UNITED STATES OF AMERICA ex. rel. v. CITIGROUP INC.

Background

Tamika Miller brought this False Claims Act case against Citigroup Inc., Citibank N.A., Citibank Inc., and unidentified Doe corporations. She alleged that Citibank manipulated its system for auditing third-party vendors and suppressed reports of compliance failures. The complaint asserted several claims, including a reverse false claim—the alleged improper avoidance of a payment obligation owed to the Government.

The Government declined to intervene in the case. Miller later sought a share of a $400 million fine that the Office of the Comptroller of the Currency obtained from Citibank through a 2020 consent order. She argued that information she had provided to the agency about Citibank’s vendor-auditing practices formed the basis for that order. While the motions were pending, Miller voluntarily dismissed all claims except the reverse false claim and consented to dismissal of the claims against Citigroup Inc. and Citibank Inc.

Share of the Government’s Award

The court first determined that the $400 million award did not appear to be an alternate remedy for the claim in Miller’s complaint. The 2020 consent order was obtained by the Office of the Comptroller of the Currency after that agency had released Citibank from its obligations under a 2015 consent order. The 2020 order also did not specifically address Citibank’s oversight of third-party vendors.

The court held independently that Miller had failed to state a valid False Claims Act claim. A reverse false claim requires an “obligation” to pay the Government, meaning an established duty rather than potential or contingent liability. Alleged violations of laws or consent orders may expose a party to penalties, but they do not create an established payment obligation merely because the Government could later impose a penalty. The court concluded that Miller had not plausibly alleged such an obligation.

Fraud Pleading Requirement

The court also held that the complaint failed to satisfy Federal Rule of Civil Procedure 9(b), which requires fraud to be pleaded with particularity. Miller generally alleged that Citibank suppressed or falsified reports, but she did not identify a specific statement, record, or report that was falsified or withheld from the Government.

Leave to Amend and Disposition

The court denied Miller’s request for leave to amend. It found that the complaint rested on a misunderstanding of the payment obligations covered by the reverse false claims provision, that Miller had already received an opportunity to amend after the motion to dismiss was filed, and that she had not supplied a proposed amendment or explained how additional allegations would cure the defects.

The court denied Miller’s January 31, 2022 motion for a share of the Government’s award. It granted the defendants’ March 25, 2022 motion to dismiss, denied leave to amend, directed the Clerk to enter judgment for the defendants, and closed the case.