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By Che Odom
June 9 — The Justice Department will look at the timing, nature and extent of disclosures about individual wrongdoing when determining a reduced settlement arrangement for companies faced with False Claims Act charges, a senior official said.
Companies won't receive preferred settlement terms for cooperation if they don't provide information on individuals, said Acting Associate Attorney General William Baer, speaking at an American Bar Association meeting in Washington.
While there is “no magic formula” in deciding what terms will be given, early and voluntary reporting “weighs significantly in a company’s favor,” he said.
“Your cooperation does not require ID-ing people as culpable,” Baer added. “That’s our job.”
Baer’s call for corporate cooperation with the DOJ’s Civil Division echoes recent statements by other officials in the wake of last fall's release of a memorandum by Deputy Attorney General Sally Quillian Yates in which she said that only companies that disclose information about individual wrongdoing may be eligible for lesser penalties (13 CARE 1952, 9/11/15).
Merely complying with the law and with subpoenas or ceasing to contest allegations won't count as cooperation, Baer warned. Instead, companies must report information that might not otherwise be discovered in the course of the government's investigation.
Making available former employees or helping the Fraud Section get information not in the company’s possession are examples of cooperation, Baer continued.
A prompt, full response or voluntary assistance is what the DOJ expects, he said. “Information detailing the actions at the center of the investigation that help us size up the three-dimensional aspect of our investigation” is what the department needs.
A review of one sector shows how the government's increased focus on individuals is playing out.
Bloomberg BNA's database of health-care related False Claims Act settlements shows that to date in 2016, 46 percent of settlement agreements included a cooperation clause directing corporate entities to cooperate fully with investigations of individuals who could be involved in related fraud (101 CARE, 5/25/16).
This represents a significant increase from prior years, when the clause appeared in 17 percent to 32 percent of health-care related FCA settlements since 2008.
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