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On May 11, 2023, the Supreme Court issued two opinions limiting the reach of the federal fraud statutes and eliminating often-used theories from the government’s arsenal.

In Ciminelli v. US, 598 U. S. __ (2023), the Supreme Court decided that the “right to control” theory—long used by prosecutors in the Second Circuit—can no longer be used to support wire fraud convictions.  The Court overturned the conviction of Louis Ciminelli, a participant in a scheme to rig bids for New York state-funded projects, known as the “Buffalo Billion” initiative. As part of the scheme, requests for proposals were strategically drafted to give preferential treatment to Ciminelli’s company. At trial, the government argued that Ciminelli and his co-defendants were guilty of wire fraud under the right-to-control theory because they deprived the entity responsible for awarding the state-funded projects of certain information necessary to make an informed decision about the bid awards. The Second Circuit affirmed the conviction and the government’s use of the right-to-control theory.

Writing on behalf of a unanimous court, Justice Clarence Thomas held that the wire fraud statue only reaches traditional property interests and the right to valuable economic information needed to make discretionary economic decisions—known as the “right to control”—is not a traditional property interest. The right-to-control theory, therefore, “cannot form the basis for a conviction under the federal fraud statutes.” Continue Reading In Control: Supreme Court Reigns-In Second Circuit Fraud Theories

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The third year of False Claims Act (FCA) enforcement under the Trump administration was defined by a number of notable settlements, the implementation of several policy changes announced last year concerning how the Department of Justice (DOJ) will pursue (and in some instances, dismiss) cases under the FCA, and a Supreme Court decision addressing the

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In this episode, hosts Mana Lombardo and Jason Crawford talk with Sarah Hill, an associate in the firm’s Government Contracts Group, about False Claims Act cert petitions pending at the Supreme Court. “Let’s Talk FCA” is Crowell & Moring’s podcast covering the latest developments with the False Claims Act.

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This week’s episode covers Supreme Court, NDAA, and ‘Fat Leonard’ news, and is hosted by partners David Robbins and Peter Eyre. Crowell & Moring’s “Fastest 5 Minutes” is a biweekly podcast that provides a brief summary of significant government contracts legal and regulatory developments that no government contracts lawyer or executive should be without.

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The government has reiterated in no uncertain terms its proposed standard for particularity under the FCA: “a qui tam complaint satisfie[s] Rule 9(b) if it contains detailed allegations supporting a plausible inference that false claims were submitted to the government, even if the complaint does not identify specific requests for payment.”  Brief for United States as Amicus Curiae, United States ex rel. Nathan v. Takeda Pharmaceuticals, Petition for Certiorari No. 12-1349 (U.S. 2013).  While opining at some length about the state of case law in the lower courts, the Solicitor General ultimately asked the Supreme Court not to hear the case.

Many of us thought that Nathan was a good opportunity for the Supreme Court to resolve an apparent split among the circuits (an issue we discussed in posts from February and March of last year).  The point of contention is the particularity required in an FCA complaint under Rule 9(b): is it enough to allege a fraudulent scheme, or must a plaintiff also furnish details about the claims themselves?  The government finds concerns about this circuit split to be somewhat overstated.  See Br. at 10 (“[T]hose circuits that initially endorsed the per se rule [requiring identification of specific claims] have issued subsequent decisions that appear to adopt a more nuanced approach.”).  The government thus finds the extent of inter-circuit disagreement to be “uncertain,” suggesting that it “may be capable of resolution without the Court’s intervention.”  Id. at 10, 14.
Continue Reading Solicitor General Addresses Standard for Rule 9(b) in FCA Cases, Asks Supreme Court Not to