Photo of Stephen M. Byers

Stephen M. Byers

Subscribe to Stephen M. Byers's Posts

Stephen M. Byers is a partner in the firm's White Collar & Regulatory Enforcement Group and serves on the group's steering committee. He is also a member of the firm's Government Contracts Group and E-Discovery & Information Management Group. Mr. Byers's practice involves counseling and representation of corporate and individual clients in all phases of white collar criminal and related civil matters, including: internal corporate investigations; federal grand jury, inspector general, civil enforcement and congressional investigations; and trials and appeals.

Mr. Byers's practice focuses on matters involving procurement fraud, health care fraud and abuse, trade secrets theft, foreign bribery, computer crimes and cybersecurity, and antitrust conspiracies. He has extensive experience with the federal False Claims Act and qui tam litigation, the Foreign Corrupt Practices Act, the Economic Espionage Act, and the Computer Fraud and Abuse Act. In addition to defense of government investigations and prosecutions, Mr. Byers has represented corporate victims of trade secrets theft, cybercrime, and other offenses. For example, he represented a Fortune 100 U.S. company in parallel civil and criminal proceedings that resulted in a $275 million criminal restitution order against a foreign competitor upon its conviction for trade secrets theft.

Contact: Read more about Stephen M. Byers

Next Tuesday, April 18, 2023, the highest court in the land will hear arguments in what is poised to be the most influential False Claims Act (FCA) case since the landmark decision in Universal Health Servs. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016).  On January 13, 2023, the U.S. Supreme Court granted certiorari to hear two consolidated appeals from the U.S. Court of Appeals for the Seventh Circuit in United States ex rel. Schutte v. SuperValu Inc., 9 F.4th 455 (7th Cir. 2021) and United States ex rel. Proctor v. Safeway, Inc., 30 F.4th 649 (7th Cir. 2022).  The Court’s decision will likely have far-reaching ramifications for FCA cases involving ambiguous contractual or regulatory requirements and may also provide benchmarks for assessing the key element of scienter across all FCA cases.  

In Supervalu and Safeway, the Seventh Circuit joined several of its sister circuits in applying the scienter standard articulated by the Supreme Court in Safeco Insurance Company of America v. Burr, 551 U.S. 47 (2007) to the FCA, finding that a defendant’s conduct is not reckless when (1) acting under an objectively reasonable, albeit erroneous, interpretation of an ambiguous regulation or contract provision; and (2) no authoritative guidance existed to warn the defendant away from that interpretation.

Continue Reading Fair Warning Protection or a “Free Pass to Fleece the Public Fisc”?: SCOTUS Takes Up the Safeco Objective Reasonableness Standard and Subjective Intent Under the FCA

The Department of Justice has announced a $14 million False Claims Act (FCA) settlement with Coloplast, a medical product manufacturer, after Coloplast self-disclosed violations of the Trade Agreements Act (TAA) and Price Reduction Clause (PRC) while under contract with the Department of Veterans Affairs (VA).  The TAA requires contractors to furnish end products that are U.S.-made or “substantially transformed” in designated countries.  Coloplast disclosed that it misapplied the substantial-transformation standard, causing Coloplast to report incorrect countries of origin for products and to improperly retain certain products on contract after manufacturing moved to non-designated countries.  Coloplast also disclosed that it overbilled the Government by failing to provide the VA with discounts pursuant to the terms of the PRC, which normally requires tracking discounts offered to designated commercial customers and offering corresponding downward price adjustments to VA customers. …

Continue Reading FCA Settlement Offers Reminder of the Importance of TAA and PRC Compliance

On September 12, 2022, the Department of Justice (DOJ) announced the first-ever settlement with a Paycheck Protection Program (PPP) lender.  The lender, Prosperity Bank, agreed to pay $18,673.50 to resolve allegations it improperly processed a PPP loan on behalf of an ineligible applicant.  The announcement coincides with DOJ’s creation of three COVID-19 fraud “Strike Force” teams designed to enhanced DOJ’s efforts to combat and prevent COVID-19 related fraud.

Pursuant to the Coronavirus Aid, Relief and Economic Security (CARES) Act, lenders who originated PPP loans were entitled to receive a fixed fee from the Small Business Administration (SBA) ranging from 1% to 5% of the loan amount.  Prosperity Bank, a regional bank with branches throughout Texas and Oklahoma, was one of those lenders.

Continue Reading DOJ Announces First-Ever False Claims Act Settlement with PPP Lender and Creation of COVID-19 Fraud Strike Force Teams

On June 23, 2022, a federal grand jury returned an indictment against Army contractor Envistacom LLC and two of its executives alleging participation in a fraudulent scheme that deprived the federal government of competition and making false representations to the government in furtherance of the conspiracy. The indictment also charged the executive as a co-conspirator, and asserts the conspirators coordinated in the preparation of so-called “competitive quotes” submitted in connection with 8(a) set aside contracts. The quotes were allegedly fraudulently inflated in order to all but guarantee the government customer would sole source the award to the conspirators’ pre-determined bidder. This indictment represents the fruits of yet another investigation by the Department of Justice’s Procurement Collusion Strike Force (“PCSF”).

According to the indictment, the defendants conspired to prepare and secure “sham” pricing quotes from third-party companies that were intentionally higher than Envistacom’s proposals to ensure that the government issued sole source awards to Envistacom. Further, the defendants allegedly coordinated with an unnamed government employee who acted as a co-conspirator and assisted in preparing and submitting Independent Government Cost Estimates (“IGCE”) for certain set aside contracts to ensure that the pre-determined bidder’s proposal would be lower than the IGCEs. Finally, the indictment alleges that the defendants made “false statements, representations, and material omissions to federal government contracting officials” about the IGCEs being “legitimate” and the sham quotes being “competitive.”…

Continue Reading Procurement Collusion Strike Force Nabs Another Military Contractor in Bid Rigging Scheme

On June 3, 2021, the district court judge in U.S. ex rel. Conyers v. Halliburton Co. et al., reversed on reconsideration a prior ruling that a kickback presumptively inflates a contract price under the False Claims Act (FCA). The court previously held that the government was entitled to a rebuttable presumption that kickbacks received by a former employee of the prime contractor, Kellogg Brown & Root (KBR), inflated the contract price under the False Claims Act. The judge revised that ruling, citing to a factual dispute over whether the kickback actually inflated the amount the government paid to reimburse KBR for its subcontract costs. The dispute centered on the falsity element of the FCA and whether KBR submitted, or caused to be submitted, a false claim for payment to the government. The revised decision is consistent with other FCA case law holding that falsity cannot be predicated on a presumption, and that the government must prove that kickbacks actually inflated the contract price.
Continue Reading District Court Reverses Course on Whether Kickbacks Presumptively Inflated Government Costs Under the False Claims Act

In a per curiam, unpublished decision in In re Fluor Intercontinental, Inc., issued on March 25, 2020, the Fourth Circuit has provided some valuable guidance concerning how companies may avoid waivers of the attorney-client privilege when making disclosures to the government after privileged internal investigations. While the decision is non-precedential even within the Fourth…

In Ingham Regional Medical Center v. U.S. (Jan. 6, 2020), the Court of Federal Claims compelled production of certain government investigatory documents that the Court found were not privileged work product prepared “in anticipation of litigation.” The Medical Center sued to recover payments for outpatient healthcare services performed in connection with DoD’s TRICARE program…

In this episode, hosts Jason Crawford and Mana Lombardo talk with Rebecca Ricigliano and Steve Byers, both partners in the firm’s White Collar & Regulatory Enforcement Group, about key considerations for navigating parallel criminal and civil False Claims Act proceedings. “Let’s Talk FCA” is Crowell & Moring’s podcast covering the latest developments with the False …

In United States ex rel. Vavra v. Kellogg Brown & Root, Inc. (Feb. 3, 2017), the Fifth Circuit held that under Section 8706(a)(1) of the Anti-Kickback Act — permitting recovery of twice the amount of each kickback plus $11,000 for each occurrence of a prohibited conduct — corporations are liable “for the knowing violations of …

On April 5, 2016, the Fraud Section of the Department of Justice’s Criminal Division launched a one-year pilot program under which companies can receive tangible credit for self-reporting violations of the Foreign Corrupt Practices Act. The rewards for self-reporting, cooperation and remediation can include avoidance of a corporate monitor, a substantial fine reduction, or declination of prosecution entirely.

In a memorandum released yesterday, Fraud Section Chief Andrew Weissmann highlighted recent enhanced enforcement efforts, including the 50% increase in FCPA Unit prosecutors, the establishment of three FBI International Corruption Unit squads devoted to FCPA investigations, and the further strengthening of cooperation with international law enforcement bodies.

Assistant Attorney General Leslie Caldwell said that incentivizing companies to self-report FCPA misconduct and cooperate by offering tangible benefits will also enhance the Fraud Section’s ability to prosecute culpable individuals. In this respect, the pilot program is a logical next step following the September 9, 2015, Individual Accountability memorandum issued by the Deputy Attorney General (“Yates Memorandum”).

In addition, AAG Caldwell stressed that the pilot program was part of DOJ’s ongoing effort to bring more transparency to the Department’s process of resolving FCPA cases, stating that transparency informs companies what conduct will result in what penalties and what sort of credit they can receive for self-disclosure and cooperation with an investigation. This, in turn, enables companies to make more rational decisions when they learn of foreign corrupt activity by their agents and employees.…

Continue Reading And Now the Carrots: DOJ Announces FCPA Self-Reporting Pilot Program