Three SCOTUS Rulings Suggest Focus on Fraud in Future Government Contracts Prosecutions
In its recent Kousisis ruling, the U.S. Supreme Court sided with the government, allowing prosecutors to pursue wire fraud convictions even in the absence of a resulting economic loss. That decision, coupled with last year’s SCOTUS opinions in Snyder and Fischer, underscores the government’s intent to utilize traditional fraud statutes in more aggressive and less conventional applications.
RJO’s White-Collar Practice Group co-chair Lauren Kramer Sujeeth, shareholder Gregory P. Rosen and associate Cindy Lopez wrote an article analyzing the implications for government contractors from Kousisis, Snyder and Fischer for Law360. In the piece, titled “3 Rulings May Reveal Next Frontier Of Government Contract Cases” (subscription required), the authors write that while the Department of Justice (DOJ) may be scaling back on public corruption efforts, procurement and fraud remain prime targets for enforcement.
The authors note that these decisions are particularly relevant given the current administration’s focus on diversity, equity and inclusion (DEI) initiatives and its intent to investigate such issues using a wide array of statutes, including the False Claims Act (FCA). They say that while Kousisis, in particular, suggests that enforcement will come with its own litigation risks for the government, contractors should be mindful of the new prosecutorial focus with respect to DEI and other procurement fraud.
“Given this landscape, it behooves all organizations that accept federal funding — prime contractors and subcontractors, grant-funded institutions, government corporations, nonprofit organizations, healthcare providers, etc. — to be prepared for whatever comes next,” they advise. “Contractors should likewise weigh their DEI exposure — remembering that FCA liability does not hinge upon specific intent — and consider proactive steps to mitigate any risk. With an endorsed and open-ended theory underpinning wire fraud, and the looming debate over materiality in the DEI context, good housekeeping and patience is warranted.”
Read a PDF of the full article.
Sujeeth is a seasoned trial lawyer who has built a thriving career taking on tough, unusual cases. She represents companies and individuals facing regulatory investigations or state and federal criminal charges, with a focus on public corruption, fraud and cryptocurrency claims. Sujeeth’s versatile practice includes representing both plaintiffs and defendants. She serves as trusted litigation counsel to companies, directors, officers and employees in breach of contract matters and trade secrets lawsuits.
A former senior federal prosecutor who supervised the largest prosecution in American history, Rosen understands how law enforcement agencies and government attorneys build cases. He leverages his experience handling more than 50 jury trials, thousands of criminal prosecutions and hundreds of grand jury proceedings as a member of the firm’s White-Collar Criminal Defense and Government Contracts Practice Groups. Mr. Rosen is adept at navigating local and national litigation, prioritizing practical advice individually tailored to each client.
Lopez counsels and represents government contractors on a broad range of matters, including bid protests, contract claims and disputes, and a variety of regulatory issues affecting government contractors, including domestic preference procurement laws. She assists government contractors in a diverse array of industries, including energy, aerospace and defense, construction, health care and cybersecurity.