Goodwin Law has announced that whistleblower attorneys are reportedly misusing the False Claims Act (FCA) to target private equity investors in the healthcare sector.
According to Goodwin, whistleblower attorneys have increasingly employed qui tam actions under the FCA to pursue private equity firms involved in healthcare and life sciences. This marks a shift in enforcement strategy. The article emphasizes that most such suits are driven by whistleblower lawyers rather than the Department of Justice (DOJ) itself, with these attorneys gaining momentum from both executive and legislative branches. This trend reflects a growing perception of private equity as a “deep-pocket” target for FCA litigation.
Goodwin also reports that in fiscal year 2021, the DOJ recovered over $5.6 billion under the FCA, with approximately $5 billion involving allegations of fraud against Medicare and Medicaid. The unprecedented scale of these recoveries underscores the continued potency of whistleblower-driven enforcement in the healthcare sector. Goodwin highlights that these recoveries are among DOJ’s most critical tools for deterring misuse of public funds.
As per Reuters, the DOJ has increased scrutiny of healthcare investors, including private equity firms, under the False Claims Act. Investigators are increasingly targeting investors who may have knowingly caused or failed to prevent false claims submitted by their portfolio companies. It specifically notes that certain enforcement actions have focused on private equity firms exercising active oversight in cases where misconduct occurred downstream.
Founded in 1912 in Boston, Goodwin Procter LLP has expanded from a two-person practice into a global law firm with over 1,800 lawyers. The firm represents leading investors, entrepreneurs, and companies across sectors such as private equity, life sciences, real estate, technology, and financial services.
