DOJ Issues New Guidance on Cooperation Credit for Entities under False Claims Act Investigations
Atlas EnergyEarlier this month, the Civil Division U.S. Department of Justice (DOJ) issued new guidance regarding how the DOJ will award credit to companies that cooperate during a False Claims Act (FCA) investigation. This new guidance was incorporated into the DOJ’s Justice Manual, and it identifies the types of cooperation eligible for credit.
The FCA is one of the federal government’s primary tools to investigate allegations of civil fraud, waste, and abuse committed by parties reimbursed by federal programs such as military contractors and healthcare providers paid by Medicare and Medicaid.
The new cooperation policy provides that credit may be earned by entities that either voluntarily disclose misconduct, cooperate in an ongoing investigation, or undertake remedial measures upon discovery of a violation. Such cooperation does not need to occur prior to the start of an investigation, and credit may be earned when a defendant self-discloses misconduct that is unknown to the government and outside of the scope of an existing investigation. Also, a company can earn credit by taking measures beyond what is required by business practices or law when preserving relevant documents and information.
The DOJ has stated that it will also consider any corrective action a company takes to remediate a FCA violation. Such corrective action may include thorough root cause analysis, potential disciplinary actions against responsible individuals, accepting responsibility for the violation, and strengthening compliance efforts to prevent future violations.
Under the guidance, cooperation credit earned by a company will most often be awarded via a reduction in the damages multiplier and calculation of civil penalties. Additionally, the DOJ will communicate with relevant administrative agencies so that such agencies will also consider the company’s cooperation, voluntary disclosure, or corrective actions when the agency makes its decisions on possible administrative actions against the company. Finally, the new policy provides the DOJ may publicly acknowledge the company’s cooperation in any DOJ press releases about the case.