Are Private Equity Firms the New Health-Care Fraud Target?

• U.S. named private equity firm defendant in health-care fraud case against compounding pharmacy • Could signal a new direction for DOJ to hold private equity firms accountable for false claims violations by companies in their portfolio

Private equity firms were placed on notice recently they may fall into an expanding False Claims Act liability net after the DOJ revealed it will try to nail one such firm for fraud by a pharmaceutical company for which it was the majority owner.

This liability risk was exposed in an FCA intervenor complaint in which the Department of Justice alleged that Riordan, ...