The federal government continues to expand its efforts to combat fraud against taxpayer-funded programs, and a recently announced initiative signals a growing interest in partnering with technologically sophisticated whistleblowers.
The U.S. Department of Justice recently announced the Fraud Oversight through Careful Use of Statistics (FOCUS) Initiative, an anti-fraud effort designed to strengthen collaboration between the government and individuals or organizations that use advanced data analysis to identify potential False Claims Act violations.
How will the FOCUS Initiative work?
Traditionally, many qui tam lawsuits have been filed by insiders—employees, contractors or others with firsthand knowledge of alleged fraud. In recent years, however, the Civil Division has seen a significant increase in complaints filed by so-called “data miners.” These individuals or companies analyze publicly available government information, billing data, procurement records and other datasets to identify patterns that may suggest fraud involving federal programs.
The Justice Department has made clear that it values these contributions. At the same time, officials have indicated that not all data-driven allegations are created equal. The FOCUS Initiative appears intended to help the government distinguish between speculative claims and those supported by rigorous analysis and a meaningful understanding of the regulations governing the programs at issue.
Under the initiative, data miners will have the opportunity to meet with attorneys from the Civil Fraud Section before filing a qui tam action. These discussions are intended to allow analysts to explain their methodologies, demonstrate the sophistication of their technology and show why particular data patterns may reliably indicate fraud rather than innocent anomalies.
Importantly, participation in these meetings is voluntary. The Justice Department has emphasized that pre-filing discussions are not a prerequisite to bringing a False Claims Act case. However, the government has also stated that it intends to prioritize working with data miners who demonstrate substantial pre-filing diligence, analytical discipline, familiarity with regulatory requirements and a commitment to developing legally supportable allegations.
The FOCUS Initiative may ultimately lead to stronger partnerships between the government and data-driven relators, particularly those capable of identifying sophisticated fraud schemes involving healthcare programs, government contracts and other federally funded activities.
Anyone considering filing a qui tam lawsuit should understand that successful False Claims Act cases require more than identifying unusual data points. Careful investigation, legal analysis and compliance with procedural requirements are necessary. Seeking personalized legal guidance when filing a claim is, therefore, generally very wise.