On September 4, the Acting Assistant Attorney General issued guidance to the Department of Justice’s Civil Division on evaluating inability-to-pay claims. “Assessing an Entity’s Assertion of an Inability to Pay” sets forth an analytical framework for evaluating an individual or company’s claim that it cannot pay a civil fine or monetary penalty because it lacks sufficient assets. This framework would apply to civil claims under the False Claims Act.
Entities must complete a certified Financial Disclosure Form, which identifies assets and liabilities, current and anticipated income and expenses, cash flow, projections, working capital, and other relevant information. They must also cooperate in providing access to appropriate evidence, including tax returns and audited financial statements. The memorandum outlines a range of factors that the Civil Division will consider in assessing an entity’s inability to pay.
