A federal government contractor fraud lawyer answers questions about how government program fraud charges arise and why they are often heard in federal court.
Government contracting fraud is one of the fastest growing areas of criminal prosecution, especially in the Washington DC area. You can see government contracting fraud from a multitude of perspectives. In the healthcare context, there are more and more prosecutions being brought against home healthcare aid companies and other various small businesses that have contracted to provide services for Medicare and Medicaid. Also, you’ll see it in the context of GSA contracts. GSA is the Government Services Administration. The GSA puts out various types of contracts for running buildings, for refurbishing buildings, for lighting, for lawn care, and for all types of areas that maintain these properties.
These contractors are signed up to provide services for the government. They have certain obligations to submit bills and to account for the work that they have done in order to may get paid. So the problem is that the government has hundreds of thousands of these setups and it’s just impossible for the government to be able to identify whether the services for which they have been billed are actually legitimate. As a result, people take advantage of that volume by overbilling the government. This creates a situation which outrages lawmakers in the U.S. Congress because it’s waste, fraud, and abuse. As a result, more and more agencies have been cracking down, through the Office of the Inspector General (“OIG”), at various contracting agencies to identify and prosecute situations where there are alleged instances of fraud in government contracting.
It depends. Oftentimes, there’s an overlap between federal offenses and the state offenses. In the context of Medicare and Medicaid, you’ll often have instances where a program is administered by the state but the funds are federal. As a result, there is the ability for the federal government to bring the case in the United States District Court rather than a state court because you have what’s called federal question jurisdiction or a federal question at issue. Also in the context of public corruption, for example, a governor of a state or the mayor of a city may be involved in some type of illegal steering of government contracts toward a particular vendor. These contracts may involve federal funds. Even though that person is a state official, the official may be prosecuted in federal court for, among other things, government contracting fraud as well as bribery or deprivation of honest government services.
Recently, a lot of the cases are in the healthcare context. There are a lot of prosecutions also brought under Section 8A of the Small Business Administration Act, where organizations that have been designated as minority or women owned business by federal government are awarded certain types of preferential contracts. Within that context, there is overbilling, or not delivering services that were promised. The government has been bringing more and more of these SBA contract fraud prosecutions recently.
In the context of healthcare it is because of the Affordable Care Act (“ACA”). Due to the amount of funds that have been committed to ensure that all Americans have health insurance, Congress wants to make sure that the money that is spent is spent correctly. As a result, the government has cracked down on fraud and abuse.
Additionally, the ACA created more law enforcement tools, such as the healthcare task forces, which have all types of super computers which are able to electronically go through each and every bill submitted to the United States Government and kicks out the ones that are “outliers.” These are bills that are four, five, or six times the amount of what would be expected for similar services based on the overall number of contracts that are presented. Then an investigator will review these smaller number of “suspicious claims” by hand. These types of new tools allow the government to more easily identify areas where there’s potential fraud and abuse and thus bring more criminal prosecutions.