On August 5, 2026, DOJ announced a $5.15 million settlement with a Taiwanese light-emitting diode (“LED”) manufacturer and its Texas-based subsidiary to resolve allegations under the False Claims Act (“FCA”), the common law, and the Tariff Act of 1930, as amended, that the companies knowingly failed to pay additional tariffs on Chinese-origin LEDs imported into the United States. The claims stem from a qui tam suit filed by a former employee. See United States ex rel. Wang v. Everlight Electronics Co., Ltd., et al., No. TDC-21-cv-1607 (D. Md.). As we reported here and here, this settlement is the latest example of DOJ’s push to target trade fraud through its Trade Fraud Task Force.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Kristin Graham Koehlerhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngKristin Graham Koehler2026-08-11 12:49:152026-08-11 12:49:15DOJ’s $5.15 Million FCA Settlement Reinforces Focus on Tariff and Customs Compliance
On August 3, 2026, DOJ announced a $14.1 million settlement with a management services organization (“MSO”) for primary care groups to resolve allegations that the organization violated the False Claims Act by causing inaccurate diagnosis codes to be submitted to the Medicare Advantage (“MA”) program. The allegations were included in a qui tam suit filed by a whistleblower who worked for two Medicare Advantage Organizations (“MAOs”). See United States ex rel. Karen Bowers v. Complete Health Partners, Inc., Pharos Capital Group, LLC, Viva Health Inc., and BlueCross and Blue Shield of Alabama, No. 3:22-cv-463 (M.D. Fla.). This is the latest in a string of MA-related FCA resolutions; alleged fraud on the MA program continues to be a top area of focus for DOJ, as we previously reported here.
Lawyers representing False Claims Act whistleblowers need to be mindful of a practical question before a qui tam complaint is filed: how far may counsel go in helping a client develop additional evidence? Ethics Opinion 1297, recently issued by the New York State Bar Association’s Committee on Professional Ethics, provides important guidance for attorneys conducting pre-filing whistleblower investigations and is likely to become a leading reference on the ethical boundaries governing counsel’s role.
On July 23, 2026, the Department of Justice announced that clinical lab Magnolia Diagnostics and its owners agreed to pay $19.2 million to resolve allegations that they violated the False Claims Act by billing Medicare for medically unnecessary respiratory pathogen panel (“RPP”) testing performed in connection with COVID-19 testing at senior living communities. Notably, Magnolia’s investors separately agreed to pay an additional $4.8 million to resolve alleged common law claims for unjust enrichment and payment by mistake and claims under the Federal Debt Collection Procedures Act arising from distributions they received from the laboratory. Assistant Attorney General Brett Shumate emphasized that the Department will seek to hold accountable not only entities that submit false claims, but also individuals and investors who allegedly benefit from fraudulent conduct, which is consistent with previous statements of DOJ’s enforcement priorities and resolutions, as we covered here and here.
As we previously reported here, the Department of Justice has launched its Fraud Oversight through Careful Use of Statistics (“FOCUS”) initiative. The initiative gives data miners an opportunity to meet with the Civil Fraud Section to “explain what differentiates their approach, how they validate their findings, and why their methodology provides a reliable basis for identifying high-quality, actionable False Claims Act matters.” (more…)
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Kristin Graham Koehlerhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngKristin Graham Koehler2026-07-20 09:21:282026-07-20 09:21:28DOJ Releases FOCUS Questionnaire to Assist in Evaluating Qui Tams Filed by Data Miners
On June 9, 2026, DOJ announced a settlement with Broadway Electric Inc. (“Broadway”); its subsidiary, Cornerstone Contracting Inc. (“Cornerstone”); and two of their individual executives, for $21.3 million to resolve False Claims Act allegations. The settlement targeted alleged fraud against the Small Business Administration’s (“SBA”) set-aside contract program for service-disabled veteran-owned small businesses (“SDVOSBs”). The settlement suggests that the government is surging resources to both anti-fraud issues generally, and to alleged SBA fraud in particular. (more…)
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Kristin Graham Koehlerhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngKristin Graham Koehler2026-07-15 11:17:582026-07-15 11:17:58June DOJ/SBA FCA Settlement Highlights Continued Focus on Contractor Compliance
In a significant decision for healthcare providers, the Texas Supreme Court reversed a court of appeals decision that had revived claims against a laboratory testing company and reinstated summary judgment for the defendant. The Court held that the Texas Health Care Program Fraud Prevention Act’s (the “Act”) omissions provision requires proof of materiality, even though the provision does not expressly use the word “material.” (more…)
The Texas Attorney General (“Texas AG”) recently announced a settlement with AstraZeneca Pharmaceuticals LP (“AstraZeneca”) for $33,998,000 to resolve allegations under the Texas Health Care Program Fraud Prevention Act (“THFPA”) arising from the company’s nurse educator program and nurse and patient support programs. SeeState ex rel. SCEF, LLC v. AstraZeneca Pharmaceuticals LP, No. D-1-GN-25-011002 (250th Dist. Ct., Travis County, transferred Dec. 18, 2025). This settlement is the latest in a series of actions by the Texas AG that demonstrate the office’s focus on large healthcare corporations and aggressive deployment of the THFPA, as discussed here. (more…)
DOJ’s $5.15 Million FCA Settlement Reinforces Focus on Tariff and Customs Compliance
On August 5, 2026, DOJ announced a $5.15 million settlement with a Taiwanese light-emitting diode (“LED”) manufacturer and its Texas-based subsidiary to resolve allegations under the False Claims Act (“FCA”), the common law, and the Tariff Act of 1930, as amended, that the companies knowingly failed to pay additional tariffs on Chinese-origin LEDs imported into the United States. The claims stem from a qui tam suit filed by a former employee. See United States ex rel. Wang v. Everlight Electronics Co., Ltd., et al., No. TDC-21-cv-1607 (D. Md.). As we reported here and here, this settlement is the latest example of DOJ’s push to target trade fraud through its Trade Fraud Task Force.
(more…)
Kristin Graham Koehler
Washington, D.C.
kkoehler@sidley.com
Ted Murphy
Washington, D.C.
ted.murphy@sidley.com
Craig Francis Dukin
Washington, D.C.
cdukin@sidley.com
Aaron M. Applebaum
Washington, D.C.
aaron.applebaum@sidley.com
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Lisa H. Miller
Washington, D.C.
lisa.miller@sidley.com
Michael D. Mann
New York
mdmann@sidley.com
Kenneth G. Coffin
Dallas
kenneth.coffin@sidley.com
Anna M. Schmitt
Chicago
anna.schmitt@sidley.com
$14.1 Million FCA Settlement Underscores Medicare Advantage Coding Scrutiny
On August 3, 2026, DOJ announced a $14.1 million settlement with a management services organization (“MSO”) for primary care groups to resolve allegations that the organization violated the False Claims Act by causing inaccurate diagnosis codes to be submitted to the Medicare Advantage (“MA”) program. The allegations were included in a qui tam suit filed by a whistleblower who worked for two Medicare Advantage Organizations (“MAOs”). See United States ex rel. Karen Bowers v. Complete Health Partners, Inc., Pharos Capital Group, LLC, Viva Health Inc., and BlueCross and Blue Shield of Alabama, No. 3:22-cv-463 (M.D. Fla.). This is the latest in a string of MA-related FCA resolutions; alleged fraud on the MA program continues to be a top area of focus for DOJ, as we previously reported here.
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Matt Bergs
Chicago
mbergs@sidley.com
Anna M. Schmitt
Chicago
anna.schmitt@sidley.com
New York Ethics Opinion Addresses Ethical Limits on Attorney Participation in Whistleblower Investigations
Lawyers representing False Claims Act whistleblowers need to be mindful of a practical question before a qui tam complaint is filed: how far may counsel go in helping a client develop additional evidence? Ethics Opinion 1297, recently issued by the New York State Bar Association’s Committee on Professional Ethics, provides important guidance for attorneys conducting pre-filing whistleblower investigations and is likely to become a leading reference on the ethical boundaries governing counsel’s role.
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Kenneth G. Coffin
Dallas
kenneth.coffin@sidley.com
Michael D. Mann
New York
mdmann@sidley.com
Laboratory, Owners, and Investors Settle COVID-19 Testing Fraud Allegations for $24 Million
On July 23, 2026, the Department of Justice announced that clinical lab Magnolia Diagnostics and its owners agreed to pay $19.2 million to resolve allegations that they violated the False Claims Act by billing Medicare for medically unnecessary respiratory pathogen panel (“RPP”) testing performed in connection with COVID-19 testing at senior living communities. Notably, Magnolia’s investors separately agreed to pay an additional $4.8 million to resolve alleged common law claims for unjust enrichment and payment by mistake and claims under the Federal Debt Collection Procedures Act arising from distributions they received from the laboratory. Assistant Attorney General Brett Shumate emphasized that the Department will seek to hold accountable not only entities that submit false claims, but also individuals and investors who allegedly benefit from fraudulent conduct, which is consistent with previous statements of DOJ’s enforcement priorities and resolutions, as we covered here and here.
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Michael D. Mann
New York
mdmann@sidley.com
Lauren E. McBride
Chicago
lmcbride@sidley.com
DOJ Releases FOCUS Questionnaire to Assist in Evaluating Qui Tams Filed by Data Miners
As we previously reported here, the Department of Justice has launched its Fraud Oversight through Careful Use of Statistics (“FOCUS”) initiative. The initiative gives data miners an opportunity to meet with the Civil Fraud Section to “explain what differentiates their approach, how they validate their findings, and why their methodology provides a reliable basis for identifying high-quality, actionable False Claims Act matters.” (more…)
Kristin Graham Koehler
Washington, D.C.
kkoehler@sidley.com
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Matt Bergs
Chicago
mbergs@sidley.com
Joseph R. LoCascio
Chicago
joseph.locascio@sidley.com
Anna M. Schmitt
Chicago
anna.schmitt@sidley.com
June DOJ/SBA FCA Settlement Highlights Continued Focus on Contractor Compliance
On June 9, 2026, DOJ announced a settlement with Broadway Electric Inc. (“Broadway”); its subsidiary, Cornerstone Contracting Inc. (“Cornerstone”); and two of their individual executives, for $21.3 million to resolve False Claims Act allegations. The settlement targeted alleged fraud against the Small Business Administration’s (“SBA”) set-aside contract program for service-disabled veteran-owned small businesses (“SDVOSBs”). The settlement suggests that the government is surging resources to both anti-fraud issues generally, and to alleged SBA fraud in particular. (more…)
Kristin Graham Koehler
Washington, D.C.
kkoehler@sidley.com
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
H. Boyd Greene IV
Washington, D.C.
bgreene@sidley.com
Kenneth G. Coffin
Dallas
kenneth.coffin@sidley.com
Dana Diaz
Washington, D.C.
dana.diaz@sidley.com
Anna M. Schmitt
Chicago
anna.schmitt@sidley.com
Texas Supreme Court Imposes Materiality Requirement on Texas Healthcare Fraud Omissions Claims
In a significant decision for healthcare providers, the Texas Supreme Court reversed a court of appeals decision that had revived claims against a laboratory testing company and reinstated summary judgment for the defendant. The Court held that the Texas Health Care Program Fraud Prevention Act’s (the “Act”) omissions provision requires proof of materiality, even though the provision does not expressly use the word “material.” (more…)
Kwaku A. Akowuah
Washington, D.C.
kakowuah@sidley.com
Scott D. Stein
Chicago
sstein@sidley.com
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Kenneth G. Coffin
Dallas
kenneth.coffin@sidley.com
Matt Bergs
Chicago
mbergs@sidley.com
Texas AG Secures Nearly $34 Million Settlement with Pharmaceutical Company, Reinforcing Active Ongoing THFPA Enforcement
The Texas Attorney General (“Texas AG”) recently announced a settlement with AstraZeneca Pharmaceuticals LP (“AstraZeneca”) for $33,998,000 to resolve allegations under the Texas Health Care Program Fraud Prevention Act (“THFPA”) arising from the company’s nurse educator program and nurse and patient support programs. See State ex rel. SCEF, LLC v. AstraZeneca Pharmaceuticals LP, No. D-1-GN-25-011002 (250th Dist. Ct., Travis County, transferred Dec. 18, 2025). This settlement is the latest in a series of actions by the Texas AG that demonstrate the office’s focus on large healthcare corporations and aggressive deployment of the THFPA, as discussed here. (more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Kenneth G. Coffin
Dallas
kenneth.coffin@sidley.com
Matt Bergs
Chicago
mbergs@sidley.com
Anna M. Schmitt
Chicago
anna.schmitt@sidley.com
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