The Department of Justice recently announced the creation of the Fraud Oversight through Careful Use of Statistics or FOCUS Initiative (“FOCUS”). According to DOJ’s Press Release, since 2024, data miners have filed over 45% of the federal False Claims Act qui tam complaints.
A Shift in Whistleblower Filings Driven by Data Mining
Traditionally, most False Claims Act whistleblowers are company insiders. In recent years, however, nearly half of all qui tam False Claims Act cases were initiated by data miners. Data miners analyze massive datasets using computer algorithms and statistical tools to uncover hidden patterns or anomalies. Such anomalies could signal fraudulent activities. Data mining has been utilized in PPP loan, Medicare drug pricing, Medicaid rebate fraud cases, among others.
The FOCUS Initiative
Under the FOCUS initiative, the government will prioritize “high-quality” actionable matters over less reliable submissions. The initiative offers specific guidance on what constitutes a “high-quality” matter.
- Strong, reliable data analysis that identifies patterns suggesting fraud and provides credible, predictive leads for government investigators.
- Clear evidence of a material violation of a statutory, regulatory, or contractual requirement, rather than merely unusual conduct.
- Particularized allegations supported by facts, with enough detail to satisfy the Federal Rule of Civil Procedure Rule 9(b)’s requirement to plead fraud with specificity.
- Evidence supporting both falsity and scienter, showing not only that claims were false but also that the defendant knew or should have known they were false.
- A well-developed investigative roadmap including key facts, relevant documents, witnesses, and avenues for corroboration.
- Consideration and elimination of alternative explanations, demonstrating why the observed conduct is more likely fraud than an innocent business practice.
- A thorough understanding of the applicable regulatory framework and program requirements, ensuring the alleged misconduct is evaluated against the correct legal standards.
More Tips for False Claims Act Data Miners
- Hire experienced FCA Counsel who can bridge the gap between advanced analytics and federal legal standards, ensuring your case is credible, defensible, and aligned with DOJ’s priorities.
- Do not submit Freedom of Information Act requests. FOIA requests are generally publicly accessible. As such, a FOIA request could alert the target entity that its practices are being scrutinized. Furthermore, False Claims Act cases remain under seal during the government’s investigation. A FOIA request could violate that seal. Finally, information obtained through a FOIA request may be considered a “public disclosure” potentially jeopardizing the whistleblower’s a/k/a relator’s standing.
- Be Mindful When Using Artificial Intelligence/AI Tools. Courts around the country have begun analyzing the use of AI and its impact on the attorney-client and work product privileges. To be safe, do not use AI to analyze communications or work product with your lawyer.
Whistleblower Law Collaborative LLC
Whistleblower Law Collaborative LLC devotes its practice entirely to representing clients nationwide in bringing whistleblower actions. Our clients bring actions under the federal and state false claims acts, and other whistleblower programs. If you are considering bringing a False Claims Act case, contact us for a free, confidential consultation.
