DOJ Catch of the Week: Kabbage Inc.

This week's Department of Justice (DOJ) Catch of the Week goes to bankrupt financial technology company Kabbage Inc. (doing business as KServicing).  On Monday (May 13), DOJ announced that the company agreed to pay up to $120 million to settle charges it violated the False Claims Act by improperly securing Small Business Administration (SBA) loans through the COVID relief Paycheck Protection Program (PPP).  The ultimate payout will depend on the...

Payments News Update – April 12, 2024

Legal and Regulatory Developments SPOTLIGHT: Visa, Mastercard CEOs Throw Hearing Off Track Payments Dive – April 9, 2024 Sen. Dick Durbin opted to postpone a Senate Judiciary hearing this week focused on Visa and Mastercard’s business practices after CEOs of the credit card companies declined to appear Tuesday. But Durbin, who chairs the committee, is still angling to bring those chief executives to Washington, according to his staff. “The witnesses...

DOJ Releases False Claims Act Results for 2023

The Department of Justice (DOJ) just released its False Claims Act results for 2023.  By all accounts, it was another big year for the government's primary fraud-fighting tool.  The top-line numbers are roughly $2.7 billion in total recoveries from 543 settlements and judgments, the highest number of settlements and judgments in a single year.  This brings the total tally of False Claims Act recoveries to more than $75 billion since...

DOJ Principal Deputy Assistant Attorney General Credits Whistleblowers, Identifies 2024 Priorities

DOJ Principal Deputy Assistant Attorney General Brian Boynton recently spoke at the 2024 Federal Bar Association’s Qui Tam Conference.  Here are a few key takeaways from his remarks, which can be found here. Crediting Whistleblowers. Boynton lauded whistleblowers, calling them “a critical source of [DOJ’s] enforcement efforts,” and he thanked them and their counsel for their efforts, adding that the DOJ “could not have done this without you.”  Whistleblowers should...

Top Ten Non-Healthcare False Claims Act Recoveries for 2023

It was another big year for DOJ enforcement under the False Claims Act, the government's primary fraud-fighting tool.  As usual, most of the recoveries were in the healthcare space with seven of the Top Ten recoveries involving various schemes to defraud Medicare and Medicaid.  See our Top Ten FCA and Top Ten Healthcare FCA listings. While healthcare recoveries dominated the Top Ten, two of the top five recoveries involved government...

Payments News Update – November 17, 2023

Legal and Regulatory Developments SPOTLIGHT: Why the CFPB Proposal for Big Techs May Affect the Entire Industry The Financial Brand – November 9, 2023 The Consumer Financial Protection Bureau is asserting the ability to perform examinations of major digital wallet and mobile payments providers in a regulatory proposal. This would be the first time entities like Apple Pay, Google Pay and more than a dozen other big tech consumer payment...

Payments News Update – November 10, 2023

Legal and Regulatory Developments SPOTLIGHT: US Consumer Watchdog Proposes Rules for Big Tech Payments, Digital Wallets Reuters – November 7, 2023 The top U.S. consumer financial watchdog on Tuesday proposed to regulate tech giants' digital payments and smartphone wallet services, saying they rival traditional payment methods in scale and scope but lack consumer safeguards. The Consumer Financial Protection Bureau's (CFPB) proposal would subject companies like Alphabet, Apple, PayPal and Block's...

October 18, 2023

The president of a California-based medical technology company has been sentenced to 8 years in prison and ordered to pay $24 million in restitution in the first COVID-related criminal securities fraud case charged by DOJ and the first COVID-related criminal healthcare fraud case brought to trial.  Among many things, Mark Schena of Arrayit Corporation was found to have taken advantage of the pandemic by claiming he and his company had...

Payments News Update – October 6, 2023

Legal and Regulatory Developments SPOTLIGHT: Supreme Court to Consider Debit Fee Case Payments Dive – September 29, 2023 The Supreme Court on Friday granted a petition from a group of North Dakota merchants who brought a case against the Federal Reserve Board in 2021 over the central bank’s setting of a debit card fee cap. The merchants’ petition for review isn’t with respect to the merits of the case, but...

In Their Own Words. . . .Deputy Attorney General Monaco

"Combating all types of fraud is a top Justice Department priority.  That is especially true when the fraud involves exploitation of the suffering of others." Deputy Attorney General Lisa O. Monaco in announcing the results of DOJ's latest nationwide COVID-19 fraud enforcement sweep, which over the last three months included 700 enforcement actions involving over $830 million in fraud.