting the Seizure of Attorney-Client Communications
The government's seizure of attorney-client communications, a headline event when it involves the President's lawyer Michael Cohen, actually is a recurrent problem in white collar criminal investigations due to the convergence of several trends.