In Securities and Exchange Commission v. Jarkesy, No. 22-859, 2024 WL 3187811 (U.S. June 27, 2024), the United Stated Supreme Court (Roberts, C.J.) held that when the Securities and Exchange Commission (“SEC”) seeks civil penalties against a defendant for securities fraud, the Seventh Amendment of the United States Constitution entitles the defendant to a trial by jury. This decision was based upon the Court’s interpretation that the SEC’s antifraud provisions replicate common law fraud, and thus actions for violations of these provisions implicate the Seventh Amendment right. The Court determined that the “public rights” exception, which allows certain matters to be resolved outside of Article III courts without a jury, does not apply in this context because the action does not fall within the distinctive areas involving governmental prerogatives traditionally resolved without Article III adjudication. This ruling curtails the SEC’s authority to impose penalties for fraud, and could potentially affect the enforcement capabilities of agencies enforcing federal law.Continue Reading Supreme Court Limits SEC’s Enforcement Power to Penalize Fraud

A recent Ninth Circuit opinion instills the importance of raising an often overlooked defense in federal fraud cases: that the defendant’s misrepresentation did not affect the “nature of the bargain.” In United States v. Milheiser, the panel recently vacated six defendants’ convictions for mail fraud, holding that merely lying to influence a transaction does not rise to the level of fraud. Instead, a “lie must go to the nature of the bargain” to support a conviction.Continue Reading The Ninth Circuit Holds That a Lie Must Go to the Nature of the Bargain to Support Fraud Conviction

In 2019, the Department of Justice created the Procurement Collusion Strike Force (PCSF or Strike Force), a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant, and program funding at all levels of government—federal, state and local. The PCSF is a constellation of partnerships among the Antitrust Division of the U.S. Department of Justice, multiple U.S. Attorneys’ Offices around the country, the Federal Bureau of Investigation (FBI), and the Inspectors General for multiple federal agencies working together to crack down on unlawful anticompetitive activities in the public procurement process. As we have previously discussed,[i] the PCSF has been steadily growing its footprint and focus since its inception in November 2019. Now four years in, the Strike Force continues to add new partners at the Federal, State and global level, boasting of more than 30,000 government officials trained in detection and prosecution of procurement offenses. The Strike Force touts its growing ranks of trained eyes and ears on the ground anywhere government funds are spent. The PCSF is sending an increasingly aggressive enforcement message that should put those engaged with government contracts, federal funds, and procurement officials on high alert.Continue Reading Aggressive Procurement Collusion Enforcement Risk Remains High for 2024

After conducting a thorough and privileged internal investigation, it becomes evident that your Company has overcharged the government over $50 million, and that the fraud was directed by a high-level manager. What do you do next? After the recent HealthSun declination, you should self-disclose under the DOJ’s Voluntary Self-Disclosure policy, in conjunction with other acts of remediation! Continue Reading Should my Company Self-Disclose Major Fraud? The Answer is Now Clear

Yesterday, the Supreme Court issued a unanimous decision holding that the aggravated identity theft statute –and its mandatory minimum of two years – is not triggered merely because someone else’s identification facilitates or furthers the offense in some way. See Dubin v. United States. We have seen a growing trend of the government adding aggravated identity theft in healthcare fraud cases. As a result of this decision, we may see that statute far less.Continue Reading Is this “Good-Bye” to the Two Year Mandatory Minimum in Healthcare Fraud Cases?