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Health Care Qui Tam cases

What does Qui Tam mean? 

Qui tam is short for the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” which roughly translates to “he who brings an action for the king as well as for himself.”  

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When the PPP program was first created, it was meant to assist business left struggling by the Covid-19 pandemic.  One of the key provisions of the program, was that the Small Business Administration (SBA) would guarantee the loan which meant that borrowers could secure loans more easily.  As mentioned in a previous blog, the government in the spring of 2020 started to go after the most egregious and problematic PPP loan applications and payments and really ramped up prosecutions.

But now, the DOJ, IRS, SEC etc are shifting their focus to more complex investigations.  We have clients where the government is scrutinizing every aspect of the loan application such as 

-was the box checked stating that you only had one entity

The Department of Justice just announced that U.S. Attorney General Merrick B. Garland created COVID-19 Fraud Enforcement Task Force to enhance enforcement efforts against COVID-19 related fraud.

Cases have included:

  • Offers to purchase COVID-19 vaccination cards

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The IRS has just announced that Operation Hidden Treasure will seek to find taxpayers with unreported income from currency transactions.  Did you notice the new question on page 1 of the Tax Form 1040?  It states, “At any time during 2020 did you receive any financial interest in virtual currency?”  Last year this question was only on Schedule 1.

The IRS Criminal Investigation Division (“CID”) will look for typical “flags” in money transactions.  That may include “structuring” (transactions in increments of less than $10,000 to avoid reporting requirements), “the use of nominees, shell corps” (entities used solely for moving money around) or “getting on and off the chain.” (On chain transactions – blockchain is modified to reflect the transaction on a public ledger. Off chain transactions are those that that go off the blockchain.  They work by swapping private keys to an existing wallet instead of transferring funds.)

The IRS identifies and investigates these tax evasion flags.  Operation Hidden Treasure is “all about finding, tracing, and attributing crypto to U.S. Taxpayers.” Do not be fooled into thinking that since it’s cryptocurrency the government does not have the know how to investigate.   Charges for tax evasion, false information on a tax return or even money laundering or structuring can be forthcoming.  Call Conaway & Strickler, PC if you have had a friendly visit from an IRS CID Agent or if you think you might be facing some issues with the IRS.  Carolyn Schenck, national fraud counsel in the IRS Office of Chief Counsel states, “Operation Hidden Treasure is designed to find, trace and attribute such transactions to taxpayers. These transactions are not anonymous.  We see you.”

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As we continue to see in the news, many cases are being charged by the Department of Justice for PPP (Payroll Protection Program) issues.  There continues to be a lot of confusion out there over the Paycheck Protection Program (PPP). Understandable since information continues to change about how to apply, whether to apply for forgiveness, and the second round of PPP loans being rolled out.  Due to the rules and the program itself changing frequently, it is important to not fall under scrutiny by the DOJ.
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The Department of Justice (DOJ) has already charged and convicted many cases of PPP loan fraud.  But, the purpose of this post is that, recently, the DOJ announced the first (publicized) civil settlement resolving PPP loan fraud allegations against a company and its owner.   The owner and SlideBelts, Inc  was required to pay a $100k civil penalty per FIRREA civil penalty provision 12 USC 1833a and the False Claims Act (FCA) 31 USC 3729 in the Eastern District of California.  The DOJ continues to be aggressive and swift in bringing criminal charges, but, this is the first public civil settlement.  Please see  https://www.justice.gov/usao-edca/press-release/file/1352931/download to read it in its entirety.

People in Georgia tend to have mixed opinions on polygraph tests-if they even have an opinion at all. One camp purports that the tests are unreliable and easy to beat. Another camp recognizes potential flaws while still understanding that these tests have a lot to offer.

The reality is that they do provide tremendous value in many cases. In fact, they have helped criminal suspects in Georgia avoid charges or have led to charges being dropped.

Official use

Public attitudes towards marijuana in Georgia are becoming far more relaxed, especially as other states, such as Colorado and California, begin legalizing recreational use of the drug. However, while Georgians may no longer think that offenders of marijuana crimes deserve the heavy handed sentences they have been subject to for decades, the fact remains that state law concerning marijuana remains very tough. While it can be easy to think that marijuana is no longer a “big deal,” the penalties that offenders face can still be surprisingly extreme.

Getting mixed messages?

Navigating what is legal and not legal concerning marijuana in Georgia can be difficult. As the Atlanta Journal-Constitution points out, while Georgia has made medical marijuana legal in the state, growing it or importing it remains illegal. As a result, people who grow even small amounts of the plant for their own medicinal purposes can find themselves suddenly facing accusation of drug dealing and years in prison.

In 2019, the nonprofit news service, ProPublica, published a story about health care fraud. The story, which included reporting about a Texas-based personal trainer, shows how easy it can be to bill health insurance providers for services despite lacking any legal basis for doing so.

Unfortunately, as the ProPublica report points out, there are some problems with the current health care billing system. The Medical License Verification Act would change that.

Obtaining a National Provider Identifier number

If you are facing criminal charges, you are naturally concerned about the potential legal and financial consequences of a conviction. However, as a nurse, even a charge of certain offenses may lead to professional consequences as well.

The state requires that licensed nurses report any convictions that involve a felony offense, controlled substances or irresponsible use of alcohol or drugs to the Georgia Board of Nursing. If charged with such a crime, the board may suspend or revoke your professional license.

1. Felony offenses

News stories continue to pour in about Paycheck Protection Program loan fraud (see

https://www.nbcnews.com/business/economy/congressional-investigation-finds-over-1-billion-ppp-fraud-n1239001).  The Paycheck Protection Program (“PPP”) was authorized as part of the Coronavirus Aid, Relief, and Economic Security Act to provide forgivable loans to eligible small businesses. Under the PPP, small businesses can apply for loans that must be used for payroll expenses, interest on mortgage, rent, and/or utilities only. The amount of a PPP loan that a business could receive is generally 2.5 times (or 250%) the business’s average monthly payroll cost.  The United States Small Business Administration oversees the PPP, but individual PPP loans are issued by private, approved lenders and banks, which are federally insured financial institutions.

How does the government identify potential fraud?  They review the following, among other things:

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