May a New York lawyer help a private False Claims Act client use a deceptive ruse to obtain evidence of alleged fraud?

Plain-English summary

The client was considering becoming a relator in a False Claims Act case and wanted more evidence that companies had obtained federal funds through fraud. The proposed method was to approach company representatives, employees, or owners while falsely claiming to seek the company's services and falsely claiming possible eligibility for grant funding. The lawyer asked whether the lawyer could advise the client on using that ruse.

The committee reads Rules 1.2(d), 8.4(a), and 8.4(c) together. Rule 8.4(c) bars a lawyer from conduct involving dishonesty, fraud, deceit, or misrepresentation; Rule 8.4(a) bars doing through another what the Rules prohibit; and Rule 1.2(d) bars counseling or assisting conduct the lawyer knows is illegal or fraudulent while permitting discussion of its legal consequences. On that basis, the opinion concludes the lawyer may explain the legal consequences of contemplated deceptive conduct but may not encourage or assist it.

The opinion finds no current authority in the New York Rules or their interpretations creating an exception for a private lawyer assisting a False Claims Act investigation of this kind. It discusses judicial decisions approving or declining to condemn deception in other investigative settings, but treats those decisions as evidentiary rulings that do not supply direct ethical guidance for this scenario. It also concludes that the limited exception recognized by New York County Lawyers Association Opinion 737 does not reach this proposed investigation, and that a New York City Bar proposal for a broader rule amendment was not adopted.

If the lawyer determines that the client intends to proceed or has proceeded with the ruse, the opinion says the lawyer should research and inform the client about potential substantive-law risks and consequences. That advice is consistent with Rules 1.1, 1.3, and 1.2(d) and does not itself violate Rule 8.4(c). The committee expressly does not address otherwise lawful investigative techniques used by government law-enforcement personnel.

In practice

Under this opinion, a private lawyer may not design, induce, assist, or supervise the client's proposed false statements to targets of a potential False Claims Act investigation. The lawyer may research and explain the substantive-law consequences if the client contemplates or has undertaken the deception, provided the lawyer does not encourage or assist it.

The opinion confines its conclusion to the proposed private investigation. It does not decide the use of otherwise lawful investigative techniques by government law-enforcement personnel, and it does not decide the substantive-law consequences of the client's conduct.

Common questions

Q: Can a private False Claims Act lawyer help a client pose as a customer to obtain evidence?

A: Not on the facts presented. The opinion finds no current authority under the New York Rules permitting the lawyer to induce, assist, or supervise the client's proposed false statements about seeking services and possible grant eligibility.

Q: May the lawyer explain what could happen if the client uses the ruse anyway?

A: Yes. Rule 1.2(d) permits discussion of the legal consequences of a proposed course of conduct, and the opinion says the lawyer may research and advise on the substantive-law risks and consequences without encouraging or assisting the deception.

Q: Do Gidatex and Mena authorize private lawyers to use deception in investigations?

A: The opinion does not treat them as direct ethical authority for this inquiry. It notes that both decisions resolved evidentiary challenges in settings other than a False Claims Act investigation and characterizes their discussion of the disciplinary rule as arguably dicta.

Q: Does New York County Lawyers Association Opinion 737 permit this investigation?

A: No. Opinion 1297 explains that the exception recognized in NYCLA Opinion 737 is limited to specified civil-rights or intellectual-property investigations, or deception expressly authorized by law, and does not cover the proposed False Claims Act investigation.

Q: Does the opinion apply to government undercover investigations?

A: No. The committee expressly states that it does not address otherwise lawful investigative techniques used by government law-enforcement personnel.

Background and rules framework

New York Rule 8.4(c) prohibits conduct involving dishonesty, fraud, deceit, or misrepresentation, and Rule 8.4(a) prohibits a lawyer from violating or attempting to violate the Rules through another person's acts. Rule 1.2(d) bars counseling or assisting conduct the lawyer knows is illegal or fraudulent but allows discussion of the legal consequences of a proposed course of conduct. Rule 1.0(i) defines fraud to include conduct that is fraudulent under applicable substantive or procedural law or has a purpose to deceive, subject to the qualifications stated in that Rule.

The opinion relies on Rules 1.1 and 1.3 for the lawyer's competence and diligence when researching and explaining the substantive-law risks of conduct the client intends to undertake or has undertaken. The committee does not opine on those substantive-law consequences.

Citations and references

Rules of Professional Conduct:

• New York Rule 1.0(i) (fraud and fraudulent)
• New York Rule 1.1 (competence)
• New York Rule 1.2(d) (counseling or assisting illegal or fraudulent conduct)
• New York Rule 1.3 (diligence)
• New York Rule 8.4(a) and (c) (acts of another; dishonesty, fraud, deceit, or misrepresentation)

Statutes:

• False Claims Act, 31 U.S.C. §§ 3729-3733

Cases:

• Gidatex v. Campaniello Imports, Ltd., 82 F. Supp. 2d 119 (S.D.N.Y. 1999), undercover investigation in a trademark dispute
• Mena v. Key Food Stores Co-op., Inc., 758 N.Y.S.2d 246 (Kings Cty. Sup. Ct. 2003), secret recording in an employment-discrimination case
• Leysock v. Forest Laboratories, Inc., No. 12-11354-FDS, 2017 WL 1591833 (D. Mass. Apr. 28, 2017), deceptive investigation in a False Claims Act case

Other opinions cited:

• New York State Opinion 1097 (2015): truthfulness by a lawyer acting as a debt collector
• New York State Opinion 1081 (2015): Rule 8.4(c) outside an attorney-client relationship
• New York County Lawyers Association Opinion 737 (2007): limited dissemblance in specified investigations

See also

• RI EAP Ethics Op. 2020-03: Lawyer as Fair Housing Tester
• NC State Bar 2014 FEO 9: Testers in Public-Interest Investigations
• Utah Ethics Op. 02-05: Government Lawyers in Undercover Operations
• Arizona Ethics Op. 99-11: Lawyers Directing Investigators

Source

• Official opinion: https://nysba.org/ethics-opinion-1297-advising-private-client-deceptive-conduct/