6th Circuit Draws a Bright Line Between Regulatory Non-Compliance and Fraudulent Inducement in a Defense Contracting Case

Takeaway: 6th Circuit provided a path forward for a common defense contracting fraud allegation.

In United States ex rel. USN4U, LLC v. Wolf Creek Federal Services[1] the 6th Circuit overturned the lower courts dismissal of a qui tam complaint that alleged a NASA contractor knowingly inflated the prices of its labor costs in Cost Estimates for fixed price contracts.

To the Moon or To the Jail? Social Media Stock Promoters Are Back in the Government’s Crosshairs

Takeaways:

  • Stock promoters have moved from boiler rooms and stock newsletters to social media services.
  • The COVID-19 pandemic and the “meme stock” mania that accompanied it brought an influx of retail traders to public markets.
  • Those retail investors have proven to be prime fodder for social media stock promoters.

The CFTC Breaks All Records –$200 Million Whistleblower Award

Takeaway: Misconduct in the multitrillion dollar derivatives market can lead to massive recoveries for the government and whistleblowers alike.   Even when the CFTC is already on the case, a whistleblower who tips off the government during an ongoing investigation may remain eligible for an award if they provide original information that “substantially contributes” to a successful enforcement action.

Whistleblower Lawsuit Yields Second Largest Medicare Advantage Settlement – $90 Million

Takeaway: This recovery makes it very clear that the federal government and whistleblowers continue to aggressively pursue fraud allegations involving the Medicare Advantage Program. We can expect to see robust enforcement and sizable recoveries to continue.

On August 30, 2021, the United States Department of Justice announced a $90 million settlement with Sutter Health and certain of its affiliates (collectively Sutter Health) relating to allegations that Sutter Health had defrauded the federal government’s huge Medicare Advantage (Part C) Program.

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