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Continuing Legal Education at the Bar Association of San Francisco: Committees

Understanding State and Federal False Claims Litigation

 

BASF’s Litigation Section recently hosted a presentation and panel discussion regarding State and Federal False Claims Litigation.

Deputy Attorney General Nick Akers (Deputy Attorney General, Corporate Fraud Section of the California Department of Justice) began the program with an overview of the California and federal false claims acts, which are intended to combat fraud and other financial misconduct directed at the government. Both acts permit a private whistleblower, known as a relator or qui tam plaintiff, to file a qui tam action in the name of the government to enforce the statute. These actions are filed under seal to give the government an opportunity to investigate the relator’s allegations, and to determine whether or not to intervene.

Assistant U.S. Attorney Sara Winslow (Northern District of California) described the process of investigating a relator’s allegations and determining whether or not to intervene. She noted that intervention decisions take into account a variety of factors, including the amount of the government’s damages and the egregiousness of the target’s misconduct. She encouraged relators’ counsel to carefully evaluate potential qui tam actions before filing, and to be candid in discussing any potential weaknesses with the government.

Jim Sanders, a partner at Reed Smith and former federal prosecutor, stressed the importance of implementing a litigation hold as soon as a client becomes aware of the government’s investigation. He also encouraged targets to reach out and be responsive to the government during its investigation of the relator’s allegations. He explained that the investigative phase provides a target with a critical window in which to address the investigators’ concerns and persuade the government not to intervene.

Deputy Attorney General Rick Acker (Deputy Attorney General, Corporate Fraud Section of the California Department of Justice) discussed the versatility of the false claims acts as tools to combat schemes to wrongfully obtain money, property or services from the government, or to wrongfully avoid obligations to pay money or transmit property to the government. He encouraged practitioners to be aware of these statutes, and to consider their use in meritorious cases involving fraud or other financial misconduct that affects federal, state, or local government funds or programs.

 

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