The False Claims Act (“FCA”) is a powerful enforcement tool for the U.S. Government. Amongst other prohibitions, the FCA prohibits any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to the federal government. FCA settlements often involve large settlement amounts, in part, due to the “per claim” penalty structure of the FCA. Under the FCA, violators are liable for civil penalties per claim, plus treble damages. For healthcare providers who submit large numbers of claims, the FCA’s penalty structure often results in exceptionally large – newsworthy – settlements. Remember, however, that the FCA is not limited to the healthcare industry. Any company or individual submitting claims for payment to the federal government faces the threat of FCA liability if those claims turn out to be false or fraudulent. The government has shown its willingness to use the FCA as an enforcement tool in other industries, like finance, education, and military contracting. Such was the case according to a recent DOJ press release.
The DOJ announced that AECOM agreed to pay $11.8 million to resolve allegations it violated the FCA. AECOM is an architecture and engineering firm that the U.S. Department of Defense has awarded contracting opportunities worth up to $28 billion, according to AECOM.
The settlement resolves allegations that AECOM violated the federal FCA by submitting or causing the submission of false claims to the Federal Emergency Management Agency (FEMA) for the replacement of educational facilities in Louisiana damaged by Hurricane Katrina. According to the government, between 2006 and 2010, AECOM was the technical assistance contractor supporting FEMA disaster recovery efforts following Hurricane Katrina and assisted applicants for FEMA funds. The government accused AECOM of preparing requests for funds for applicants that caused the applicants to receive funds beyond what FEMA rules allowed. Specifically, “AECOM supervisors reviewed and did not correct disaster assistance applications that included materially false design, damage, and replacement eligibility descriptions, according to the government.” The government previously investigated and settled FCA claims involving the Roman Catholic Archdiocese of New Orleans and Xavier University of Louisiana’s role in the submission of the false certifications for FEMA funding prepared by AECOM. According to the government, nearly $25 million has been recovered related to disaster assistance applications prepared by AECOM. This matter serves as a reminder that claims for payment (false or fraudulent) need not be submitted directly to a government agency to be considered a violation of the FCA. A violation of the FCA may occur when a person or entity causes a false claim to be submitted to the government.
The attorneys at Chilivis Grubman represent companies and individuals of all types and sizes, and across all industries, in connection with False Claims Act investigations and litigation. If you need help with such a matter, please feel free to contact us.