Companies Are Held Accountable for Fraudster Employees

The federal government brought a False Claims Act action against a mortgage company, alleging that it violated the FCA when its employees improperly paid referral fees to a real estate company. The mortgage company argued that it should not be held liable for its employees’ misdeeds, especially since the fraudulent activity was against the company’s penal interests. In United States v. Anchor Mortgage Corp., 2010 WL 3184210 (N.D. Ill. Aug. 11, 2010), the court held that under the theory of respondeat superior, the company can be held liable when its employee was “acting within the scope of employment.” Here, the court found that the employees were acting within the scope of their delegated authority and the employees were clearly acting for the benefit of the mortgage company, “which profited from the transactions” of the increased business.

Corporations are required to maintain a watchful eye over the actions of their employees. Too often, companies turn a blind eye to fraud within their corporate ranks, only to argue that they were oblivious to the fraudulent activity pumping up their soaring profits. Relators are able to hold these companies accountable.

For more information about qui tam law and health care fraud, contact Nolan & Auerbach, P.A.

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