The facts before the Third Circuit in the recently decided case of Patel v. United States illustrate how parties can put themselves in a bind if they make factual admissions when resolving a criminal case involving fraud on the government while not simultaneously resolving the government’s civil claims under the False Claims Act (FCA) for the same underlying conduct.

Background

Nita and Kirtish Patel, a married couple, owned and operated mobile diagnostic testing companies providing services reimbursed by Medicare. The couple’s scheme consisted of submitting tests for reimbursement that they falsely represented as having been supervised by a licensed neurologist. Mr. Patel admitted to fraudulently interpreting and writing diagnostic reports produced by the companies despite having no medical license. Mrs. Patel admitted assisting her husband in forging physician signatures on the fraudulently produced reports to make them appear legitimate. The reports were then used by referring physicians to make patient treatment decisions.

The government learned of the scheme when a former employee of the Patels filed a sealed qui tam action against them under the FCA. Likely due to the risk of patient harm, the Department of Justice (DOJ) moved quickly. Not long after the qui tam complaint was filed, the Patels were arrested. The couple ultimately pled guilty to healthcare fraud in violation of 18 U.S.C. § 1347 and as part of the plea acknowledged over $4 million in losses.

Crucially,...

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