The government has become increasingly aggressive in pursuing criminal claims not only against corporations, but also against in-house counsel and compliance personnel, for conduct once treated almost exclusively as civil. This trend creates situations in which a judgment call on the part of an in-house attorney or compliance officer could create real and dire personal consequences. Most recently, the U.S. Treasury Department’s Financial Crimes Enforcement Network imposed a $1 million civil penalty against a money services industry compliance officer as a result of a purported failure to ensure his company’s compliance with anti-money laundering laws.

The False Claims Act

The False Claims Act (FCA) provides an ideal case study for this phenomenon, as it is increasingly being used in this context. Under the FCA, if a person knowingly presents a false claim to the government, makes a false statement to the government, or influences another person to do either, and such fraudulent representations were made for the purposes of obtaining compensation from the government, the government can hold that person civilly and criminally liable, by combining it with ancillary criminal statutes. 31 U.S.C. §§ 3729(a)(1)(A), (B). The FCA is unique in that it also allows private citizens to file suit for violations on behalf of the government. This type of suit is known as a “qui tam” action, and the private individual who initiates the filing is known as a “ relator.” 31 U.S.C. §§ 3729, et seq.

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