Once-Renowned US Health Fraud Unit in Boston Gets an Inside Edge

Boston’s chief federal prosecutor is scrutinizing his lawyers’ biopharma investigations amid perceptions the office has lost its reputation as the Justice Department’s most feared health-care fraud enforcer.

Joshua Levy, now the acting head and White House nominee to lead the US attorney’s office in Massachusetts, is relying on his decades of experience as the health-care industry’s go-to defense attorney opposite DOJ as he examines legal theories and evidence his line prosecutors pursue in the medical field.

“I am very much interested in the health-care fraud cases because I feel like I know the space; I hope I can add value,” Levy said in an interview.

While he’s trying to “empower the assistant US attorneys who are on the front line,” he confirmed the defense bar suggestions that the boss is closely involved in the matters he knows best. “Do the AUSAs working on a case know, ‘Oh, Levy’s paying attention to this one’? Yeah, they probably do,” he said.

Former Boston health-care prosecutors and other outside lawyers said they’ve observed a diminished criminal and civil enforcement presence in recent years.

The office was previously nationally regarded for cleaning up pervasive abuse in the Boston area’s powerhouse pharmaceutical and medical device sector. Any effort at restoring health-care prosecutors’ uncompromising tradition will test Levy’s open-minded investigative approach rooted in years advising the Big Pharma C-suites.

Since assuming control of the office last May, Levy’s hands-on role overseeing assistant US attorneys investigating biotech cases may give them an insider’s edge in grasping industry weaknesses and pressure points in tough-to-prove matters.

Through experiences embedded in the boardrooms at clients such as Pfizer Inc., Regeneron Pharmaceuticals, Inc., and Medtronic Plc, Levy is also guided by vivid memories of the office’s prosecution stumbles—portending an era of thorough, carefully-considered investigations.

More Cases

Levy countered the notion that the health-care caseload is suffering. The office is handling more than 20 new whistleblower complaints alleging false claims filed in the district last year—one of its highest annual totals ever, Levy said. There are also three investigations arising from health-care companies voluntarily disclosing potential wrongdoing under a 2023 nationwide policy. Levy is a member of an advisory group for the deputy attorney general which helped draft that and other corporate enforcement policies.

Levy’s operating in the immediate aftermath of negative publicity brought by his predecessor. He replaced Rachael Rollins, the district’s first Black female US attorney, who stepped down last year amid an inspector general’s report finding she’d committed numerous ethical and policy breaches.

He’d reportedly been a finalist for the nomination in 2021, but was instead brought on to serve as Rollins’ top deputy. The IG investigation found Levy repeatedly tried to stop Rollins’ misconduct, including by rejecting her request to write a letter that might’ve created a public impression that her political foe was under DOJ investigation.

That wasn’t his only involvement in an episode the District of Massachusetts wishes to forget.

In one extraordinary trial 12 years ago, Levy was the lead partner on the Ropes & Gray defense table that delivered an early knockout blow to Massachusetts health-care prosecutors that still reverberates today.

During opening arguments defending medical device manufacturer Stryker Biotech from criminal fraud allegations, Levy’s team revealed that DOJ investigators never interviewed the surgeons who’d allegedly been defrauded. Consequently, the government learned that the defense planned to call those doctors as witnesses who were to tell the jury they weren’t duped by the company’s salespeople.

A few days later, the department dropped all felony charges against Stryker and three sales executives. Stryker pleaded to one misdemeanor carrying a $15 million fine.

“I think about that case a lot,” Levy said as he sat in the the same US attorney’s conference room where he once unsuccessfully tried convincing prosecutors not to charge Stryker.

“It’s such a massive thing to be charged with federal felonies,” he added. “I think everybody in this office understands the gravity of that, and how you need to go the extra mile to make sure you have your case locked down.”

Levy’s background is seen by his former peers in Boston’s health-care defense bar as a potential positive for clients.

His 17 years at Ropes & Gray gives him a “holistic perspective” on a manufacturer’s defense that “could ultimately benefit a company who could be investigated by the healthcare fraud unit,” said Miranda Hooker, a partner at Goodwin Procter and former Boston health care prosecutor.

Plus, as the defense counsel in Stryker, Levy “will be much more attuned to how these cases can go wrong,” Hooker said. “While he will certainly be interested in the same level of vigorous enforcement of health-care fraud that the US attorney’s office in Boston has always had, I think he’s also going to take a much more critical eye at these cases.”

Boston Heyday

But other defense lawyers, including Levy’s supporters, say health-care enforcement activity has been on the decline due to departures of some of the office’s pioneering leaders and a pandemic-induced slowdown.

Some of those interviewed are skeptical Boston can ever return to its heyday, when seemingly every pharmaceutical and medical device giant was swept up by the office’s creative theories to secure hefty settlements, such as off-label drug promotion.

“That kept everyone very busy in the 2000s and the 2010s for a while. But then those sorts of cases went away,” said David Schumacher, a former supervisor in Boston’s health-care fraud unit who now represents health care providers as a partner with Hooper Lundy & Bookman. “There’s only so many times that you can whack Pfizer and Eli Lilly and Abbott and the same companies for the same conduct.”

Those cases dried up as the industry grew more sophisticated in its compliance protocols. Levy acknowledged this trend, calling it a testament that “enforcement is working.”

His office has adapted by monitoring emerging practices, such as expensive rare disease medicines or kickback schemes involving genetic testing or electronic health records, Levy said.

He also agreed with the sentiment shared by multiple lawyers that his office has become a victim of its own success in health-care fraud enforcement by inspiring more competition for cases.

It used to be that whistleblower lawyers trusted Boston’s civil team arguably above anywhere else to bring claims. As other districts started replicating the Boston model, their preferred destinations grew diffuse.

No ‘Bomb Thrower’

Another headwind for the office to recapture its combative spirit may be Levy himself. His style is a departure from Boston’s legendary unyielding health-care supervisors of prior decades.

“He is not going to be any form of bomb thrower with respect to poor practices in the health-care space. He’s going to want to study it, understand it,” said Brien O’Connor, who practiced closely with Levy at Ropes.

Levy is a “tough competitor” who “likes to win when he decides something ought to be won in a courtroom,” but he’s also effective at assessing a case’s weaknesses, O’Connor said. “Is that something that maybe slows down the pace or lessens the volume of new cases that are charged in the district? Maybe.”

Health-care fraud investigations are known for being tricky to develop, requiring intensive document review to establish criminal intent and awareness in upper levels of a company.

From his time in private practice, Levy “understands the nuances of these cases, the gray areas, and the complexity,” said Zachary Hafer, the former criminal chief of the Massachusetts office who’s now a partner at Cooley. “He understands that there’s an enormous difference between sloppiness and bad intent.”

For that approach to translate into robust enforcement may take years to gain traction.

Aaron Katz, who was Levy’s co-counsel representing Stryker Biotech envisions the nature of investigations evolving to fit lessons Levy learned from outhustling the Stryker prosecutors who neglected to interview the surgeons.

Levy “had an innate understanding,” Katz said, that “if you want to get to the bottom of the real facts, you’ve got to go talk to people. You can’t just read the emails and the text messages.”

“That means that investigations are potentially going to be longer, more complex, more resource intensive,” added Katz. “Nowadays if you want to see a reinvigorated health-care fraud enforcement, I think you’re probably going to have to do a bunch of investigations that go nowhere.”