Up the Chain: Third-Party Exposure for Private Equity, Consultants, and Funders

The False Claims Act enforcement landscape continues to accelerate in 2026, with FCA recoveries reaching nearly $3 billion and qui tam filings hitting a record 979 cases in FY 2024. This expanding enforcement environment is reshaping compliance obligations for private equity firms, consultants, and other capital providers who have historically operated outside direct FCA scrutiny. Blank Rome LLP, a sponsor of the American Conference Institute's Advanced Forum on False Claims and Qui Tam Enforcement, is positioning itself at the center of this evolving risk discussion through a dedicated session focused on third-party exposure.

The core issue centers on liability expansion upstream the contracting chain. Traditional FCA enforcement targeted prime contractors submitting claims to the government. However, Department of Justice priorities have evolved to capture investors, consultants, and financing sources that were previously considered peripheral to enforcement actions. Joint-and-several liability theories, coupled with emerging cyber-certification exposure and advisory conflicts of interest, create multifaceted risks for private equity sponsors and their advisors. These developments require fundamental changes to deal structuring, diligence processes, and engagement models.

Justin Chiarodo's session will provide practitioners with frameworks to identify which third parties face material FCA exposure and examine practical strategies to mitigate risk. The discussion will emphasize "pressure-testing" deals and advisory arrangements before they become litigation exhibits, enabling private equity firms and consultants to embed compliance considerations into investment and engagement decisions from inception. For institutional investors and alternative asset managers navigating government contracting exposure, this session addresses a critical gap between traditional compliance frameworks and the realities of modern FCA enforcement.