District of Columbia
In the nation’s capital, contractors representing a multitude of industries do business with the federal and local government. To that end, the District’s version of the False Claims Act, known as the D.C. Procurement Reform Amendment Act, D.C. Code §§ 2-308.13 to 2-308.21, is very similar to the federal FCA. Much of the same conduct that would result in penalties under the federal FCA would also result in penalties under D.C.’s False Claims Act, such as intentionally submitting false claims for payment and making or using false records that cause the District to pay a claim.
Due to its unique relationship with the federal government and the resulted proliferation of contractors operating within the District, the D.C. False Claims Act is much broader than most other states. It covers not just Medicaid and other healthcare programs, but any industry that contracts with the district. Also, it applies to “false” as opposed to “false and fraudulent” claims submitted and statements made. The Act does not apply to claims related to unemployment compensation, workers’ compensation, or claims involving certain of the District’s tax laws.
In D.C., the per claim penalty is between $5,000 and $10,000 in addition to treble (3x) damages. If the defendant voluntarily discloses the false claims, a court may waive these penalties. Plaintiffs must bring any claims under the D.C. False Claims Act within either six years from when the violation occurred or three years after the relevant agency discovered the violation. Claims cannot be brought more than ten years after a violation occurred. Along with its qui tam mechanism, the D.C. False Claims Act, like the federal FCA, prohibits employers from retaliating against employees who either report FCA violations or who assist in such actions.
In 2012, D.C. lawmakers passed the Medicaid Fraud Enforcement and Recovery Amendment Act in response to receiving a notice from the Department of Health of Human Services (“HHS”) informing them that the District’s False Claims Act required amendments to bring it closer in line with the federal FCA. Currently, D.C. is ineligible to receive the 10% bonus recovery from federal FCA Medicaid recoveries.
D.C. Attorney General Irvin B. Nathan is seeking treble damages amounting to $117 million from Bank of America for an alleged embezzlement scheme conducted by a former employee of the Office of Tax and Revenue. Harriette Walters allegedly wrote fraudulent tax return checks and cashed them at Bank of America using a D.C. account. The Attorney General contends that Bank of America employees were involved. Recently, the D.C. Court of Appeals allowed the government to proceed with a trial against Bank of America.
Miracle Hands, a non-profit organization operating in Washington, D.C., was ordered to pay $329,653 to the District after it diverting grant funds from D.C.’s HIV/AIDS program. Under a contract with the District, Miracle Hands was supposed to use the funds to convert a large warehouse into a career training facility for individuals with HIV/AIDS. The non-profit used the funds for other purposes.