DOJ Criminal Division Renews Efforts to Investigate Whistleblower Allegations

by Holland & Knight LLP


  • Department of Justice Criminal Division Assistant Attorney General Leslie Caldwell announced a new process signaling a heightened effort to bring criminal prosecutors into the loop regarding False Claims Act referrals and other whistleblower complaints.
  • This newly articulated policy highlights significant legal issues surrounding complex parallel civil and criminal investigations.

The Department of Justice (DOJ) has signaled a heightened effort to bring criminal prosecutors into the loop regarding False Claims Act referrals and other whistleblower complaints. In recent remarks at a conference comprised primarily of plaintiffs' lawyers for whistleblowers, DOJ Criminal Division Assistant Attorney General (AAG) Leslie Caldwell announced the following:

"We in the Criminal Division have recently implemented a procedure so that all new qui tam complaints are shared by the Civil Division with the Criminal Division as soon as the cases are filed. Experienced prosecutors in the Fraud Section are immediately reviewing the qui tam cases when we receive them to determine whether to open a parallel criminal investigation."1

This newly articulated policy should get the attention of every government contractor, physician, hospital, nursing home and other healthcare provider billing Medicare or Medicaid, as well as companies doing business overseas and those regulated by the Securities and Exchange Commission (SEC). It also highlights significant legal issues surrounding complex parallel civil and criminal investigations.

The venue for AAG Caldwell's remarks was a conference for the "Taxpayers Against Fraud Education Fund (TAFEF)," which is largely funded by whistleblowers and their lawyers.2 The organization's mission, according to its website, includes working "to maintain the integrity and advance the effectiveness of whistleblower reward and private enforcement provisions in federal and state laws" and working to "advance public and government support for whistleblower cases."

While AAG Caldwell's announcement focused on False Claims Act qui tam lawsuits – wherein a private whistleblower files a civil enforcement action on behalf of the federal government, which then has the option to intervene – she also highlighted the Fraud Section's experience in a variety of whistleblower cases that are also a focus for TAFEF, such as the following:

  • The False Claims Act, 31 U.S.C. §3729 et seq., prohibits knowingly making (or causing someone else to file) a false claim to get the government to pay that claim. The act offers qui tam whistleblowers with up to 30 percent of the government's recovery funds and provides a private right of action to the whistleblower to pursue a case even when the government declines to do so. The act initially was intended to address fraudulent suppliers to the Union Army during the Civil War but is now used to address fraud across the spectrum of government contracting and other industries that bill the government. The "false" claims can be based on any number of certifications and other statements made by contractors or claimants. The government has also aggressively employed the statute in the healthcare sector against doctors and hospitals billing Medicare and Medicaid, as well as medical device manufacturers and pharmaceutical companies that the government claims offer improper "kickbacks" to induce healthcare providers to use their products – which are then billed to Medicare or Medicaid.
  • The Securities and Exchange Commission's whistleblower program is relatively new. It was part of the Dodd-Frank Wall Street Reform and Consumer Protection Act that was signed by President Obama in 2010. The SEC provides 10 to 30 percent of the money collected when an SEC enforcement action leads to over $1 million in sanctions. Those efforts are coordinated by the SEC's Office of the Whistleblower.3 SEC whistleblower cases often involve mortgage and other kinds of loan fraud and Ponzi schemes. They can also relate to unlawful bribes paid to foreign government officials that are prohibited by the Foreign Corrupt Practices Act, which is jointly investigated by the DOJ and the SEC when a company is publicly traded or otherwise SEC-regulated. SEC whistleblowers can come in the form of a company's own audit and compliance personnel, as evidenced by a recent $300,000 reward.4
  • The Dodd-Frank Act also contained whistleblower provisions for matters regulated by the Commodity Futures Trading Commission. Like the SEC, the CFTC has a Whistleblower Office,5 which announced its first award in May 2014.6 The guidelines mirror those of the SEC, with awards of 10 to 30 percent for actions resulting in over $1 million in sanctions.
  • Internal Revenue Service whistleblowers can also obtain 10 to 30 percent of the government's recovery in cases involving more than $2 million in unpaid tax liability. Like the SEC and the CFTC, the IRS has its own Whistleblower Office.7

There can be a fine line between civil violations – knowingly submitting false claims to the government under the False Claims Act, for example – and violations of the criminal statutes that the government uses to prosecute fraud. These include making false statements in connection with federal healthcare programs;8 healthcare fraud;9 giving or receiving kickbacks to physicians providing services under federal healthcare programs;10 securities and commodities fraud;11 defrauding the government in connection with grants, contracts, loans, etc.;12 and basic false statements13 as well as mail and wire fraud14 violations. The difference is that criminal statutes require knowing and willful misconduct or a knowing intent to defraud the government.

In her recent remarks, AAG Caldwell explained that criminal prosecutors will "coordinate swiftly with the Civil Division and the U.S. Attorney's Offices about the best ways to proceed in the parallel investigations." She touted the Criminal Division's "wealth of experience in successfully bringing parallel investigations" and said "... We know how to make it work." AAG Caldwell then encouraged the whistleblower lawyers to discuss their cases with criminal prosecutors as they do with their civil counterparts.

The government's efforts to coordinate parallel civil and criminal investigations are nothing new. In 1970, the Supreme Court upheld the government's authority to conduct parallel proceedings without violating due process provided it acts in good faith.15 The current U.S. Attorney's Manual was revised in 1997.16 Both Section 9-42.010, which governs "Coordination of Criminal and Civil Fraud Against the Government Cases,"17 and Section 9-42.440, which contains "Provisions for the Handling of Qui Tam Suits Filed Under the False Claims Act,"18 advise coordination of efforts between the DOJ's Civil Division Commercial Litigation Branch and its Criminal Division and U.S. Attorney's Offices.

What is new is the expanded scope of the internal referral policy. AAG Caldwell's announcement about sharing qui tam complaints is more than the latest implementation of the DOJ's effort to pursue parallel civil and criminal investigations of alleged financial fraud affecting the federal government. On Jan. 30, 2012, Attorney General Eric Holder issued a memorandum instructing civil and criminal investigators to share information "to the fullest extent appropriate to the case and permissible by law."19 The memorandum instructs all litigating components, including the Criminal Division, to create policies and procedures to ensure coordination at the intake, investigation and resolution phases of investigations. The Criminal Division has now apparently finalized its policies and procedures to include a review of all qui tam complaints.

What does this mean for those who may find themselves in the investigative crosshairs of the government? Clients and their counsel need to navigate the potential troubled waters of a parallel investigation carefully. Parallel civil and criminal investigations present unique issues that can complicate matters for both the government and the subject of the investigation. Clients should be aware, for example, that the government – both the civil and criminal sides – has no obligation to disclose the existence of a parallel investigation or whether a referral has been made. In addition, while criminal prosecutors and agents cannot disclose grand jury information to their civil counterparts without a court's permission, they can share evidence obtained through other means, including search warrants and undercover operations. Counsel needs to watch for the possibility that criminal prosecutors are directing a civil investigation for the purpose of obtaining information through civil means that they might not be able to obtain through criminal processes. Civil DOJ attorneys need to avoid affirmatively misleading parties in civil investigations into believing that a parallel criminal investigation does not exist. Counsel in civil investigations needs to weigh an individual's Fifth Amendment right not to incriminate themselves against the potential for a court-ordered "negative inference" jury instruction in a civil case for refusing to answer questions. Both the government and private litigants need to evaluate how a resolution in one arena — and the timing of that resolution — might affect a resolution in the other.

Two cases illustrate some of those complications. The 2012 Attorney General Memorandum contains the following footnote:

"When conducting parallel investigations, Department attorneys should be mindful of arguments like those raised in Stringer20 and United States v. Scrushy, 366 F.Supp. 2d 1134 (N.D. Ala. 2005), that civil, administrative, or regulatory proceedings are being used improperly to further a criminal investigation . . . ."

In the Stringer case, the Ninth Circuit reversed a U.S. District Court's ruling that the government violated a criminal defendant's due process rights when it shielded the existence of a criminal investigation during an SEC investigation. The court held that the SEC did not affirmatively mislead the defendant about the existence of a criminal investigation, as evidenced by warnings in the form that the SEC provides to persons supplying information to the SEC that say it may share information with other agencies, including criminal authorities.

The Scrushy case, however, went the other way. The District Court dismissed the defendant's civil SEC deposition testimony and related perjury counts of the indictment because the civil and criminal investigations became "inescapably intertwined" after the criminal prosecutor manipulated which questions were and were not asked at the civil deposition and influenced where the deposition occurred so as to create venue for the criminal perjury case.

In short, while the coordination by the Justice Department's Civil and Criminal Divisions to investigate whistleblower allegations under the False Claims Act's qui tam provision and other statutes is not new, the DOJ clearly has refocused its efforts. Organizations, individuals and attorneys involved in civil investigations should therefore be aware of the real possibility of a parallel criminal investigation and the issues that will arise.  









8 42 U.S.C. §1320b(a)

9 18 U.S.C. §1347

10 42 U.S.C. §1320b(b)

11 18 U.S.C. §1348

12 18 U.S.C. §1031

13 18 U.S.C. §1001

14 18 U.S.C. §§1341, 1343

15 United States v. Kordel, 397 U.S. 1 (1970)

16 Similar language is contained in the 1988 version at §9-42.010 ( usao/usam/1988/title9criminaldivisionchapters41-60.pdf)


18 Id. See also DOJ's Criminal Resources Manual §932 (

19 The Memorandum is contained in DOJ's Organization and Functions Manual at §27 ( eousa/foia_reading_room/usam/title1/doj00027.htm). It is incorporated into the U.S. Attorney's Manual at §1-12.000 (

20 United States v. Stringer, 535 F.3d 929 (9th Cir. 2008)

Written by:

Holland & Knight LLP

Holland & Knight LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at:

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit
  • New Relic - For more information on New Relic cookies, please visit
  • Google Analytics - For more information on Google Analytics cookies, visit To opt-out of being tracked by Google Analytics across all websites visit This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at:

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.