White-collar prosecution in 2022: Expect to see increased health care scrutiny
Authorities are also hinting at increased interagency data sharing, such as between civil investigators and criminal prosecutors.
With 2021 behind us, what can clients expect in terms of white-collar prosecutions in 2022? Drawing on what the last year taught us, here are the predictions for the near future, and tips on how to avoid and handle government inquiries.
All eyes on fraud
Those working in health care, real estate or financial sectors can expect to see increased prosecutions in the coming year. The Biden administration announced sending a “surge” of resources to combat corporate fraud. How serious is this commitment? An entire new FBI squad was created to support fraud prosecutions by the Department of Justice (DOJ). This redoubling of efforts to weed out perceived fraud in health care, financial institutions, securities, and cryptocurrencies also includes tech-heavy, data-driven programs aimed at predicting corporate violations.
Related: Health care fraud dominated DOJ’s false-claims recovery cases last year
Authorities are also hinting at increased interagency data sharing, such as between civil compliance investigators and criminal prosecutors. Professionals working in the following industries and areas should particularly take heed:
- COVID-19 pandemic-related transactions, including business owners and other applicants seeking, using, or obtaining forgiveness of loans from the Paycheck Protection Program (PPP), the Small Business Administration (SBA), or relief from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and related government programs are the low hanging fruit. Fraud investigations can also be expected to extend into conduct by banking executives and other employees who processed loan applications.
- In real estate, cash transactions are more likely to raise red flags for investigators. As of this writing, the U.S. Treasury Department is evaluating new regulations for cash-based real estate deals. Prosecutions of violations of these new regulations should be expected to follow.
- Cryptocurrencies frequently make headlines, and as federal and state lawmakers consider cryptocurrency regulations, expect additional resources into crypto and cyber fraud.
- Cooperation credit, which the current administration says was too leniently granted in the past, is now expected to be more challenging to obtain. To receive this sought-after credit, corporate clients should expect to deliver to the DOJ all nonprivileged information about anyone involved in the misconduct at issue, not just persons who the client believes to be “substantially involved.”
Health care fraud
Health care, including telemedicine and telehealth fraud deserves its own section. Almost daily, the government publicizes another major health care fraud takedown with numerous doctors, labs, pharmacies, and other health care executives getting arrested and charged with Medicare/Medicaid fraud and conspiracy. With its large senior population, South Florida has especially been the focus of major takedown operations. Anyone working in the industry should pay close attention to the clear message coming out of the DOJ and the Department of Health and Human Services (HHS).
Who are the authorities targeting and how can you protect yourself? The federal government, through the Attorney General and Office of Inspector General, announces its annual list of priorities. These priorities provide a good indicator of who is targeted and where government resources are focused. Recently, telehealth (as well as PPP fraud) have been at the top of the priority list for criminal enforcement actions. In the telemedicine context, prosecutors seem to consider marketing companies as a red flag for patient brokering and illegal kickbacks.
Many major strike force operations have also focused on overprescribed durable medical equipment (DME), such as the infamous Operation Brace Yourself, and unscrupulous cancer and genetic testing. Now, the DOJ is charging for alleged criminal conduct in the telemedicine consultation itself, as opposed to the prior arrests for “telefraud,” where telemedicine was used to perpetuate another type of health care fraud.
The takeaways
As federal and state authorities pledge and deliver additional resources to combat the perceived rampant white-collar fraud, professionals working in or advising clients in the industries mentioned above should stay on top of the latest regulations, news and trends. Documenting available information and support for actions taken could serve you well in the future. Unfortunately, over the past two years, we’ve seen many well-meaning doctors, bankers, and business owners who have been thrust into the fast-paced web of changing regulations and guidelines, end up being investigated or prosecuted for violating these complex laws.
Ron Herman owns Herman Law in West Palm Beach. He represents business and health care professionals facing white-collar charges, has served on various boards, and frequently provides media commentary on high profile criminal cases. He may be reached at RHerman@RHLawFL.com.
Read more: