Deion Sanders, a.k.a. “Prime Time” and “Neon Deion” is not likely to come to mind when thinking about potential liability under the False Claims Act (FCA). But Prime Time has been entrenched in a long-running FCA case related to a nonprofit organization he founded and aptly named PrimeTime Association.
The qui tam action against Sanders, PrimeTime Association, and numerous other defendants, was filed in 2012 in the Northern District of Texas. The relator alleged that Sanders and his nonprofit falsified applications in order to obtain federal funds under the Summer Food Service Program (SFSP) and the National School Lunch Program (NSLP), administered by the Texas Department of Agriculture. The SFSP and NSLP are federally-funded, state-administered grant programs that reimburse nonprofit private schools and others that provide free healthy meals to kids and teens in low-income areas.
The relator’s allegations center around Sanders’ Prime Prep Academy, a group of charter schools co-founded by Sanders in 2012 and featured in a reality TV series called Deion’s Family Playbook. The schools were marred by controversy from the beginning and permanently closed in 2015.
In July 2013, the Department of Justice (DOJ) declined to intervene in the action. Undeterred, the relator moved forward with his claims under a provision of the FCA, 31 U.S.C. § 3730(c)(3), that allows a relator to proceed with a qui tam action notwithstanding the government’s declination. Six years of litigation have followed, including an appeal by the relator to the Fifth Circuit Court of Appeals which affirmed summary judgment in favor of three defendants, removing them from the lawsuit.
Sanders, however, has remained in the case, receiving sanctions for failing to attend court hearings or respond to discovery requests. At one point in the case, after his counsel withdrew, Sanders represented himself. While Sanders achieved the rare feat of playing two professional sports at the same time, adding counsel to his resume was not in the cards. After continuing to miss court hearings, and face additional sanctions, Sanders retained new counsel and continues to defend the lawsuit.
Derek Adams, a former Trial Attorney with the Department of Justice, Civil Fraud Section, is a partner in the firm’s False Claims Act, FIRREA, and Litigation practice groups. Derek has extensive experience with False Claims Act matters, and can be reached at firstname.lastname@example.org or (202) 466-8960 if you have any questions or need help with FCA compliance, investigations, or litigation.