The United States Court of Appeals for the Fourth Circuit recently affirmed a $114 million judgment in a protracted, and hotly contested, suit filed under the qui tam provisions of the False Claims Act (FCA) against the owner of a specialty clinical laboratory and the two individuals who led its sales operation. In United States ex rel. Lutz v. Mallory, et al., 988 F.3d 730 (4th Cir. 2021), the court upheld the FCA judgment entered in the trial court, which was predicated upon illegal kickback payments made by the laboratory to independent sales contractors and physicians. The decision is notable both for holding that commission-based payments to independent sales contractors violate the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b) (AKS), and for affirming a jury verdict that, once treble damages and penalties were added, resulted in a judgment equal to seven times the amount of damages assessed by the jury.
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