Facing a False Claims Act Investigation in New York City? Here's What You Need to Know

If you or your business is under investigation for violations of the False Claims Act in New York City, the stakes could not be higher. The federal government uses the False Claims Act, commonly called the FCA, to pursue individuals and companies that it believes submitted fraudulent claims for payment to a government program. A finding of liability can result in treble damages, meaning three times the amount of the alleged fraud, plus civil penalties of up to $27,018 per false claim. In serious cases, criminal charges can follow.

FCA cases are complex, and the government often has a significant head start. Many investigations begin with a qui tam lawsuit, meaning a private individual, often a current or former employee, files a sealed complaint on the government's behalf. You may not even know a case has been filed against you while federal investigators are already reviewing your records, interviewing witnesses, and building their case.

The earlier you retain a False Claims Act defense lawyer in New York City, the more options you have to protect yourself, your business, and your future.

What Is the False Claims Act and Who Does It Apply To?

The False Claims Act is a federal law that imposes liability on any person or entity that knowingly submits a false or fraudulent claim for payment to the United States government. Originally passed during the Civil War to combat defense contractor fraud, the FCA now covers virtually every industry that does business with the federal government, including healthcare, defense contracting, construction, education, pharmaceuticals, and financial services.

The law applies to you if your company or organization receives federal funds and submits claims, certifications, or reports to a federal agency. You do not have to intend to defraud the government to face liability under the FCA. The law covers not only knowing fraud but also reckless disregard and deliberate ignorance of the truth. That is a broad standard, and prosecutors and relators use it aggressively.

A False Claims Act defense lawyer in New York City can assess whether your conduct actually falls within the scope of the law, challenge the government's legal theory, and build a defense around the specific facts of your case.

How Do False Claims Act Cases Start in New York?

Most FCA cases begin in one of two ways. The first is a government-initiated investigation, in which a federal agency like the Department of Justice, the Department of Health and Human Services Office of Inspector General, or a U.S. Attorney's Office opens a case based on its own review of records, tips, or referrals from other agencies.

The second and far more common path is a qui tam lawsuit. Qui tam is a Latin phrase meaning "who as well," and it refers to the provision of the FCA that allows private individuals to file lawsuits on behalf of the federal government and share in any recovery. These private plaintiffs are called relators, and they are often disgruntled employees, competitors, or former business partners who believe they have inside knowledge of fraudulent conduct.

When a qui tam complaint is filed, it is placed under seal, meaning it is kept secret from the defendant while the government investigates. You may have no idea a case exists against you for months or even years. Once the seal is lifted, the government either intervenes in the case or allows the relator to proceed on their own. Either way, you will need a False Claims Act defense lawyer in New York City immediately.

What Is a Qui Tam Lawsuit and What Does It Mean for You in New York?

A qui tam lawsuit is a civil action filed under the False Claims Act by a private individual acting on behalf of the federal government. The relator, the person filing the suit, is typically someone with inside knowledge of the alleged fraud, such as a current or former employee, a contractor, or a competitor.

If the government recovers money, the relator receives between 15 and 30 percent of the recovery, depending on how much they contributed to the case. This financial incentive is powerful and motivates individuals to report even ambiguous conduct as fraud. Relators are represented by their own attorneys, who take these cases on contingency because they share in the recovery.

The sealed period of a qui tam case is particularly dangerous for defendants. While your case sits under seal, the government is investigating you, subpoenaing your records, and interviewing your employees. By the time you learn the case exists, the government may already have built a substantial file. A False Claims Act defense lawyer in New York City can begin assessing your exposure and building a defense the moment you become aware of any investigation.

What Are the Penalties for a False Claims Act Violation in New York?

The civil penalties under the False Claims Act are severe. For each false claim submitted, the government can seek civil penalties currently ranging from $13,508 to $27,018. On top of those per-claim penalties, the government can recover three times the amount of the actual damages it suffered. In healthcare fraud cases involving thousands of individual billing submissions, these figures can quickly reach tens of millions of dollars.

Beyond the civil penalties, FCA violations can trigger criminal prosecution under separate federal statutes, including the federal healthcare fraud statute and the general federal fraud statutes. A criminal conviction brings the possibility of prison time, criminal fines, and exclusion from federal healthcare programs, which can effectively end a medical practice or healthcare business permanently.

Exclusion from Medicare and Medicaid is itself a devastating consequence for any healthcare provider. Even a civil FCA settlement without a criminal conviction can result in exclusion, loss of licensure, and reputational damage that proves impossible to recover from without skilled legal representation.

Do You Have a False Claims Act Defense Case in New York City?

Whether you have a viable defense to a False Claims Act claim depends on the specific facts of your case, the nature of the alleged conduct, and how the government or relator has characterized your actions. A False Claims Act defense lawyer in New York City will evaluate whether the government can actually prove each element of its claim.

To establish FCA liability, the government must prove that you submitted a claim to the federal government, that the claim was false or fraudulent, that you knew the claim was false or acted with reckless disregard or deliberate ignorance of its truth, and that the government suffered damages as a result. Each of these elements can be challenged. Many cases involve billing errors, coding mistakes, or regulatory ambiguities that do not rise to the level of knowing fraud.

The FCA also contains an important public disclosure bar, which can block qui tam suits based on information that was already publicly available before the relator filed. If the relator's allegations are substantially the same as information already in the public domain, the case may be dismissed. Our False Claims Act defense lawyers in New York City analyze every available defense from day one.

What Industries Are Most Commonly Targeted by False Claims Act Investigations in New York?

The False Claims Act reaches any industry that receives federal funding, but certain sectors face particularly aggressive enforcement in New York City and throughout the region.

Healthcare is by far the most common target. Hospitals, physician groups, home health agencies, skilled nursing facilities, pharmaceutical companies, and medical device manufacturers all face FCA exposure through Medicare and Medicaid billing. Defense contractors, construction companies working on federally funded projects, universities receiving federal research grants, and financial institutions participating in federal programs are also frequent targets.

In New York City, the Southern District and Eastern District of New York are among the most active federal districts in the country for FCA enforcement. The United States Attorney's Offices in both districts have dedicated units that pursue healthcare fraud, financial fraud, and government contracting fraud with significant resources. If your business operates in any federally funded space in New York, understanding your FCA exposure is essential.

What Should You Do If You Receive a Civil Investigative Demand in New York?

A Civil Investigative Demand, commonly called a CID, is a powerful tool that allows the Department of Justice to compel the production of documents, written answers to interrogatories, and oral testimony before any lawsuit is filed. Receiving a CID means the government is actively investigating potential FCA violations and believes you or your organization may have relevant information or may be a target.

Do not ignore a CID or respond to it without legal counsel. The documents and information you produce in response to a CID can become the foundation of the government's case against you. Responding incorrectly, producing too much, or failing to assert applicable privileges can cause significant harm. At the same time, failing to comply can result in a court order compelling compliance.

Contact a False Claims Act defense lawyer in New York City the moment you receive a CID. Our attorneys will review the demand, identify the scope of what is being sought, assert all applicable privileges, and manage your response in a way that protects your interests.

What Are the Best Defenses to a False Claims Act Claim in New York?

Several strong defenses are available to individuals and businesses facing FCA claims, and which defenses apply depends on the specific facts of your case. Our False Claims Act defense lawyers in New York City evaluate every available argument from the outset.

The knowledge defense is one of the most powerful. The FCA requires proof that the defendant acted knowingly, with reckless disregard, or with deliberate ignorance. If the alleged conduct resulted from a good-faith interpretation of an ambiguous regulation, a coding error, or a mistake made without any intent to deceive, the knowledge element may not be met. The Supreme Court's 2023 decision in United States ex rel. Schutte v. SuperValu clarified the knowledge standard, and our attorneys stay current on how courts in New York are applying it.

The materiality defense challenges whether the false statement actually mattered to the government's payment decision. The Supreme Court's decision in Universal Health Services v. United States ex rel. Escobar established that materiality is a demanding standard, and that minor regulatory violations do not automatically give rise to FCA liability. Other defenses include the public disclosure bar, the first-to-file rule that bars duplicative qui tam suits, and arguments that the relator lacks original source status.

How Does a False Claims Act Investigation Differ from a Criminal Healthcare Fraud Investigation in New York?

The False Claims Act is a civil statute, meaning the primary consequences are financial rather than criminal. However, the same conduct that gives rise to civil FCA liability can also support criminal charges under separate federal statutes, including 18 U.S.C. § 1347, the federal healthcare fraud statute, and 18 U.S.C. § 1001, the federal false statements statute.

The government frequently pursues both civil and criminal liability simultaneously or in sequence. A civil FCA investigation handled by the Civil Division of the U.S. Attorney's Office can be referred to the Criminal Division if prosecutors believe the evidence supports a criminal charge. This means that admissions made in the context of a civil FCA settlement or investigation can potentially be used to support a criminal case.

Our False Claims Act defense lawyers in New York City coordinate civil and criminal defense strategy from the outset to ensure that nothing done in the civil proceeding creates criminal exposure. Treating these matters as separate is one of the most dangerous mistakes a defendant can make.

False Claims Act Defense Cases Our False Claims Act Defense Lawyers Handle in New York City

Our False Claims Act defense lawyers in New York City represent individuals, businesses, and healthcare organizations across a wide range of FCA matters. We provide representation at every stage, from the earliest signs of investigation through trial and appeal.

• Healthcare fraud and Medicare billing defense: Our False Claims Act defense lawyers represent hospitals, physician groups, home health agencies, and other healthcare providers facing FCA investigations and qui tam suits involving Medicare and Medicaid billing.
• Pharmaceutical and medical device FCA defense: Our attorneys represent pharmaceutical companies and device manufacturers under investigation for off-label marketing, kickback arrangements, and pricing fraud under federal healthcare programs.
• Defense contractor FCA defense: Our False Claims Act defense lawyers represent government contractors under investigation for overbilling, false certifications, defective pricing, and substandard product substitution on federal contracts.
• Research grant fraud defense: Our attorneys represent universities, research institutions, and individual researchers facing FCA claims involving misuse of federal grant funds or false progress reports.
• Financial institution FCA defense: Our False Claims Act defense lawyers represent banks and mortgage companies facing claims related to federally backed loan programs, including FHA and SBA lending.
• Construction and infrastructure FCA defense: Our attorneys represent contractors and subcontractors on federally funded construction projects facing claims of false certifications, prevailing wage fraud, and substandard work.
• Qui tam defendant representation: Our False Claims Act defense lawyers represent businesses and individuals named as defendants in sealed and unsealed qui tam suits filed by relators across all industries.
• Civil Investigative Demand response: Our attorneys represent clients responding to CIDs issued by the Department of Justice during pre-suit FCA investigations.
• Corporate compliance and internal investigations: Our False Claims Act defense lawyers conduct internal investigations and advise businesses on compliance programs designed to prevent FCA exposure before it becomes a legal problem.

Our False Claims Act defense lawyers in New York City handle matters in the Southern District of New York, the Eastern District of New York, and in federal courts across the country when New York-based clients face FCA claims in other jurisdictions.

How Our False Claims Act Defense Lawyers Can Help You in New York City

When you are facing a False Claims Act investigation or lawsuit in New York City, you need attorneys who understand how the government builds these cases, how relators and their counsel operate, and what strategies produce results. Our False Claims Act defense lawyers in New York City are prepared to fight at every stage of the process.

• Early case assessment: Our False Claims Act defense lawyers analyze your exposure from the first sign of investigation, identifying the government's likely theory, the strength of the evidence, and the defenses available to you.
• CID and subpoena response: Our attorneys manage your response to Civil Investigative Demands and grand jury subpoenas, asserting all applicable privileges and limiting the scope of what you must produce.
• Government negotiation: Our False Claims Act defense lawyers engage directly with DOJ attorneys and U.S. Attorney's Office prosecutors to present your side of the story, challenge the government's evidence, and pursue resolution before a lawsuit is filed.
• Qui tam suit defense: Our attorneys represent defendants in sealed and unsealed qui tam actions, challenging the relator's standing, the sufficiency of the complaint, and the merits of the underlying allegations.
• Settlement negotiation: Our False Claims Act defense lawyers negotiate settlements that minimize financial penalties, avoid exclusion, and protect your ability to continue doing business with the federal government.
• Trial defense: Our attorneys are prepared to take False Claims Act cases to trial when fighting the allegations is the right strategy and the evidence supports it.
• Parallel criminal defense coordination: Our False Claims Act defense lawyers coordinate civil and criminal defense strategy simultaneously to ensure nothing done in the civil matter creates or worsens criminal exposure.
• Corporate compliance counseling: Our attorneys advise businesses on building and strengthening compliance programs that reduce FCA risk and demonstrate good faith to government investigators.

Every FCA matter is different, and the right strategy depends on the facts, the industry, and the specific allegations involved. Our False Claims Act defense lawyers in New York City will build a defense tailored to your situation.

Contact Varghese and Associates, P.C. to Speak With a False Claims Act Defense Lawyer in New York City

If you are facing a False Claims Act investigation, a Civil Investigative Demand, or a qui tam lawsuit in New York City, do not wait to get legal help. The government and relators' counsel are already working, and every day without skilled representation is a day the other side is building its case. At Varghese and Associates, P.C., our False Claims Act defense lawyers in New York City are ready to step in immediately and fight for you. Contact Varghese and Associates, P.C. today to schedule a confidential consultation with a False Claims Act defense lawyer in New York City.