Insurance Commission Split Is Kickback
Client Alert | 1 min read | 08.02.05
The Court of Federal Claims in Morse Diesel Int'l, Inc. v. U.S. (July 15, 2005) held that Morse Diesel, a construction management company whose parent had a commission-splitting arrangement with its performance bond brokers, violated the Anti-Kickback Act of 1986 because the payments from the brokers back to the parent were not, as the contractor argued, merely discounts, promotional allowances, or rebates, but rather were for the improper purpose of “cementing” the brokers’ exclusive relationship with Morse and its parent. Further, in an expansive reading of the term “prime contractor,” the court found that, even though Morse Diesel was the named prime contractor under several fixed-price contracts, its parent also was a prime contractor within the meaning of the act and the surety bond brokers were “subcontractors,” despite the facts that there was no direct relationship between Morse Diesel and the sureties and Morse Diesel did not receive directly any of the sureties’ payments.
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Client Alert | 3 min read | 11.21.25
On November 7, 2025, in Thornton v. National Academy of Sciences, No. 25-cv-2155, 2025 WL 3123732 (D.D.C. Nov. 7, 2025), the District Court for the District of Columbia dismissed a False Claims Act (FCA) retaliation complaint on the basis that the plaintiff’s allegations that he was fired after blowing the whistle on purported illegally discriminatory use of federal funding was not sufficient to support his FCA claim. This case appears to be one of the first filed, and subsequently dismissed, following Deputy Attorney General Todd Blanche’s announcement of the creation of the Civil Rights Fraud Initiative on May 19, 2025, which “strongly encourages” private individuals to file lawsuits under the FCA relating to purportedly discriminatory and illegal use of federal funding for diversity, equity, and inclusion (DEI) initiatives in violation of Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (Jan. 21, 2025). In this case, the court dismissed the FCA retaliation claim and rejected the argument that an organization could violate the FCA merely by “engaging in discriminatory conduct while conducting a federally funded study.” The analysis in Thornton could be a sign of how forthcoming arguments of retaliation based on reporting allegedly fraudulent DEI activity will be analyzed in the future.
Client Alert | 3 min read | 11.20.25
Client Alert | 3 min read | 11.20.25
Client Alert | 6 min read | 11.19.25
