Solving Clients’ Problems

Example: A Structured Settlement of Fraud Allegations

The Problem:

The client was a small, pioneering pharmaceutical firm which came under investigation for the off-label promotion of a key drug. The Department of Justice demanded tens of millions of dollars in settlement of False Claims Act allegations - far more than the client could afford to pay. Settlement discussions on the merits of the company's liability had stalled over the two sides' different views of the strength of the government's case. The government threatened to commence litigation in earnest, which would have been costly but which would have brought the company and the government no closer to resolving the case.

The Solution:

Drawing on his experience in the Fraud Section, Ben Vernia saw the need to persuade the Department of Justice that no matter how strong it felt its case to be, the Company could pay only a fraction of what the government demanded, and that the best the Department could hope to achieve through litigation was a claim junior to that of the client's secured creditors.

Ben and attorneys at his former firm worked with the client to provide the information the Department needed to verify the client's financial straits, and a settlement was reached for a payment over five years of a fraction of the government's demand.