When Defendants Quickly Resolve False Claims Act Allegations

Typically, False Claims Act qui tam actions take many years to be integrated and resolved. Occasionally the lawsuits move quickly, wrapping up within a year or two after the initial filing. Why is there such a wide time disparity? By and large, these expedited FCA actions involve defendants who are highly motivated to clean the slate of fraud allegations.

Commonly, during corporate mergers or acquisitions, the acquiring entities will seek to resolve pending actions against the acquired companies. For example, in December 2011, Halcyon Healthcare acquired Altus Healthcare & Hospice, Inc. Within months of the acquisition, Halcyon agreed to pay $555,572 to the federal government in settlement of allegations contained in a year-old Medicare fraud qui tam lawsuit filed against Altus. Notably, in announcing the settlement, Halcyon emphasized that the problems pre-dated the acquisition and that all issues had been resolved.

Relatedly, new corporate management will regularly seize the moment to come clean about their predecessors’ past digressions. For example, in recent years, several large pharmaceutical fraud cases have settled within months of new CEOs taking the helm. Once again, the public message was that a “new day” had dawned at the company and that the fraudulent missteps were directed by the old leadership.

More information for whistleblowers is located at the Nolan & Auerbach, P.A. website.