‘False claims’ bring more risks for vendors

The Justice Department’s recent decision to review new False Claims Act fraud lawsuits for criminal as well as civil charges brings additional risks to federal contractors.

DOJ officials announced recently that under a new policy all new civil lawsuits under the False Claims Act will be automatically reviewed for possible criminal prosecution. The False Claims Act lawsuits typically are whistleblower lawsuits brought by individuals.

In the past, criminal reviews were done at DOJ’s discretion. Now they are to happen in all cases and possibly earlier than before, according to King & Spalding LLP law firm.

“This new centralized criminal review signals that the criminal—and civil—stakes may be escalating for companies and their executives accused by a whistleblower of defrauding the government,” King & Spalding wrote in a client alert. Along with a “heightened risk of prosecution comes an intensified risk of the attendant problems that can follow from criminal charges, such as suspension, debarment, or exclusion,” they wrote.

More information: Client Alert http://goo.gl/ZBTGz1

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