Aggressive enforcement tactics treat fraudsters like mobsters

A pair of handcuffs on a white background

Government agents are adopting a more forceful approach when it comes to fraud investigations, at times utilizing tactics typically reserved for violent criminals, according to Bloomberg

Patrick Cotter, a former assistant U.S. attorney who currently works as a defense lawyer in Chicago, explained how armed agents burst into the home of one client as he ate breakfast with his family and confiscated computers, cell phones and documents linked to a suspected fraud scheme.

“Now we’re seeing traditional criminal prosecutorial tactics against individuals for the first time on a large scale,” he told the news outlet. “These tactics had previously been reserved for racketeers, bank robbers and drug dealers. This is a sea change.”

The government’s more aggressive approach to fraud enforcement was evident in the coordinated arrest of more than 300 individuals who are accused of being responsible for more than $900 million fraudulent claims. After the Yates memo was released last fall, federal prosecutors can no longer release individuals from liability, a concession that was often on the table when negotiating settlements.

Los Angeles attorney Mark Hardiman referenced the government’s case against his client, Prem Reddy, M.D., founder of Prime Healthcare Services, who faces charges from the Department of Justice, as an example of the government’s new, hard-nosed approach.

Although the DOJ has shown an increased willingness to go after individuals at the center of healthcare fraud schemes, so far prosecutors have been unable to follow through in the courtroom. Last month a jury acquitted W. Carl Reichel, the president of Warner Chilcott PLC, accused of overseeing a comprehensive kickback scheme that plied physicians with expensive dinners.

- read the Bloomberg article