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White Collar + Fraud + Investigations + Compliance

Posts from September 2022.

Musings of a Former DOJ Trial Attorney: Let’s talk bank exam privilege. As most practitioners in this space are aware, documents and communications relating to the supervisory role of bank regulators are protected under bank exam privilege. It’s also commonly understood that the privilege itself is owned by the bank regulator, not the financial institution. How does that play out in the real life of an AUSA or DOJ Trial Attorney investigating the financial institution or issues involving the financial institution? Well, oftentimes, financial institutions will redact communications with the bank regulator and internal documents and communications involving that exam. What financial institutions don’t anticipate is that the bank regulator may waive the privilege related to specific exams. In other words, if the bank regulator grants that waiver, and to the extent that no other privilege applies, those previously protected documents and communications lose that protection. 

Recently, the DOJ announced that Biogen agreed to pay $900 Million to settle a declined qui tam case. Relator and former Biogen employee, Michael Bawduniak, alleged that Biogen paid kickbacks to physicians in the form of speaker honoraria, speaker training fees, consulting fees and meals, to induce them to prescribe certain drugs in violation of the Anti-Kickback Statute. 

Last Thursday, Deputy Attorney General Lisa Monaco made remarks regarding corporate criminal enforcement.  Deputy Attorney General Monaco set forth five key priorities: (i) individual accountability; (ii) consideration of previous misconduct; (iii) self-disclosures by companies accused of misconduct; (iv) compliance monitors; and (v) compensation/incentive plans that encourage a healthy corporate culture and avoid risky behavior.  In my view, this is not a substantial departure from the Department’s current practice.  Deputy Attorney General Monaco’s articulation of these priorities, however, codifies practices that were already occurring in both Civil and Criminal matters. 

Yesterday, the Department of Justice announced that Akorn Operating Company, a pharmaceutical company, (“Akorn”) agreed to pay $7.9 Million to resolve allegations that it caused certain submissions of false claims to Medicare Part D in violation of the False Claims Act (“FCA”). 

This settlement is notable because it relates to disclosure in the settlement context.  Based on the information provided in the press release, it appears that Akorn admitted to certain facts in cooperation with the FCA investigation and, as a result, the Department considered that cooperation in determining the settlement amount and resolution of the allegations.

Today, the DOJ announced a settlement with Philips RS North America LLC, formerly known as Respironics Inc., related to allegations of that it paid illegal kickbacks to durable medical equipment (“DME”) suppliers. Notably, the DOJ alleges that Respironics Inc. (“Respironics”) gave DME suppliers data related to prescribing physicians to assist the suppliers in marketing to physicians. The federal Anti-Kickback Statute (“AKS”) prohibits a person or entity from knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or reward the purchase of any item that may be reimbursed under the federal healthcare programs.  Here, DOJ alleges that Respironics caused certain DME suppliers to submit false claims for medical equipment that were false because of its inducements to the DME suppliers in the form of free data.

Musings of former DOJ trial attorney: Let's talk about whistleblower programs. Does your company have a robust complaint and whistleblower program? If you have a client-facing escalated complaints department, are your complaints imaged and searchable? Is there a way to aggregate your company's or bank's complaints so you can determine if there is a larger issue afoot? Are your risk groups mining complaint and whistleblower information to determine if there is heightened exposure in certain areas?

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