NYSBA Issues Ethics Opinion on Lawyer Involvement in Deceptive Investigative Conduct in FCA Cases

NYSBA Issues Ethics Opinion on Lawyer Involvement in Deceptive Investigative Conduct in FCA Cases

On July 23, the New York State Bar Association (NYSBA) Committee on Professional Ethics issued Opinion 1297, addressing whether an attorney may advise a private client regarding the use of deception to gather evidence in support of a potential False Claims Act (FCA) complaint. The opinion reaffirms the breadth of the ethical prohibitions on lawyer involvement in deceptive conduct, even in the investigative context. 

The opinion arose from an inquiry by a lawyer whose client is a prospective relator in an FCA case. The client sought to use deceptive means — specifically, having an investigator pose as a potential customer and make false statements — to obtain evidence of fraud involving federal government funds prior to filing a qui tam complaint. 

The Committee concluded that attorneys are not permitted to direct, participate in, or supervise any deceptive investigative techniques on behalf of their clients. 

The Committee’s key findings are as follows.

• No existing authority under the New York Rules of Professional Conduct provides an exception permitting a lawyer to induce, assist, or supervise a client’s use of deception in FCA investigations. Rule 8.4(c) broadly prohibits a lawyer from engaging in “conduct involving dishonesty, fraud, deceit or misrepresentation,” and Rule 8.4(a) extends this prohibition to acting “through the acts of another.”
• Under Rule 1.2(d), a lawyer may not counsel or assist a client in conduct the lawyer knows to be illegal or fraudulent. No exception exists for FCA investigative contexts. 
• If the client intends to proceed (or has already proceeded) with deceptive conduct, the lawyer may research and advise the client on the potential legal risks and consequences of such conduct. This advisory role is consistent with the lawyer’s duties of competence and diligence under Rules 1.1 and 1.3, and the limitation on advice contemplated by Rule 1.2(d). Such advice does not violate Rule 8.4(c). 
• The Committee acknowledged prior New York County Lawyers Association and New York City Bar analyses of limited “dissemblance” in undercover investigations, but declined to adopt any implicit exception, noting that such a carve-out would require an amendment to Rule 8.4’s text. 

While the Committee ultimately determined that attorneys may not induce, assist, or supervise a client in engaging in deception, it nonetheless made clear that attorneys are permitted to counsel clients on the legal consequences of deceptive conduct the client is independently considering. 

The Committee also noted that certain courts have “strongly condemned” the conduct contemplated by the opinion, with at least one court dismissing an FCA case where the plaintiff’s counsel employed deceptive investigative practices. Practitioners should therefore consider both the applicable ethical constraints and the litigation risks that may result from such conduct.

DOJ Secures $36.4 Million in Combined Settlements Over Genetic Testing Kickback Scheme

On July 30, the US Department of Justice (DOJ) announced that Houston-based clinical laboratory, Access DX Laboratory, along with its former chief executive Michael Stewart and Florida businessman Harold Shatz, will pay a combined $36.4 million to resolve civil FCA allegations tied to kickback payments and medically unnecessary genetic testing billed to Medicare and Medicaid. 

According to the government, between January 2018 and January 2020, the defendants paid marketers in exchange for patient referrals, unbundled genetic-testing billing codes, paid telemedicine providers for false and fraudulent doctors’ orders, and submitted and caused the submission of false claims for genetic testing. 

Both Stewart and Shatz agreed to plead guilty to conspiracy to defraud the United States and to pay and receive health care kickbacks under 18 U.S.C. § 371. Each entered into a civil FCA settlement contemporaneously with his plea. 

As part of its own settlement, Access DX Laboratory agreed to enter into a five-year Corporate Integrity Agreement (CIA) with the US Department of Health and Human Services Office of Inspector General (HHS-OIG). Per the government, this CIA will require Access DX Laboratory “to implement auditing and accountability provisions, including implementation of a robust compliance program, training and education requirements, and a review of arrangements with referral sources.”

The civil settlements resolve claims originally brought as a whistleblower lawsuit filed under the qui tam provisions of the FCA, which allow private parties to sue on the government’s behalf and share in any recovery. Relator Douglas Green, the president of a Massachusetts marketing company that was hired to market genetic testing to Medicare and Medicaid beneficiaries, will receive $7.2 million from the total settlement amount.

The cases are U.S. ex rel. Green v. Access DX Laboratory LLC., et al., No. 1:19-cv-02845 (N.D. Ga.), U.S. v. Stewart et al., No. 4:22-cr-00328 (S.D. Tex.), and U.S. v. Shatz et al., No. 4:24-cr-00330 (S.D. Tex.).

Except for the admissions made by Stewart and Shatz as part of their criminal plea agreements, the claims resolved by the settlement are allegations only and there has been no determination of liability.

Read the DOJ’s press release here.

Boston Ophthalmology Practice Settles FCA Allegations for $3.9 Million

On July 31, the DOJ announced that Ophthalmic Consultants of Boston, Inc. (OCB) agreed to pay $3,902,588.28 to resolve allegations that it violated the FCA by improperly billing federal health care programs. 

According to federal prosecutors, between January 1, 2015, and July 30, 2025, OCB submitted claims to both Medicare and MassHealth for office visits at which ophthalmologists administered intravitreal injections. As explained by the government, Medicare and MassHealth generally do not permit separate billing for the office visit in addition to the injection itself, except under limited circumstances. OCB allegedly used a specific billing modifier to charge for additional office visits even when it had not performed a distinct, separately billable service required for use of the modifier. 

The settlement credited OCB for its cooperation under the DOJ’s Guidelines for Taking Voluntary Disclosure, Cooperation, and Remediation into Account in False Claims Act Matters. The settlement resolves claims originally brought as a whistleblower lawsuit filed under the qui tam provisions of the FCA. 

The case is U.S., et al., ex rel. John Doe v. Ophthalmic Consultants of Boston, Inc., et al., No. 24-cv-11495 (D. Mass.).

The claims resolved by the settlement are allegations only and there has been no determination of liability.

Read the DOJ’s press release here.

Federal and State Authorities Announce Sweeping Medicaid Fraud Charges Against Philadelphia Home Care Workers

On August 4, the US Attorney’s Office for the Eastern District of Pennsylvania announced that 12 individuals and a home care agency had been charged by federal indictment in a coordinated enforcement action targeting fraudulent billing of Pennsylvania’s Medicaid program. 

The announcement coincided with a significant expansion of the DOJ’s Northeast Health Care Fraud Strike Force into Philadelphia. Per the government, the three enforcement actions involved personal care aides and Medicaid recipients who conspired to bill for home care services that were never actually provided. 

In the first federal case, three indictments charged a total of eight defendants. One indictment alleged that a personal care aide billed for services purportedly rendered to a recipient who was, in fact, incarcerated, causing at least $160,000 in false claims. A second indictment in the same case alleged that aides billed for care they could not have delivered because they were working other jobs, were hospitalized, or were themselves incarcerated, causing approximately $445,000 in false claims. A third indictment alleged that a father-son pair billed for home care while the aide was working as a rideshare and food-delivery contractor, causing at least $211,000 in false claims. 

In the second federal case, two additional home care workers were charged. One individual allegedly billed for services while he was at the gym, a massage parlor, traveling, or selling drugs, causing approximately $400,000 in false claims, while the other individual allegedly billed while vacationing in Saudi Arabia, Jamaica, Colombia, and other destinations, causing approximately $600,000 in false claims. 

In the third federal case, two individuals and their company, Benevolent Home Health LLC, were charged with billing for services purportedly provided by a caregiver who was allegedly trafficking narcotics, who was later detained in federal custody, and by another aide who was deceased — causing approximately $224,000 in false claims.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Read the DOJ’s press release here.

Florida-Based Medicare Advantage Provider Agrees to Pay $14.1 Million to Resolve FCA Allegations

On August 3, the DOJ announced that Complete Health Partners Holdings, headquartered in Jacksonville, Florida, agreed to pay $14,100,000 to resolve allegations that it violated the FCA by causing the submission of false diagnosis codes to inflate payments received from the Medicare Advantage program. 

Complete Health is a management services organization that manages, owns, or operates affiliated provider groups in Florida, Alabama, and Colorado. Under contracts with Medicare Advantage Organizations (MAOs), Complete Health received a percentage of the payments the MAOs received from the Centers for Medicare & Medicaid Services (CMS), which are calculated using a risk adjustment model that accounts for patient diagnoses. 

According to the government, this compensation structure gave Complete Health a financial incentive to submit additional diagnosis codes to increase patients’ risk scores and the resulting CMS payments. Specifically, the government alleges that, between 2020 and 2023, Complete Health submitted diagnosis codes that were not clinically valid, not properly supported by beneficiaries’ medical records, or not considered in the care or treatment of the beneficiary. According to the government, Complete Health disseminated incorrect coding guidance to its coders and physicians, and its coders identified additional diagnosis codes that were then presented to doctors for addition to patient records even when clinically unjustified. 

The settlement resolves claims originally brought as a whistleblower lawsuit filed under the qui tam provisions of the FCA by Karen Bowers, a former associate director of risk adjustment at VIVA Health. Bowers will receive approximately $2,467,500 as her share of the total settlement amount. 

The case is U.S. ex rel. Karen Bowers v. Complete Health Partners, Inc., Pharos Capital Group, LLC, Viva Health Inc., and Blue Cross and Blue Shield of Alabama, No. 3:22-cv-463 (M.D. Fla.).

The claims resolved by the settlement are allegations only and there has been no determination of liability.

Read the DOJ’s press release here.

Seventh Circuit Court of Appeals Affirms 120-Month Sentence for OBGYN Convicted of Health Care Fraud

On July 31, the US Court of Appeals for the Seventh Circuit issued an opinion affirming the conviction and sentence of Dr. Mona Ghosh, a former obstetrician-gynecologist who pleaded guilty to two counts of health care fraud. In rejecting each of Dr. Ghosh’s challenges to her 120-month sentence, the court provided guidance on the application of sentencing enhancements and acceptance-of-responsibility reductions in health care fraud cases involving patient harm. 

As explained by the Seventh Circuit, Dr. Ghosh owned and operated a women’s health care practice in Hoffman Estates, Illinois. Between February 2018 and April 2022, Dr. Ghosh participated in a scheme to submit fraudulent claims to Medicaid, Tricare, and other benefit programs for services she did not provide or that were not medically necessary. The scheme resulted in approximately $2.4 million in reimbursement for Dr. Ghosh and included billing for telemedicine visits consisting solely of unreturned voicemails, claims for office visits when the doctor was out of state, and charges for unnecessary procedures — most notably, irreversible endometrial ablations performed on patients without their informed consent. At sentencing, patients and a former medical assistant testified that Dr. Ghosh performed ablations on women who did not know about or agree to the procedure, and at least one patient subsequently required a hysterectomy to address complications. 

The Seventh Circuit addressed three issues on appeal. First, it upheld the district court’s denial of an acceptance-of-responsibility reduction under US Sentencing Guideline § 3E1.1. The court explained that Dr. Ghosh repeatedly deflected blame by attributing the fraudulent billing to a third-party billing agent during her plea colloquy and by filing a response to a state professional licensing complaint that contradicted admissions in her federal plea agreement. The court emphasized that a guilty plea alone does not entitle a defendant to the reduction and that sentencing courts are owed great deference in assessing whether a defendant has genuinely accepted personal responsibility. 

Second, the Seventh Circuit affirmed the two-level enhancement under Guideline § 2B1.1(b)(16) for conscious or reckless risk of serious bodily injury, holding that performing irreversible surgical procedures without informed consent constituted a gross deviation from the standard of care. The court noted that patient testimony — including accounts of forged or manipulated consent forms — was properly credited over defense expert testimony that itself depended on the accuracy of medical records the patients disputed. 

Third, the Seventh Circuit found the 120-month sentence reasonable. It concluded that the district court appropriately gave greater weight to the serious physical and emotional harm to patients than Dr. Ghosh’s mitigating personal history and support letters, particularly given Dr. Ghosh’s personal enrichment at the expense of her patient’s care. 

The Seventh Circuit’s opinion reinforces that health care fraud prosecutions involving direct patient harm will be treated with heightened severity at sentencing, and that inconsistent statements made in parallel civil or administrative proceedings can defeat an acceptance-of-responsibility reduction in the criminal case.

The case is U.S. v. Mona Ghosh, No. 25-2054 (7th Cir.).