Fraud – False Claims Act

Listen to this article

Where a defendant has moved to dismiss a False Claims Act complaint, that motion must be allowed because the relator’s allegations lack the particularity required by Rule 9(b) of the Federal Rules of Civil Procedure.

“This is a qui tam action brought in 2020 by Relators Reynaldo Solano and Neals Maxilin on behalf of the United States and several States pursuant to the False Claims Act (the ‘FCA’) and analogous state statutes. The relators allege that Barton & Associates, Inc. knowingly either provided or contracted with providers to furnish unnecessary medical services and equipment to patients eligible for Medicare or other government-funded health plans. …

“The relators rely on many of the provisions of the FCA to target allegedly false claims, including the presentation of false claims under 31 U.S.C. §3729(a)(1)(A) (Count I), making or using a false record or statement to cause claims to be paid under §3729(a)(1)(B) (Count II), conspiracy to commit a violation under §3729(a)(1)(C) (Count III), knowingly delivering less than all of the government’s property in Barton’s possession under §3729(a)(1)(D) (Count IV), and knowingly concealing or improperly avoiding an obligation to pay money to the government under §3729(a)(1)(G) (Count V). They further allege violations of the California, Florida, Illinois, Massachusetts, Michigan, New Jersey, New York, and Texas state false claims acts (Count VI through XIII). …

“Here, while the relators allege a scheme involving misconduct by various actors, they do so at too high a level of generality. Beyond a general outline of a fraudulent scheme, the complaint is minimal as to any details about specific false claims and lacks reliable indicia that lead to a strong inference that claims were actually submitted in this manner. … The purported clients are identified, but there are no rough time periods, locations, or amounts of fraudulently submitted claims, nor is there any identification of the specific government programs to which such claims were made other than the boilerplate references to Medicare and other governmental programs. … Indeed, the complaint contains only one example of the scheme in action. After a client’s request on January 10, 2019, a Barton-contracted physician signed a prescription for a patient without having met, seen, or communicated with the patient. But the complaint does not allege that the patient was enrolled in Medicare, that Barton received any assessment fee or kickback for approving the prescription, that the prescription was medically unnecessary, or that the recruited client submitted a claim for the patient to Medicare.

“Potentially to bolster the allegations with ‘factual or statistical evidence to strengthen the inference of fraud beyond possibility “without necessarily providing details as to each false claim,”’ … the relators allege some numerical totals as to dollars and the number of prescriptions. However, the ‘factual and statistical evidence struggle[] to connect these allegations with the submission of any false claims to government programs.’ …

“It may not be ‘irrational to infer that, given [the allegations], some false claims for … reimbursement were submitted to the government.’ … But allegations which merely give raise to ‘speculation as to whether the alleged scheme caused the filing of false claims with the government,’ … are insufficient under Rule 9(b). Because the relators have only raised facts to suggest that fraud was possible, the FCA claims are dismissed. …

“Here, the relators fail to identify with any specificity the state law claims. Rather, they assert general propositions regarding false claims, repeating and incorporating by reference the previous allegations. Where those claims fail, the analogous state law claims suffer the same fate.”

United States, et al., ex rel. Solano, et al. v. Barton & Associates, Inc., et al. (Lawyers Weekly No. 02-168-24) (7 pages) (O’Toole, J.) (Civil Action No. 20-11231-GAO) (March 29, 2024).

Click here to read the full text of the opinion.