BP Will Be Paying for Many Years for Their Most Recent Accident

BP has agreed to pay a record $20 billion to resolve all federal and state claims against the company over its role in the Deepwater Horizon oil spill.

Under the terms of the finalized deal announced by the Justice Department on Monday, BP won’t have to pay all the money at once. Softening the hit to its cash flow, the company is able to spread out payments over a 15-year period. The last installments are due in 2031, more than 21 years after the Deepwater Horizon disaster, which killed 11 crew members and caused the largest oil spill in U.S. waters.

The two biggest pieces of the settlement* are the $5.5 billion in Clean Water Act penalties and the $7.1 billion that BP agreed to pay to the U.S. and Gulf Coast states to cover long-term environmental damages.

Here are the payment schedules for both categories, according to the consent decree filed in federal court in New Orleans on Monday:

Department of Justice

Department of Justice

 

Attorney General Loretta Lynch called the deal “a strong and fitting response to the worst environmental disaster in U.S. history.” BP officials, as WSJ’s Devlin Barrett notes, have said previously the agreement provides the company, and the Gulf region, “a path to closure,” resolving the largest legal exposure and providing more certainty in terms of costs and payments.

 

* Total settlement figure also includes $1 billion that BP previously committed for early restoration projects; up to $700 million for any later-discovered injuries or losses or to pay for adjustments to restoration projects; $4.9 billion to five Gulf States, plus another $1 billion to localities, to settle economic-damage claims; and $600 million to settle other claims, including reimbursement for response and removal costs.

Columbus Regional Healthcare System and Physician Ordered to Pay Over $25Million False Claims Violation

Columbus Regional Healthcare System and Dr. Andrew Pippas have agreed to pay more than $25 million to resolve allegations that they violated the False Claims Act by submitting claims in violation of the Stark Law.  Under the settlement agreement, Columbus Regional has agreed to pay $25 million, plus additional contingent payments not to exceed $10 million, for a maximum settlement amount of $35 million, and Pippas has agreed to pay $425,000.

The Stark Law prohibits physician referrals of certain health services for Medicare and Medicaid patients if the physician has a financial relationship with the entity to which he or she refers the patient.  The United States alleged that between 2003 and 2013, Columbus Regional provided excessive salary and directorship payments to Pippas that violated the Stark Law.

The United States also alleged that from May 2006 through May 2013, Columbus Regional submitted claims to federal health care programs for services at higher levels than supported by the documentation, and between 2010 and 2012, they submitted claims to federal health care programs for radiation therapy at higher levels than the therapy that was provided.

 

Of the $25.425 million that Columbus Regional and Pippas have agreed to pay to resolve their respective civil claims, they will pay $24,666,040 to the federal government for federal healthcare program losses and $758,960 to the state of Georgia for the state share of its Medicaid losses. 

Also as part of the settlement, Columbus Regional will enter into a Corporate Integrity Agreement  with the Department of Health and Human Services-Office of the Inspector General that requires Columbus Regional to implement measures designed to avoid or promptly detect future conduct similar to that which gave rise to this settlement.

 

 

Walter Investment Management Corp. Must Pay More than $29 Million

 

The Justice Department announced today that Walter Investment Management Corp. WIMC has agreed to pay $29.63 million to resolve allegations that WIMC, through its subsidiaries, Reverse Mortgage Solution Inc., REO Management Solutions LLC and RMS Asset Management Solutions LLC, violated the False Claims Act in connection with their participation in the Department of Housing and Urban Development’s Home Equity Conversion Mortgages program, which insures “reverse” mortgage loans.  WIMC, through subsidiaries such as RMS and Green Tree Servicing LLC, provides business support to the residential mortgage industry, including servicing of reverse or forward mortgages on behalf of major financial institutions.*

“The Department of Justice is committed to ensuring that those who service HUD-insured reverse mortgages are held accountable for their knowing failure to comply with important HUD requirements,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Schemes such as these undermine an important tool available to older Americans who wish to use a HUD-insured reverse mortgage loan to age in place.”

Reverse mortgage loans allow elderly people to access the equity in their homes.  To encourage reverse mortgage loans, HUD insures such loans through a program administered by HUD’s Federal Housing Administration.  Under HUD’s program, a loan becomes due and payable when the home is sold or vacant for more than 12 months or upon the death of the homeowner, whichever comes first.  The lender is repaid the amount of the loan, including the costs of servicing the loan and interest that accrues, after a loan becomes due and payable.  HUD will reimburse a lender that is unable to recoup the full amount of the loan.  In order to file a claim, the servicer is required to meet a number of requirements and deadlines.  Failure to meet these requirements and deadlines could result in denial of the insurance claim.

The government alleged that, from August 2009 to March 2015, RMS, with the knowledge and support of its corporate parent, WIMC, submitted false claims for debenture interest from HUD by failing to properly disclose that it had not met certain deadlines and, therefore, was not entitled to such interest payments.  In order to obtain such interest, HUD requires lenders and their servicers to obtain appraisals within 30 days of the loan becoming due and payable.  The significance of the 30-day appraisal requirement is, among other things, to establish a mutual understanding between the lender and HUD as to the market value of the property so that a decision can be made as to whether to proceed with foreclosure, engage in a workout with the lender or deal with estate rights issues.

The government also alleged that from July 2010 to October 2014, WIMC, through its subsidiaries, submitted false claims to HUD for the reimbursement of unlawful referral fees by falsely representing them to be lawful sales commissions.  As part of an insurance claim, HUD will reimburse lenders or their servicers for sales commissions paid to real estate agents as part of the liquidation of foreclosed properties.  HUD will not, however, reimburse lenders or their servicers for fees paid for the referral of liquidation business.  According to the government, RMS often used straw companies to liquidate foreclosed properties.  Upon sale of the foreclosed property, the straw companies split the six-percent sales commissions: the real estate agents shared a five-percent sales commission and the companies kept a one-percent referral fee.  These straw companies, in turn, deducted a small fee from the one-percent referral fee and kicked the remainder back to RMS.  Nonetheless, RMS submitted insurance claims to HUD that included payment for the full six-percent sales commission, when, in fact, the payment included a prohibited referral fee.

The settlement resolves allegations filed in a lawsuit by Matthew McDonald, a former executive of RMS, under the qui tam, or whistleblower, provisions of the False Claims Act.  The act permits private individuals to sue on behalf of the government for false claims and to share in any recovery.  The False Claims Act also permits the government to intervene in such lawsuits, as it did in this case.  Mr. McDonald will receive $5.15 million as his share of the recovery in this case.

This information verified by the Dept. of Justice

EDF Resource Capital Inc. Violates False Claims Act

 

EDF Resource Capital Inc. and its CEO, Frank Dinsmore, have agreed to resolve allegations that they violated the False Claims Act and otherwise failed to remit payments owed to the Small Business Administration (SBA) under the 504 loan program, the Department of Justice announced today.  Under the settlement agreement, EDF and Dinsmore have agreed to make payments and turn over certain assets to the United States for a total settlement of approximately $6 million.

The SBA 504 loan program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings.  Under the program, local lenders like EDF are responsible for arranging, servicing and collecting on these small business loans, which are guaranteed, in part, by the SBA.  In return for the authority to make determinations on 504 loans without prior SBA approval, EDF was required to bear a share of any losses suffered by the SBA on such loans and to maintain a loan loss reserve fund (LLRF) to help ensure payment of its loss-sharing obligations. 

This settlement resolves claims that EDF and Dinsmore violated the False Claims Act in connection with EDF’s failure to maintain adequate reserves in its LLRF.  EDF allegedly was required to fund its LLRF at a level determined by the riskiness of its 504 loan program portfolio yet knowingly concealed from the SBA hundreds of troubled loans to avoid its obligation to fully fund its LLRF.

The settlement also resolves a lawsuit filed by the United States against EDF and a related entity, Redemption Reliance LLC, alleging that EDF failed to remit required payments to the SBA to satisfy its loss-sharing obligations.  The lawsuit also alleges that the SBA agreed to advance funds to EDF in connection with certain defaulted 504 loans but that, after EDF assigned the loan documents for these loans to Redemption Reliance, neither EDF nor Redemption Reliance remitted the monies owed on these loans to the SBA. 

“The 504 Loan Program provides small businesses with access to the capital they need to start, grow and succeed,” said General Counsel Melvin F. Williams Jr. of the SBA.  “SBA has no tolerance for fraud, waste, or abuse by participants in the 504 Loan Program.  Working with the attorneys at the Department of Justice and SBA’s Office of Inspector General, this settlement marks the successful conclusion of a major enforcement action.”        

“The defendants’ misrepresentations to SBA knowingly put the taxpayer’s money at risk,” said Inspector General Peggy E. Gustafson of the SBA.  “As stewards of the taxpayers’ money, the SBA must guard against losses within its loan portfolios.  In this instance, the actions of the defendants did not allow SBA to protect taxpayers from such losses.  I want to thank the Department of Justice and our investigative partners for achieving this settlement.”

This information confirmed via the US Dept. of Justice.

Payday Loan Lending Scheme Uncovered

The operators of a payday lending scheme that allegedly conned millions of dollars from consumers nationwide have agreed to more than $54 million in settlements with the Federal Trade Commission . The settlements, announced on July 7, arise from allegations by the that Timothy Coppinger, Frampton Rowland III and their companies targeted online payday loan applicants – consumers seeking short-term loans to tide them over until they received their next paycheck. Approximately 400,000 consumers were affected by the scheme, and the settlement funds will be used to reimburse them for losses, according to the FTC.

Using information gathered from data brokers and lead generators, the companies allegedly deposited funds in the applicants’ bank accounts without obtaining permission. The companies subsequently withdrew money to pay recurring “finance” charges without using any of the funds to pay the total allegedly owed, the FTC alleged. The companies also allegedly misrepresented the loans’ costs, finance charges, annual percentage rates payment schedule and other data. Consumers who closed their bank accounts in an effort to stop the unauthorized debits discovered that the companies had sold the purported loans to debt-collection companies that harassed them for payment, the FTC alleged. A federal court in Missouri stopped the operation and froze the Defendants’ assets pending resolution of the FTC allegations.

The Coppinger and Frampton limited liability companies involved in the lawsuit include: CWB Services; Orion Services; Sandpoint Capital; Basseterre Capital; Namakan Capital; Anasazi Services; Anasazi Group; Vandelier Group; St. Armands Group; Longboat Group and Oread Group. The settlements, which require federal court approval, erase any consumer debt purportedly owed to the Defendants and bar them from reporting the debts to credit-reporting agencies.

The agreements, according to the FTC, also ban the Defendants “from any aspect of the consumer lending business, including collecting payments, communicating about loans and selling debt.” If approved by the court, the FTC said the settlements will impose a more than $32.1 million consumer redress judgement on the Coppinger companies agreed and a similar judgement of nearly $21.9 million on the Frampton companies. The judgments against Coppinger and Frampton will be suspended upon their surrender of certain assets, according to the FTC.

Construction Boss Fraudulently Gained Control of Condos Homeowners Association

According to the US Dept. of Justice website a former construction boss from Las Vegas was sentenced today to 188 months in prison for his role in a $58,141,275 million scheme to fraudulently gain control of condominium homeowners’ associations (HOAs) in the Las Vegas area to secure construction and other contracts for himself and others.  Forty-two individuals have been convicted of crimes in connection with the scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Laura A. Bucheit of the FBI’s Las Vegas Office, Sheriff Joseph Lombardo of the Las Vegas Metropolitan Police Department and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.

Leon Benzer, 48, pleaded guilty on Jan. 23, 2015, to one count of conspiracy to commit mail and wire fraud, 14 counts of wire fraud, two counts of mail fraud and two counts of tax evasion.  In addition to imposing the prison term, U.S. District Judge James C. Mahan of the District of Nevada ordered Benzer to pay restitution in the amount of $13,294,100.

“Leon Benzer recruited and paid off puppets to serve on homeowners’ boards so that they would steer lucrative contracts to his company and cronies,” said Assistant Attorney General Caldwell.  “Far from enjoying their corrupt proceeds, however, Benzer and his co-conspirators will serve years behind prison bars.”

“When Leon Benzer named his company, Silver Lining Construction, he probably wasn’t aware of the IRS Criminal Investigation Division and the expertise of our special agents when it comes to putting pieces of a puzzle together to build a picture of fraudulent activity,” said Chief Weber.  “Benzer manipulated and bribed HOA boards in order to enrich himself and his co-conspirators at the expense of American taxpayers.  Not only did he try to hide the proceeds of his crimes in order to evade paying taxes, but he failed to pay his employment taxes.  Today, justice was served and the “silver lining” that Benzer anticipated was not realized thanks to the work of IRS-CI and our law enforcement partners.”

In connection with his guilty plea, Benzer admitted that, from approximately August 2003 through February 2009, he and an attorney developed a scheme to control the boards of directors of HOAs in the Las Vegas area.  According to plea documents, Benzer and his co-conspirators recruited straw buyers to purchase condominiums and secure positions on HOAs’ boards of directors.  Benzer admitted that he paid the board members to take actions favorable to his interests, including hiring his co-conspirator’s law firm to handle construction-related litigation and awarding remedial construction contracts to Benzer’s company, Silver Lining Construction.

Pfizer Agrees to $325 Million Settlement for Fraudulant Marketing of Neurontin

Pfizer Inc. and Warner-Lambert Co. LLC have agreed to pay $325 million in settlement of a lawsuit brought by a class of third-party payers. It was alleged that the drug Neurontin had been fraudulently marketed by Pfizer and Warner-Lambert. All of the claims brought by class members arising out of the sale and marketing of Neurontin will be resolved. The Plaintiffs’ motion for preliminary approval of the settlement came just more than a month after Pfizer agreed to settle the remaining claims for attorneys’ fees in Kaiser Foundation Health Plan Inc.’s suit against the drug manufacturer in the multidistrict litigation (MDL).
The class Plaintiffs, which include Harden Manufacturing Corp., Louisiana Blue Cross/Blue Shield and others, were ready to bring the litigation to an end. The members of the class Plaintiffs’ steering committee (PSC) wrote in a memorandum in support of the settlement:
This settlement, which provides significant and long-awaited benefits to class members, exceeds the standard for preliminary approval of a class action settlement.
The settlement came less than a month after Pfizer agreed to settle another suit in the MDL. Pfizer agreed in that settlement to pay Kaiser, a health maintenance organization, an undisclosed amount of attorneys’ fees. Since 2004, payers of Neurontin have accused the Defendants in several suits of fraudulently marketing the drug and causing them economic harm. Those suits were ultimately centralized before the United States District Court for the District of Massachusetts for MDL proceedings.
In the newly settled suit, class Plaintiffs alleged a fraudulent scheme to market and sell Neurontin for a variety of uses not approved by the U.S. Food and Drug Administration (FDA). The defendants sought to market the drug for several off-label uses in a variety of ways, including through false or misleading statements to physicians, according to the suit. The third-party payers involved in the action include insurance companies, health care benefit providers, union health and welfare plans and others. The class Plaintiffs have sought preliminary approval of the settlement and certification of the class for settlement purposes. They have asked for date for a final approval hearing.

Novartis To Pay Billions for Kickback Scheme

The U.S. Department of Justice says that Novartis should pay up to $3.35 billion in damages and civil fines for using kickbacks to boost sales of two drugs that caused federal health care programs to overpay for medicines, according to documents filed in federal court in New York.

 

The feds argue that Novartis violated the False Claims Act by using different plans, including rebates, to induce specialty pharmacies to boost prescriptions for two drugs: the Myfortic treatment for kidney transplants and Exjade, a medicine used for reducing excess iron in patients who undergo blood transfusions.

In its filing, the Justice Department is seeking up to $1.52 billion in damages, which represents triple the amount of money that Medicare and Medicaid paid for the drugs as a result of kickbacks between 2004 and 2013. The feds are also seeking up to $1.83 billion in fines – or $5,500 to $11,000 – for each of more than 166,000 allegedly false claims that were submitted for reimbursement to the health care sales manager.

Two years ago, the Justice Department and about a dozen states joined the litigation and a trial date for the lawsuit brought by the feds is set to begin in November. We should note that the feds also joined a separate whistleblower lawsuit filed by another former Novartis employee. In that suit, court document allege that Novartis paid for lavish trips and that speaker dinners given for doctors were purportedly kickbacks that used to induce them to prescribe Novartis drugs, according to court documents.

In a statement, a Novartis spokeswoman writes us that the document filed by the feds is a pre-trial order,which is a standard procedural step in which all parties submit an overview of their case and a list of the documents and witnesses they plan to utilize at trial. Novartis continues to dispute the allegations and is continuing to defend itself in this litigation.”

Last month, by the way, Express Scripts agreed to pay $60 million to resolve allegations by the feds that one of its business units participated in the kickback scheme. Last year, another specialty pharmacy, BioScrip, agreed to pay $15 million to settle allegations as part of the same litigation.

 

Trinity Ordered To Pay Settlement Of $663 Million

Joshua Harman, a Virginian with two small highway safety companies, made a discovery in late 2011 that perhaps only a guardrail maker could: A big competitor had changed the dimensions of its roadside safety device by as much as an inch here and there, he said, without telling federal regulators.

As designed, Trinity Industries Inc.’s ET-Plus system was meant to turn the end of a guardrail into a de facto shock absorber. The altered units, as Harman saw it, were locking up when hit, spearing cars and their occupants.

 

Harman, 46, spent 3 1/2 years trying to prove his point, driving hundreds of thousands of miles to inspect twisted guardrails at crash sites. In 2012 he sued Trinity, accusing it of hiding the potentially deadly alterations from the Federal Highway Administration. On Tuesday, almost eight months after a Texas jury agreed Trinity had defrauded taxpayers, the judge issued a final penalty: Trinity must pay $663 million, with $199 million of that going to Harman and the rest to the government.

It was one of the largest awards to taxpayers under the U.S. False Claims Act as well as the largest to an individual whistle-blower, said Patrick Burns, co-director of the nonprofit group Taxpayers Against Fraud Education Fund.

Harman, who lost his left leg in a construction accident two decades ago, said he brought the case to raise awareness about a safety risk that he says cost many victims their limbs. At least nine deaths have been linked in personal-injury lawsuits to the ET-Plus.

“I have sacrificed everything I’ve got to facilitate this situation,” Harman said. “With this $663 million judgment, it opens the eyes, hopefully, of the nation.”

Harman, whose guardrail manufacturing company filed for bankruptcy protection in March, may never collect on the award if Trinity, the biggest U.S. maker of highway safety equipment, wins on appeal.

Jeff Eller, a spokesman for Dallas-based Trinity, said in an e-mail that “the judgment is erroneous and should be reversed in its entirety.”

Trinity has said the changes didn’t detract from the safety of its ET-Plus units, which have been successfully tested multiple times. The company, whose shares have fallen 18 percent since the verdict, is defending more than 20 lawsuits over the safety of the ET-Plus.

One day after the October verdict, the FHWA, which evaluates highway devices before declaring them eligible for federal reimbursement, ordered a review of the ET-Plus. The system passed all eight crash tests since then, the agency said in March.

Whistleblower Saves Medicare Millions!

- Thanks to a brave whistleblower the Justice Department said Tuesday that it is stepping into a long-running lawsuit against one of the nation's largest nursing-home chains, accusing it of systematic Medicare overbilling and sometimes putting frail, dying patients through arduous rehab schedules just to increase revenue.

The department is taking control of a whistleblower lawsuit in U.S. District Court in Alexandria against Toledo, Ohio-based HCR ManorCare after a yearslong investigation. The initial accusations against the company were filed by a northern Virginia occupational therapist in 2009.

The lawsuit alleges that ManorCare routinely pressured administrators of its nursing homes, assisted living and rehab facilities to meet financial targets by billing for unnecessary care.

ManorCare, which also operates under the Heartland and Arden Courts brands, denied wrongdoing and said the dispute revolves around providing care that exceeds government expectations.

"The government bases its allegations on retrospective analyses performed by a few alleged experts who have never cared for, spoken with or even seen the patients in question. Instead, these alleged experts second-guess the hands-on clinical judgment of tens of thousands of experienced, licensed, caring and compassionate doctors, nurses and therapists who actually provided care to our patients," the company said in a statement issued Tuesday. It declined to comment further.

But Jeffrey Downey, attorney for the original whistleblower, occupational therapist Christine Ribik, said the government's investigation of ManorCare was exhaustive and "uncovered an astonishing amount of really bad facts."

The lawsuit alleges that ManorCare routinely pushed the vast majority of its patients into Medicare's highest tier of rehabilitation services, whether they needed it or not. That allowed the company to increase the amounts it billed.

For instance, in 2006, ManorCare billed Medicare at the top reimbursement rate for 39 percent of its patients. That number more than doubled to 80 percent by 2009, according to the lawsuit.

The lawsuit describes an 85-year-old patient at a ManorCare facility in Palm Harbor, Florida, whose medical records called for hospice care only, instead being put through 100 days of therapy even though a therapist described him as "medically fragile." He was put into hospice care only at the end of the 100 days, which marked the length of time that Medicare would cover his therapy treatments.

"We strive for a system whereby health care providers provide reasonable and necessary services without overbilling Medicare for unreasonable and unnecessary services," said Dana Boente, U.S. Attorney for the Eastern District of Virginia, where the case has been brought.

The lawsuit does not specify the amount that investigators believe Medicare was overbilled, but says Medicare paid more than $6 billion to ManorCare's 281 skilled nursing facilities from January 2006 to May 2012.

ManorCare operates skilled nursing facilities in 30 states. It was purchased in 2007 by The Carlyle Group for $6.3 billion.

The lawsuit was initially filed under the False Claims Act, which allows private citizens to bring lawsuits on behalf of the United States when they have knowledge that the government is being defrauded. The U.S. can then investigate and decide whether it wants to take over the case. Whistleblowers whose cases are taken over by the government are entitled to collect anywhere from to 15 to 25 percent of any money recovered. The percentage increases slightly if they win a case without the government's help.

Is This The American Way? Fraud-Fraud-and More Fraud!

 

What does Fraud look like? Inside gated communities where guards demand photo ID even from Santa, CEOs’ Christmas plums are super-sugared with record-breaking corporate profits.

These are people somehow not derided as moochers, even though their million-dollar pay packages are propped up by tax breaks.
The parable of Charles Dickens’ A Christmas Carol springs to mind as Wall Street banks and law firms hand out six- and seven-figure year-end bonuses while Wal-Mart and fast food workers protest wages so low that their holiday meals are food pantry dregs. It is CEOs, not the working poor, who deserve public scorn for their dependence on government handouts.

The Institute for Policy Studies issued a report last month that details the mooching of the nation’s top corporations and CEOs. It’s called “Fleecing Uncle Sam.” The findings are pretty galling.
Of America’s 100 top-paid CEOs, 29 worked schemes that enabled them to collect more in compensation than their corporations paid in income taxes. The average pay for these 29: $32 million. For one year. And corporations mangle tax the code to deduct that too.
Though their corporations reported combined pre-tax profits of $24 billion, they wrangled $238 million in tax refunds out of the federal government. That’s refunds — the government gave money to highly profitable corporations.

That’s an effective tax rate of negative one percent.
That means middle-class taxpayers helped cover the cost of million-dollar pay packages for CEOs. Middle class taxpayers, whose median family income is $51,324 and whose federal income taxes are withdrawn directly from their checks before they see a cent of pay, support CEOs who pull down $32 million a year.

Their corporations pay nothing for essential government services that middle class taxpayers provide. That includes patent protection, the Commerce Department’s sanctions against foreign trade rule violations and federal court dispute resolution.
Some corporations haven’t developed schemes enabling them to tax the federal government. Instead, they pay, but not at that 35 percent rate they’re always whining about. Between 2008 and 2012, the average large corporation, according to Fleecing Uncle Sam, paid just 19.4 percent. Individuals earning $50,000 a year pay 25 percent. Clearly, corporations are not paying a fair share at 19 percent.

There’s this wacky theory that if governments excuse corporations from paying their share, then they’ll expand and create jobs. It’s wacky because it’s fiction. Highly profitable corporations aren’t expanding and creating jobs; they’re buying back their own stock.

A study by University of Massachusetts professor William Lazonick, president of the Academic-Industry Research Network, showed that between 2003 and 2012, S&P 500 corporations used 54 percent of their earnings – $2.4 trillion – to buy their own stock.

And this is the AMERICAN Way??

Alstom Hit Hard With Settlement For Bribery

French engineering giant Alstom.  SA agreed to pay $772 million to settle accusations that it paid millions of dollars in bribes to win energy contracts, prosecutors said on Monday.
That amount represents the largest-ever criminal penalty the U.S. Department of Justice has gotten from a company on bribery-related charges.

The record criminal penalty in part reflects what prosecutors saw as an initial failure of the company to fully cooperate, according to people familiar with the matter.

U.S. authorities have ramped up overseas bribery enforcement in recent years, often investigating foreign companies that have a subsidiary located within the U.S. The Foreign Corrupt Practices Act makes it a crime to bribe a government official in exchange for business.

“This investigation spanned years and crossed continents, as agents from the FBI Washington and New Haven field offices conducted interviews and collected evidence in every corner of the globe,” said FBI Executive Assistant Director Anderson.  “The record dollar amount of the fine is a clear deterrent to companies who would engage in foreign bribery, but an even better deterrent is that we are sending executives who commit these crimes to prison.”

Alstom pleaded guilty to a two-count criminal information filed today in the U.S. District Court for the District of Connecticut, charging the company with violating the Foreign Corrupt Practices Act (FCPA) by falsifying its books and records and failing to implement adequate internal controls.  Alstom admitted its criminal conduct and agreed to pay a criminal penalty of $772,290,000.  U.S. District Judge Janet B. Arterton of the District of Connecticut scheduled a sentencing hearing for June 23, 2015 at 3pm.

In addition, Alstom Network Schweiz AG, formerly Alstom Prom (Alstom Prom), Alstom’s Swiss subsidiary, pleaded guilty to a criminal information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA.  Alstom Power Inc. (Alstom Power) and Alstom Grid Inc. (Alstom Grid), two U.S. subsidiaries, both entered into deferred prosecution agreements, admitting that they conspired to violate the anti-bribery provisions of the FCPA.  Alstom Power is headquartered in Windsor, Connecticut, and Alstom Grid, formerly Alstom T&D, was headquartered in New Jersey. 

According to the companies’ admissions, Alstom, Alstom Prom, Alstom Power and Alstom Grid, through various executives and employees, paid bribes to government officials and falsified books and records in connection with power, grid and transportation projects for state-owned entities around the world, including in Indonesia, Egypt, Saudi Arabia, the Bahamas and Taiwan.  In Indonesia, for example, Alstom, Alstom Prom, and Alstom Power paid bribes to government officials – including a high-ranking member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara, the state-owned electricity company in Indonesia – in exchange for assistance in securing several contracts to provide power-related services valued at approximately $375 million.  In total, Alstom paid more than $75 million to secure $4 billion in projects around the world, with a profit to the company of approximately $300 million.   

Alstom and its subsidiaries also attempted to conceal the bribery scheme by retaining consultants purportedly to provide consulting services on behalf of the companies, but who actually served as conduits for corrupt payments to the government officials.  Internal Alstom documents refer to some of the consultants in code, including “Mr. Geneva,” “Mr. Paris,” “London,” “Quiet Man” and “Old Friend.”

Drug Promoting and Marketing Error Costs Shire Pharmaceuticals $56.5 Million

Shire Pharmaceuticals LLC to Pay $56.5 Million to Resolve False Claims Act Allegations Relating to Drug Marketing and Promotion Practices

 

 

Pharmaceutical company Shire Pharmaceuticals LLC will pay $56.5 million to settle civil allegations that it violated the False Claims Act as a result of its marketing and promotion of several drugs.Shire, located in Wayne, Pennsylvania, manufactures and sells pharmaceuticals, including Adderall XR, Vyvanse and Daytrana, which are approved for the treatment of attention deficit hyperactivity disorder (ADHD), and Pentasa and Lialda, which are approved for the treatment of mild to moderate active ulcerative colitis.

 

“Patients and health care providers must receive accurate information about available prescription drugs so that they can make safe and informed treatment decisions,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “The Department of Justice will be vigilant to hold accountable pharmaceutical companies that provide misleading information regarding a drug’s safety or efficacy.”

The settlement resolves allegations that, between January 2004 and December 2007, Shire promoted Adderall XR for certain uses despite a lack of clinical data to support such claims and overstated the efficacy of Adderall XR, particularly relative to other ADHD drugs.  Among the allegedly unsupported claims was that Adderall XR was clinically superior to other ADHD drugs because it would “normalize” its recipients. Shire allegedly stated that its competitors’ products could not achieve similar results, which the government contended was not shown in the clinical data that Shire collected.  Shire also allegedly marketed Adderall XR based on unsupported claims that Adderall XR would prevent poor academic performance, loss of employment, criminal behavior, traffic accidents and sexually transmitted disease.  In addition, Shire allegedly promoted Adderall XR for the treatment of conduct disorder without approval from the Food and Drug Administration (FDA).

The settlement also resolves allegations that, between February 2007 and September 2010, Shire sales representatives and other agents allegedly made false and misleading statements about the efficacy and “abuseability” of Vyvanse to state Medicaid formulary committees and to individual physicians.

  For example, one Shire medical science liaison allegedly told a state formulary board that Vyvanse “provides less abuse liability” than “every other long-acting release mechanism” on the market. 

Shire also made allegedly unsupported claims that treatment with Vyvanse would prevent car accidents, divorce, arrests and unemployment. 

Finally, the settlement resolves allegations that between January 2006 and June 2010, Shire sales representatives promoted Lialda and Pentasa for off-label uses not approved by the FDA and not covered by federal healthcare programs.  Specifically, the government alleged that Shire promoted Lialda off-label for the prevention of colorectal cancer.

"This settlement represents another important step in our fight against fraud in federally-funded healthcare programs such as Medicare and Medicaid,” said U.S. Attorney Zachary T. Fardon for the Northern District of Illinois.  

The allegations resolved by the settlement arose from a lawsuit filed by Dr. Gerardo Torres, a former Shire executive, and a separate lawsuit filed by Anita Hsieh, Kara Harris and Ian Clark, former Shire sales representatives.  The lawsuits were filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery.  Torres will receive $5.9 million.   

 

As a result of today’s $56.5 million settlement, the federal government will receive $35,713,965, and state Medicaid programs will receive $20,786,034.  The Medicaid program is funded jointly by the federal and state governments.  In addition, Shire has separately reached agreement with the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) on a corporate integrity agreement, which will address the company’s future marketing efforts.

 

 

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Mortgage Fraud Still Happening

If you thought the bad guys had left the mortgage business for greener pastures, think again. The thieves are still out there, ready to separate you from your money. But at the same time, many of us are still not above stretching the truth a little when we are trying to obtain financing.

First, the business bad guys, represented today by Amerisave Mortgage Corp., which the Consumer Financial Protection Bureau has ordered to pay $19.3 million for providing a deceptive bait-and-switch scheme on would-be borrowers.



The CFPB found that the Atlanta-based online company, which lends in all 50 states, lured consumers by advertising misleading interest rates. Then locked them in with costly up-front fees, failed to honor its published rates and illegally overcharged them for affiliated third-party services.

Here's how it worked, according to the CFPB:

Since 2011, the company advertised inaccurate rates and terms in online banner ads and searchable rate tables on third-party websites, inducing consumers to pursue a mortgage with Amerisave. Once at Amerisave's website, consumers received quotes based on an 800 FICO score, even when they had previously entered a score well below 800 on the third-party site that led them to Amerisave in the first place.

The company also required consumers to pay for an appraisal before it would provide a good-faith estimate; then it ordered the appraisal from an affiliated company. Borrowers weren't told that tiny fact until later.

Then, at closing, Amerisave charged its customers for something called "appraisal validation" reports without disclosing that the service was provided by an affiliated company. They also weren't told the fee was marked up by as much as 900%.

In its investigation, the CFPB found that Amerisave and its owner, Patrick Markert, pocketed more than $3 million in indirect profit distributions by overcharging unknowing borrowers. The validation reports cost $20, but Amerisave charged $100, with the $80 windfall finding its way to Markert's wallet.

Whistleblower Advocate Attorney General Eric Holder



U.S. Attorney General Eric Holder on Wednesday called for Congress to take steps to help prosecutors build criminal cases against senior Wall Street executives, saying companies often insulated their leaders from responsibility for misconduct.

Holder made some of his most extensive comments yet on improving the prosecution of white-collar crime. He called on Congress to boost rewards for Wall Street whistleblowers and fund more FBI agents with forensic accounting expertise.

It has reached multibillion-dollar settlements with institutions including JPMorgan Chase & Co, Bank of America Corp and Citigroup Inc, for misrepresenting risks of shoddy mortgage bonds sold before the crisis. But no individuals have faced related charges.

"When it comes to financial fraud, the department recognizes the value of bringing enforcement actions against individuals, as opposed to simply the companies that employ them," Holder said. But he said prosecutors could not always prove that operations knew about a particular scheme. He said blurred lines of authority often make it hard to name the person responsible for individual business decisions.

Holder suggested lawmakers consider a rule in the Sarbanes-Oxley Act of 2002 that requires a single executive to sign accounting forms and bear liability for misrepresentations, and examine whether it could be applied to other areas of corporate wrongdoing.

"We need not tolerate a system that permits top executives to enjoy all of the rewards of excessively risky activity while bearing none of the responsibility," he said, before an audience that included Manhattan U.S. Attorney Preet Bharara and U.S. District Judge Jed Rakoff.

COOPERATORS

Also on Wednesday, another top Justice Department official said prosecutors have put individuals at the center of probes into corporate misconduct.

"If you want full cooperation credit, make your extensive efforts to secure evidence of individual culpability the first thing you talk about when you walk in the door to make your presentation," Marshall Miller, the No. 2 official in the Criminal Division told an audience of lawyers who conduct corporate investigations
.
Reuters reported last week that prosecutors in cases of foreign bribery and other white-collar crimes have used more investigative tools such as body wires and search warrants and also improved relationships with counterparts overseas to build stronger cases against individuals.
Since the financial crisis, prosecutors have stepped up efforts to pursue bankers, traders and others in finance for other types of fraud including insider trading and manipulation of interest rate benchmarks and foreign exchange rates.

Holder confirmed that the department had obtained undercover cooperators as part of its probe into the manipulation of foreign exchange rates, and expected to bring charges against individuals in financial fraud cases in the "coming months."

But the law caps rewards for potential whistleblowers in cases that do not involve fraud against government programs and hurts the ability of prosecutors to get Wall Street executives to cooperate, Holder said in his speech. "We should seek to better equip investigators to obtain this often elusive evidence," Holder said.

In one recent case in which a federal judge ordered Bank of America to pay $1.27 billion for fraud at its Countrywide unit, a whistleblower who served as the government's star witness is entitled to $1.6 million. Holder described that amount as a "paltry sum" for an industry in which the collective bonus pool stood above $26 billion last year and median executive pay was $15 million.

In addition to cooperators, Holder said prosecuting white-collar crime also requires FBI agents sophisticated enough to know what questions to ask and what to look for when those witnesses do come forward. He called on Congress to consider more resources for the FBI to sustain efforts to investigate financial crime.

CVS Does It Again!



Alabama Supreme Court on Friday allowed a class action lawsuit seeking more than $3 billion to go forward against CVS Health Corp and several insurance companies, agreeing with the ruling by a lower court which said the plaintiffs could be certified as a class.

 

The case dates back to a 1999 class action settlement for $56 million over alleged accounting fraud at MedPartners, a physician and pharmacy benefits management corporation.

 

CVS Health could not be reached for comment.

 

MedPartners became Caremark and merged in 2007 with CVS, now known as CVS Health.

In 2003, Alabama attorneys filed a lawsuit on behalf of a stockholder John Lauriello, alleging fraudulent insurance information was given in court by MedPartners and its insurers.

The plaintiffs allege that MedPartners and its insurers hid the fact that unlimited insurance coverage was available at the time of the initial class action in 1998, enabling them to settle for $56 million, instead of $3 billion in stockholder losses, according to court documents.

LB & B claims to be minority owned to qualify for grant money!

Funny what some people will do for money isn't it.

This information taken directly from the LB & B Website

Success
            Our success is a combination of customer satisfaction, employee satisfaction, high productivity and efficient operations.

 Ethics and Integrity
            Our integrity and ethics will never be compromised. Each and every employee must be challenged, recognized and involved.

It's amazing the lengths people will go to get free money. This company thought it would be a good idea to claim that it was owned by someone who was socially and economically disadvantaged in order to qualify for a Section 8(a) program. They also used this status to qualify for SBA's Mentor Protégé program. They were eventually brought to justice on both counts. The first was headed by former employees and the latter was prosecuted by the Federal government.

The question I have is how many other free money sources did they oust before people caught on to what they were doing and also how many other fraudulent companies are adhering to the same type of false funding options. This is very frustrating to the common person who not only supports and donates to these false causes, but also to the other legitimate company's that lost out on financial assistance.

How do you feel about this company? Do you know of any such false organizations? If so please contact our office today. James Vander Linden  (612) 339-6841,or email   jim@vanderlindenlaw.com.