Responding to a False Claims Act (FCA) Civil Investigative Demand (CID)

Former U.S. Attorneys and Assistant U.S. Attorneys are Highly Experienced in False Claims Act (FCA) Civil Investigative Demand (CID) Defense

The False Claims Act (FCA) is a broad federal statute that includes provisions for both civil and criminal enforcement. In civil enforcement cases, the U.S Attorney’s Office has the authority to issue civil investigative demands (CIDs) to compel the production of records, written responses, and testimony. While mandatory, responding to a False Claims Act civil investigative demand can be risky, and CID recipients need to ensure that they are making informed decisions based on the advice of experienced federal defense counsel.

At Oberheiden P.C., our former U.S. Attorneys and Assistant U.S. Attorneys have notable experience on both sides of False Claims Act investigations. This includes experience issuing, enforcing, challenging, and responding to FCA civil investigative demands. We represent individuals and businesses in FCA investigations across the country, and we have resolved the substantial majority of our clients’ FCA investigations without charges being filed.

What You Need to Know about Your (or Your Company’s) FCA Civil Investigative Demand

Responding appropriately to an FCA civil investigative demand requires a clear understanding of the federal investigative process as well as the potential risks and benefits of providing information to the U.S. Attorney’s Office. Making informed decisions is critical, and CID recipients must ensure that they are taking all of the necessary steps to protect their interests to the fullest extent possible.

So, what do you need to know if you have received a False Claims Act CID from the U.S. Attorney’s Office? Here are five key facts about False Claims Act CIDs:

1. The U.S. Attorney’s Office Can Issue CIDs During Government-Initiated Investigations and In Response to Qui Tam Lawsuits

False Claims Act investigations can arise in two primary ways: Either (i) the government can launch an investigation on its own initiative, or (ii) the government can be forced to investigate in response to a qui tam (or whistleblower) lawsuit.

The U.S. Attorney’s Office has the authority to issue CIDs in both scenarios. As a result, receiving a CID won’t necessarily provide insight into the impetus behind the government’s investigation. Likewise, while the False Claims Act requires that CIDs “state the nature of the conduct” under investigation, the U.S. Attorney’s Office will often make this statement in a very general sense. Even so, experienced federal defense counsel will be able to glean the source and scope of the government’s investigation from the contents of a False Claims Act CID in many cases.

2. The U.S. Attorney’s Office Can Only Issue a CID Before Initiating Litigation or Intervening in a Qui Tam Action

While responding to a False Claims Act civil investigative demand can be a burdensome and time-consuming process, and while it can be risky if not handled appropriately, in a sense receiving a CID is good news. The U.S. Attorney’s Office can only issue a CID during the investigative process, so at this stage avoiding charges entirely is still a very real possibility.

Additionally, it is important to keep in mind that receiving a False Claims Act CID does not necessarily mean that you or your company is the target of the government’s investigation. The U.S. Attorney’s Office also uses CIDs to obtain evidence from witnesses. Together with working to identify the source and scope of the government’s investigation, our federal defense lawyers can engage with the U.S. Attorney’s Office to identify the target of the investigation as well.

3. False Claims Act Civil Investigative Demands Can Compel Records, Written Responses, Testimony Under Oath, or All of the Above

A key aspect of civil investigative demands issued under the False Claims Act is their breadth. These CIDs are often extraordinarily broad, requiring not only the production of voluminous records, but also written responses and oral testimony under oath. As a result, responding appropriately can be a difficult and time-consuming process, and False Claims Act CID recipients must work closely with their federal defense counsel to ensure that they are meeting their legal obligations without unnecessarily disclosing information that the U.S. Attorney’s Office may be able to use to substantiate civil or criminal charges.

4. Failing to Respond Appropriately to a False Claims Act CID Can Have Several Adverse Consequences

Responding to an FCA civil investigative demand is mandatory, and the U.S. Attorney’s Office can seek judicial enforcement if necessary. Failing to respond appropriately to a CID can have several adverse consequences. Not only is non-compliance almost certain to lead to additional scrutiny from the U.S. Attorney’s Office, but it can potentially lead to a finding of spoliation, interfering with a federal investigation, and contempt of court as well. While there are limited grounds for challenging False Claims Act CIDs, CID recipients cannot assume that their challenges will succeed. Instead, they must prepare to submit a timely and compliant response while simultaneously pursuing their challenges in court—or, as is often the better approach, working to negotiate the scope of the CID with the U.S. Attorney’s Office.

5. A Strategic FCA Civil Investigative Demand Response Can Facilitate a Favorable Resolution to the Government’s Investigation

While responding to an FCA civil investigative demand presents risks, it also presents opportunities. With the right approach, targets of False Claims Act investigations can often use their CID responses to begin steering the government’s inquiry toward a favorable resolution. When we represent companies and individuals during False Claims Act investigations, we leverage all possible opportunities, and we take a strategic and forward-thinking approach focused on achieving a favorable result as efficiently and cost-effectively as possible.

Put our highly experienced team on your side

Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd

Former Department of Justice

Brian J. Kuester

Former U.S. Attorney
Former DA

John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach

Former Special Agent (OIG)

Michael Koslow

Former Supervisory Special Agent (FBI)

Chris Quick

Former Special Agent (FBI & IRS-CI)

Ray Yuen

Former Supervisory Special Agent (FBI)

5 Keys to Effective and Strategic False Claims Act CID Response

Favorably resolving False Claims Act investigations is all about making the right decisions while avoiding costly miscues. With this in mind, here are five keys to executing an effective and strategic False Claims Act CID response:

1. Promptly Formulating a CID Response Strategy

Given the time constraints, the volume of work required, and the consequences of non-compliance, promptly formulating a CID response strategy is critical. FCA civil investigative demand recipients should begin working with their federal defense counsel immediately to assemble a team, establish roles and lines of communication, and develop a plan for moving forward.

2. Identifying, Preserving, and Collecting All Relevant Records

False Claims Act CID recipients must also promptly identify and take adequate steps to preserve all relevant records. Crucially, the universe of relevant records is not necessarily limited to those that are responsive to the CID. Efforts to collect responsive records should begin immediately as well, as should efforts to set aside or catalog records that are relevant but not subject to disclosure pursuant to the language of the CID.

3. Preserving the Attorney-Client and Fifth Amendment Privileges

When submitting documents and written answers to the U.S. Attorney’s Office in response to a CID, it is imperative to preserve the attorney-client privilege. Recipients must consider the benefits and drawbacks of asserting their Fifth Amendment privilege in relevant cases as well.

4. Working With (Rather Than Against) the U.S. Attorney’s Office

In many cases, it will be beneficial for FCA civil investigative demand recipients to take the approach of working with (rather than against) the U.S. Attorney’s Office. By cooperating as warranted, recipients can often not only reduce the scope of their response obligations, but also set the stage for a positive pre-charge outcome.

5. Responding with a Clear Understanding of the Risks and Opportunities At Hand

At all stages of the process, False Claims Act CID recipients need to make informed decisions with a clear understanding of the risks and opportunities at hand. By systematically targeting a specific outcome, CID recipients can maximize their chances of resolving the government’s investigation without any charges or liability.

FAQs: Responding to a False Claims Act CID from the U.S. Attorney’s Office

Speak with a Senior False Claims Act Defense Lawyer at Oberheiden P.C.

If you or your company needs to respond to a False Claims Act CID, our former U.S. Attorneys and Assistant U.S. Attorneys can help. To get started with a complimentary consultation, please call 888-680-1745 or tell us how we can reach you online today.