The SUPPORT for Patients and Communities Act, enacted on October 24, 2018 to combat the opioid epidemic, created a new criminal kickback prohibition for addiction treatment-related services. Codified at 18 U.S.C. Â§ 220 and entitled â€œEliminating Kickbacks in Recovery Act of 2018," it criminalizes paying for patient referrals or offering inducements to patients receiving addiction treatment services. Each violation is punishable by up to 10 years' imprisonment and a $200,000 fine.
Government Misses Civil Forfeiture Deadline and Must Release Seized Funds, Says Eastern District of Pennsylvania
On November 14, 2018, the District Court for the Eastern District of Pennsylvania in United States v. Goodchild held that the government cannot retain funds that were seized by civil seizure warrant when the civil case was untimely, even if the government has also noticed the property as subject to criminal forfeiture. The court held that this result was compelled by the plain language of the Civil Asset Forfeiture Reform Act of 2000 (CAFRA). The decision serves a reminder to the government of the harsh consequences that can attend failure to meet deadlines and potentially complicates the government's calculus regarding pre-indictment civil forfeiture.
On November 14, 2018, IRS Criminal Investigation Division (â€œCIDâ€) released its Annual Report for fiscal year 2018, detailing its enforcement actions for the past fiscal year. CID is the federal enforcement agency with exclusive jurisdiction over federal tax crimes, i.e., Title 26 and 31 offenses.
Eastern District of Pennsylvania Refuses to Keep FCA Qui Tam Complaint Under Seal to Facilitate Government's Settlement Negotiations
On October 16, 2018, the District Court for the Eastern District of Pennsylvania denied the government's requested eleventh extension of the seal in a five-year-old False Claims Act qui tam case. The court ruled that the government's desire to continue settlement negotiations with the defendant, who had been given a copy of the complaint with the court's permission, did not constitute "good cause" to extend the seal, as required by the FCA.
OIG 15-Year Exclusion for False Claims Act Violations by Lab Company and its CEO Sends Warning to FCA Defendants
On August 17, 2018, a Department of Health and Human Services ALJ affirmed HHS OIG's 15-year exclusion of BestCare Laboratory Services, Inc. and its CEO from federal health care programs pursuant to the OIG's permissive exclusion authority. The exclusion was based on BestCare's submission of false claims for mileage reimbursement which violated CMS billing restrictions and formed the basis of a qui tam False Claims Act action, culminating in a $30 million damages award.
Eastern District of Pennsylvania Forms Civil Enforcement Strike Force Adding Resources to False Claims Act Cases
On August 1, 2018, U.S. Attorney for the Eastern District of Pennsylvania William M. McSwain announced the formation of an Affirmative Civil Enforcement (â€œACEâ€) Strike Force within the U.S. Attorney's Office Civil Division. The ACE Strike Force's mission is to bring "additional firepower" to investigations and lawsuits that â€œprosecute fraud and abuse against government programs, including healthcare and procurement fraud,â€ as well as to enforce federal civil rights statutes and "combat the opioid crisis." The ACE Strike Force will initially include five Civil AUSAs and a team leader.Â
Criminal suspects and subjects of investigations frequently are asked by law enforcement to consent to searches of their possessions, such as vehicles and bags during traffic stops, and even their homes. Trying to be cooperative, many initially agree, but later change their minds when officers' actions go beyond their comfort or expectations. Although it has long been settled that an individual can limit the scope of a consensual search, perhaps surprisingly, whether that consent could be revoked was an open question in the Third Circuit until recently. On August 1, 2018, the court answered that question in the affirmative.
The government's seizure of attorney-client communications, a headline event when it involves the President's lawyer Michael Cohen, actually is a recurrent problem in white collar criminal investigations due to the convergence of several trends.
Felony Tax Obstruction Statute Only Applies to Ongoing or Foreseeable Proceedings, Not to Routine Non-Compliance with Tax Code Requirements, SCOTUS Clarifies
On March 21, 2018, the U.S. Supreme Court in Marinello v. United States imposed a significant limitation on the government's ability to charge and successfully convict taxpayers for obstructing administration of the Internal Revenue Code. Section 7212(a) of the IRC makes it a felony to â€œcorruptly or by forceâ€ â€œendeavor to obstruct or impede the due administration of this title.â€ In a 7-2 decision, the Court announced a narrow interpretation of â€œdue administration of [the IRC],â€ holding that due administration referred only to a particular proceeding and not general IRS administration.
Time is Running Out to Disclose Hidden Foreign Assets and Receive Amnesty from Criminal Prosecution, IRS Says
The IRS has announced that it is ending its Offshore Voluntary Disclosure Program (OVDP) in September, 2018. The OVDP currently is the only available mechanism for U.S. taxpayers with undisclosed foreign assets to come into compliance with U.S. tax and foreign asset reporting laws and eliminate the risk of related criminal exposure. Taxpayers who still have undisclosed offshore financial accounts and other assets have roughly six months to send a completed disclosure package to the IRS; the process of crafting and submitting a disclosure can be lengthy so taxpayers should not delay.
On March 2, 2018, the District Court for the Eastern District of Pennsylvania addressed whether a criminal defendant can cross-examine an immunized government witness about the content of her communications with her own counsel regarding her receipt of immunity. Ruling on this issue of first impression, the court held that neither the Confrontation Clause nor the witness' immunity agreement permitted such an inquiry.
Latvian Bank Faces Exclusion as a "Primary Money Laundering Concern" Based on North Korean Ties and Other Misdeeds
On February 12, 2018, the Financial Crimes Enforcement Network ("FinCEN"), a division of the Treasury Department charged with enforcing the anti-money laundering provisions Bank Secrecy Act ("BSA"), branded ABLV Bank, AS as a "financial institution of primary money laundering concern" and announced its intention, via a notice of proposed rulemaking, to effectively exclude ABLV Bank from the U.S. financial system by prohibiting U.S. banks from opening or maintaining correspondent accounts in ABLV Bank's name or on its behalf.