The government’s dilatory investigation of a sealed False Claims Act (“FCA”) complaint was so egregious that its $32M award after a nine-week jury trial will be cut nearly in half. The Fifth Circuit Court of Appeals refused the defendants’ request to overturn the entire verdict but enforced the consequences of the government’s prejudicial delay by tying the conduct together with the government’s failure to toll the statute of limitations for many of its claims. This decision strengthens potential defenses for defendants in FCA cases who are routinely left in the dark while the government conducts years-long one-sided investigations in secrecy.
The ruling in U.S. ex rel. Aldridge v. Corporate Mgmt., Inc., et al. addressed several issues raised by a Mississippi Critical Access Hospital (“the Hospital”) and its management company, both of which are owned by the same individuals. Underlying the appeal is a judgment against the Hospital, the management company and its owners, finding that the defendants falsified cost reports to hide inflated executive salaries and paid management fees for work that was never performed. At trial, the jury awarded the government $10.8M, which when trebled by statutory penalties provided under the FCA saddles the defendants with a verdict of over $32M.
The qui tam complaint was filed by the Hospital’s former CEO in May 2007. In August 2007, the government filed its first motion for an extension of time to consider its election to intervene. This...
KOTA KINABALU: A civil servant was arrested on Monday morning (April 20) to facilitate investigations into alleged false claims involving a RM1.3mil janitorial project. According to the Malaysia An...