State Fraud Actions

NY State Capitol

February 2017

February 8, 2017 – Georgia announced that the Office of the Attorney General’s multi-year legal battle against payday lenders Western Sky Financial, LLC, CashCall, Inc. and related entities has concluded in a settlement providing over $40 million in monetary relief to Georgia consumers. The settlement comes on the heels of a October 31, 2016 ruling by the Georgia Supreme Court that out-of-state Internet lenders are subject to the State’s Payday Lending Act, which prohibits a lender from making loans of $3,000 or less unless the lender is licensed to lend in Georgia or under federal law.  Georgia law caps the interest rate of such loans at 10%; however, Western Sky and its affiliates sold over 18,000 loans to Georgia borrowers bearing interest rates of 140% to 340%, and collected over $32 million in interest and fees from those consumers since 2010. The settlement requires Western Sky and its affiliates to pay $23.5 million in consumer restitution, to cease all collections and to forgive all outstanding loans, which will provide an additional $17 million in loan relief to Georgia borrowers. GA

February 8, 2017 – A King County judge ordered the makers of 5-hour ENERGY® to pay nearly $4.3 million in penalties, attorneys’ fees and costs for multiple violations of the state Consumer Protection Act. Washington filed a lawsuit against the companies in 2014, alleging violations of the state Consumer Protection Act. After a three-week trial last September, Judge Beth Andrus ruled in the state’s favor, finding that claims in the companies’ advertising were deceptive, and therefore violated the Consumer Protection Act. The deceptive claims — that the popular flavored energy shots is superior to coffee, that doctors recommend 5-hour ENERGY®, and that its decaffeinated formula provides energy, alertness and focus that lasts for hours — appeared in press releases, on the internet and in thousands of print and broadcast ads. WA

February 6, 2017 –New Jersey Assemblyman Robert Schroeder (R-Bergen) was sentenced to prison for stealing nearly $1.9 million from individuals who loaned him money for a business venture in North Dakota and writing over $3.4 million in bad checks to other creditors who loaned him money or provided goods and services for his various companies, including All Points International Distributors, Inc., which sold tents and prefabricated buildings to the U.S. military. Schroeder, 56, of Washington Township (Bergen County), was sentenced to eight years in state prison by Superior Court Judge Robert Reed in Somerset County.  Schroeder pleaded guilty on Oct. 7 to a charge of second-degree misconduct by a corporate official.  He must pay full restitution of $5,318,150 to his victims, and he is permanently barred from public office and public employment in New Jersey. Four companies that he operated also pleaded guilty in October. Each of those corporate defendants – All Points International Distributors, Inc.; Hercules Global Logistics, LLC; RS Consultants, LLC; and RGS Bergen, LLC – pleaded guilty to second-degree issuing bad checks. Each of the companies is jointly and severally liable with Schroeder for paying full restitution to the victims. NJ

February 6, 2017 – New Jersey announced that Smart TV manufacturer VIZIO, Inc. (“VIZIO”) and its subsidiary VIZIO Inscape Services, LLC, (“Inscape”) have agreed to pay the State and the Federal Trade Commission (FTC) $2.5 million and change their business practices to settle allegations they violated consumer protection laws by surreptitiously tracking consumers’ television viewing habits and selling the information to marketing companies and data brokers. The settlement ends parallel investigations conducted by the Division and the FTC into the use of data-collecting technology installed on VIZIO’s “Smart TVs.” The State obtained $1 million and the FTC obtained $1.5 million in the settlement. In a joint Complaint filed in the United States District Court for the District of New Jersey, the State and the FTC alleged that VIZIO and Inscape violated state and federal laws by failing to effectively inform consumers that VIZIO smart televisions were continuously collecting and storing information about their viewing habits, and that the data was being sold to third parties for marketing purposes. NJ

January 2017

January 31, 2017 – All 50 states and the District of Columbia announced a joint settlement with Colorado-based The Western Union Company, resolving a multistate investigation which focused on complaints of consumers who used Western Union’s wire transfer service to send money to third parties involved in schemes to defraud consumers. The settlement requires Western Union to develop and put into action a comprehensive anti-fraud program designed to help detect and prevent incidents where consumers who have been the victims of fraud use Western Union to wire money to scam artists. Western Union also has agreed to pay a total of $5 million to the states for the states’ costs and fees. In addition to this settlement with the states, Western Union also settled claims related to fraud-induced transfers with the Federal Trade Commission and U.S. Department of Justice, as announced on January 19, 2017.  As part of those related settlements, Western Union has agreed to pay $586M to a fund that the Department of Justice will administer to provide refunds to victims of fraud induced wire transfers nationwide. NY, FL, MA, OH, PA

January 31, 2017 – New York announced a settlement with for-profit education company DeVry Education Group, Inc. and its subsidiaries DeVry University, Inc. and DeVry/New York, Inc. (collectively, “DeVry”).  The settlement resolves an investigation that revealed that DeVry lured students with ads that exaggerated graduates’ success in finding employment at graduation and contained inadequately substantiated claims about graduates’ salary success.  Many of DeVry’s advertisements centered on a claim that 90% of DeVry graduates who are actively seeking employment obtain employment in their field of study within six months of graduation.  The Attorney General’s investigation revealed that the 90% claim was misleading because a substantial number of the graduates included in the 90% figure were graduates who were already employed prior to graduating from DeVry.  In fact, many of the graduates included in the 90% were employed before they even enrolled at DeVry. Pursuant to the agreement, DeVry will pay $2.25 million in consumer restitution and $500,000 in penalties, fees and costs. NY

January 30, 2017 – Florida announced a $1.5 million life claim settlement agreement reached with subsidiaries of the Ameriprise Group, RiverSource Life Insurance Company and RiverSource Life Insurance Company of New York. The settlement agreement focuses on the one-sided use of the Social Security Administration’s Death Master File to stop paying a deceased person’s annuity, but not using the same information to find and begin paying the deceased’s family or other beneficiaries for life insurance policies. Florida, California, New Hampshire, North Dakota and Pennsylvania conducted the examination into the companies that led to this agreement.  Florida’s allocation of the multi-state settlement payment by Ameriprise is more than $111,000, which covers the costs of the investigations and future compliance monitoring. To date, state insurance regulators have either reached settlements or concluded the investigation of 28 of the top 40 companies constituting 80 percent of the total market. Efforts continue to be focused on the examination of the remaining 12 insurers. FL

January 30, 2017 –Scott Rookus was sentenced by Judge Jon Hulsing of the 20th Circuit Court in Ottawa County to 7 to 20 years for racketeering and 57 months to 10 years for fraudulent sales of securities. Judge Hulsing is also requiring Rookus pay $4,393,420 in restitution to the victims of his million dollar Ponzi scheme that ran from 2010 to 2015. Between 2010 and 2013, Rookus solicited and obtained investments of approximately $1.5 million for his holdings company, New Haven Holdings. His customers, many of whom were senior citizens, were told that earnings from their investments would come from the profits of Rookus’ enterprises, when in fact the money he took resulted in a Ponzi-scheme from which he was the primary beneficiary. To cover his tracks, Rookus issued fraudulent returns to some investors using money from newer investors. He used the investor funds to pay personal expenses such as his children’s private school education and to pay off tax liens against him. The scheme was uncovered after Rookus filed for personal bankruptcy in March 2015 and his investors found out that they had lost everything they invested. MI

January 26, 2017 – New Jersey filed two separate actions against home improvement companies and their owners alleging they used deceptive business practices in order to obtain $1.4 million in federal relief funds from 51 homeowners who paid them to repair and elevate their storm-damaged properties. Named in the first Complaint are father and son contractors Paul Zaidinski, Sr., and Paul Zaidinski, Jr., and their Point Pleasant-based company, Shore HL, Inc., which does business as “Shore House Lifters.” Named in the second Complaint are contractor George Rex and his Pleasantville-based companies, Atlantic Coast Housing Lifting, LLC and George Rex Construction, LLC. The defendants engaged in “unconscionable consumer practices” that include taking money from consumers to renovate, rebuild, and/or elevate Sandy-damaged homes and then failing to begin work, performing the work in a substandard manner, and/or abandoning unfinished projects without returning for weeks, months, or at all, according to the State’s Complaints. NJ

January 26, 2017 – New York announced a lawsuit against STAR Exemption Advisor, YCA Corp. and its business owner Arie Gal, for allegedly scamming thousands of new homeowners out of at least $1.5 million by charging them excessive fees to enroll them in the Basic STAR Exemption Program, which is otherwise free.  The lawsuit, filed in Nassau County Supreme Court, seeks to provide full restitution to all those affected, and a complete accounting to identify all consumers who are entitled to such refunds. The lawsuit also seeks additional costs, damages, and to permanently enjoin the respondents from marketing any Basic Star rebate or property tax reduction services within the State of New York. The Attorney General’s office also secured a temporary restraining order enjoining the defendants from continuing doing business in New York State, to pay full restitution and damages to all injured consumers and to render a full accounting of all victims to the office. The temporary restraining order also froze all of the defendants’ assets. NY

January 24, 2017 – Florida and the Federal Trade Commission announced a settlement with several related debt relief and credit repair services companies and their principal. The settlement resolves allegations that Chastity Valdes and her companies, Consumer Assistance LLC, Consumer Assistance Project Corp. and Palermo Global LLC, engaged in unlawful debt relief operations targeting student loan holders. Among other things, the settlement bans the defendants from operating in the debt relief and credit repair industries. In 2016, Attorney General Bondi’s Office and the FTC filed a joint lawsuit against Valdes and her companies, alleging the defendants took illegal up-front fees in return for their purported debt relief and credit repair services. According to the complaint, the defendants allegedly falsely claimed these services reduced consumers’ student loan debt and repaired consumers’ credit. The complaint also asserted violations of the Florida Deceptive and Unfair Trade Practices Act, the FTC Act, the Telemarketing Sales Rule and the Credit Repair Organizations Act. As part of the settlement, the defendants are banned from selling debt relief and credit repair services and prohibited from making material misrepresentations about any products or services. The order also imposes a judgment of more than $2.3 million, which will be suspended upon the surrender of virtually all of the defendants’ assets. FL

January 18, 2017 – New York announced a joint settlement with four other states and the Federal Trade Commission with Mallinckrodt plc and its U.S. subsidiary, formerly known as Questcor Pharmaceuticals (“Questcor”), a drug manufacturer. The complaint and settlement, filed jointly, alleges that Questcor unlawfully acted to prevent competition for its drug H.P. Acthar Gel, which is typically used as a last resort to treat certain life-threatening diseases, including infantile spasms and multiple sclerosis.  In 2001, Questcor bought the rights to Acthar, known as an adrenocorticotropic hormone (ACTH)-based therapeutic drug, which are used to treat certain life-threatening diseases, and is the standard of care for infantile spasms. It is the only such drug sold in the United States. Since then, Questcor has increased the price of Acthar 85,000%, from $40 per vial to over $34,000 per vial. The complaint alleges that Questcor monopolized the market for ACTH drugs by purchasing the rights to Synacthen, which was being sold by Novartis Pharma A.G. in 2012. Synacthen is used to treat patients with the same life-threatening conditions as Acthar, but is sold in Europe and Canada at a fraction of the price. NY, TX

January 18, 2017 – Illinois filed a lawsuit against Navient Corporation, its subsidiaries Navient Solutions Inc., Pioneer Credit Recovery Inc. and General Revenue Corporation and Sallie Mae Bank, over widespread abuses across all aspects of its business, including student lending, student loan servicing and student loan debt collection. Madigan’s complaint alleges that Navient’s practices harmed borrowers and put the company’s profits before the interests of millions of student borrowers across the country. For decades, Navient and Sallie Mae have been involved in the business of student lending – from the origination of loans, to the servicing of those loans for repayment, and the collection of loans that enter into default. In this time, Madigan alleged that Navient grew its student loan company into one of the country’s largest by engaging in practices that repeatedly harmed borrowers. IL

January 13, 2017 – Illinois, the Department of Justice, and 21 other states announced an $864 million settlement with Moody’s Corporation, Moody’s Investors Service Inc. and Moody’s Analytics Inc. to resolve allegations that the credit ratings agency compromised its independence and objectivity in assigning its highest ratings to risky mortgage-backed securities and other structured finance securities in the lead up to the 2008 economic collapse. According to the settlement, Moody’s consistently made misrepresentations about the processes it used to assign credit ratings to structured finance securities. While publicly promising independent, objective analyses, the company privately relaxed its ratings criteria to ensure its clients’ residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOs) would achieve higher ratings than the actual quality of the assets supported. Structured finance securities, including RMBS and CDOs, derive their value from the monthly payments consumers make on their mortgages. The alleged misconduct began as early as 2001 and became particularly rampant between 2004 and 2007. IL, CA, PA, MA

January 13, 2017 – Nearly 4,500 students victimized by the now-defunct American Career Institute (ACI) in Massachusetts will have their federal student loans forgiven by the U.S. Department of Education, Massachusetts announced. The announcement marks the first time the Department has granted a state attorney general’s application to cancel loans for a group of defrauded students. According to the Department, students who attended any of ACI’s five career training schools in Massachusetts – Braintree, Cambridge, Framingham, Springfield, and Woburn – will have their loans discharged based on deceptive and illegal practices uncovered by the AG’s investigation into the former for-profit school. In addition to federal loan discharges, former ACI students will also be entitled to refunds of any payments made on their federal loans.  The combined borrower loan discharges for ACI students announced will total roughly $30 million. MA

January 12, 2017 – Texas announced a settlement with MB2 Dental Solutions (MB2) and 21 affiliated pediatric dental practices. MB2 agreed to pay the United States and the State of Texas $8.45 million for alleged violations of the federal False Claims Act (FCA) and the Texas Medicaid Fraud Prevention Act (TMFPA). Three lawsuits were resolved with this settlement alleging that MB2 knowingly submitted claims for children’s dental services which were either not performed or were provided after false identification was used. The claims also involved illegal kickbacks to Medicaid beneficiaries and their families, marketers and marketing entities. The allegations were brought to the attention of the U.S. and Texas authorities by whistleblowers who filed one lawsuit under the FCA and two under the TMFPA. TX

January 12, 2017 – Florida announced coordinated settlements with the operators of an online lending scheme. The operators of the alleged scheme are Western Sky Financial, LLC, CashCall, Inc., WS Funding, LLC, Delbert Services Corporation and John Paul Reddam, who is President, CEO, owner and director of CashCall. These settlements, in coordination with a pending Florida class action settlement against CashCall and Reddam filed in the U.S District Court for the Southern District of Florida, resolve allegations that the lender offered, serviced and collected on Western Sky loans to Florida borrowers with illegal interest rates of more than 18 percent. Subject to final court order in the class action, the settlements collectively provide more than $27 million in monetary relief to Floridians. Under the settlements, approximately 14,000 borrowers are expected to be eligible for a cash payment from a combined fund of more than $11 million. To be entitled to share in the fund, borrowers must have taken out a loan from these lenders and paid back more than principal plus 18 percent interest. FL

January 12, 2017 – New York announced the indictment and arraignment of attorney Anthony Cornachio, 74, of Garden City as well as the indictment and arraignment of NRI Group, LLC. (“NRI”) and Canarsie A.W.A.R.E., Inc. (“Canarsie”), both Medicaid-enrolled drug treatment programs companies controlled by Cornachio. Also announced was the indictment and arraignment of three-quarter housing operators Yury Baumblit, 66, and Rimma Baumblit, 60, of Brooklyn, and their company Back on Track Group, Inc. In papers unsealed in New York State Supreme Court, Kings County, prosecutors allege that Yury Baumblit and Rimma Baumblit, in exchange for payments from Cornachio’s companies, forced residents of their three-quarter homes to attend treatment at NRI and Canarsie regardless of the residents’ actual need for drug treatment services or face eviction. All of the residences leased by Back on Track Group, Inc. and operated by Yury Baumblit and Rimma Baumblit as three-quarter homes were located in Kings County. During the course of this scheme, which dates back to at least 2013, Cornachio allegedly paid Back on Track Group, Inc. over $900,000.00 in illegal kickbacks.  As a result of this kickback scheme, prosecutors allege that Cornachio, through NRI and Canarsie, submitted, and caused to be submitted, at least $1.7 million in false claims for reimbursement to Medicaid. These claims, prosecutors allege, were fraudulent because they resulted from illegal kickbacks and were often medically unnecessary. NY

January 12, 2017 – New York announced the resolution of a four-year investigation of Citigroup Global Markets, Inc. (CGMI), a subsidiary of Citigroup, that revealed that CGMI had overcharged over 47,000 of its customers more than $22.5 million in fees.  After the Attorney General’s Office launched its investigation, CGMI revised its policies and procedures to address the fee overcharge issues uncovered in the investigation, and as a part of the agreement CGMI admits the findings of Attorney General Schneiderman’s investigation. In cooperation with the Attorney General’s investigation, in October 2014 CGMI began reimbursing its customers in full with interest, for the overcharged fees.  The agreement also requires CGMI to report fee overcharge issues to the New York Attorney General’s office for the next three years and to pay a penalty of $1 million to the State of New York. The fee overcharges at issue in the investigation arose (1) when CGMI overcharged some of its customers more than the fees they had negotiated on their managed investment accounts, and (2) when CGMI overcharged customers by failing to rebate certain customers’ accounts after periods of inactivity when fees should not have been charged but were charged.  NY

January 11, 2017 – New York reached an agreement in principle along with 37 states and the District of Columbia to join the federal government in a settlement with Shire Pharmaceuticals LLC and other subsidiaries of Shire plc (Shire). The agreement settles allegations that Shire and the company it acquired in 2011, Advanced BioHealing (ABH), employed kickbacks and other unlawful methods to improperly promote Dermagraft, a bioengineered human skin substitute approved by the FDA for the treatment of diabetic foot ulcers. Shire plc is a multinational pharmaceutical company headquartered in Ireland, with its United States operational headquarters in Lexington, Massachusetts. Shire will pay the federal government $350 million dollars, of which $14.5 million will go to the Medicaid program, to resolve allegations that Shire’s improper promotion and marketing of Dermagraft caused false claims to be submitted to government health care programs.  The States will receive $6,104,000 for the State share of the Medicaid program.  The settlement resolves the allegations asserted in six qui tam actions brought by whistleblowers in, or transferred to, the United States District Court for the Middle District of Florida. Two of the qui tam actions named New York and other states and included allegations that Shire submitted or caused to be submitted false claims to the Medicaid program under federal and state False Claims Acts. NY, FL

January 10, 2017 – New York announced the convictions of Lawrence D. Rosenbaum, 65, of Albany, New York, and his wife, Thomasine Henderson, 66. On January 5, 2017, Rosenbaum pleaded guilty to Grand Larceny, Securities Fraud and Tax Fraud for fraudulently soliciting hundreds of thousands of dollars from investors for kosher and halal cheese factories in upstate New York and bio-energy companies in New York State and Costa Rica. As part of his plea, Rosenbaum agreed to execute nearly $1,000,000 in judgments in favor of his victims, and he will be sentenced to 3 to 9 years in state prison. Also on January 5, Henderson pleaded guilty to Insurance Fraud and Falsifying Business Records in connection with her submission of a false claim in an attempt to obtain payment on a life insurance policy after her son’s suicide last year. According to the prosecution, Rosenbaum is an insurance broker who owned and operated Rosenbaum Financial Services in Albany, New York for decades. In approximately 2001, Rosenbaum formed a limited liability company, Saratoga Cheese Company LLC, which he claimed would develop a halal and kosher cheese plant in the Capital Region, using local dairy products and a cheese coagulator that he had learned about when he was an exchange student in Germany decades earlier. In 2006, Rosenbaum reformed this entity as Saratoga Cheese Corporation, with the stated purpose of developing a cheese manufacturing facility in Cayuga County. NY

January 9, 2017 – New York announced that it has filed a lawsuit against dietary supplement maker Quincy Bioscience, LLC and related companies and executives, charging that they deceptively market the widely-sold supplement Prevagen by falsely claiming that the product improves memory, despite lacking reliable scientific evidence to support this claim. The lawsuit, filed in the U.S. District Court for the Southern District of New York, seeks a ban on further false claims about Prevagen, restitution for consumers, disgorgement of ill-gotten gains, and civil penalties for violations of state law. According to the complaint, Quincy Bioscience’s own research demonstrates the flawed science behind its claims that Prevagen can improve memory. Quincy Bioscience developed and marketed Prevagen on the theory that its active ingredient, apoaequorin, a dietary protein, enters the human brain to supplement proteins that are lost during the natural aging process. Yet Quincy Bioscience lacks any studies showing that this orally-administered protein can cross the human blood brain barrier, and in fact, Quincy’s own studies show that the protein is rapidly digested in the stomach and broken down into amino acids like any other dietary protein. NY

January 4, 2017 – New York announced the plea and conviction of Gary Mole, 52, an Australian citizen and the former CEO of Glacial Energy Holdings (“GEH”), stemming from the underreporting of over $18.5 million dollars in taxable income by Glacial Energy of New York (“GENY”), a wholly owned subsidiary of GEH.  Mole pleaded guilty to Criminal Tax Fraud in the Second Degree, a class C felony. According to prosecutors, from 2006 through 2008, Mole was the CEO and sole shareholder of GEH, an energy service company incorporated in Nevada. In approximately 2006, Mole allegedly began personally investing taxable revenue of GENY in a mining operation in the Democratic Republic of Congo (“DRC”), Generales Des Mines Au Congo SPRL, known as “Gemico.” Between January 1, 2006 and December 31, 2008 Mole diverted over $18.5 million in taxable revenue from GENY to Gemico. Mole instructed subordinates to wire money to bank accounts in the Democratic Republic of Congo, Switzerland, Lichtenstein, South Africa, and China, among others, all for the benefit of Gemico. NY

December 2016

December 29, 2016 –Tennessee Gas Pipeline LLC agreed to pay the Massachusetts $640,000 to settle a lawsuit brought by Tennessee Gas – a subsidiary of Kinder Morgan – against the state for an easement through Otis State Forest in Sandisfield to expand an existing natural gas pipeline. As part of the $640,000 settlement, Tennessee Gas will pay $300,000 for the Department of Conservation and Recreation (DCR) to identify and acquire additional conservation land in the vicinity that provides ecological functions equivalent to the land impacted by the pipeline. MA

December 20, 2016 – California announced an additional $66 million settlement with Volkswagen over the company’s use of “defeat device” software to bypass emissions controls in its Volkswagen, Audi and Porsche 3.0-liter diesel vehicles, in violation of California’s environmental laws.  The settlement, in which California will receive $66 million to mitigate environmental harm, including $25 million to provide incentives for the purchase of zero emission vehicles, is part of a $225 million nationwide agreement, which the California Attorney General’s office negotiated alongside the California Air Resources Board, the U.S. Department of Justice, and the U.S. Environmental Protection Agency.  This is the third partial settlement following a landmark $14.7 billion agreement with Volkswagen over defeat devices in its 2.0-liter diesel vehicles (of which $1.18 billion will flow to California) and a settlement California obtained from Volkswagen for $86 million in civil penalties. CA

December 20, 2016 – Massachusetts announced that a Burlington woman has been sentenced to jail and ordered to pay up to $570,000 in restitution for stealing from public agencies by billing for unlicensed psychological services. Nita Guzman, age 52, pleaded guilty on Friday in Middlesex Superior Court to the charges of Medicaid False Claims (2 counts), False Claims to Public Agency (1 Count), Larceny (4 Counts), and Unlicensed Practice of Psychology (2 Counts). An AG’s investigation revealed that Guzman, through her company New England Psychological Consultants, Inc., billed Medicaid, Medicare, and Lawrence Public Schools more than $550,000 for unlicensed mental health services. MA

December 19, 2016 – New Jersey announced that the owner of an Essex County trucking company has been charged with bilking nearly $389,000 from his insurance carrier by providing false payroll information to obtain lower premiums on workers compensation coverage. Elvis Parra, owner of E&K Trucking, Inc. in Newark, was indicted Friday on second-degree charges of theft by deception and misconduct by a corporate official, third-degree insurance fraud, and fourth-degree workers compensation fraud in connection with the alleged scheme that cheated Liberty Mutual Insurance Company (“Liberty Mutual”) out of premiums. According to the indictment, Parra falsely represented that his trucking company employed only three drivers who were paid a total of $75,000 annually, when in reality he paid more than $2.9 million in annual wages to an additional 81 owner/operator drivers, according to prosecutors. NJ

December 16, 2016 – Virginia announced that Southwest Virginia communities will enjoy cleaner water thanks to enhanced environmental protections agreed to as part of a settlement between Virginia, Alabama, Kentucky, Tennessee and the Southern Coal Corporation for the company’ s continued and systemic polluting of waterways in violation of state and federal laws.  The Commonwealth of Virginia will receive $112,500 as part of a $900,000 civil penalty, and Southern Coal Corporation will commit to environmental improvement plans and facility upgrades to comply with the Clean Water Act and prevent any illegal discharge of pollutants into Southwest Virginia waterways. The company will also hire an independent auditor to monitor its compliance and will post all its discharge reports online so the public can know what is being discharged into their waterways and whether the company is fulfilling its obligations. VA

December 15, 2016 – Ohio joined 19 other state attorneys general in filing a federal lawsuit against Heritage Pharmaceuticals and several other generic drug makers accused of conspiring to reduce competition and inflate prices in the United States for two drugs: doxycycline hyclate delayed-release (an antibiotic) and glyburide (a diabetes medication). The lawsuit names as defendants Heritage Pharmaceuticals Inc., Aurobindo Pharma USA Inc., Citron Pharma LLC, Mayne Pharma (USA) Inc., Mylan Pharmaceuticals Inc., and Teva Pharmaceuticals USA Inc. The states allege that Heritage Pharmaceuticals, through senior executives and salespeople, organized and initiated a wide-ranging series of conspiracies with other companies to allocate markets, artificially inflate and manipulate prices, and otherwise thwart competition. According to the complaint, the defendants routinely coordinated their schemes by interacting directly with competitors at events, such as industry trade shows and customer conferences, and through direct email, phone, and text message communications. OH

December 14, 2016 – Michigan announced that Scott Rookus, of Jenison, pled no contest to two felony charges, one count of Racketeering and one count of Fraudulent Sale of Securities in relation to his role in running a million dollar Ponzi scheme between 2010 and 2015. Rookus was originally charged with more than 30 crimes regarding the alleged Ponzi scheme in June 2016. Between 2010 and 2013, Rookus allegedly solicited and obtained investments of approximately $1.5 million for his holdings company, New Haven Holdings. His customers many of whom were senior citizens, were told that earnings from their investments would come from the profits of Rookus’ enterprises, when in fact the money he took resulted in an alleged Ponzi-scheme from which he was the primary beneficiary. MI

December 14, 2016 – New York joined twelve other states, the District of Columbia, and the Federal Trade Commission in announcing a $17.5 million settlement with ruby Corp., which owns the dating website The settlement follows an investigation into the July 2015 hack of the website that resulted in the online publication of user information for millions of members, including photographs, usernames, email addresses, communications, and other profile information. The settlement includes an immediate payment of $1,657,000 divided amongst the states and the Federal Trade Commission, of which New York will receive $81,330.94. The remainder of the $17.5 million payment is suspended based on ruby Corp.’s inability to pay. Up to 652,627 New York residents were members of Ashley Madison at the time of the security breach. NY

December 14, 2016 – Florida announced a million dollar settlement reached with an obstetrician and gynecologist in Ocala. Dr. Rasiklal Dhanji Nagda is a Medicaid provider and owner of Nagda Medical, Inc. According to Attorney General Bondi’s Medicaid Fraud Control Unit’s investigation, Nagda submitted more than 700 claims to Medicaid for intrauterine devices not approved by the Food and Drug Administration, and received reimbursements from the Medicaid program. Nagda allegedly used a credit card to order large quantities of Bayer’s Mirena IUDs from an online pharmacy,, on a monthly basis. FL

December 8, 2016 – New York and 41 other states announced a $19.5 million multistate agreement with Bristol-Myers Squibb (“BMS”) arising from alleged improper marketing and promotion of the drug Abilify. Abilify is one of several second-generation antipsychotic prescription drugs, commonly referred to as “atypical antipsychotics,” that were originally used to treat schizophrenia. New York alleged that BMS improperly promoted Abilify for pediatric use and for use in elderly patients with symptoms consistent with dementia and Alzheimer’s disease.  In fact, in 2006, Abilify received a “black box” warning stating that elderly patients with dementia-related psychosis who are treated with antipsychotic drugs have an increased risk of death.  The complaint further alleged that BMS violated state consumer protection laws by misrepresenting and minimizing risks of the drug including metabolic and weight gain side effects and by misrepresenting the findings of scientific studies. NY, GA

December 8, 2016 – New York announced the settlement of a lawsuit against SG Hylan Motors Corp., a Staten Island dealership doing business as Staten Island Honda and Staten Island Nissan (collectively “SG Hylan”) and a separate settlement with Best Auto Outlet, Inc. (“Best Auto”) located in Floral Park.  The SG Hylan settlement resolves a lawsuit filed by the Attorney General in July 2016, which alleged that these auto dealerships unlawfully sold “after-sale” products and services, including credit repair and identity theft protection services, to over 2,300 consumers, sometimes exceeding a cost of $2,000 per consumer.  The settlement requires SG Hylan to pay $1.5 million in restitution to these consumers. The agreement with Best Auto, which returns $115,000 in restitution to consumers, concludes an investigation into this dealership for similar misconduct – alleged unlawful sale of credit repair and identity theft prevention services, and other “after-sale” items to over 200 consumers. NY

December 1, 2016 – Michigan announced that Fuataina Afutiti, of Westland, was sentenced to 30 months to up to 20 years in prison for stealing nearly $2 million dollars from the Veterans Health Administration Credit Union. The former President and CEO of the credit union used the stolen funds for her personal use including leasing luxury cars, gambling and financing personal vacations. Afutiti, 50, plead guilty as charged to one count of Receiving Proceeds from a Continuing Criminal Enterprise and one count of Embezzlement from a Credit Union. She was sentenced Thursday, December 1, 2016 before Judge David Groner, in the 3rd Circuit Court in Wayne County. Afutiti will report to prison on January 4, 2017. MI

November 2016

November 30, 2016 –An Ohio man was sentenced to prison for stealing more than $2 million in timber from property owned by an elderly Grove City resident. Vinton County Common Pleas Judge Jeffrey Simmons sentenced Mark Betts, 53, of McArthur, to four years in prison. Betts was also ordered to pay $2,025,088 in restitution. Betts, the owner of Betts Logging, pleaded guilty last month to cutting the trees from the victim’s property without permission and stealing the timber between April 2007 and September 2010. An investigation conducted by the Attorney General’s Ohio Bureau of Criminal Investigation and the Vinton County Sheriff’s Office found that Betts harvested hundreds of acres of trees, valued by a forestry expert to be worth $2,025,088, from the victim’s property on Goose Creek Road and Dunkle Creek Road and then sold the timber to sawmills for more than $578,000. OH

November 22, 2016 – A national loan servicer responsible for handling millions of student loan accounts across the country has agreed to pay $2.4 million over allegations that it failed to properly process struggling Massachusetts students’ applications for federal repayment plans intended to lower their monthly payments and engaged in harassing debt collection practices, amongst other violations of state and federal law. The assurance of discontinuance, alleges that ACS Education Services (ACS), which services federal loans made under the Federal Family Education Loan (FFEL) program along with private loans, also charged some borrowers excessive late fees, failed to protect some active-duty service members as required by federal law, and made excessive phone calls to borrowers. MA

November 21, 2016 – Pennsylvania announced the filing of criminal charges against 50 individuals following investigations by the Office of Attorney General’s Insurance Fraud Section. The charges are part of a November sweep conducted by the Insurance Fraud Section, which is the largest law enforcement entity in Pennsylvania with specific authority to investigate and prosecute cases of insurance fraud. The total potential fraud involved in these cases is more than $1.1 million. The charges announced involve some of the most common types of insurance fraud. PA

November 21, 2016 – Georgia 41 other states filed an amended antitrust lawsuit against the makers of Suboxone, a prescription drug used to treat opioid addiction, over allegations that the companies engaged in a scheme to block generic competitors and cause purchasers to pay artificially high prices. Reckitt Benckiser Pharmaceuticals, now known as Indivior, is accused of conspiring with MonoSol Rx to switch Suboxone from a tablet version to a film (that dissolves in the mouth) in order to prevent or delay generic alternatives and maintain monopoly profits. According to the lawsuit, when Reckitt introduced Suboxone in 2002 (in tablet form), it had exclusivity protection that lasted for seven years, meaning no generic version could enter the market during that time. Before that period ended, however, Reckitt worked with MonoSol Rx to create a new version of Suboxone – a dissolvable film, similar in size to a breath strip. Over time, Reckitt allegedly converted the market away from the tablet to the film through marketing, price adjustments, and other methods. GA

November 18, 2016 – New York announced a $25 million settlement agreement against Trump University. Under the terms of the settlement, over 6,000 victims will receive restitution and Trump University will pay up to $1 million in penalties to the State of New York for violating state education laws. NY

November 17, 2016 – California announced a $14 million settlement with BP West Coast Products LLC, BP Products North America, Inc., and Atlantic Richfield Company over allegations that the companies violated state laws regarding operating and maintaining motor vehicle fuel underground storage tank laws.  The Attorney General’s office and several district attorneys across the state allege that BP failed to properly inspect and maintain underground tanks used to store gasoline for retail sale at approximately 780 gas stations in California over a period of 10 years and violated other hazardous material and hazardous waste laws. The complaint alleges that, since 2006, BP has improperly monitored, inspected, and maintained underground storage tanks used to store gasoline for retail sale; tampered with or disabled leak detection devices; and improperly handled and disposed of hazardous wastes and materials associated with the underground storage tanks at retail gas stations throughout California. CA

November 16, 2016 – New York announced that Zwanger & Pesiri Radiology Group, LLP, Zwanger Radiology P.C. and Dr. Steven Mendelson (collectively, “Zwanger”) will pay $8,153,727 to resolve allegations that the defendants knowingly submitted false claims to Medicare and Medicaid. The settlement resolved allegations that from January 1, 2003 through October 26, 2015, Zwanger submitted claims for services provided or supervised by physicians, or at a Zwanger location, that were not enrolled in Medicare and/or Medicaid and therefore ineligible for payment. Zwanger falsely claimed that Dr. Mendelson, who was a Medicare and Medicaid enrolled provider, had in fact performed the procedures. The settlement also resolved allegations that from January 1, 2008 through February 28, 2014, Zwanger submitted false claims to Medicare and Medicaid for certain radiology procedures that were not ordered by a treating physician. These procedures included the automatic performance of certain types of x-rays, and the automatic performance of ultrasounds in female patients, even these both procedures were not ordered by a treating physician. NY

November 16, 2016 – Washington announced that CHI Franciscan will provide more than $1.1 million in healthcare cost relief after an investigation into mislabeled charges and inadequate fee disclosures. CHI Franciscan operates three urgent care clinics in Kitsap County that charge a facility fee due to their affiliation with the hospital. The clinics must disclose the fee to patients through a variety of methods, including identification on the clinic’s website, signage at the clinic and a notice provided to patients before they receive care. The Attorney General pursued an investigation based on evidence that Franciscan did not meet its obligation to disclose this fee. In addition, the Attorney General investigated concerns that CHI Franciscan mislabeled facility fees as emergency room fees during a three month period in 2015. WA

November 15, 2016 – Resolving a multistate investigation into a 2013 data breach that involved the personal information of more than 50,000 Massachusetts residents, software company Adobe Systems, Inc. (Adobe) has agreed to pay $1 million and implement new policies and practices to prevent future breaches. An investigation by the states revealed that in September 2013, Adobe received an alert that the hard drive for one of its application servers was nearing capacity. In responding to the alert, Adobe learned that an unauthorized attempt was being made to decrypt customer payment card numbers maintained on the server. The states allege that the nature of the attack was foreseeable and that contrary to Adobe’s representations to its customers, it did not take reasonable steps to protect consumers’ personal information, or to promptly detect the attack and prevent the theft of consumers’ data.  The states allege that the data breach of certain Adobe servers included those containing the personal information of approximately 534,000 residents of the participating states, including approximately 53,000 Massachusetts residents. MA, OH, IL

November 15, 2016 – Florida and five other states announced a settlement with the National Football League resolving antitrust concerns about the NFL’s league-wide mandatory price floor policy. The policy required each of the 32 NFL member teams to impose a price floor on all secondary market ticket sales on the NFL’s Ticket Exchange and related websites officially sanctioned by the league. This policy, which the NFL terminated after the investigation began, prohibited sellers from listing tickets for resale on the NFL’s officially sanctioned resale sites at a price lower than the face-value of the ticket. The settlement prohibits a league-wide mandatory price floor policy and includes disclosure requirements in cases where an individual team imposes its own price floor. Additionally, the settlement prohibits the NFL from directing or requiring ticketing practices among teams that are designed to preclude fans from using competing exchanges and prohibits the NFL from interfering with an individual team’s efforts to coordinate anti-fraud measures with competing secondary ticket exchanges. FL

November 11, 2016 – New York announced the arrest of attorney Anthony Cornachio, 74, of Garden City and charges against NRI Group, LLC (“NRI”) and Canarsie A.W.A.R.E., Inc. (“Canarsie”), which are Medicaid-enrolled drug treatment programs controlled by Cornachio. The Attorney General’s Medicaid Fraud Control Unit (“MFCU”) also charged three-quarter housing operators Yury Baumblit, 66, and Rimma Baumblit, 60, of Brooklyn, and their company Back on Track Group, Inc. In papers filed in New York City Criminal Court, Kings County and New York State Supreme Court, Kings County, prosecutors allege that Yury Baumblit and Rimma Baumblit, in exchange for payments from Cornachio’s companies, forced residents of their “three-quarter” homes to either face eviction or attend NRI and Canarsie regardless of the residents’ actual need for drug treatment services. During the course of this scheme, which dates back to at least 2013, Cornachio allegedly paid Back on Track Group, Inc. over $900,000.00 in illegal kickbacks.  As a result of this kickback scheme, prosecutors allege that Cornachio, through NRI and Canarsie, submitted, and caused to be submitted, at least $1.7 Million in false claims for reimbursement to Medicaid. NY

November 10, 2016 – New York announced that it has reached settlements resolving investigations into the National Vietnam Veterans Foundation, which also operated as the American Veteran Support Foundation (the “NVVF”), its former President and Founder, John Thomas Burch, Jr. (“Burch”), and its Vice President, David Kaufman (“Kaufman”). NVVF has operated nationwide since 1992 and began soliciting in New York in approximately 2008.  By 2014, NVVF was collecting nearly $9 million nationwide from its fundraising campaigns, soliciting small dollar donations from the public through direct mail and phone calls — purportedly to help Vietnam Veterans.  Nearly all of the money raised through its direct mail campaigns was instead used to pay its fundraisers.  For example, in 2014, $7.7 million of the $8.6 million raised was used to pay NVVF’s fundraisers.  The fraction that actually made it to NVVF was further reduced by a pattern of abuse, mismanagement and misspending by NVVF’s former President, Burch. NY

November 4, 2016 – New Jersey announced that the owner of an in-home senior care company in Atlantic County was sentenced to state prison for engaging in a scheme with her sister and a lawyer to steal millions of dollars from their elderly clients. Jan Van Holt, 60, of Linwood, former owner of “A Better Choice,” a firm that offered elderly clients in-home care and legal financial planning, was sentenced to 12 years in state prison, including 5 ½ years of parole ineligibility. Van Holt and Steen conspired with Barbara Lieberman, 64, of Northfield, a lawyer who specialized in elder law, to steal over $2.7 million from 12 elderly clients from 2003 through 2012. NJ

November 2, 2016 –A Thurston County Superior Court judge ordered the Grocery Manufacturers Association to pay $18 million in penalties and punitive damages, after Washington’s lawsuit revealed GMA intentionally violated Washington campaign finance laws. The case arose from Washington’s investigation of the finances of opposition to voter Initiative 522, which would have required labeling of genetically modified organisms, or GMOs, in food sold to consumers. The ruling against GMA — a Washington, D.C.-based trade group representing major food, beverage and consumer companies — is believed to constitute the largest campaign finance judgment in United States history. WA

November 2, 2016 – New York announced a $1.6 million settlement with Queens-based American Hope Group, Inc. and its principal, Mauricio Villamarin Martinez (collectively “American Hope Group”), following an investigation into a fraudulent mortgage rescue scheme that preyed upon financially vulnerable Hispanic homeowners who were desperate to save their homes from foreclosure. The AG’s investigation found that American Hope Group collected millions of dollars in monthly fees from consumers, yet routinely failed to deliver on its promises to provide substantial relief from unaffordable mortgage payments through loan modifications and other forms of foreclosure prevention. The settlement, a Consent Order, concludes the AG’s investigation into American Hope Group’s mortgage rescue scheme. NY

October 2016

October 28, 2016 – California announced a $15 million settlement securing restitution for Californians who invested money with Beverly Hills-based investment adviser Stanley Chais, money that he then funneled into Bernard Madoff’s notorious Ponzi scheme. Chais was responsible for one of the largest operations channeling money directly to Bernard Madoff, violating California’s consumer protection and corporate securities laws.  He deceived his clients, many of whom were elderly, into paying him substantial fees, claiming he was actively managing their money while in actuality turning their investments over to Madoff.  As a result, many lost their life savings when Madoff’s fraudulent scheme was ultimately exposed in late 2008. CA

October 27, 2016 – Pennsylvania and 33 other Attorneys General reached a $41.2 million settlement with the makers of Hyundai and Kia automobiles following allegations that the companies misrepresented mileage and fuel economy ratings. An investigation by the states showed the companies misrepresented mileage and fuel economy ratings on certain vehicles from 2011, 2012 and 2013. The companies also allegedly sought to capitalize on the erroneous mileage estimates by placing them prominently in a variety of advertisements and other promotional campaigns. These actions distorted facts that may have been substantial to consumers’ decisions to purchase particular vehicles during a time of high gasoline prices, the states’ investigation revealed.  PA, NJ, MA, OH

October 25, 2016 – New York announced that it has reached separate $6 million settlements – for a total of $12 million in penalties and costs – with DraftKings and FanDuel, resolving lawsuits alleging false and deceptive advertising practices by the companies. The settlement agreements impose the highest New York penalty awards for deceptive advertising in recent memory. The agreements also require sweeping reforms to the companies’ marketing, including clear disclosure of terms and conditions for marketing promotions, expected winnings, and expected performance in the online contests, as well as resources for players at risk for compulsive gaming disorders, including addiction. Furthermore, the companies will be required to maintain a webpage that provides information about the rate of success of users in its contests, including the percentage of winnings captured by the top 1%, 5% and 10% of players. NY

October 24, 2016 – New Jersey announced that a doctor from Middlesex County pleaded guilty to engaging in sophisticated fraud and money laundering schemes by which he hid approximately $3.6 million in income from his medical practices to evade taxes.  He also pleaded guilty to using money from the schemes to pay illegal kickbacks to doctors.

Dr. Manoj Patharkar, 45, of South Amboy, N.J., pleaded guilty before Superior Court Judge Michael A. Toto in Middlesex County to first-degree conspiracy, first-degree money laundering, seven counts of third-degree filing fraudulent tax returns, and three counts of third-degree failure to pay taxes. He also entered guilty pleas to all of those same counts on behalf of his corporation Pain Management Associates of Central Jersey (PMACJ). Those charges were contained in an Aug. 24, 2015 indictment. In addition, he pleaded guilty to an accusation charging him with second-degree conspiracy and second-degree commercial bribery in connection with the illegal kickback scheme. NJ

October 17, 2016 –New York has joined with other states and the federal government and reached agreement with institutional pharmacy Omnicare Inc. (Omnicare) to settle civil allegations that Omnicare conspired with Illinois-based pharmaceutical drug manufacturer Abbott Laboratories (Abbott) to increase overall utilization of the drug Depakote through the use of various disguised kickback arrangements.  Omnicare, acquired by CVS Health Corporation effective August 18, 2015, provides pharmaceuticals and related pharmacy services to long-term care facilities as well as chronic care facilities and other settings. Depakote is approved for treatment of seizure disorders, mania associated with bipolar disorder and prophylaxis of migraines. Omnicare will pay the states and the federal government a total of $28.125 million in civil damages to compensate Medicaid, Medicare, and various other federal healthcare programs for harm suffered as a result of its conduct.  NY

October 12, 2016 – Massachusetts negotiated an agreement with National Grid that returns more than $1.5 million to thousands of National Grid residential gas customers who were wrongfully charged a more expensive rate. Under the agreement, National Grid will issue bill credits to more than 4,500 residential gas customers who were incorrectly charged the company’s non-heating rate instead of the less expensive heating rate. Credit amounts will be customer-specific and issued later this year. MA

October 5, 2016 – A transportation company, its owner, and three managers have been indicted in connection with an alleged scheme involving $19 million in false claims billed to the state’s Medicaid program (MassHealth), Attorney General Maura Healey announced. The company primarily provided MassHealth members with non-emergency transportation services to methadone clinics. The AG’s Office alleges that between April 2011 and September 2015, Westminster-based Rite Way LLC (Rite Way) fraudulently and repeatedly billed MassHealth for transportation services that were never provided, including claims for individuals who were hospitalized in inpatient settings, no longer used the company’s services, or were deceased on the claimed dates of service. MA

October 4, 2016 – Pennsylvania announced the Office of Attorney General has reached a settlement with a chain of nursing homes accused of misleading consumers by failing to provide basic services to elderly and vulnerable residents. The settlement with Reliant Senior Care Holdings, Inc. and related companies requires a $2 million payment to the Office of Attorney General and a series of changes devised to make sure that staffing levels and care within facilities owned or operated by Reliant match the representations made in marketing materials, care plans and bills. The settlement was the result of an investigation conducted by the Office of Attorney General’s Health Care Section. PA

September 2016

September 30, 2016 – California, along with 49 other states and the District of Columbia, announced a $95.9 million settlement with USA Discounters over allegations that the company used deceptive marketing and unlawful debt collection practices targeting military service-members.  Under the settlement, Attorney General Harris secured nearly $7 million in restitution for over 4,100 Californians who were harmed by the company’s fraudulent actions. USA Discounters, which also did business as USA Living and Fletcher’s Jewelers, operated retail stores near military installations, including near Navy and Marine Corps installations in the San Diego Area.  It sold consumer products, including furniture, appliances, televisions, computers, smartphones, and jewelry, primarily on credit and specifically targeted members of the military and veterans. The company marketed itself as a discount retailer but actually sold its merchandise at a substantial mark-up, including additional fees that effectively concealed exorbitantly high interest rates for financed purchases. CA, FL, PA

September 30, 2016 – New York announced guilty pleas by Katia Donnelly and her durable medical equipment and supply store, Bennett Surgical Supply, Inc., for submitting thousands of false claims to Medicaid resulting in Medicaid paying them more than two million dollars over a six and a half year period. Donnelly admitted during her plea that she used the Medicaid identification numbers of Bennett Surgical customers to fraudulently bill for items she never purchased or delivered to them. She and her corporation plead guilty to Grand Larceny in the Second Degree, and it is expected that Donnelly will be sentenced to 2 to 6 years in State Prison. NY

September 28, 2016 – A national mortgage servicer has paid $1.4 million and agreed to strengthen its policies over its alleged abusive debt collection practices that affected more than 5,000 borrower accounts in Massachusetts. Ditech Financial, LLC, previously GreenTree Servicing, LLC, agreed to change its practices to comply with state debt collection and consumer protection laws. The assurance of discontinuance requires that Ditech stop making excessive debt collection calls to consumers and provide written notice regarding the borrowers’ right to receive detailed information about any debts that Ditech sought to collect, as required by law. MA

September 26, 2016 – New York announced that it has entered into a settlement agreement with First Call, Inc., to resolve allegations that it billed Medicaid for transportation services provided by unqualified drivers and without required documentation. The investigation settled False Claims Act allegations that are identified in the settlement agreement, pursuant to a qui tam lawsuit filed by whistleblower Thomas D. Ayers asserting claims under the New York False Claims Act. As a result of the settlement, the company will pay New York State $173,650.83 in restitution and damages pursuant to the New York False Claims Act. NY

September 22, 2016 – New York announced that, together with the Attorneys General of 34 other states and the District of Columbia, his office has filed a lawsuit against Indivior, the manufacturer of the branded drug Suboxone, and MonoSolRX, the company that licensed its patented sublingual film technology to Indivior. Suboxone is used to treat patients addicted to heroin and other drugs, including painkillers. The lawsuit alleges that Indivior (which was spun off from Reckitt Benckiser in 2014) tried to coerce patients to switch from a tablet to a dissolvable oral strip version of Suboxone and engaged in other anticompetitive business practices to maintain Indivior’s monopoly over Suboxone. NY

September 20, 2016 – New York announced the sentencing of licensed pharmacist Glenn Schabel, 55, of Melville, and his company, Glenn Schabel, Inc. in connection with a nation-wide scheme to sell diverted HIV medication to unsuspecting New Yorkers.  Schabel was sentenced to 2-6 years in prison, and forfeited $5,456,267 to the New York State Medicaid Program. This sentencing is part of the Attorney General’s Medicaid Fraud Control Unit’s (“MFCU”) “Operation Black-Market Meds” investigation. NY

September 12, 2016 – Pennsylvania announced the arrest of a licensed professional counselor charged with submitting hundreds of fraudulent Medicaid claims in an alleged scheme that netted him more than $100,000 for counseling services that he never provided. Michael Clarence Johnston, 55, the former owner and operator of Vision Counseling Services in Brodheadsville, Monroe County, was charged with various criminal offenses following an investigation by the Office of Attorney General’s Medicaid Fraud Control Section. PA

August 2016

August 24, 2016 – Florida obtained a court order temporarily shutting down a tech support company that, along with its owners, allegedly deceived consumers out of more than $25 million. The scam operated as Client Care Experts, formerly known as First Choice Tech Support, LLC, and is owned by CEO Michael Seward and his partner, Kevin McCormick. The defendants ran the tech support scam out of a boiler room in Boynton Beach and employed more than 200 telemarketers at the location. The order follows an effort by defendants to dissolve an earlier order obtained by Attorney General Bondi’s Office that temporarily shut down the business, froze the defendants’ assets to preserve funds for consumer restitution and appointed a receiver to oversee the operation through the conclusion of the case. The court denied the defendants’ motion to dissolve and kept the previous order in place pending the final judgment. FL

August 24, 2016 – New York and the Justice Department announced that three hospitals in the Mount Sinai Health System are paying a total of $2.95 million to resolve allegations that the hospitals knowingly retained over $844,000 in overpayments made by Medicaid in violation of the federal and New York False Claims Acts.  Knowing retention of an overpayment from the government for more than sixty days is known as a “reverse false claim” and is a violation of both federal and state false claim acts. The entities involved include Mount Sinai Beth Israel (“Beth Israel”) (formerly Beth Israel Medical Center), Mount Sinai St. Luke’s (“St. Luke’s”) (formerly St. Luke’s Hospital) and Mount Sinai Roosevelt (“Roosevelt”) (formerly Roosevelt Hospital) (together, the “Hospitals”) – and the Hospitals’ former partnership group, Continuum Health Partners, Inc. (“Continuum,” and together with the Hospitals, “Defendants”). As part of the settlements, Defendants admitted that, beginning in 2009 due to a software compatibility issue, a coding error caused Defendants to submit claims for payment above and beyond what they had received from the managed care organization, and that Medicaid paid these claims as a secondary payor. In September 2010, the New York Office of the State Comptroller brought to Continuum’s attention a small number of these claims, and Defendants admitted that in late 2010 they were made aware of the coding error. NY

August 22, 2016 – New York announced a settlement with HealthNow, New York, Inc., after an investigation uncovered the wrongful denial of thousands of claims for outpatient psychotherapy and more than one hundred claims for nutritional counseling for eating disorders. The wrongful denials totaled more than $1.6 million in patient claims. Under the agreement, the Buffalo-based company, a not-for profit health service corporation providing health care coverage for approximately 573,700 New Yorkers (including 291,000 who are enrolled in commercial health plans), will pay members for the wrongfully denied claims, revise its policies, and will eliminate a company policy that subjected all psychotherapy claims to review after a member’s 20th visit. Attorney General Schneiderman’s Health Care Bureau launched an investigation in 2015 into HealthNow’s administration of behavioral health benefits following the receipt of consumer complaints. The complaints alleged that HealthNow had improperly denied coverage for treatments by requiring that all outpatient behavioral health visits be preauthorized after the first 20 visits per year, and by excluding coverage for nutritional counseling for eating disorders. NY

August 22, 2016 – Two Florida companies have been ordered to pay $17 million for deceptively marketing and billing for medications and services relating to the treatment of erectile dysfunction at an unlicensed medical clinic in Framingham, Massachusetts announced. The judgment, ordered by the Suffolk Superior Court, permanently prohibits Florida Men’s Medical Clinic, LLC (FMMC) and Men’s Medical Clinic, LLC (MMC) from operating unlicensed medical clinics in Massachusetts or deceptively marketing any medication or medical service relating to the treatment of erectile dysfunction in the state. Under the judgment, the two companies are also ordered to pay, between them, in excess of $17 million, with $6.3 million for restitution to Massachusetts consumers and the remainder in payments to the Commonwealth, including civil penalties. The companies have represented that they have ceased operations, and recovery of the amounts they are ordered to pay is uncertain. MA

August 17, 2016 – New York announced a $1.1 million dollar settlement resolving a whistleblower case against My Pillow, Inc., a Minnesota corporation that sells pillows and other sleep-related products. The lawsuit alleged that My Pillow knowingly failed to collect and remit New York sales taxes on sales made to New York customers through its website and over the telephone. The action began when a whistleblower filed a complaint in state Supreme Court in Manhattan. Based on its investigation of the whistleblower’s allegations, the Attorney General’s Office contends that from 2011-2015, My Pillow failed to collect and remit approximately $537,000 in sales taxes on taxable sales made over the phone and through the Internet to New Yorkers. My Pillow was required to collect and remit sales taxes because the company sold products at trade shows in New York through independent contractors and other representatives, among other reasons.  The Attorney General’s Office claims that My Pillow knowingly made false records or statements concerning the sales taxes it was required to collect and remit. NY

August 9, 2016 – Michigan announced that James Mulholland, of St. Petersburg, Florida and Thomas Mulholland, of Midland, both 59, have been found guilty by a jury on 8 felonies each for the Ponzi Scheme they ran through their Lansing-based business Mulholland Financial. Starting in 2009 until they filed for bankruptcy in 2010, the brothers raised almost $2 million from investors. They made no mention that their business was in trouble and promised a 7% rate of return from the real estate profits and that the principal and interest were guaranteed and could be liquid within 30 days of making a written request. In reality almost every month from January 2009 to February 2010, Mulholland Financial lost money and new investor money began being used to pay off earlier investors. Mulholland Financial was forced to file for bankruptcy in February of 2010 due to overwhelming debt. By this time there were multiple investigations being conducted into the business practices. The case sat dormant with another agency until spring of 2016 until Schuette’s office picked up the case. Over 250 investors lost $18.3 million. MI

August 8, 2016 – Georgia and 42 other states announced a $100 million multistate settlement with Barclays Bank PLC and Barclays Capital Inc. for fraudulent and anti-competitive conduct involving the manipulation of the London interbank offered rate, or, Libor. This is a benchmark interest rate that affects financial instruments worth trillions of dollars and has a widespread impact on global markets and consumers. Barclays has agreed to pay $100 million, of which about $93 million will be used to reimburse government and nonprofit organizations that had Libor-linked swaps and other investment contracts with Barclays and that were harmed by the activity. A multistate investigation revealed that Barclays had manipulated Libor during the financial crisis period of 2007-2008 by understating the interest rates it would need to pay to borrow money in order to avoid the appearance that Barclays was in financial difficulty and would need to pay a higher rate than some of its peers. Government entities and not-for-profit organizations were defrauded when they entered into swaps and other investment instruments with Barclays without knowing that Barclays and other banks on the U.S. dollar-Libor-setting panel were manipulating Libor and colluding with other banks to do so. GA, VA, IL

August 8, 2016 – Florida announced the conviction of a Florida couple in connection to an organized retail theft scheme to steal two million dollars’ worth of baby formula. Alicia Tondreau-Leve was convicted of racketeering, conspiracy to commit racketeering, dealing in stolen property as an organizer, and money laundering while her husband, Alan Leve was convicted of conspiracy to commit racketeering for their role in a multistate, multimillion dollar scheme that involved selling stolen formula through an online business named Formula Mom. FL

August 4, 2016 – Ohio, along with 48 other states, announced a $125 million settlement with Cephalon and affiliated companies over allegations that Cephalon engaged in anticompetitive conduct that delayed the market entry of generic versions of Provigil, a prescription drug used to promote wakefulness and treat sleep disorders. Ohio’s total recovery is expected to be about $4 million, including an estimated $1.57 million for Ohio consumers who bought Provigil between 2006 and 2012, $1.43 million for state entities that bought Provigil, and $1 million to the Ohio Attorney General’s Office. This multistate settlement was facilitated by litigation brought against Cephalon by the Federal Trade Commission. In May 2015, the FTC settled its suit against Cephalon for injunctive relief and $1.2 billion, which was paid into an escrow account. OH, GA

August 3, 2016 – New York announced that Keisha Relf Davis, a New York State Department of Education vocational counselor, pleaded guilty to taking part in a scheme that stole over $2.3 million from New York State. As part of the scheme, Relf Davis, in exchange for cash bribes, approved students for the Office of Adult Career and Continuing Education Services’ Vocational Rehabilitation Program (“ACCES-VR”), although these students never applied to the program. The ACCES-VR program was created to help eligible New Yorkers with disabilities and functional limitations gain self-dependence through education, training, and employment. Relf Davis knew that the students she approved did not have disabilities or functional limitations to qualify for this program. NY

August 1, 2016 – New York and the Justice Department announced that St. Joseph’s Hospital Health Center (St. Joseph’s) will pay $3.2 million to resolve allegations that it violated the federal and New York False Claims Act by presenting false claims for payment to the state Medicaid program for mental health services rendered by unqualified staff. settlements resolve allegations that St. Joseph’s knowingly presented false claims for payment to Medicaid for mobile-crisis outreach services rendered from January 1, 2007 through February 29, 2016 by personnel who failed to satisfy the basic CPEP staffing requirements. By submitting claims for payment to Medicaid without disclosing that its CPEP staff failed to meet the regulatory staffing requirements, and by accepting payment for these claims, the governments allege that St. Joseph’s misrepresented its compliance with mental health staffing requirements that are central to the provision of counseling services and, by doing so, violated the False Claims Act.  As part of the settlements, St. Joseph’s admits that it was improper to have conducted mobile crisis outreach visits without a member of its CPEP professional staff present and then bill Medicaid for such services. NY

July 2016

July 28, 2016 – State Street Bank and Trust Company (State Street) will return $75 million in profits to resolve allegations it provided misleading information as to how it priced foreign exchange transactions, Massachusetts announced. The agreement is part of a $382 million federal-state global resolution in conjunction with the U.S. Securities and Exchange Commission, the U.S. Department of Justice, and the U.S. Department of Labor, along with three class action lawsuits. The agreement with the AG’s Office requires State Street to provide $75 million in disgorgement, along with a payment of $500,000 to the Commonwealth. Additional disgorgement and penalties will be paid by State Street through separate agreements with federal enforcement entities. MA

July 25, 2016 – Florida announced the arrests of three individuals for operating a $1 billion Medicare and Medicaid fraud scheme involving numerous Miami-based health care providers. Attorney General Bondi’s MFCU, as part of the HEAT Strike Force, assisted in identifying more than $100 million of Medicaid fraud in connection to this scheme. According to the indictment, Philip Esformes, 47, operated a network of more than 30 skilled nursing homes and assisted living facilities that gave access to thousands of Medicare and Medicaid beneficiaries. Many of these beneficiaries did not qualify for skilled nursing home care or for placement in an assisted living facility. However, Esformes and co-conspirators admitted the beneficiaries to Esformes Network facilities, and received medically unnecessary services billed to Medicare and Medicaid. The defendants also allegedly received kickbacks by steering the beneficiaries to other health care providers, including community mental health centers and home health care providers, who also performed medically unnecessary treatments billed to Medicare and Medicaid. In order to hide the kickbacks from law enforcement, the kickbacks were often paid in cash, or were disguised as payments to charitable donations, payments for services and sham lease payments. FL

July 21, 2016 – New Jersey filed an action against an Ocean County home improvement contracting company and two of its owners for allegedly taking more than $1.1 million from Superstorm Sandy victims – including over $898,000 in federal relief grants – and failing to begin or complete the contracted-for work. The Price Home Group Limited Liability Company of Manahawkin, and its owners Jonathan Price of Manahawkin, and Scott Cowan of Demarest, took significant initial payments to elevate or replace Sandy-damaged homes then failed to begin work, performed the work in a substandard manner and/or abandoned unfinished projects without returning for weeks, months, or at all, according to the state’s Complaint filed in Ocean County Superior Court. NJ

July 19, 2016 – New York announced a $4.28 million settlement with international art dealer Gagosian Gallery following an investigation into sales tax collection practices. The Attorney General alleges that from at least 2005 to 2015, Pre-War Art, Inc., a California affiliate of Gagosian Gallery, sold and shipped nearly $40 million of art to customers in New York without collecting or remitting New York state and local sales tax.  During this time, employees of Pre-War, and the Gagosian Gallery location in New York, engaged in substantial economic activity to promote and facilitate the sale of Pre-War’s art in New York. Additionally, the Attorney General alleges that from at least 2012 to 2015, Gagosian Gallery Inc. sold a significant volume of art in New York that was shipped out of state, for which it should have, but did not, collect New York state and local sales tax.  NY

July 8, 2016 – Virginia announced that it has secured financial commitments of up to $12 million from Alpha Natural Resources for cleanup and reclamation of the former Twin Star mine in Buchanan County. The cleanup funds, which were secured as part of the federal bankruptcy proceedings of Alpha Natural Resources, will provide significant water quality and environmental benefits to Buchanan County and prevent taxpayers from having to fund cleanup, closure, and water quality improvement efforts at the former mine site. The Twin Star complex is the only Virginia mine still owned by Alpha, after the company sold off its other Virginia mines. VA

July 8, 2016 – California announced that the Bureau of Children’s Justice and False Claims Unit of the California Department of Justice has reached a settlement agreement with K12 Inc., a for-profit online charter school operator, and the 14 affiliated non-profit schools known as the California Virtual Academies (“CAVA Schools”) that it manages, over alleged violations of California’s false claims, false advertising and unfair competition laws. As part of the settlement, which is subject to court approval, K12 will provide approximately $160 million in debt relief to the non-profit schools it manages—“balanced budget credits” that were accrued by the schools as a result of the fee structure K12 used in its contracts—and will pay $8.5 million in settlement of all claims.  In addition, K12 has agreed to implement significant reforms of its contracts with the CAVA Schools, undergo independent reviews of its services for students with disabilities, ensure accuracy of all advertisements, and provide teachers with sufficient information and training to prevent improper claiming of attendance dollars. CA

July 8, 2016 – Florida and the Federal Trade Commission announced that a federal court has temporarily shut down an international tech support operation bilking consumers out of millions of dollars. According to the investigation, the scam attempted to scare consumers into believing their computers were compromised by malware or hackers, and then company representatives pretending to be certified by or affiliated with Microsoft and Apple offered to fix the problem for a fee. The court order temporarily shut down the defendants’ operation, froze the defendants’ assets and placed control of those assets with a court-appointed receiver. The complaint filed jointly by Attorney General Bondi’s Office and the FTC alleges that defendants based in Florida, Iowa, Nevada and Canada relied on a combination of deceptive online ads and misleading, high-pressure sales tactics to frighten consumers into spending hundreds of dollars for dubious computer repairs and antivirus software. FL

July 7, 2016 – A Bedford-based transportation service provider has agreed to pay more than $700,000 to resolve allegations that it submitted false claims to the state’s Medicaid program (MassHealth) for medically unnecessary wheelchair van rides, Massachusetts announced. It also allegedly submitted claims for services that should have been provided at a lower cost through a MassHealth transportation broker. The AG’s investigation revealed that REM Transportation Services, LLC (REM) submitted the false claims from January 5, 2010 to December 31, 2014. Many of the MassHealth members allegedly receiving the rides were ambulatory and did not use wheelchairs or need assistance, as required under MassHealth regulations. MA

July 7, 2016 – Massachusetts announced that it has reached an agreement with INDYCAR, LLC. that will refund customers $925,000 for advance tickets purchased to the cancelled Boston Grand Prix. AG Healey also filed suit against Boston Grand Prix, LLC (BGP) and CEO John Casey, seeking full refunds for all ticket purchasers. Nearly 4,000 individuals purchased tickets in advance of the planned Labor Day race, spending an estimated $2,086,798.67. BGP refunded customers approximately $400,000 before they stopped giving refunds. INDYCAR, the race’s sanctioning body, has agreed to pay $925,000 of the amount due. MA

July 6, 2016 – A Superior Court Judge has permanently barred New York-based Leroy N. Brown, an unregistered home improvement contractor who did business as “B&K Masonry & Chimney,” from performing home improvement work in New Jersey, and ordered him to pay $1.1 million after finding that he committed 410 violations of the State’s consumer protection laws and regulations, following an action brought by the Attorney General’s Office and the Division of Consumer Affairs. The State’s eight-count Verified Complaint, filed last December, alleged that Brown, d/b/a “B&K Masonry & Chimney,” committed multiple violations of the Consumer Fraud Act, the Contractors’ Registration Act, and related regulations by, among other things, misrepresenting himself as a registered contractor and using deceptive sales tactics, including proclamations of imminent health and safety risks, to induce mostly elderly consumers into purchasing expensive chimney repairs that were never completed. NJ

June 2016

June 28, 2016 – New York announced its participation in an interrelated series of partial settlements with Volkswagen AG and its Audi and Porsche affiliates arising from Volkswagen’s violations of emissions standards and state consumer protection laws. As part of the settlements, some of which are still subject to court approval, all owners of 2.0 liter, 4-cylinder engine VW and Audi diesel cars in New York will be entitled to be paid full, pre-scandal fair market value for their vehicle, in addition to a cash payment of at least $5,100. Under the deal, car owners may also choose to keep their vehicle and wait to see if VW and Audi develop acceptable emissions fixes; car owners who exercise this option will also receive a cash payment of at least $5,100. The settlements will also direct to New York over $115 million for environmental projects to improve New York’s air quality, as well as over $30 million in additional monetary recoveries for the state’s general fund. NY, FL, TX

June 27, 2016 – Massachusetts announced that a Chicopee-based mechanical contractor has agreed to pay more than $220,000 to resolve allegations it falsely certified compliance with equal opportunity requirements on two public contracts. The assurance of discontinuance alleges B-G Mechanical Contractors, Inc. (B-G) violated the state’s consumer protection laws and False Claims Act by failing to abide by provisions in two public design-build energy contracts requiring B-G to subcontract a certain percentage of work to Minority/Women Business Enterprises (M/WBEs). For both contracts, the AG’s Office alleges B-G improperly claimed full M/WBE credit for supplies subcontractors sold to and then repurchased from M/WBEs in sham transactions. MA

June 24, 2016 – Florida arrested two Panama City mental health counselors for allegedly defrauding the Florida Medicaid program out of more than $360,000. The investigation revealed that Laurie Lynne Kidd, 54, who has a doctorate in psychology, hired Courtney Ann Hill, 27, to provide individual and group therapy to assisted living facilities. Hill is an unlicensed and unqualified employee and allegedly submitted false reports claiming that Hill provided therapy to the residents, when, in fact the defendant did not. Kidd billed Medicaid for the services never rendered as if Kidd herself performed the services. Kidd allegedly submitted more than $400,000 in fraudulent claims and received more than $360,000 from the Florida Medicaid program due to the fraudulent claims. Hill is allegedly responsible for $99,000 of Kidd’s fraudulent claims. FL

June 23, 2016 – Palmco Power NJ, LLC and Palmco Energy NJ, LLC (collectively, “Palmco”) have agreed to pay $5.28 million, including up to $4.5 million in consumer restitution, and to significantly revise its business practices, in order to resolve the State’s allegations that Palmco engaged in aggressive and deceptive marketing practices, and failed to provide promised energy rates that were competitive, lower than the utility companies, or consistent with the pricing mechanisms in Palmco’s contracts. A Complaint filed in May 2014 by the Attorney General’s Office alleged that the Brooklyn-based Palmco violated the Electric Discount and Energy Competition Act, the Consumer Fraud Act, and multiple regulations concerning energy licensing and registration, retail choice consumer protection, anti-slamming requirements and advertising, among other things, through its aggressive door-to-door and telephone solicitations, and representations as to “competitive prices” for gas and electric. NJ

June 22, 2016 – New York announced a $28 million settlement of a civil lawsuit that claimed the owners of Medford Multicare Center for Living, Inc. (“Medford”) located in Medford, New York looted the corporation and committed fraud and illegality in operating a business. The civil lawsuits claims were based on a history of criminal conduct by employees of the nursing home, staffing and service cuts and diversion of Medicaid funds to themselves and their controlled entities. The assurance of discontinuance provides that the settlement funds, which will be administered by an Independent Financial Monitor, will in part be used to establish a “Resident Care Fund” to fund care recommendations by the Independent Operator. That fund will provide the much needed reforms and improvements in the delivery of care and services to Medford’s elderly and frail residents. In addition, ten million dollars will be returned to the Medicaid program. The Medford corporation was also sentenced for its role in the cover-up of a patient death in 2012.‎ NY

June 20, 2016 – Florida and the Federal Trade Commission announced a settlement with Vast Tech Support, LLC, its owner, founder, and Chief Operating Officer Mark Donohue and OMG Tech Support, LLC. In November 2014, Attorney General Bondi’s Office and the FTC filed a complaint against Vast Tech Support, Donohue, OMG Tech Help and the companies’ principals and related entities for deceptively marketing computer software and tech support services. The Vast Tech Support and OMG Tech Support defendants agreed to a judgment of more than $27 million and to surrender all assets to the court-appointed receiver, who will liquidate the assets and wind down the companies. Vast Tech Support advertised a registry software product, PC HealthBoost, claiming the product could dramatically increase computer speed and protect from errors, crashes and freezes. After consumers downloaded a free version of the software, a system scan allegedly misled consumers to believe that their computer had hundreds or thousands of errors in need of repair, regardless of whether the computer had any performance issues. Another defendant in this matter, Boost Software, urged consumers to pay $29.97 for the registered version of PC HealthBoost to fix the non-existent errors. FL

June 20, 2016 – New York announced the arrest of Joseph Wright, 52, of Middletown NY, for allegedly stealing over $5 million dollars from Medicaid. Prosecutors allege that Wright, as owner of a purportedly not-for-profit organization “Assistance By Improv II, Inc.” (ABI), located at 953 Southern Boulevard in the Bronx, lured thousands of low-income New Yorkers to ABI with the promise of affordable housing, arranged to have them subjected to unnecessary medical tests and then filed false claims for reimbursement with the State Medicaid program. Prosecutors alleged in papers filed in court that Wright unlawfully owns and operates ABI as a medical mill that masquerades as a charitable housing organization. Prosecutors allege that Wright ignored ABI’s professed charitable mission and duped potential clients, most of whom were Medicaid recipients, into surrendering their personal health care information and undergoing purported medical screening to qualify for housing. NY

June 17, 2016 – New Jersey concluded its investigation of Walker Cancer Research Institute, Inc., a Maryland-based charity, through entry of a Consent Order, which includes a $375,000 voluntary payment to the Rutgers Cancer Institute of New Jersey to support cancer research in the state. As part of the settlement, Walker Cancer Research has also agreed to pay the Division $95,000 in reimbursement of its attorney’s fees and investigative costs, and agreed to certain practices, among other things, in its direct mail solicitation of contributions. Walker Cancer Research entered into the settlement without any admission of liability. NJ

June 17, 2016 – New York announced the unsealing of an indictment charging Renee Kanas, 63, a resident of Tamarac, Florida, with Grand Larceny in the Second Degree, a Class C felony.  Kanas is charged in Albany County Court with stealing over $148,000 in pension payments from the New York State and Local Employees Retirement System paid to her father, Jacob Yudenfreund, a New York State pensioner who died in March 2010. According to the indictment and statements made by the prosecutor at arraignment, Kanas’ father was a New York State pensioner who elected to receive reduced monthly benefits so his wife, Doris Yudenfreund, would continue to receive benefits after his death.  Mrs. Yudenfreund, however, predeceased Mr. Yudenfreund.  As such, upon Mr. Yudenfreund’s passing in March 2010, his pension benefits ceased. NY

June 14, 2016 – Florida and the Federal Trade Commission obtained a federal district court order to temporarily shut down a Central Florida-based operation allegedly causing more than $15 million in consumer harm. The operation blasted consumers with robocalls designed to deceive consumers into paying up-front fees for phony credit card interest-rate-reduction and debt-elimination services. The defendants, claiming to be Bank Card Services and the Credit Assistance Program, allegedly called consumers promising to substantially and permanently lower credit card interest rates, pay off consumers’ debts faster and save consumers thousands of dollars. According to the complaint filed in court, the defendants charged between $500 to $5,000 in illegal up-front fees and rarely, if ever, delivered the promised services. For an additional fee paid in advance, the defendants also allegedly claimed they would pay off credit card balances using money obtained from bogus government funds, leaving some victims in even greater debt. FL

June 13, 2016 – Ohio announced that it has joined with other states and the federal government to settle allegations that Salix Pharmaceuticals, Inc. paid kickbacks to improperly promote various drugs and medical devices. The agreement will result in a combined state and federal settlement amount of $1,394,595 for Ohio. Salix, a Delaware corporation headquartered in Raleigh, North Carolina, will pay the states and the federal government a total of $54 million dollars, of which $16,578,000 will go to the Medicaid programs to resolve civil allegations that Salix’s unlawful promotion of Xifaxan, Apriso, Relistor, MoviPrep, OsmoPrep, Solesta, and Deflux caused false claims to be submitted to government health care programs. Specifically, the agreement resolves allegations that the company paid kickbacks, including honoraria and meals, to health care professionals as an inducement to recommend, promote, and prescribe certain Salix products. OH

June 9, 2016 – Georgia announced that it joined with other states and the federal government to settle allegations that Genentech, Inc. (“Genentech”) and OSI Pharmaceuticals, LLC (“OSI”) made misleading representations to physicians and other health care providers about the effectiveness of the drug, Tarceva, to treat non-small cell lung cancer (“NSCLC”). These misleading representations caused false or fraudulent claims for Tarceva to be submitted to the State’s Medicaid Program for use that was not approved by the FDA. More specifically, the settlement resolves allegations that OSI and Genentech promoted Tarceva (FDA-approved for second-line NSCLC) off-label by making false and misleading representations to physicians and other health care providers that Tarceva was effective to treat first-line NSCLC in certain patients who were current or former smokers. The agreement also resolves allegations that the companies paid kickbacks to health care professionals as encouragement to prescribe Tarceva. GA, MA, OH

June 8, 2016 – New Jersey announced that a Burlington County medical device distributor was charged with stealing more than $100,000 in insurance payments intended for two companies that made and marketed a device to clear patients’ airways. Loetta Karen Edwards, 46, owner of Edwards Medical DME, LLC, (Edwards Medical) in Cinnaminson, was indicted on one count of second-degree theft by failure to make required disposition of property received. Edwards was a local distributor of the “Frequencer,” a Canadian-made medical device that helps clear airways in patients with cystic fibrosis and chronic obstructive pulmonary disease. According to prosecutors, Edwards would order the devices on behalf of individuals who paid for them through their insurance companies. Prosecutors say Edwards would then process the insurance claims for the devices and receive the payments. She would then remit a portion of the money to the device manufacturer, Dymedso, Inc., and a portion to Dymedso’s Ohio-based sales representative, Clinical Technology. NJ

June 6, 2016 – Michigan filed 33 felony charges against Scott Rookus, 45 of Jenison, for his role in running an alleged Ponzi scheme between 2010 and 2015. Between 2010 and 2013 Rookus allegedly solicited and obtained investments of approximately $1.5 million for his holdings company, New Haven Holdings. His customers many of whom were senior citizens, were allegedly told that earnings from their investments would come from the profits of Rookus’ enterprises, when in fact the money he took resulted in an alleged Ponzi-scheme from which he was the primary beneficiary. To cover his tracks, Rookus allegedly issued fraudulent returns to some investors using money from newer investors. He allegedly used the investor funds to pay personal expenses such as his children’s private school education and to pay of tax liens against him. The alleged scheme was uncovered after Rookus filed for personal bankruptcy in March 2015 and his investors found out that they had lost everything they invested. MI

June 6, 2016 – New York announced a settlement with 165 West 91st Street Holdings, LLC, a Manhattan developer, for the loss of two rent-controlled apartments in an Upper West Side building while it was being converted into a condominium, as a result of prohibited agreements to buy-out tenancy rights. The settlement requires the developer to pay a $540,000 penalty, $490,000 of which will go to the New York City Affordable Housing Fund created by the Attorney General’s office in order to compensate for lost affordable housing. The Martin Act, New York’s blue sky law, protects apartment purchasers and tenants in buildings that are converted to coops or condominiums. Tenants get an exclusive right to buy their units and, in most cases, cannot be evicted purely because the building is being converted. NY

May 2016

May 27, 2016 –New Jersey assessed a $2 million civil monetary penalty against a Hudson County couple and their bogus private investment fund management company for selling sham securities and using more than $500,000 of investors’ funds to buy luxury cars, expensive clothing and jewelry, and other personal items. West New York residents Alcibiades Cifuentes, his wife, Jennifer Wee Cifuentes, and Cifuentes Fund Management, LLC (“CFM”) violated the State’s Uniform Securities Law by offering investors unregistered securities in the form of investment contracts and/or purported limited partnership interests in the couple’s “investment,” according to the Bureau’s Summary Order. The Cifuenteses held themselves out as the principals of CFM, which they claimed was a private investment fund management company that invested in foreign currencies. Neither the Cifuenteses nor CFM are registered with the Bureau in any capacity. Since May 2013, the pair through CFM, raised at least $553,969 from at least 24 unsuspecting domestic and foreign investors, at least 11 of whom were offered and sold the unregistered securities to or from New Jersey. NJ

May 26, 2016 – New York announced that it has entered into a settlement agreement with Vascuscript, Inc., d/b/a Mobile Pharmacy Solutions, to resolve allegations that it billed Medicaid for prescriptions which were written by an excluded Medicaid Provider. The Attorney General’s investigation determined that from April 21, 2010, through January 25, 2013, Vascuscript, Inc. submitted and received payment on approximately 4,600 claims to Medicaid for prescriptions that were written by Dr. Mikhail Strutsovskiy. The Department of Health had previously excluded Dr. Strutsovskiy from the Medicaid program, rendering prescriptions written by him ineligible for Medicaid reimbursement.  Before filling a prescription, pharmacies are required under Medicaid billing rules to first ascertain whether the prescriber’s services are eligible for reimbursement.  Because Vascuscript did not do so, it filled and delivered the prescriptions written by Dr. Strutsovskiy that were not eligible for Medicaid reimbursement. NY

May 26, 2016 – New Hampshire Transmission (NHT) will refund New England ratepayers $6.8 million to settle allegations that the company improperly included millions of dollars of development costs in its transmission rates. The settlement resolves a complaint the Massachusetts Attorney General’s Office filed with the Federal Energy Regulatory Commission (FERC) in April 2015.  The AG’s office argued that New England consumers should not foot the bill for the $9.9 million that NHT spent to develop its proposed SeaLink transmission project, a project which was not selected to be built by ISO-New England, the Regional Transmission Operator. As a result of the settlement, NHT will refund $6.5 million of the costs it billed to ratepayers in 2012, 2013 and 2014 and has agreed to forgo billing customers for costs incurred for the project in 2015, which is equal to $305,000. MA

May 25, 2016 – Florida and the Federal Trade Commission announced two joint actions against alleged unlawful debt relief operations targeting student loan holders. In the first action, the enforcement agencies filed a joint action against Chasity Valdes and her companies, Consumer Assistance LLC, Consumer Assistance Project Corp. and Palermo Global LLC, alleging that the defendants took illegal up-front fees in return for their purported debt relief and credit repair services that they falsely claimed would reduce consumers’ student loan debt and repair the consumers’ credit. According to the complaint, the defendants led consumers to believe they qualified for government student loan forgiveness programs that would result in a reduction of their student loan debt, even though the programs have strict requirements that the consumers were likely not to meet. The complaint also alleges defendants misrepresented that they would audit consumers’ loans for errors that would invalidate the loans or reduce the balance, when in reality, at most, defendants merely sent worthless form dispute letters. FL

May 24, 2016 – California filed a lawsuit against Johnson & Johnson (J&J) for false advertising and deceptive marketing of its surgical mesh products for women.  The complaint alleges that J&J neglected to inform both patients and doctors of possible severe complications and misrepresented the frequency and severity of risks. California co-led a multistate investigation, including 46 states and the District of Columbia, into J&J’s surgical mesh products for women, and is seeking injunctive relief and monetary penalties to ensure that J&J stops its deceptive practices. The suit further claims that J&J knew about potential risks and side effects prior to the launch of their mesh products, yet omitted that information from educational and marketing materials provided to doctors and patients. CA, WA

May 20, 2016 – New Jersey announced that a chiropractor from Morris County pleaded guilty to taking more than $250,000 in illegal kickbacks from doctors and other individuals in return for referring patients to their practices, clinics and medical imaging centers. Dr. Alexander Dimeo, 61, of Budd Lake, N.J., and Fort Myers, Fla., pleaded guilty to two separate accusations before Superior Court Judge Michael A. Toto in Middlesex County.  Dimeo retired last year, but he formerly operated Passaic Chiropractic & Therapy Center PC in Passaic.  In pleading guilty, Dimeo admitted that between 2009 and 2015, he received approximately $254,500 in illegal kickbacks for patient referrals.  NJ

May 20, 2016 – New York announced that New Paltz-based construction company Lalo Drywall, Inc. and its owner Sergio Raymundo, 28, were sentenced in Manhattan Supreme Court after a conviction related to wage theft for underpaying workers at a mixed-use, commercial, and low-income residential project in Harlem. Raymundo and Lalo Drywall, Inc. admitted to cheating eight workers at a Harlem housing project out of approximately $800,000 in wages during a 17-month period.  The defendants attempted to conceal the underpayments by signing false checks drawn on the company’s account indicating that employees on the job were paid properly under the law. However, those checks were never actually given to the workers. NY

May 18, 2016 – New Jersey announced that a former Essex County insurance agent has been sentenced to six years in prison for submitting hundreds of fraudulent life insurance applications to reap more than $1 million in commission and bonuses from Massachusetts Mutual Life Insurance Company (MassMutual). Stanley Jerome, 33, of Orange, pleaded guilty to second-degree money laundering and insurance fraud in March. Jerome admitted to paying individuals for their identifying information which he then used to submit bogus life insurance applications to MassMutual to reap sales commissions and bonuses totaling $1,132,675. Because most of the applications were for low-income individuals, Jerome provided false employment, salary, and net worth information on the applications. NJ

May 17, 2016 – New Jersey announced that a lawyer who practiced in Jersey City has been indicted by a state grand jury on charges that he stole more than $1.5 million from five clients over a period of more than 10 years. From October 2004 through May 2015, Joseph J. Talafous Jr. allegedly stole approximately $1,528,022 from clients, and laundered most of the funds through his attorney trust account and/or attorney business account. Among other allegations, Talafous is accused of stealing approximately $402,418 from a trust set up for the benefit of a young boy in 2005 with funds from a wrongful death suit stemming from the death of his father. The father died in 2001 in a workplace accident when the child, a West New York resident, was still an infant. NJ

May 13, 2016 – A Somerville-based ambulance services provider has been sued for allegedly overbilling the state’s Medicaid program (MassHealth) for more than $600,000 in ambulance services that reflected a higher level of care than was actually provided. The complaint against Cataldo Ambulance Service, Inc. (Cataldo), filed on Thursday in Suffolk Superior Court, alleges that from 2005 to November 2015, Cataldo billed MassHealth for Emergency Advanced Life Support (ALS) services when, in fact, the patient’s condition at the scene only required, and the patient only received, Emergency Basic Life Support (BLS) services. Cataldo provides a variety of transportation services, including emergency ambulance services, throughout the Greater Boston area. According to the complaint, Cataldo’s inappropriate billing practices persisted despite being notified that, in many instances, the patient’s condition and the services rendered were insufficient to justify billing at an ALS level. MA

May 13, 2016 – Georgia announced that Family Dermatology, P.C. has entered into a settlement with the State of Georgia in response to allegations that it violated the Georgia Fair Business Practices Act by attempting to collect debts from consumers without sufficiently confirming that the debts were valid and/or that the billing statements were accurate. A number of consumers claimed they had been billed for services for which they had already paid, while others alleged that the company failed to timely submit claims to consumers’ insurance providers, resulting in the insurance providers denying the claims and consumers then being charged.  When consumers tried to contact Family Dermatology to question the bills, most claimed they were unable to get through to customer service. Family Dermatology, P.C., while denying any wrongdoing, has entered into an Assurance of Voluntary Compliance which requires it to pay restitution to consumers who, due to the company’s billing practices, paid alleged debts they did not owe. The company must also cease collecting on 42,301 customer accounts for services provided prior to April 1, 2013, totaling $8,892,215, and pay $5,000 in fees and penalties. GA

May 11, 2016 – Pennsylvania announced the arrest of a Dauphin County man charged in connection with the alleged theft of $5.7 million from clients of his former payroll service company.  According to a criminal complaint, William Simon Sullivan Jr., 42, was the owner and operator of a company known as Net Pay Solutions, Inc., a payroll service that is no longer in business. Prior to a bankruptcy filing, the company at one time handled payroll processing, as well as the payment of federal, state and local taxes for more than 200 businesses located throughout the country. It is alleged that Sullivan, as the business’ chief executive, used funds that were allocated solely to pay his clients’ taxes to instead pay his company’s operating expenses and financial obligations. He also is accused of using client funds to cover personal spending on vehicles, travel and home renovations, investigators allege in a criminal complaint. PA

May 10, 2016 – Illinois announced two settlements with Peoples Gas Light and Coke Company (Peoples) and its parent company, Integrys Energy Group, which is owned by WEC Energy Group Inc. (WEC), totaling $18.5 million to resolve an Illinois Commerce Commission (ICC) investigation and Madigan’s own investigation into Peoples’ misleading statements about the cost of its Accelerated Main Replacement Program (AMRP). The settlements stem from petitions filed last year by Madigan and the Citizens Utility Board (CUB) with the ICC following a shocking audit report that found Peoples’ AMRP could cost consumers $8 billion, an estimate the company now admits it withheld from the ICC in a hearing in advance of the ICC’s approval of its 2015 merger with WEC. Prior to its merger with WEC, company executives estimated the cost of the program at $4.5 billion. IL

May 9, 2016 – New York announced that Steven Croman, a major New York City landlord with more than 140 apartment buildings across Manhattan, surrendered on multiple felony charges for his role in an alleged scheme to fraudulently obtain several multi-million dollar refinancing loans between 2012 and 2014. Croman was also named, along with private investigator Anthony Falconite, in a civil suit filed by the Attorney General’s office for allegedly engaging in illegal, fraudulent, and deceptive conduct in connection with Croman’s real-estate business. The lawsuit alleges that Croman directs an illegal operation that wields harassment, coercion, and fraud to force rent-regulated tenants out of their apartments and convert their apartments into highly profitable market-rate units. The lawsuit further alleges that Croman deployed Falconite, a former New York City police officer, to frighten and intimidate rent-regulated tenants into surrendering their apartments. NY

May 6, 2016 – New York announced the sentencing of the remaining three defendants in an elaborate bid-rigging conspiracy that illegally steered multi-million dollar public works contracts for Monroe County to favored and connected companies, resulting in the restraint of competition. The four defendants were originally indicted in November 2013 and charged with a scheme to rig the bidding processes for a number of multi-million dollar public works contracts in Monroe County.  Those contracts included a $99 million contract to provide upgrades and maintenance for the County’s IT infrastructure (the “IT project”), and a $212 million contract to provide upgrades and maintenance for the County’s public safety and security systems (the “Public Safety project”).  NY

May 3, 2016 – Pennsylvania joined with other states and the federal government in a $306 million civil settlement that resolves allegations that Olympus America, Inc. and some of its subsidiaries paid illegal kickbacks to healthcare providers. The settlement was the result of a whistleblower lawsuit – United States et al., ex rel. John Slowik v. Olympus America, Inc., et al – filed in New Jersey. The lawsuit alleged that Olympus used improper financial incentives to induce doctors and hospital executives to buy a wide ranging array of its endoscopes and other surgical equipment, and to thereby unlawfully increase sales and gain market share. PA, NY

May 3, 2016 – New York announced a settlement with Aby J. Rosen, a major contemporary art collector, for failing to pay millions in sales and use taxes on art acquisitions made by his companies. Rosen will pay $7 million following the Attorney General’s investigation into the use of resale certificates. The Attorney General alleges that beginning in 2002, Mr. Rosen bought or commissioned more than $80 million worth of contemporary art, but did not pay applicable State and City sales and use taxes on the purchases.  Between 2002 and 2015, Mr. Rosen used two companies, known as 22nd Century Acquisitions LLC and Lever House Artwork LLC, to purchase and, in Lever House Artwork’s case, commission artwork, claiming an exclusion from sales tax on the basis that the purchases and commissions were for resale. NY

April 2016

April 29, 2016 – Michigan announced that a judge has ordered Shawn Dicken, of Bay City, to pay $663, 531.48 in restitution for her role in an extensive multi-county Ponzi scheme. Dicken was convicted in 2014 after an Attorney General investigation and sentenced to 140 months to 20 years in prison. Beginning in 2011, Dicken was employed as the lead salesperson for The Diversified Group Advisory Firm LLC, an investment company. During her tenure with Diversified, Dicken misrepresented the investments she marketed to investors, saying investments offered by Diversified were without risk, completely liquid, featuring a guaranteed rate of return of between 9.5% and 10.44%. Dicken failed to disclose the risks associated with the actual investment in question – a highly leveraged real estate investment that could result in the loss of all of the investors’ money. Many investors, including senior citizens, risked their life savings.  Dicken swindled investors out of more than two million dollars and investigation revealed she took an eight percent commission, pocketing approximately $160,000 for herself. MI

April 27, 2016 – New York announced settlements with six ticket brokers that, collectively, illegally resold hundreds of thousands of tickets in New York State since 2011, including on popular ticket resale platforms like StubHub and Vivid Seats.  The companies –, Inc. of New Jersey, Charm City Entertainment LLC of Florida, Just In Time Tickets, Inc. of New York, A2Z Tix LLC of New York, Flying Falco Entertainment, Inc. (d/b/a Avery Tickets) of California, and All Events Utah, LLC of Utah  – each illegally sold tickets to events in New York over the last several years without first obtaining the required license.  TicketToad, A2Z, Just In Time, Flying Falco Entertainment and All Events Utah also violated New York’s ticket laws by using illegal software (known as ticket “Bots”) to purchase large numbers of tickets on websites such as before the tickets could be obtained by consumers.  The settlements require that the companies and their principals maintain proper ticket reseller licenses, abstain from using Bots, and pay penalties for having operated illegally. The settlements require the six companies to pay a combined total of $2,760,000 in disgorged profits and penalties to the State. NY

April 27, 2016 – New Jersey announced that 10 alleged members and associates of the New York-based Genovese organized crime family were indicted on charges including first-degree racketeering for allegedly reaping millions of dollars in New Jersey through illegal loansharking, unlicensed check cashing, gambling and money laundering, including laundering of drug proceeds. Another defendant was charged in connection with the laundering of drug money, and the wives of three of the defendants were charged with tax fraud, bringing the total defendants to 14. The charges stem from “Operation Fistful,” a joint investigation by the New Jersey Division of Criminal Justice and the Waterfront Commission of New York Harbor, conducted with assistance from the New York and Queens County District Attorneys’ Offices and other law enforcement agencies. NJ

April 27, 2016 – Michigan and 34 other states reached an agreement in principle to settle allegations against Wyeth, a subsidiary of Pfizer, Inc. The settlement will resolve allegations that Wyeth knowingly underpaid rebates owed under the Medicaid Drug Rebate Program for the sales, Protonix Oral and Protonix IV between 2001 and 2006. Both are drugs that are used to treat conditions such as acid reflux. Under the settlement Wyeth agreed to pay $784.6 million to the United States and the States. Over $371 million of this amount will go to the Medicaid Program. The settlement stems from two whistleblower lawsuits which were filed in the United States District Court for the District of Massachusetts. The United States, 35 states (including Michigan) and the District of Columbia intervened in the lawsuits. NY, NJ, MI, WA

April 25, 2016 – New Jersey announced that 48 people were indicted on charges including first-degree racketeering in connection with an elaborate bank fraud scheme in which numerous defendants impersonated holders of legitimate business bank accounts in order to steal more than half a million dollars from the accounts, withdrawing most of the funds at casinos in Atlantic City. The defendants allegedly targeted business accounts at JP Morgan Chase Bank, stealing more than $570,000 from 27 business bank accounts in two schemes carried out between February 2011 and August 2012. NJ

April 21, 2016 – New York announced a settlement with the national drugstore chain Walgreen, Co. and its subsidiary Duane Reade (collectively, “Walgreens”) for overcharging New York consumers and using misleading advertisements.  In addition to paying $500,000 in penalties, fees, and costs, Walgreens has agreed to several important reforms of its current advertising and business practices in New York.  The Attorney General’s undercover investigation had found that Walgreens deceptively induced New York consumers to purchase products. Among other claims, the investigation found that Walgreens represented to consumers that they would receive the price published in print advertisements and on store shelf tags, but charged consumers a different price at the register. Walgreens operates approximately 251 Walgreens and 214 Duane Reade stores across New York State. NY

April 21, 2016 – New York announced four separate settlements with auto dealers that return nearly $2 million in restitution to nearly 5,000 consumers and $174,000 in penalties and costs to the state for selling “after-sale” products. The dealerships, Koeppel Auto Group, Plaza Dealerships, Manfredi Auto Group, and Huntington Honda have locations in Staten Island, Brooklyn, Queens, Long Island and Westchester. The Attorney General charged the dealerships with unlawfully selling “after-sale” products and services, including credit repair and identity theft protection services, that often added thousands of dollars to the purchase price of the vehicle. These settlements are part of the Attorney General’s wider initiative to end the practice engaged in by many dealers of “jamming,” or unlawfully charging consumers without their consent or knowledge for purchases. NY

April 20, 2016 – New York announced the arrest of Certified Nurse Aide Jessicka Cohen in Ballston Spa.  Cohen was arraigned on one count of Grand Larceny in the Fourth Degree and one count of Criminal Possession of Stolen Property in the Fourth Degree, both Class E felonies.  In July 2015, she allegedly stole a unique wedding ring from a resident at Saratoga Center for Rehabilitation and Skilled Nursing Center.  She then allegedly sold the ring at a local store.  Cohen worked at Saratoga Center through Favorite Healthcare Staffing, a local agency from at least May through July of 2015.  The ring was reported missing to the staff at Saratoga Center and pursuant to the investigation, documentation was discovered that the defendant sold the ring at Ballston Coin and Jewelry, in Ballston Spa.  The ring was a wedding ring that the victim never took off of her finger. NY

April 19, 2016 – New Jersey announced that Lawrence Durr – a longtime committeeman, mayor and planning board member in Chesterfield Township – pleaded guilty to a criminal charge that he filed fraudulent ethics disclosure forms that failed to disclose his financial relationship to a developer. A state investigation revealed that Durr entered into an undisclosed deal to sell transferrable development rights on a 104-acre farm to the developer, and then used his official positions to advance the developer’s plan to build a major residential and commercial project at another site in the township. In pleading guilty, Durr admitted that from February 2006 through October 2007, he filed false ethics disclosure forms with the Township of Chesterfield that failed to disclose his financial relationship with Renaissance Properties Inc. He is permanently barred from public office or employment. NJ

April 15, 2016 – A former North Jersey chiropractor who was stripped of his license to practice more than a decade ago, has been charged with masterminding a medical fraud ring that allegedly bilked nearly $4 million from numerous insurance carriers. In an indictment handed up in Morris County Superior Court, Philip Potacco was charged with conspiracy, money laundering, and a host of other crimes in connection with the scheme he allegedly ran from his South Orange Medical Facility Consulting Group LLC (“SOTC”), 2010 to 2015. Potacco, whose chiropractic license was revoked in 2002, allegedly hired a licensed chiropractor to act as a straw owner of SOTC while he ran it covertly. Potacco allegedly used illegal “runners” to recruit accident patients to the facility, including people who had staged their crashes. Potacco then fraudulently submitted insurance claims for those patients, using the billing information of the licensed chiropractor he had hired, prosecutors said. Some of those claims were for services that were never rendered, according to prosecutors. NJ

April 15, 2016 – Pennsylvania announced the arrest of a daughter and mother from Jefferson County charged with defrauding the Victims Compensation Assistance Program, a state program created to provide financial assistance to crime victims. The arrests of Monica Greene, 26, and Melissa L. Greene-Balbo, 46, are the result of an investigation by the Office of Attorney General’s Bureau of Criminal Investigations. According to investigators, Greene was physically assaulted and subsequently received $3,792 for moving expenses and lost wages that she was not entitled to by submitting false documentation to VCAP. Greene-Balbo, Greene’s mother, is accused of conspiring with her daughter to carry out the fraud, in part by providing false documentation, according to investigators. PA

April 13, 2016 – Florida announced the arrest of a Florida dentist in connection to a scheme to fraudulently obtain oxycodone. Dr. Joseph Gorfien, D.D.S., is a partner at Gorfien & Jacobsohn, P.A., a dental practice, along with partner and director Dr. Henry Jacobsohn, D.M.D. According to the investigation, Gorfien used Jacobsohn’s professional license information and prescription pad to forge, then later fill, unlawful prescriptions for oxycodone without his partner’s knowledge. Gorfien is charged with 11 counts of purchase of oxycodone, each a second-degree felony, one count of obtaining controlled substances by fraud or forgery, a third-degree felony, and one count of criminal use of personal identification information, a third-degree felony. If convicted, Gorfien faces up to 175 years in prison. FL

April 12, 2016 – Florida arrested two Miami-Dade County residents for allegedly billing the Medicaid program more than $100,000 for in-home support services not rendered. According to the investigation, David Krochmal, 43, owner of Peer Link Programs, and Cecilia Ines Krochmal, 47, operated a Home Health Agency that specialized in servicing individuals with developmental disabilities. Cecilia Krochmal, David Krochmal’s sister-in-law, managed the day-to-day operations of the business. The defendants allegedly falsified service logs for individual Medicaid recipients to include in-home services, such as assisting with personal hygiene; however, told clients that the business could not afford to visit clients’ homes to provide individual services. Instead, the defendants picked up multiple Medicaid recipients to participate in group activities on the weekends. FL

April 11, 2016 – Illinois announced a $41 million settlement with Goldman Sachs as a result of the investment bank’s misconduct in its marketing and sale of risky residential mortgage-backed securities (RMBS) leading up to the 2008 economic collapse. The agreement is part of a $5 billion national settlement forged by the U.S. Department of Justice (DOJ), state attorneys general from New York and California and other federal entities. The settlement includes $25 million in relief for Illinois’ pension systems and $16 million in relief for Illinois consumers. The agreement stems from an investigation concerning the investment bank’s failure to disclose the true risk of RMBS investments. IL

April 7, 2016 – Washington announced favorable resolutions for consumers with six student loan debt adjustors that overcharged Washington state students and collected unlawful fees. The six loan adjustors will pay a total of $162,000 to refund Washington students for illegal charges and an additional $56,000 for the Attorney General’s costs and attorney’s fees, as well as monitoring and future enforcement of the Consumer Protection Act. Student loan debt adjustment firms offer to help students fill out and submit paperwork to the U.S. Department of Education to consolidate their federal student loans. But information about repayment options and help consolidating federal student loans is available — for free — directly from the U.S. Department of Education.  All 346 Washington student victims will receive full refunds of the money they paid to the various companies. The Attorney General’s Office will notify eligible consumers and distribute the refunds directly to them in July 2016. WA

April 4, 2016 – New Jersey announced that a former Morris County investment advisor was sentenced to seven years in prison for fabricating and mailing more than 100 financial account statements that inflated 14 of her clients’ accounts by a combined $818,000. In December, Janet Fooshee, also known as Janet Gurley and Janet Katz, pleaded guilty to defrauding more than two dozen retirees and others over a 10-year period beginning in 2003. In addition to fabricating account statements, she admitted stealing approximately $151,000 from four clients, receiving more than $191,539 in unlawful investment advisor fees, defrauding another client out of almost $81,000, and stealing the identities of at least eight corporations. NJ

April 1, 2016 – Florida announced more than $170,000 in fraudulent taxpayer dollars reclaimed from multiple bank accounts owned by Christina Benson, owner of Tranquility Health Care Solutions in Orlando. Benson used Tranquility to recruit homeless men and women to pose as patients and billed Medicaid for services not provided and not warranted. Additionally, Benson allegedly used untrained personnel, some with criminal arrest records, in her scheme. On March 9, 2016, Benson plead guilty to one count of Medicaid provider fraud, a first-degree felony. FL

March 2016

March 31, 2016 – Pennsylvania announced the arrest of a Crawford County couple accused of stealing approximately $132,000 from the local moose lodge where they served in administrative roles.  According to criminal complaints filed in the case, the money was allegedly stolen between May 2011 and October 2014 from Moose Lodge No. 2505, located in East Fairfield Township, Crawford County. Investigators allege the couple stole the money during a time when they incurred significant gambling losses. PA

March 30, 2016 – California announced a preliminary approval of settlements resolving allegations that LG, Hitachi, Panasonic, Toshiba, and Samsung, companies all based in Japan or Korea, fixed prices on critical components of televisions and computer monitors from 1995 to 2007.  Those critical components, known as Cathode Ray Tubes or CRTs, were used to display images on computer monitors and televisions screens before they were replaced by flat screens. The settlements, which were filed in San Francisco Superior Court, require all five companies to pay a total of $4.95 million to settle claims of overcharges paid by California government entities, general damages suffered by the State’s economy, and civil penalties. CA

March 30, 2016 – New York joined the Federal Trade Commission (FTC), the other 49 states, and the District of Columbia in announcing the successful conclusion of the largest multistate charity fraud action to date. Two nationwide sham cancer charities are being dissolved and their president is banned from profiting from any charity fundraising in the future, pursuant to a settlement agreed to by the FTC, all 50 states, and the District of Columbia. Cancer Fund of America Inc. (CFA) and Cancer Support Services Inc. (CSS) and their leader, James Reynolds, Sr., agreed to settle charges that CFA and CSS claimed to help cancer patients, but instead, the overwhelming majority of donations benefitted the sham charity operators, their families and friends, and fundraisers. Under the settlement order, CFA and CSS will be permanently closed and their assets liquidated.  The order imposes a judgment against CFA, CSS, and Reynolds, jointly and severally, of $75,825,653, the amount consumers donated to CFA and CSS between 2008 and 2012. NY, PA, FL

March 29, 2016 – New York announced the guilty pleas of licensed pharmacist Glenn Schabel, 55, of Melville, and his company, Glenn Schabel, Inc. in connection with a nation-wide scheme to sell diverted HIV medication to unsuspecting New Yorkers.  Schabel pled guilty to Criminal Diversion of Prescription Medications and Prescriptions in the First Degree, and Commercial Bribe Receiving in the First Degree.  Schabel will be sentenced to up to two and one-third to seven years state prison and forfeit $5,456,267 to the New York State Medicaid Program. Glenn Schabel Inc., pled guilty to Money Laundering in the First Degree.  In April 2012, MFCU investigators arrested Schabel and three other individuals and charged ten companies, for using a network of bogus prescription medication wholesalers in Alabama, Mississippi, North Carolina, and California to launder money and to sell over $274 million in diverted prescription medications. NY

March 28, 2016 – California announced a $8,500,000 settlement with Wells Fargo Bank over privacy violations that included recording consumers’ phone calls without timely telling consumers they were being recorded, as required by California law. As part of the settlement, which is in the form of a stipulated judgment, Wells Fargo will pay civil penalties totaling $7,616,000 and will reimburse the prosecutors’ investigative costs of $384,000. In addition, Wells Fargo will contribute $500,000 to two statewide organizations dedicated to advancing consumer protection and privacy rights.  CA

March 28, 2016 – A company that purchased income streams from veterans and other pensioners has agreed to provide more than $2 million in debt relief to resolve allegations that it made predatory and illegal loans to Massachusetts consumers. Under the terms of the assurance of discontinuance, Future Income Payments, LLC (FIP), which was formerly known as Pensions, Annuities and Settlements, LLC, has agreed to convert its current contracts with consumers into interest-free loans. Through this alleged scheme, the 85 affected Massachusetts consumers who entered into contracts with FIP received upfront payments ranging from $1,800 to more than $40,000. In exchange, FIP accessed the consumers’ bank accounts each month to deduct a portion of their pension payments. The AG’s investigation revealed that FIP was charging consumers interest rates that far exceeded the statutory limit, many exceeding 100 percent. Under the terms of the settlement, any consumer who has already paid in excess of the principal balance borrowed will receive a refund for any overpayments. MA

March 28, 2016 – Pennsylvania announced its Bureau of Consumer Protection secured default court orders against: Daniel Fry, who did business as Fry Asphalt, and Peter Thomas Lazrovitch, William Lazrovitch, and Kelly Waters Lazrovitch, who did business as All County Asphalt, Seal Coating, and Lazro and Sons General Construction. The contractors were ordered to pay approximately $186,998 combined in consumer restitution, civil penalties and legal costs. The lawsuits aimed to address the contractors’ failures to meet the following requirements: maintain current registration, use HICPA-compliant contracts, perform contracted services in a workmanlike manner, complete contracted services, provide consumers with a three-day cancellation notice and restrict initial deposits to one-third of the total sales price. PA

March 28, 2016 – New York announced that Style Management Corp. (Style) and its owner Andrew Rosenberg have agreed to pay a total of $845,000 in restitution and fines to drivers who were illegally charged by the company.  Style is located in Manhattan, and manages or owns approximately 142 medallions. The New York City Taxi and Limousine Commission (“TLC”) lease cap rules limit the dollar amount drivers may be charged for leasing medallions and taxicabs, in order to ensure a baseline level of take-home earnings for drivers.  The rules also strictly limit add-on charges that can be imposed upon drivers and limit the purposes for which charges may be assessed. The Attorney General’s investigation of Style revealed that the company violated the TLC’s lease cap rules by charging amounts in excess of the amounts allowed under law, and by rounding drivers’ credit card fare earnings to even dollar amounts, almost always rounding in Style’s favor. NY

March 24, 2016 – New York announced a groundbreaking $3.1 million agreement with Focused Technologies Imaging Services, LLC (“FTIS”), its sole owner Charles “Chuck” Tobin, and its former co-owner Julie Benware, for unlawfully outsourcing government-funded work to a subcontractor based in Mumbai, India in 2008 and 2009. The outsourcing was illegal because even though FTIS was required to perform the work at a warehouse in Albany, New York, FTIS unlawfully sent personal information of over 16 million people to a foreign business that was unauthorized to receive this information. The outsourcing also resulted in the failure of FTIS to adhere to a requirement that over 50% of the labor hours of the contract be performed by individuals with disabilities. NY

March 23, 2016 – California obtained a $1.1 billion judgment against defunct Corinthian Colleges, Inc. (CCI) for their predatory and unlawful practices. While CCI filed for bankruptcy in May 2015, this judgment can help secure further relief for struggling students. In October 2013, Attorney General Kamala D. Harris led the charge against CCI and its subsidiaries that operate Everest, Heald, and Wyotech colleges, filing suit seeking to put an end to abusive practices that left tens of thousands of students under a mountain of debt and useless degrees. CCI filed for bankruptcy in May 2015. In granting the default judgment, the Court ordered restitution on behalf of students in the amount of $820,000,000 and civil penalties totaling $350,025,000, for a total of $1,170,025,000 in monetary relief.  CA

March 23, 2016 – New York announced a settlement with Carolina Furniture, Inc., a business that sells furniture and home furnishings.  An investigation of a “store closing sale” by the attorney general showed that Carolina Furniture made deceptive representations in its advertisements and failed to obtain a proper license before the sale.  Carolina Furniture advertised its store closing extensively and made many representations about the sale that the NYAG found deceptive. For example, Carolina Furniture sent out a letter to 40,000 consumers inviting them to a “PRIVATE SALE HELD 4 DAYS ONLY!”  This claim was not true as all three retail locations were open to the public during the “private sale.” NY

March 22, 2016 – New York announced a $1.1 million dollar settlement of a whistleblower case alleging that real estate developer Asher Roshanzamir wrongfully deferred payment of New York state and New York City income taxes.  Federal law allows a seller of real property to defer paying income taxes on certain capital gains when he exchanges it for ‘like-kind’ real property, under certain conditions.  An investigation by the Attorney General’s Office found that Mr. Roshanzamir wrongfully deferred payment of New York State and local income taxes by disguising withdraws of approximately $3.5 million from the like-kind exchange and by disguising approximately $5 million in equity contributions as loans. NY

March 18, 2016 – New York announced the guilty pleas of Sergio Raymundo, 28, and his New Paltz-based construction company Lalo Drywall, Inc. Raymundo and Lalo Drywall, Inc. cheated eight workers at a Harlem housing project out of approximately $800,000 in wages during a 17-month period, and attempted to conceal the underpayments by signing false checks drawn on the company’s account indicating that employees on the job were paid properly under the law. However, those checks were never actually given to the workers. NY

March 18, 2016 – Illinois announced that a former Illinois Department of Human Services (IDHS) caseworker was arraigned on charges of theft, aggravated ID theft and official misconduct for allegedly stealing a reissued LINK card from a DHS client. Gwendolyn Ross, 63, of Rockford, surrendered herself to the Winnebago County Sheriff’s Office on March 11. Illinois Attorney General Lisa Madigan alleged that Ross, a former IDHS caseworker at the Winnebago County Family Community Resource Centre (FCRC), stole a reissued LINK card from a DHS client while it was being processed by the Rockford DHS office. Within hours of obtaining the card, she was observed on store security footage using the card to make purchases. IL

March 16, 2016 – A Thurston County judge ordered a California company that scammed new Washington property owners into buying overpriced deeds to pay more than $3.6 million, after granting summary judgment in a lawsuit brought by Attorney General’s office. The court found the Bellflower, Calif.-based LA Investors, LLC, which conducts business as “Local Records Office.” violated the state Consumer Protection Act at least 256,998 times by sending deceptive mailers. The company sent official-looking notices implying that consumers must buy a dramatically overpriced $89 copy of their deeds. Deeds typically cost only a few dollars from a local county office, and many property owners can obtain a copy of their deed for free online. WA

March 16, 2016 – New Jersey announced that four individuals have been charged in connection with two separate schemes in which investors allegedly were defrauded of a total of $350,000 that they invested in purported medical ventures. In the first scheme, Joseph Denti Jr., Joseph Giardina and Heidi Francavilla allegedly stole $250,000 from a doctor by convincing him to advance that amount for a bogus investment involving a surgical center. They allegedly diverted his funds for their personal benefit. In the second scheme, Ralph Perricelli Jr. and Joseph Denti Jr. allegedly convinced a married couple to invest $100,000 in a blood-testing laboratory by falsely claiming to be joint owners of the lab. NJ

March 16, 2016 – A Seattle-based man and his three companies will pay back as much as $7,750,000 to approximately 165,000 consumers nationwide. Benjamin Rogovy used systematic deception in the running of his for-profit company, Christian Prayer Center, including the creation of fake religious leaders and posting false testimonials to entice consumers to pay for prayers. In a separate business, Rogovy used deceptive and unfair business practices to run the Consumer Complaint Agency, a for-profit business that promised consumers it would advocate on their behalf regarding their complaints against businesses. Instead, the company charged consumers up to $25 for doing little more than passively forwarding complaints. Rogovy’s actions violate Washington’s Consumer Protection Act, which forbids businesses from making false claims, and the Charitable Solicitations Act, which prohibits churches and charities from using misleading or deceptive statements in any charitable solicitation. WA

March 15, 2016 –Florida announced an Assurance of Voluntary Compliance with You Fit, LLC, relating to the company’s advertising and business practices. You Fit is a Broward-based company that operates health clubs across Florida and in several states. According to consumer complaints, the company advertised month-to-month memberships as requiring no commitment or no obligation and did not disclose certain additional required commitments and fees until after members signed their contracts. Complainants also alleged that, in some cases, the company failed to acknowledge some membership cancellations and continued to charge monthly fees even after consumers attempted to cancel. FL

March 15, 2016 – New York announced a settlement with the owner of two Manhattan restaurants for wage underpayments. The owner, Wallace Lai, admitted to a number of labor law violations, including keeping tips intended for delivery workers after customers ordered through online delivery services. From May 2014 until January 2015, the restaurants delivered food to customers through the food delivery websites,, and Through those websites, customers paid with credit cards, typically including a tip for delivery workers. Lai unlawfully kept the tips charged through the sites – never paying them to the delivery workers as customers intended. New York Labor Law prohibits employers from keeping any part of the tips that are intended for service employees, including delivery workers. NY

March 10, 2016 – New York announced the felony convictions of estate planning attorney Stephen M. Newman and caregiver Joan M. Morgante, for stealing over $900,000 from the estates of wealthy brother and sister June and Worth Farrington. After being appointed sole trustee, between November 2008 and November 2011, Newman diverted over $900,000 in monies from the Farringtons’ trust accounts to himself.  Additionally, Newman diverted over $400,000 to Morgante, including the purchase of a $325,000 townhouse.  As part of his plea, Newman agreed to forfeit $800,000 and to surrender his licenses to practice law in New York and Florida. NY

March 10, 2016 – Florida announced a lawsuit filed against Prime Resorts International, a central Florida-based timeshare resale company, and its President and owner, John Piccione for alleged violations of the Florida Deceptive and Unfair Trade Practices Act and the Florida Timeshare Resale Accountability Act. The defendants allegedly made unsolicited telephone calls to consumers nationwide claiming to have ready buyers and renters willing to pay a specified price for consumers’ timeshare properties. The defendants collected upfront fees from consumers ranging from $595 to more than $4,000, and purportedly did not have buyers or renters lined up to pay any price for consumers’ timeshares. FL

March 9, 2016 – Florida arrested a couple for defrauding the Medicaid program out of more than $180,000 in fraudulent claims. Oscar Alzate, 48, and Alba Garcia, 48, owners of Digital Radiology Center, Inc. and Medisound, Inc., allegedly operated a clinic without the appropriate licensure or proper oversight by a physician as required by Florida law. The investigation revealed that Alzate and his partner Garcia, neither who are physicians, billed the Medicaid program for services never rendered. The clinic owners also allegedly forged physicians’ signatures on medical reports and provided defective mammography services. FL

March 9, 2016 – New Jersey announced that the owner of a now-defunct Bergen County used car dealership, D.I.B Leasing, along with three employees and a bookkeeper, have been charged with conspiracy, money laundering, and other offenses in connection with bank financing scam that allegedly netted $1.4 million in fraudulent loans for luxury cars. Prosecutors allege the defendants created fake employment records, inflated incomes, and supplied false pay stubs and fictitious employee verifications to dupe banks into approving auto financing for customers whose income levels did not qualify them for loans on the pricey vehicles. NJ

March 8, 2016 – A Connecticut psychiatrist will pay $404,798 to settle a civil False Claims Act lawsuit alleging that she submitted false claims for payments to Connecticut’s Medicaid program. The state alleged that, from March 2010 to September 2013, while operating a private practice in Mansfield, Dr. Panoor submitted upcoded claims indicating that she provided Medicaid patients with both group counseling and either individual psychotherapy or a detailed examination on the same dates of service when, in fact, she did not provide psychotherapy or detailed examination sessions but instead provided medication management services or a brief meeting with the patient for the purpose of monitoring or changing a patient’s drug prescription – services that are coded, and thus reimbursed, at lower payment rates. CT

March 7, 2016 – A Colorado-based telecommunications and Internet service provider company, Level 3 Communications, has agreed to pay more than $8 million to resolve allegations it improperly withheld rental payments to the Massachusetts Department of Transportation (“MassDOT”) under an agreement that allows it to run fiber optic cables alongside state highways.  The settlement agreement resolves allegations that Level 3 Communications breached its contract with MassDOT and violated the Massachusetts False Claims Act by concealing the amount it owed the state agency and knowingly avoiding its annual rent obligations.  MA

March 7, 2016 –The U.S. Supreme Court denied Apple Inc.’s request for the Court to review a lower court decision, clearing the way for the distribution of $400 million to U.S. consumers who paid artificially-inflated prices for e-books.  The case was tried jointly, between a 33-state coalition and the U.S. Department of Justice.  The district court’s ruling was affirmed by the United States Court of Appeals for the Second Circuit in June 2015.  With the Supreme Court declining to review that decision, Apple has no further opportunity to contest its liability.  TX, CT

March 4, 2016 – Texas reached a settlement with online daily fantasy sports site FanDuel, under which the company will stop accepting paid entries for cash prizes in the state on May 2.  Traditional fantasy sports leagues that are not operated by a third party for revenue are, as a general rule, legal under Texas law.  In those leagues, participants generally split any pot amongst themselves, so there is no house that takes a cut.  FanDuel will continue to operate its free games in Texas, but will stop accepting paid contest entries on May 2.  In return, the Office of the Attorney General agrees not to take any legal action against FanDuel in connection with the operation of its contests.  TX

March 3, 2016 – New York announced an agreement with Endo Health Solutions Inc. and Endo Pharmaceuticals Inc. (“Endo”), which make and sell the long-acting opioid, Opana ER.  The agreement requires Endo to cease all misrepresentations regarding the properties of Opana ER, to describe accurately the risk of addiction to Opana ER, and to summarize studies regarding Opana ER on its website.  Endo must also create a program that will prevent its sales staff from promoting this powerful narcotic painkiller to health care providers who may be involved in the abuse and illegal diversion of opioids.  Endo, an Irish company with U.S. headquarters in Pennsylvania, makes a variety of prescription drugs.  Endo’s opioid drug Opana ER has been widely abused in New York State.  NY

February 2016

February 29, 2016 – New Jersey announced that two men pleaded guilty to conspiring in a $1.5 million series of thefts involving tractor-trailers loaded with cargo, including clothing, beauty products, auto parts and beer, which the defendants stole and fenced.  Seven men pleaded guilty previously to taking part in the theft ring, which operated in New Jersey, New York and Pennsylvania.  Between June 2012 and April 2015, ring members engaged in nine thefts and two purchases of additional stolen goods in which the total value of the cargo and tractor-trailers stolen exceeded $1.5 million.  NJ

February 26, 2016 – Illinois filed a lawsuit against a Delaware coal company, the American Coal Company, for a coal slurry release near an Illinois mine that resulted in the relocation of at least one resident. The complaint alleges that an injection well located around the village of Raleigh, was leaking unknown quantities of coal slurry, a byproduct of coal preparation. The complaint further alleges the slurry flowed into the nearby Bethel Creek and contaminated soil and groundwater, resulting in at least one resident having to be relocated. IL

February 25, 2016 – Florida announced a multimillion dollar settlement with entities doing business as InterFACE Talent and the entities’ president and CEO, Roman Vintfeld. The Florida Attorney General’s Office obtained a stipulated permanent injunction and a final consent judgment against the defendants, resolving allegations of unfair and deceptive business practices in selling talent marketing services to Florida consumers. InterFACE, a New Jersey-based talent company, allegedly falsely promised to help Florida consumers get modeling and acting jobs, but instead took large up-front fees for nothing more than photo shoots and introductions to industry professionals. FL

February 25, 2016 – Pennsylvania announced a recent Commonwealth Court ruling imposed a civil penalty of $10.8 million on two individuals who will be barred from soliciting charitable donations in Pennsylvania until the penalty is paid in full. According to legal filings in the case, the defendants operated commercial telemarketing firms, Phil’s Productions, LLC and MVP Productions, based in Ohio that sold concert tickets and advertising on behalf of local firefighters unions. Telemarketers led consumers to believe they were firefighters or police officers when they were not. They also made misrepresentations about how much they were paid. PA

February 24, 2016 – New York, together with 21 other states, announced multimillion dollar settlements with Natixis Funding Corp. and Societe Generale for fraudulent and anticompetitive conduct in municipal bond derivative transactions with state and local government entities and nonprofits across the country. Natixis and Societe Generale will pay $29,950,000 and $26,750,000 respectively as part of a coordinated 22-state and private class settlement. Pursuant to the settlements, $53,865,000 will be paid into a Settlement Fund and largely applied to restitution for municipalities, counties, government agencies, school districts and nonprofits that the states allege were harmed when they entered into municipal derivatives contracts with Natixis or Societe Generale. NY, NJ, FL

February 22, 2016 – Michigan filed felony charges against a former Motor City Casino dealer and six others for their roles in an alleged scheme to steal money from the casino involving hundreds of dollars of individual player payouts on lost bets during games of Texas Hold ‘em. The charges were filed following an investigation by the Michigan State Police after they were asked by Motor City Casino to investigate possible dealer/player collusion. The felony complaints allege that Darryl Green, who was employed as a dealer at Motor City Casino in 2014 when the alleged acts took place, conspired with the other six defendants to make payouts to them on losing bets or simply not collect payment on lost bets. MI

February 18, 2016 – National mortgage lender and servicer HSBC has agreed to pay $4 million to resolve allegations that it received commissions and other kickbacks relating to force-placed insurance policies that it procured for struggling Massachusetts homeowners. Force-placed insurance is property insurance that mortgage servicers obtain on behalf of homeowners when they believe homeowners have failed to maintain adequate homeowners insurance. Force-placed insurance often occurs in circumstances where a borrower has fallen behind on his or her mortgage payments. The settlement provides for refunds to thousands of Massachusetts borrowers who were improperly charged force-placed insurance premiums that included commissions or other payments to HSBC. MA

February 17, 2016 – Maryland announced that the Office of the Secretary of State has shut down a purported charity for veterans which allegedly falsified marketing materials and other documents and has not accounted for donations. The Secretary of State issued a cease-and-desist order against the Southern Maryland Veterans Association, along with principal Dan Brashear, and alleged former associate Norman Randolph McDonald. In response to multiple complaints, an investigation by the Secretary of State’s Charities and Legal Services Division, aided by the Office of the Attorney General, showed that the organization was allegedly not assisting the housing needs of veterans as claimed in marketing materials. The charity was also not registered with the Secretary of State. MD

February 17, 2016 – New York announced an agreement with Buffalo Biodiesel, a company that collects cooking oil waste and converts it into biodiesel, over claims that the company filed lawsuits against hundreds of small businesses across Western New York and several surrounding states. The over 600 lawsuits, most of which were filed in Buffalo City Court, made various breach of contract claims against small businesses that had entered into a contract with the company. Buffalo Biodiesel sought thousands of dollars, sometimes as much as tens of thousands of dollars, in damages from ‘mom and pop’ restaurants. The agreement requires Buffalo Biodiesel to withdraw all applications it made for default judgments, to vacate default judgments it has taken against unrepresented businesses, and return any money it might have collected on judgments. NY

February 16, 2016 – New York announced the conviction and sentencing of Frederick E. Monroe, Jr., 59, of Queensbury, New York, for stealing over $5 million from investors by fraudulently soliciting them to reinvest their retirement monies.  In December 2015, Monroe pleaded guilty in Albany County Court to Scheme to Defraud, Grand Larceny, Money Laundering and Securities Fraud for luring clients with whom he had established relationships with over his 20-year career as a financial planner, and then diverting their monies for his own personal use, as well as to pay back earlier investors he had defrauded. NY

February 11, 2016 – New York, in conjunction with members of a state and federal working group announced a $3.2 billion settlement with Morgan Stanley over the bank’s deceptive practices leading up to the financial crisis.  The settlement includes $550 million – $400 million worth of consumer relief and $150 million in cash – that will be allocated to New York State. The resolution requires Morgan Stanley to provide significant community-level relief to New Yorkers, including loan reductions to help residents avoid foreclosure, and funds to spur the construction of more affordable housing. Additional resources will be dedicated to helping communities transform their code enforcement systems, invest in land banks, and purchase distressed properties to keep them out of the hands of predatory investors. NY

 February 11, 2016 – MoneyGram Payment Systems, Inc. a Dallas-based company, has agreed to pay the 49 participating states and the District of Columbia a total of $13 million to resolve an investigation that focused on complaints from persons who wired money to third parties engaged in fraud using MoneyGram’s wire transfer service. The settlement also calls for MoneyGram to maintain an anti-fraud program that is documented in writing. In addition to its required anti-fraud measures and monetary terms, the MoneyGram settlement provides for an independent third-party Settlement Administrator who will review MoneyGram records and send notices concerning restitution to all persons eligible to receive it under the settlement. NJ, TX, MA

February 10, 2016 – New York announced that in 2015, more than $2 million was refunded to 53 New York consumers who claimed their new cars were lemons, and nearly $500,000 was awarded to 15 consumers who had problems with used cars. Lemon laws provide a legal remedy for consumers who are buyers or lessees of new cars and certain used cars that do not conform to the terms of its written warranty, and the manufacturer or its authorized agent is unable to repair defects with the car after a reasonable number of attempts. Since 2011, New York consumers have recovered $12,391,367 through the Attorney General’s Lemon Law Arbitration Program. NY

 February 10, 2016 – Authorities announced the arrest of Mohammad Shahid Zaman, of Staten Island, NY, who allegedly was a central figure in an elaborate fraud scheme in which the participants used fictitious identities to obtain credit cards and open bank accounts which they used to steal approximately $3 million from various banks. The scheme included a group of “merchants” who in many cases allegedly ran shell businesses set up solely for the purpose of participating in this fraud. The merchants allegedly swiped the fraudulent credit cards using point of sale terminals and received reimbursement from credit card processing companies via wire transfer, while never actually providing any merchandise or services. Twelve other defendants were charged by the New Jersey Attorney General’s Office in December as a result of a joint state and federal investigation. NJ

 February 8, 2016 – NJ Announced that Sondra Steen, pleaded guilty to participating in a scheme with her sister and a lawyer to steal millions of dollars from elderly clients of an in-home senior care company in Atlantic County. Steen was indicted along with her sister Jan Van Holt, owner of A Better Choice, a company that offered elderly clients in-home care and legal financial planning; Susan Hamlett, who worked as an aide for company clients; and William Price, who has since pleaded guilty to taking part in the scheme and stealing $125,000 from an elderly couple he met as a caseworker for Atlantic County Adult Protective Services. Van Holt and Steen were charged with conspiring with Barbara Lieberman, a lawyer who specialized in elder law, to steal over $2.7 million from 12 elderly clients from January 2003 through December 2012. NJ

February 5, 2016 – The Department of Justice, the Department of Housing and Urban Development, the Consumer Financial Protection Bureau, along with 49 states, and the District of Columbia announced that HSBC will pay $470 million to address mortgage origination, servicing, and foreclosure abuses.  The settlement also requires HSBC to substantially change how it services mortgage loans, handles foreclosures and ensures the accuracy of information provided in bankruptcy court.  These terms are meant to prevent abuses such as robo-signing, improper documentation and the loss of paperwork.  NY, CA, PA, TX, IL, MA

February 2, 2016 – New Jersey announced that two South Jersey corporations and five of their officials have been indicted in an alleged workers compensation fraud scheme that bilked nearly $600,000 from an insurance carrier.  Supreme Asset Management Recovery (SAMR), an electronic recycling company in Lakewood, and The Amato Agency, LLC, an insurance agency in Neptune, along with the five officials, were indicted on second-degree charges of conspiracy, fraud and theft by deception for allegedly providing false and misleading information to obtain lower premiums on workers’ compensation insurance.  According to the state grand jury indictment, the two companies and the five officials – misclassified SAMR’s warehouse workers as office staff on insurance applications to obtain much lower workers compensation premiums.  NJ

February 1, 2016 – Barclays Capital Inc. and Credit Suisse Securities (USA) LLC will pay a combined $154.3 million to the State of New York and the SEC to settle investigations into false statements and omissions made in connection with the marketing of their respective dark pools and other high-speed electronic equities trading services.  Dark pools are private exchanges for trading securities that are not viewable by the general public and are completed outside of public stock exchanges.  Barclays admitted to core facts set forth in the Attorney General’s Complaint from June 2014 alleging misrepresentations about how it operated its dark pool, “Barclays LX,” including that it misled investors and violated securities laws.  NY

January 2016

January 29, 2016 – Florida arrested three individuals for allegedly defrauding Medicaid out of more than half a million dollars. Two more defendants are being sought by authorities for arrest. According to the investigation, Matthew, Micah and Jimmie Harrell, along with Kenneith Durden and Keith Daly, billed Medicaid for services not provided and fraudulently used a licensed mental health provider’s information without that provider’s knowledge or consent to become accepted as a Medicaid provider. Matthew Harrell and Kenneith Durden allegedly set up parallel, fraudulent business operations in Florida, Georgia and Louisiana that all engaged in similar criminal activities. The businesses operated under the names Revive Athletics Florida, Divine Consulting Services, and Durden Consulting Services of Florida. FL


January 27, 2016 – New York announced that it reached an agreement with a Capital Region transportation company, Advantage Transit Group, Inc., for repayment of Medicaid funds totaling over $1 million dollars that the company was not entitled to receive. Advantage Transit Group provides, among other services, transportation for Medicaid recipients to and from appointments and submits claims for reimbursement to Medicaid. Under the settlement agreement, Advantage Transit Group acknowledged that it submitted claims for reimbursement to Medicaid for transportation services and received payment for services that were not rendered. NY

January 22, 2016 – Virginia has recovered more than $63 million collectively from eleven banks to settle allegations that the banks misled the Commonwealth of Virginia and the Virginia Retirement System through the sale of allegedly misrepresented residential mortgage-backed securities. This is the largest non-healthcare-related recovery ever obtained in a suit alleging violations of the Virginia Fraud Against Taxpayers Act. The eleven banks included in the settlement are Countrywide Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith, Inc., RBS Securities Inc., Barclays Capital Inc., Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman, Sachs & Co., HSBC Securities (USA) Inc., Credit Suisse Securities (USA) LLC, and UBS Securities LLC. VA

January 22, 2016 – California reached a settlement with food industry giant Mondelēz International, Inc., formerly Kraft Foods, for selling ginger snap cookies containing lead in excess of California limits. Under the settlement, Mondelēz will agree to strict product sourcing and testing protocols that limit lead in its Nabisco Ginger Snap cookies to no more than 30 parts per billion per serving and will pay approximately $750,000 in civil penalties, costs and attorneys’ fees.  Additionally, the company will hire a food quality auditor to train personnel, will fund ongoing independent auditing of its products to monitor for lead, and will monitor supply chains to ensure raw materials are within acceptable limits. CA

January 21, 2016 – New York will receive $47 million in a settlement with CenterLight Healthcare and CenterLight Health System, resolving allegations that CenterLight Healthcare’s Select Medicaid Managed Long Term Care Plan fraudulently billed Medicaid for services they did not provide to more than 1,200 Medicaid recipients.  Under the settlement, CenterLight Healthcare admitted that it enrolled Medicaid beneficiaries who were referred by social adult day care centers even though the beneficiaries were not eligible to receive managed long-term care under the plan, and that the centers were providing services that did not qualify for reimbursement under New York State Department of Health standards, or CenterLight’s contract with DOH. NY

January 20, 2016 – Pennsylvania announced a $450,000 consumer protection settlement with CVS Pharmacy, L.L.C. The settlement follows allegations the company violated a 2010 agreement in which it agreed to address concerns related to the sale of expired over the counter drugs, infant formula and dairy products. Agents allegedly reported finding expired products, including infant formula and drugs made for children, at five of the six CVS stores they visited. CVS employees in two cases also allegedly bypassed a register prompt that was designed to prohibit the sale of expired products. PA

January 19, 2016 – New Jersey will receive a total of $2.7 million as a result of its participation in a global settlement with Qualitest Pharmaceuticals Inc. that resolves civil allegations the company mislabeled its multivitamin-with-fluoride tablets to indicate they were richer in fluoride than they actually were. Qualitest was the subject of a whistleblower lawsuit filed in 2013 by a Florida dentist who alleged that it unlawfully represented its multivitamin tablets as containing levels of fluoride recommended by the American Dental Association (ADA) when they did not. NJ

January 14, 2016 – Millennium Labs will pay $6.5 million to Georgia to settle kickback and unnecessary testing allegations. Georgia’s settlement, part of a wider agreement in which Millennium will pay $250 million, resolves allegations that Millennium caused medically unnecessary urine drug testing, facilitated overreaching genetic evaluations, and gave physicians free urine testing cups to induce the use of Millennium’s labs for follow-up testing. GA

January 7, 2016 – New York announced a settlement with UnitedHealth Group resolving concerns that United’s business practices in New York unlawfully restrained competition in the market for certain elder and long term care insurance products. The settlement provides that United may not require skilled nursing facilities seeking to participate in United’s broader insurance network to also contract with United for a separate service – United’s institutional special needs plan. The Attorney General had received complaints that United was foreclosing competition by requiring skilled nursing facilities to accept its institutional special needs plan as a condition for participating in its broader provider network. NY

December 2015

December 28, 2015 – California announced a settlement resolving allegations that Pratibha Syntex Ltd., a company based in India, gained an unfair competitive advantage over American-based companies by using pirated software in the production of clothing imported and sold in California. The case marks the first time a state has secured a legally enforceable judgment against an international company for these types of violations. CA

December 22, 2015 – Rome Finance Company, Inc. will pay compensation exceeding $3.7 million to settle claims that it engaged in predatory lending practices targeted at men and women in the military. Rome Finance, which did business most recently as Colfax Capital Corporation and Culver Capital, LLC, financed consumer debts exclusively to service members, typically for computers, gaming systems, and other goods and services from retailers online or at malls near military bases. Over 550 New York State service members benefited directly from this settlement and ancillary resolutions. NY

December 18, 2015 – Virginia reached a settlement with MoneyKey, Inc., a Delaware-based online consumer lender, for alleged violations of the state’s consumer finance statutes and the Virginia Consumer Protection Act. MoneyKey has agreed to provide approximately $4 million to over 5,000 Virginia customers to resolve allegations that it imposed illegal charges on borrowers who received open-ended credit loans. VA

December 18, 2015 – Pharmaceutical company Warner Chilcott entered in to a $23.3 million settlement with the California Department of Insurance to resolved allegations contained in a whistleblower lawsuit brought by three former employees alleging drug marketing fraud in violation of state law.  The suit alleged that Warner Chilcott executives violated the California Insurance Code False Claims Act, which prohibits anyone from defrauding private insurance companies by using kickbacks or other inducements to procure or steer clients or patients.  CA

December 17, 2015 – Connecticut and other states have joined a global settlement with Novartis Pharmaceuticals to resolve allegations that Novartis provided kickbacks to certain specialty pharmacies in exchange for recommending the drug Exjade to Medicaid and Medicare patients.  Novartis has paid the states and the federal government $390 million to resolve these allegations.  CT, IL, NY, MI, WA

December 16, 2015 – 48 states and the federal government reached an agreement in principle with Qualitest Pharmaceuticals, Inc., a manufacturer of generic pharmaceutical products, and its parent company, Endo Health Solutions, to pay $39 million to resolve civil allegations of unlawful labeling practices.  According to the lawsuit filed by whistleblower Dr. Stephan Porter, Qualitest unlawfully labeled and marketed multivitamin tablets with fluoride as containing the American Dental Association recommended amount of fluoride, when the tablets actually contained less than half that amount.  NY, NH

December 15, 2015 – Comcast Cable Communications LLC agreed to pay a total of $25.95 million in penalties and other amounts to settle claims by the State of California that it unlawfully disposed of both hazardous waste (primarily e-waste such as remote controls, routers, etc.) and sensitive customer information.  CA

December 10, 2015 – New Jersey announced that Accutest Laboratories would pay the State $2 million to resolve allegations that it deviated from both federal and state requirements for the extraction and testing of certain compounds, thereby submitting false claims to the State and its agencies for payment.  The State and its agencies – including the New Jersey Department of Environmental Protection (DEP) – had contracted with Accutest to perform a variety of environmental tests in its extraction laboratory.  The allegations central to today’s settlement flow from a federal qui tam or “whistleblower” lawsuit filed two years prior by a former Accutest employee, Koroush Vaziri.  The New Jersey Attorney General said that the settlement was the largest non-Medicaid-related False Claims Act settlement entered into by the State since New Jersey’s False Claims Act took effect in March 2008.  NJ

December 4, 2015 – The New York Attorney General announced the arrest of two individuals for allegedly defrauding the state of more than $3 million.  The indictment alleges that the individuals and related companies paid patients not to fill their HIV prescriptions and to forego receiving life-saving medications in return for side payments, as well as with dispensing to patients “diverted” medications obtained from unlicensed vendors.  The parties then submitted false claims to Medicaid and the state AIDS Drugs Assistance Program (ADAP), claiming to have dispensed the medications to patients in accordance with state and federal law.  NY

November 2015

November 24, 2015 — In a series of related cases, a former hospital CFO, two orthopedic surgeons and two others have been charged in long-running health care fraud schemes that illegally referred thousands of patients for spinal surgeries and generated nearly $600 million in fraudulent billings over an eight-year period.  The schemes involved tens of millions of dollars in illegal kickbacks to dozens of doctors, chiropractors and others.  As a result of the illegal payments, thousands of patients were referred for spinal surgeries at California hospitals.  Many of the fraudulent claims were paid by the California worker’s compensation system and the federal government.  CA

November 23, 2015 – Florida and other states have joined a global settlement with Millennium Health, formerly Millennium Laboratories, to resolve allegations that Millenium billed federal and state health care programs for medically unnecessary urine drug and genetic testing, and for providing free items to physicians who agreed to refer expensive laboratory testing business to Millennium.  Millennium agreed to pay $256 million to the federal government and 48 states.  FL, WA

November 20, 2015 – The New Jersey Bureau of Securities filed legal action against, and separately revoked the registrations of, two individuals who are alleged to have defrauded over 170 investors out of millions of dollars in a scheme involving investment in a Florida condominium complex called Esplanade at Millennia Condominiums.  NJ

November 16, 2015 – Education Management Corporation (EDMC) entered in to settlements with states and the federal government to settle whistleblower lawsuits alleging EDMC illegally paid incentives-based compensation to its admissions recruiters, tied to the number of students they recruited.  The settlement includes loan repayment forgiveness and consumer-protection changes to the marketing, recruiting and enrollment practices of EDMC.   IN, IL, IA, MD, MT, NJ, NY, NM, NC, TN, VA, WA

November 4, 2015 – The federal government, District of Columbia, and 48 states, settled claims against AstraZeneca LP and Cephalon, Inc., for a total of $54 million.  The settlement resolves allegations that AstraZeneca and Cephalon under-paid drug rebates owed to the states.  Under the federal law known as the Medicaid Drug Rebate Program, drug manufacturers must periodically return a portion of the amount paid by state Medicaid programs for the manufacturers’ drugs.  The rebate program is designed to ensure that states pay competitive prices for drugs, and is calculated based on a percentage of the average price drug wholesalers pay for the manufacturers’ drugs.  This average price, which the manufacturer reports to the federal government, is known as the Average Manufacturer’s Price or “AMP.”  The greater the AMP reported by the manufacturer, the greater the rebate the manufacturer must pay.  NY; MA; NH

November 3, 2015 – In a consent judgment, Hess Corporation has agreed to pay $4.4 million over allegations that it illegally obtained reimbursements from a Massachusetts state fund for environmental cleanup projects at dozens of gasoline service stations throughout the state.  The complaint alleged that Hess submitted reimbursement applications to the Massachusetts Underground Storage Tank Petroleum Product Cleanup Fund program (UST Fund) with false certifications in that they failed to disclose the companies’ insurance claims, and therefore were not in compliance with applicable regulations.  MA

November 3, 2015 – A construction company, D’Allessandro Corp., has agreed to pay $190,000 and conduct trainings to resolve allegations it falsely certified compliance with equal opportunity requirements on multiple public construction contracts in Massachusetts.  MA

October 2015

October 21, 2015 – 14 states, as well as the District of Columbia and the cities of Chicago and New York, reached a $4 million settlement with UPS, resolving allegations brought by a whistleblower that that certain UPS employees recorded inaccurate delivery times on packages sent by governmental customers through next-day delivery services, resulting in premium-priced packages that appeared to have been delivered by their guaranteed commitment times when they had not been timely delivered.  The lawsuit also alleged that certain UPS employees applied inapplicable or inappropriate exception codes to excuse late next-day packages, including claims of weather emergencies despite sunny conditions. As a result, the governmental customers were unable to claim or receive refunds for the late deliveries under the terms of their contracts.  FL; IL; NY; MA; NM; NC; VA

October 14, 2015 – The Maryland Attorney General announced a $13.5 million settlement with NuVasive, Inc, resolving allegations brought in a whistleblower suit that the California medical device company improperly marketed its spine surgery products and provided kickbacks to doctors through speaking fees and other payments.  MD

October 9, 2015 – 12 states, the District of Columbia, and the federal government, reached a $26.75 million multistate settlement with Stericycle, Inc., an Illinois-based medical waste disposal company, resolving allegations that Stericycle imposed improper fuel and energy surcharges on governmental customers.  FL; IN; IL; NJ; MA; NC; RI; VA

October 8, 2015 – 43 states joined the federal government in a $9.25 million dollar settlement with PharMerica over allegations in two separate whistleblower actions that PharMerica conspired with Abbott Laboratories, a drug manufacturer, through a number of disguised kickback arrangements to increase overall utilization of the drug Depakote and to promote misbranded Depakote.  FL; MD; MA; NH

October 7, 2015 – In New York, two individuals who owned and operated two transportation companies, were arrested for allegedly violating the Workers’ Compensation law and illegally obtaining over $1 million from the Medicaid system.  Yellow Medi-Van and Taxi, Inc. received payments from the Medicaid Program for transporting Medicaid beneficiaries to medical appointments.  The defendants are alleged to have knowingly operated the company in violation of transportation regulations, including not having worker’s compensation insurance.  During the time the company was operated unlawfully, the companies obtained over $1 million in Medicaid payments.  NY

September 2015

September 29, 2015 – The New Jersey Medicaid Fraud Control Unit and Office of the Insurance Fraud Prosecutor obtained an indictment against a doctor, Syed Jaffery, for accepting kickbacks in exchange for patient referrals.  The indictment alleges that from 2010 to 2013, Jaffrey participated in a scheme by which he agreed to refer patients needing MRI and CT scans to Diagnostic Imaging Services of South Jersey in exchange for monetary kickbacks.  Over the course of the scheme, Jaffrey allegedly accepted approximately $195,000.  In an attempt to disguise the arrangement, the kickback checks were made payable to Jaffrey’s alleged shell company Mask Realities and purported to be for a rental space for billing services.  NJ

September 23, 2015 – The Florida Attorney General announced a $3.5 million settlement with Adventist Health System Sunbelt Healthcare Corporation and Adventist Health System/Sunbelt, Inc. to resolve two suits brought by whistleblowers alleging that Adventist maintained improper financial relationships with physicians and submitted claims to Florida Medicaid for services and items the physicians referred.  The settlement resolves claims that Adventist submitted false Medicaid claims and awarded referring doctors based on the number of tests and procedures the doctors ordered.  Adventist also entered into separate civil settlements with the federal government, North Carolina and Texas, agreeing to pay more than $115 million. FL; NC

September 10, 2015 — The Washington Attorney General announced a suit against CareOne Dental Corporation and related individuals for Medicaid fraud.  The suit alleges that the defendants systematically billed Medicaid for non-covered services which they misrepresented in their billings, “upcoded” services (more expensive versions of what they actually performed), and services they simply didn’t provide.   The Attorney General’s Office currently estimates at least 20 percent of the claims CareOne Dental presented to Medicaid from January 2011 to June of 2015 were fraudulent, which would amount to approximately $1 million in single damages.  WA

September 4, 2015 — Georgia has reached a civil settlement agreement resolving allegations of Georgia False Medicaid Claims Act violations with Columbus Regional Hospital System (CHRS) and related entities.  The defendants have agreed to pay Georgia and the United States $25,000,000, and will pay an additional $10,000,000 if certain financial conditions are met.  The settlement resolves allegations that the defendants submitted claims to the State of Georgia for evaluation and management services billed at higher levels than supported by documentation, for radiation therapy that did not qualify as such, and for claims submitted in violation of Medicaid rules prohibiting the payment of remuneration in return for referral of Medicaid patients.  The case began with a lawsuit filed May 8, 2012 by Richard Barker in the Middle District of Georgia.  GA

August 2015

August 24, 2015 – The New York Attorney General announced a $6 million dollar settlement with Empire State Home Care Services, Inc. (Empire), a home care agency operating out of Brooklyn, NY. The settlement resolves claims that Empire improperly reported its home health aide hours as well as administrative and general expenses on cost reports filed between 2002 and 2005. These cost reports were used to set the reimbursement rates that Empire received from the state for the years 2004 through 2007 and resulted in over $3 million in reimbursements to which Empire was not entitled.  NY

August 24, 2015 – The New York Attorney General announced settlement agreements with five defendants in a False Claims Act case that will return more than $8 million to the Medicaid and Medicare programs. The agreements resolve claims that SpecialCare Hospital Management Corporation defrauded Medicaid and Medicare by illegally referring patients to unlicensed drug and alcohol treatment programs in exchange for kickbacks.  Investigation of the defendants began after whistleblowers Mathew I. Gelfand, M.D. and Enrico Montaperto filed complaints under New York’s False Claims Act.  NY

August 20, 2015 — Three construction companies have agreed to settle for a total of $1.4 million to resolve allegations they falsely certified compliance with minority-owned subcontractor requirements on multiple public construction contracts in Massachusetts.  The Commonwealth’s complaint alleges that CTA Construction Company, Inc., MDR Construction Company, Inc., and minority-owned business enterprise Luxor Equipment Corporation, Inc., now known as Margen, Inc. violated the Massachusetts False Claims Act in connection with three contracts.  MA

August 17, 2015 – Following a special audit, the Indiana Attorney General has filed a lawsuit against a maintenance product company and a former school maintenance director demanding repayment of nearly $1 million for their illegal bribery and kickbacks scheme that defrauded the Warsaw Community Schools.   IN

August 10, 2015 – A New Hampshire investment advisor was sentenced to up to 7 years in prison for fraud.  Richard M. Higgins plead guilty to one felony count of engaging in a course of conduct involving a scheme to defraud in connection with the purchase and sale of securities, and one felony count of a course of business that operated as fraud in connection with acting as an investment advisor.  Beginning in late 2006 and continuing through August 2007, Higgins solicited investors for a pooled investment in the form of a limited partnership, making a number of false and misleading statements.  Higgins then further defrauded the investors by providing them quarterly statements which regularly overstated the performance of their investments.  NH

August 4, 2015 – Pediatric Services of America, Inc., reached a $2.7 million federal-state settlement resolving allegations that the company inappropriately failed to return overpayments received from state Medicaid programs as well as other federally insured health programs. PSA is also alleged to have overcharged for home nursing services by improperly rounding-up claims to the nearest whole hour.  Connecticut Department of Social Service Commissioner Roderick L. Bremby said, “This settlement exemplifies the outstanding work across the state and federal governments to obtain compensation for the taxpayer-funded Medicaid program when medical providers cross the line.”  CT

August 3, 2015 – 19 states and the federal government have joined in a settlement valued at over $2.7 million with Georgia-based company Pediatric Services of America, Inc. (“PSA”).  The case began as a whistleblower action, filed in the Southern District of Georgia under the federal False Claims Act and various state false claims statutes, and was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the U.S. Attorney’s Office for the Southern District of Georgia, the U.S. Department of Health and Human Services, and the Office of the Inspector General.  In addition, a National Association of Medicaid Fraud Control Units (NAMFCU) Team participated in the investigation and conducted the settlement negotiations with PSA on behalf of the states and included representatives from the Offices of the Attorneys General for the states of Massachusetts, Georgia, Virginia, Texas, Illinois, and Washington.  MA

July 2015

July 29, 2015 – New York Attorney General Eric T. Schneiderman announced the sentencing of the executive director of a company for stealing funds from the Nursing Home Transition and Diversion program, a Medicaid-funded program that provides senior citizens and those suffering from physical disabilities an alternative to institutional living through the use of Medicaid funds for renovations to the homes of the elderly and disabled (wheelchair ramps, grab bars, etc.).  Defendant plead guilty to grand larceny, based on the submission of bids and cost reports, which falsely stated the actual costs of the projects, significantly inflating the actual costs or including services which were never provided.  NY

July 20, 2015 – Following a jury trial, Humphrey Udeh was convicted of defrauding New York’s Medicaid program of over $1 million.  Udeh billed the state for over three thousand units of a highly-specialized and expensive liquid pediatric nutritional formula, when he actually dispensed over-the-counter nutritional supplement formulas.   In order to perpetuate the scam, Udeh utilized generic prescriptions of pediatric formula and false letters of medical necessity, obtained by employees of his company, Advanced Medical Supply, from unsuspecting physician and medical facilities.  He then used the generic prescriptions and false letters to support his fraudulent claims.  Udeh was sentenced to serve 7 to 21 years in state prison and pay a $1.7 million fine.  NY

July 15, 2015 – The New Mexico Attorney General announced the creation of the Fraud Recovery Strike Force, a unit in his office charged with aggressively investigating and  pursuing litigation to protect New Mexico  consumers, New Mexico taxpayers, and to recover public funds.  The Fraud Recovery Strike Force is charged with investigating false claims and deceptive practices, and is partnering with whistle-blowers to expose abuse and corruption.  The strike force will enforce state and federal law in order to recover millions of dollars fleeced from the public treasury and New Mexico’s economy at no additional cost to the taxpayer.  Its efforts will be directed to high priority risk areas including securities fraud, investments with public employee retirement funds, health care fraud, and marketplace fraud.  NM

July 15, 2015 – A Hawaii administrative panel determined that Liberty Dialysis was overpaid over $7 million for treatments given to Medicaid patients between 2006 and 2010.  While the Attorney General stated that the original overpayments were the result of a state computer error, Hawaii also announced that it was pursuing litigation against Liberty, which is alleged to have known it was being overpaid and continued to submit claims in a way designed to continue those overpayments.  HI

July 10, 2015 – New York reached a $22.4 million settlement with the pharmacy Trinity Homecare LLC, primarily owned by Walgreen Co.  The settlement relates to Synagis, an injectable drug for premature infants at risk for Respiratory Syncytial Virus (“RSV”).  The drug can cost more than $2,000 per dose.  Trinity had its staff try to sell Synagis by directly contacting the families of outpatient premature babies or their doctors, regardless of a patient’s need or if the baby’s current physician wanted it prescribed.  According to allegations, initially lodged by a whistleblower hospital physician, Trinity staff improperly obtained babies’ names and other patient information from the hospital’s neo-natal intensive care unit logbooks.  The whistleblower also alleged that Trinity misappropriated her name and medical license number on one alleged Synagis prescription for a baby she had never cared for.  The Attorney General also conducted an audit and found that Trinity billed Medicaid when the pharmacy had no written prescription or when a purported prescription was invalid, including because it lacked a prescriber’s signature, patient’s name or a date.  NY

July 6, 2015 – New York announced a $400,000 settlement with a transportation company that was unable to provide documentation for services it had billed to Medicaid.  “Providers must be able to properly document services for which they received payment from Medicaid,” said Attorney General Schneiderman.  “Doing otherwise drains Medicaid of precious resources, and my office will steadfastly guard New York taxpayer dollars expended to ensure quality care to those most in need.”  NY

June 2015

June 29, 2015 – New York announced a settlement with pharmacy Trinity Homecare LLC that returns $2.5 million to the state’s Medicaid program.  A whistleblower filed a lawsuit in 2009 alleging that Trinity pushed infusion drugs, which are prescribed to manage symptoms, to hemophilia patients and presented claims to Medicaid for unneeded or excessive quantity of these drugs.  The whistleblower alleged improper billing for drug deliveries, including ones that patients refused to accept and excess shipments.  In at least one instance, these expensive drugs were allegedly left outside a patient’s home without signature by the patient.  NY

June 23, 2015 – Georgia announced a prison sentence for the owner of Senior Care of Columbus, Inc., following her guilty plea to Medicaid fraud and related charges.  From 2009 until 2011, the defendant submitted numerous fraudulent claims for and was reimbursed for services that were not provided to patients.   An extraordinarily high percentage of claims submitted by defendant for reimbursement to Georgia Medicaid lacked any documentation, and it was discovered that in many instances, the defendant billed Medicaid on days when patients received no services at all, and for patients who had been discharged.  GA

June 18, 2015 – 47 states and the District of Columbia reached a settlement with Inspire Pharmaceuticals, resolving allegations that Inspire violated state and federal False Claims Act laws by illegally marketing the drug Azasite for off-label uses not approved by the U.S. Food and Drug Administration.  Approved only for the treatment of bacterial conjunctivitis (“pink eye”), Inspire marketed Azasite for the treatment of blepharitis, an inflammation of the eyelash follicles.  While physicians are permitted to prescribe drugs for conditions other than those for which the drugs have been approved by the FDA, pharmaceutical companies are prohibited from marketing drugs to physicians for such off label conditions.  It is contended that, as a result of Inspire’s illegal off label promotion, Inspire caused the submission of false and fraudulent claims for Azasite to the Medicaid program and other federal programs.  NY

June 18, 2015 – Florida joined the federal government in announcing charges against 73 South Florida residents for their alleged participation in various schemes to defraud Medicare and Medicaid out of more than $262 million.  FL

June 18, 2015 – Connecticut commenced a case under that state’s False Claims Act against the co-owners of a psychiatric clinic alleged to have submitted false claims to the state’s Medicaid program, Connecticut Medical Assistance Program (CMAP), from January 2010 through December 2014.  According to the complaint, the defendants illegally submitted false claims for reimbursement while knowingly retaining and concealing the overpayment.  The psychiatrist is alleged to have engaged in a systemic practice of knowingly “upcoding” the claims for reimbursement she submitted to the CMAP.  For example, as the complaint alleges, she routinely double, triple, and in some cases quadruple-booked appointments for her Medicaid patients, then submitted CMAP using a reimbursement code, which required her to see the patient for approximately 75 to 80 minutes when, in fact, she saw each patient for as little as 5-10 minutes.  The state’s complaint identifies 113 days where the psychaitrist billed the CMAP for more than 24 hours of service.  Both defendants are also alleged to have attempted to conceal from state auditors the existence of databases that contained information which would have established evidence that the claims were false.  CT

June 11, 2015 – Louisiana announced that its Medicaid program will receive over $5 million as a result of a settlement between specialty pharmacy company Accredo Health Group, Inc. and 40 states and the federal government, resolving allegations that Accredo engaged in a scheme with drugmaker Novartis to boost sales of the drug Exjade, which is used to treat chronic iron overload due to blood transfusions.  Accredo is accused of improperly directing nurses to contact Medicaid beneficiaries to encourage continued use of Exjade.  Accredo’s goal in the scheme was to earn higher sales revenue, additional dispensing fees and more rebates from Novartis.  The nurses were directed to discuss Exjade’s common side effects, but not its less common but more severe possible side effects such as kidney or liver problems.  LA

June 10, 2015 – New Mexico issued a request for proposals (RFP) seeking a forensic audit firm to assist with the continuing investigations of 12 behavioral health providers referred to the Office of the Attorney General by the state’s Human Services Department.   The RFP, which requires completion within six months of issuance of a contract, expands the Attorney General’s resources already dedicated to an investigation of allegations of $36 million in Medicaid fraud that was used as the basis for terminating New Mexico contracts with 15 behavioral health providers.  NM

June 10, 2015 – a Georgia dentist was convicted for misuse of Medicaid funds, pleading guilty to criminal charges and civilly settled allegations of fraud for $324,327.05.  According to the allegations, the defendant knowingly billed for services provided on certain days when he was not in the office.  On those days, unqualified staff performed services, which were then billed as if the dentist had performed the services.  In connection with his plea, the defendant also surrendered his license to practice dentistry.  GA

June 9, 2015 – Michigan’s Health Care Fraud Division received recognition from the Office of Inspector General for the United States Department of Health and Human Services (HHS-OIG) in the form of HHS-OIG’s annual Excellence in Fighting Fraud, Waste and Abuse award.  In granting the award, HHS-OIG noted that during fiscal year 2014, the Michigan MFCU charged 39 complaints, obtained 25 convictions, and secured 16 civil settlements or judgments.  The total recoveries related to these convictions and settlements were $46,562,341.  MI

June 5, 2015 — The District of Columbia reached a $19.4 million settlement resolving the District’s claims concerning multi-year contracts the DC Public Schools (DCPS) entered into with Chartwells, a division of Compass Group USA, Inc., and Thompson Hospitality Services LLC, in a case first filed by a whistleblower.  DC

June 4, 2015 – Georgia reached a civil settlement agreement with Health Management Associates, Inc. (HMA) and Clearview Regional Medical Center.  The hospital, which is located in Monroe, Ga., was previously named Walton Regional Medical Center and was owned by hospital operator HMA during the time period relevant to the lawsuit.  It is now owned by Community Health Systems.  The defendants agreed to pay Georgia and the United States $991,925 to resolve allegations that they submitted false claims to the Georgia Medicaid program from 2008 to 2009 by providing kickbacks to Clinica de la Mama, an obstetric clinic serving primarily undocumented Hispanic women, and related entities to induce the referral of those patients to its hospital for labor and delivery.  Georgia will receive $396,770 as its share of the settlement.   The case began with the filing of a whistleblower lawsuit by Ralph D. Williams, who received a share of the settlement.  GA

May 2015

May 19, 2015 – New Jersey announced that it was a party to a settlement between United Parcel Service and governmental entities, awarding $740,000 to New Jersey and $25 million to the federal government.  Under contracts at issue between UPS and the government, UPS guaranteed delivery of packages by certain specified times the following day.  The investigation began after a UPS employee filed a federal whistleblower lawsuit in Virginia alleging that a practice of falsifying package arrival times and logging in phony reasons for late arrivals went on company-wide.  The UPS employee alleged that, in some cases, bogus exception codes excusing late deliveries were entered into the tracking system before UPS drivers had even arrived at locations where cumbersome security procedures and other delays had purportedly occurred.  NJ

May 15, 2015 — Washington Attorney General Bob Ferguson announced his office expects to recover a total of $63 million from nine LCD manufacturers, whose price-fixing conspiracy drove up prices consumers paid on items like TVs, laptops and cell phones. If approved, it will be one of the largest recoveries for Washington by the Attorney General’s Antitrust Division in state history. The companies involved and the amount they agreed to pay are: Samsung ($12.94 million), AU Optronics ($12.5 million), Chi Mei Optoelectronics ($8.75 million), Sharp ($6.75 million), Epson ($2.7 million), Toshiba ($950,000), and Chunghwa Picture Tubes ($350,502). The office previously reached agreements with LG ($13 million) and Hitachi ($5.2 million). WA

May 13, 2015 — Michigan Attorney General Bill Schuette announced a $75 million settlement with Enbridge Energy over the July 2010 Line 6B spill that sent more than 800,000 gallons of oil into Talmadge Creek and the Kalamazoo River from a pipeline owned and operated by Enbridge. MI

May 12, 2015 — California Attorney General Kamala D. Harris announced that the California Department of Justice, along with the Attorneys General of the other 49 States and the District of Columbia, the Consumer Financial Protection Bureau, and the Federal Communications Commission, reached settlements with Sprint Corporation and Cellco Partnership (d/b/a Verizon Wireless) to resolve allegations that Sprint and Verizon placed charges for third-party services on consumers’ mobile telephone bills that were not authorized by the consumers, a practice known as “mobile cramming.” The state of California will receive $549,731.29 in the Sprint settlement, and $733,298.41 in the Verizon settlement. In total, Sprint will pay $68 million and Verizon will pay $90 million the bulk of which will go to consumers who were victims of cramming. Sprint and Verizon are the third and fourth mobile telephone providers to enter into a nationwide settlement to resolve allegations regarding cramming. In December 2014, Attorney General Harris reached a $90 million settlement with T-Mobile and a $105 million settlement with AT&T in October of 2014. CA

May 11, 2015 — Acting New Jersey Attorney General John J. Hoffman announced guilty plea of Rehan Zuberi and his wife Humara Paracha to charges they bribed dozens of doctors in exchange for referrals, worth several million dollars, to the medical imaging centers they owned and operated under the umbrella group Diagnostic Imaging Affiliates which managed numerous diagnostic imaging facilities throughout northern and central New Jersey. NJ

May 8, 2015 — New York Attorney General Eric T. Schneiderman announced an agreement in principle to settle kickback claims against Medco Health Solutions subsidiary Accredo Health Group, Inc. to resolve allegations that Accredo recommended the drug Exjade to Medicaid patients in exchange for kickbacks from Novartis Pharmaceuticals Corporation which markets the drug. Under the settlement, Accredo will pay $60 million to the federal government, New York, and several other states. About $3.4 million of the settlement will resolve claims relating to New York’s Medicaid program. In January 2014, another pharmacy, BioScrip, Inc., agreed to pay $15 million to resolve similar claims. The case against Novartis is ongoing. NY

May 7, 2015 — California Attorney General Kamala D. Harris announced an $11.5 million settlement with Phillips 66 and ConocoPhillips to resolve allegations they violated state laws governing the proper operation and maintenance of underground storage tanks used to store gasoline for retail sale. The companies failed to comply with hazardous materials and hazardous waste laws at over 560 gasoline stations owned or operated by the companies in the state of California. CA

May 6, 2015 — New York Attorney General Eric T. Schneiderman announced that Carewell Ambulette, Inc. and its owner, Kurien Palliankal have pleaded guilty to stealing more than $200,000 from the New York Medicaid program. Palliankal will be sentenced to six months in jail, followed by five years of probation, and will also be required to pay full restitution to Medicaid. Carewell will be fined $10,000. From July 2006 through March 2010, Palliankal and Carewell defrauded the Medicaid system by doctoring the request forms received from the medical providers. These forms authorized taxi service, but Palliankal changed the forms to appear as though they authorized the more expensive ambulette service, which Medicaid pays at a rate four times higher than taxi service. NY

April 2015

 April 29, 2015 — Lehigh Cement agreed to pay $7.5 million to resolve allegations it violated the Clean Water Act by discharging millions of gallons daily of quarry process water and stormwater polluted with thousands of pounds of sediment, and hundreds of pounds of selenium and other toxic metals, into Permanente Creek, a tributary to San Francisco Bay.  CA

April 29, 2015 — The trustees of the Victor E. Perley Fund, a private foundation for the benefit of underprivileged children, agreed to pay $1.025 million to settle charges the board allowed the foundation’s new leader, Richard A. Basini, to fund his own interests and those of a fellow trustee, James J. Cahill, resulting in the Perley Fund’s purchase of a million-dollar Southampton home that Basini used as his private residence.  NY

April 28, 2015 — Life Focus Center of Charlestown, Inc., a former nonprofit that provided day habilitation services to individuals with developmental disabilities, agreed to pay more than $94,000 to settle claims it violated the Massachusetts False Claims Act by billing the state’s Medicaid program (MassHealth) for services not provided.  MA

April 24, 2015 — Ohio Attorney General Mike DeWine announced a lawsuit against a group of interrelated companies accused of violating Ohio’s consumer protection laws by failing to honor consumers’ rights to cancel travel club memberships sold at hotel sales presentations in Toledo, Cleveland, and Columbus.  The lawsuit names the following companies as defendants: A2Z Vacations LLC, Great Quest Travel Inc. (d/b/a One and Only Travel), World Wide Travel Resources Inc., Travel Supplier of America Inc. and Universal Concepts Inc.  OH

April 23, 2015 — Grady Health System agreed to pay $2,950,000 to settle claims it inaccurately coded claims for neo-natal intensive care unit patients, resulting in alleged damages to the Georgia Medicaid program.  GA

April 23, 2015 — New York Attorney General Eric T. Schneiderman filed lawsuits against Portofino Spas, LLC and Total Tan, Inc., accusing both franchises of false advertising by denying or minimizing scientific evidence linking tanning to an increased cancer risk; promoting indoor tanning as a safe way to reap the benefits of vitamin D and other purported health benefits; and asserting the safety of indoor tanning compared to tanning outdoors.  NY

April 22, 2015 — Massachusetts Attorney General Maura Healey announced the filing of a complaint against the Center for Psychiatric Medicine for unlawfully profiting off of patients seeking treatment for opiate addiction.  The state alleges that since October 2010, the company charged hundreds of its patients cash fees to receive Suboxone treatment, a medication covered by MassHealth, when they should not have been charged at all.  MA

April 20, 2015 — The Texas Attorney General’s Office filed a lawsuit against Houston-based learning center Parkview Home School for unlawfully marketing and selling fraudulent high school diplomas and transcripts.  According to the state, Parkview has provided fake high school diplomas and transcripts to Texas consumers for a fee and employs no teachers, requiring little or no coursework or educational requirements on their students.  TX

April 16, 2015 — Georgia doctor Zheng Xiang Wang and the Wang Eye Clinic, P.C. agreed to pay $790,000 to settle allegations they billed Georgia Medicaid for medically unnecessary ophthalmology procedures.  GA

April 16, 2015 — A former retail insurance agent with Kilgore Insurance Agency, along with the agency’s owners, have been ordered to pay more than $3.5 million in restitution and interest for overcharging clients, mostly small business owners, by padding insurance premiums with hidden “agency fees.”  MA

April 15, 2015 — New York Attorney General Eric T. Schneiderman announced a $10 million settlement of a lawsuit filed against the auditing firm Ernst & Young LLP over its involvement in a financial statement fraud at the now-defunct investment bank, Lehman Brothers Holdings, Inc.  That money will be distributed as restitution to investors in Lehman securities, along with some $99 million being paid by Ernst & Young to settle a private federal class action that relied in part on facts uncovered by the Attorney General’s investigation.  No other law enforcement authority has brought an enforcement action in connection with the 2008 collapse of Lehman and today’s settlement resolves the first lawsuit brought against an auditor of a public company under New York’s securities laws.  NY

April 13, 2015 — Hallmark Health Systems agreed to pay $1.75 million to settle allegations it improperly billed the Massachusetts Medicaid Program (MassHealth) for certain inpatient admissions at its hospitals, resulting in overpayments by MassHealth.  The settlement alleges that from March 2008 to December 2013, Hallmark used a specific default code that classified MassHealth patients as having received short-stay inpatient services, when an observation or outpatient level of care would have been more appropriate.  MA

April 10, 2015 — Texas Attorney General Ken Paxton announced the $300,000 settlement of an antitrust investigation into Pennsylvania-based Benco Dental Supply Company’s participation in an illegal group boycott in the dental supply market.  TX

April 10, 2015 — The Federal Trade Commission and Illinois Attorney General’s Office obtained a court order temporarily halting a fake debt collection scam located in Aurora, Illinois, which allegedly used threats and intimidation tactics to coerce consumers to pay payday loan debts they either did not owe, or did not owe to the defendants.  Defendants named in the case include: K.I.P., LLC; Charles Dickey, individually and as an owner, member, or managing member of K.I.P., LLC, and also doing business as (d/b/a) Ezell Williams and Associates, Corp.; Ezell Williams, LLC; Excel Receivables, Corp.; Second Chance Financial Credit, Corp.; Second Chance Financial, LLC; Payday Loan Recovery Group, LLC; Payday Loan Recovery Group; Payday Loan Recovery; International Recovery Services, LLC; International Recovery Services; and D&R Recovery.  FTC

April 9, 2015 — Oscar Lee Benton, the owner of Benton Travel Group, was sentenced to up to 10 days in jail and a $360,000 fine after the Georgia Attorney General’s office took him to court for scamming customers and failing to refund the money he had been ordered to pay back to customers for cancelling travel plans and refusing to provide refunds.  GA

April 9, 2015 — New York Attorney General Eric T. Schneiderman announced a lawsuit against the board of directors of two Brooklyn-based nonprofits, Brooklyn Child & Family Services, Inc. and Project Teen Aid Housing Development Fund Corp., for alleged gross negligence and failed management of the organizations, including pilfering funds, otherwise seeking personal profits and failing to pay employee wages.  NY

April 7, 2015 — Dr. Punyamurtula Kishore along with his company Preventive Medicine Associates, Inc. pleaded guilty for running a Medicaid fraud scheme involving millions of dollars in taxpayer funds.  Kishore was sentenced to 360 days in jail and ordered to pay $9.3 million in restitution.  Based on the government’s investigation, Dr. Kishore used bribes, or kickbacks, to induce sober house owners to send their residents’ urine drug screening business to his laboratories for testing.  MA

April 7, 2015 — Texas Attorney General Ken Paxton announced New Jersey-based pharmaceutical product manufacturer Glenmark Generics Inc. USA agreed to pay $25 million to resolve the State’s investigation under the Texas Medicaid Fraud Prevention Act against Glenmark for fraudulently reporting inflated drug prices to the Medicaid program.  TX

April 1, 2015 — The New Jersey Bureau of Securities has ordered Charles J. Boyer III and James A. Wilson to pay $1 million for allegedly operating a Ponzi scheme under which they transferred approximately $177,000 of investor funds into their own personal accounts rather than investing the funds as represented to investors.  NJ

April 1, 2015 — Keli House Community Services, Inc., a nonprofit serving New Yorkers with disabilities and their families, agreed to reimburse New York’s Medicaid program $363,643 for using unqualified individuals to provide services to Medicaid recipients who participated in the Home and Community Based Services Program offered by the New York State Office of Persons with Developmental Disabilities.  NY

March 2015

March 31, 2015 — New York Attorney General Eric T. Schneiderman announced his office and the Attorneys General of Oregon, Minnesota, Missouri and Texas filed lawsuits against Orbital Publishing Group, Inc. for mailing millions of unauthorized and allegedly misleading magazine and newspaper subscription notices to consumers nationwide.  The solicitations were sent without the permission of the publishers and overcharged consumers.  NY

March 30, 2015 — New York Attorney General Eric T. Schneiderman announced a landmark agreement with Pennsylvania-based retail giant GNC to implement new standards in authenticating herbal supplements, ensuring their purity, and educating consumers about their chemical content.  GNC will be required to implement these new procedures in all of its more than 6,000 stores nationwide, making this agreement the first in the nation to require testing standards for herbal supplements that exceed current FDA requirements.  NY

March 26, 2015 — Pinnacle Financial Consulting, LLC and its owner Robert Burton have been ordered to pay more than $1.9 million for preying upon vulnerable consumers during the foreclosure crisis and engaging in the unauthorized practice of law.  MA

March 26, 2015 — Energy Services Providers Inc. (d/b/a Pennsylvania Gas and Electric) agreed to pay $2.3 million in refunds to eligible consumers in addition to the $4.5 million the company has already paid for allegedly deceptively marketing its variable electric rates to Pennsylvania consumers, many of whom filed complaints about spikes in their rates during the winter of 2014.  PA

March 20, 2015 — Florida Attorney General Pam Bondi’s Medicaid Fraud Control Unit announced the arrests of four individuals for allegedly recruiting the homeless to defraud Medicaid.  According to the investigation, Christina Benson, owner of Tranquility Healthcare Solutions, billed Medicaid for services not provided or warranted for homeless men and women who were recruited by her associates to pose as patients.  In less than a year and a half, Tranquility fraudulently billed Medicaid approximately $3.2 million.  FL

March 19, 2015 — Bank of New York Mellon agreed to pay $714 million to settle charges the bank engaged in fraud and other misconduct when providing foreign exchange (“FX”) services to its customers.  As part of the settlements with the US and New York, BNYM admitted that contrary to representations to clients that it provided “best rates” and “best execution” for FX transactions, the Bank actually gave clients the worst reported interbank rates of the trading day.  The charges originated in a lawsuit brought by a whistleblower under the New York False Claims Act.  Whistleblower Insider

March 19, 2015 — Florida Attorney General Pam Bondi’s Division of Consumer Protection is suing dating company Singles Plus for allegedly making false claims about success rates, matches and its screening process.  FL

March 17, 2015 — The DOJ and New York State announced a settlement with Coach USA Inc.City Sights LLC and their joint venture, Twin America LLC, to remedy competitive concerns in the New York City hop-on, hop-off bus tour market.  The settlement requires the defendants to relinquish all of City Sights’ Manhattan bus stop authorizations and disgorge $7.5 million in ill-gotten profits that the defendants obtained by operating Twin America in violation of the antitrust laws.  NY

March 17, 2015 — Illinois Attorney General Lisa Madigan announced a lawsuit against Illinois-based online sports equipment retailer Great Sports, Inc. and now-defunct Legion Global Corp. for dishonest business practices that resulted in consumers losing hundreds of thousands of dollars.  According to Madigan’s lawsuit, consumers purchasing goods at any of the company’s websites,, and, received incorrect orders or damaged products.  IL

March 16, 2015 — New York Attorney General Eric T. Schneiderman announced that New York along with 49 other states and the District of Columbia have reached a settlement with global pharmaceutical company Daiichi Sankyo, Inc. to resolves allegations that Daiichi violated the False Claims Act by using lavish meals and speaker programs to improperly induce physicians to prescribe the drugs Azor, Benicar, Tribenzor and Welchol.  Under the agreement, Daiichi agreed to pay the US and state Medicaid programs $39 million.  The allegations originated in a whistleblower lawsuit filed by former Daiichi sales representative Kathy Fragoules under the qui tam provisions of the federal and New York State False Claims Acts.  She will receive $6.1 million of the federal recovery and an undisclosed portion of the state recoveries.  NY

March 13, 2015 — Florida Attorney General Pam Bondi’s Office obtained a temporary injunction and asset freeze against World Mark Wholesale and Trade, LLC for allegedly engaging in a systematic scheme to defraud owners of timeshares throughout Florida and nationwide.  FL

March 12, 2015 — The New Jersey Bureau of Securities obtained a default judgment totaling more than $23 million in restitution, disgorgement, and civil penalties against Branded Marketing LLC (also known as, its successor company Branded Marketing, Inc., and its President and CEO, Richard Jackowitz, and affiliated company IT Connect, Inc., for their role in an investment scam that raised more than $4 million from unsuspecting investors.  NJ

March 12, 2015 — Florida Attorney General Pam Bondi announced the plea of a Gadsden County Home Health Care Provider, Melissa Simmons, for defrauding the Florida Medicaid program out of more than $13,000. The charges originated from the receipt of an anonymous tip through the Florida Medicaid Fraud Hotline.  FL

March 11, 2015 — Olufemi Afuape and Oluyemisi Afuape, owners of Zion Rehab Services, were ordered to pay $1,407,325.50 in restitution to the Georgia Department of Community Health for billing the Georgia Medicaid program for physical, occupational and speech therapy without regard to whether the services were medically necessary and without regard to whether the services were actually delivered.  GA

March 9, 2015 — New York Attorney General Eric T. Schneiderman announced that Mental Health Association of Rockland County, Inc. agreed to pay $304,000 to resolve claims its managers and employees altered records in advance of a Medicaid audit so that the records would appear to support claims that were submitted by MHA Rockland to New York State’s Medicaid program.  The allegations originated in a whistleblower lawsuit filed by two former MHA Rockland employees under the qui tam provisions of the New York False Claims Act, who will receive an undisclosed portion of the settlement.  NY

March 6, 2015 — Florida Attorney General Pam Bondi announced the arrest of three men for their alleged involvement in an $11 million multi-state drug diversion ring which involved the purchase of millions of dollars of medications on the black market, primarily from Medicaid recipients in Miami and Newark, and their resale to pharmacies in the Northeast, including North Philly Pharmacy in Philadelphia and Lu Puja Pharmacy in Chicago.  FL

March 5, 2015 — Florida Attorney General Pam Bondi’s Office announced the filing of four complaints involving deceptive marketing and sales of computer software and tech support services to Florida consumers, many of whom are senior citizens. The call centers allegedly used deceptive marketing, such as pop up ads warning of viruses or other malware, to lead consumers to call these companies who were then directed through scare tactics to pay for unnecessary computer repairs and support services.  Consumers typically paid from $99 to $600 to resolve non-existent computer issues.  The companies involved included ASAP Tech Help, LLC, E-Racer Tech, LLC, Protech Support, LLC (d/b/a Rapid Tech Support), and Techfix USA, LLC (d/b/a PC Smart Support and First Class Tech Support).  FL

March 5, 2015 — New York Attorney General Eric T. Schneiderman along with the Federal Trade Commission announced an $8 million settlement with Allstar Marketing Group, LLC thatrequires the direct marketing firm to stop using allegedly deceptive and misleading advertising and ordering processes when selling a variety of products, such as the Snuggie, the Perfect Brownie Pan and the Magic Mesh screen.  According to NY, Allstar ran misleading infomercials that featured attractively priced offers for products to lure consumers to place orders and then used deceptive and confusing ordering processes, that resulted in consumers being charged excessive and unauthorized fees and charges.  NY

March 5, 2015 – Acting New Jersey Attorney General John J. Hoffman and Department of Environmental Protection Commissioner Bob Martin announced that ExxonMobil agreed to pay the State $225 million to resolve its liability for damage to the environment and injury to natural resources caused by contamination from its refinery operations in Bayonne and Linden, as well as from company service stations and other facilities located throughout New Jersey.  NJ

March 5, 2015 — Florida Attorney General Pam Bondi announced settlements with home security system providers Security Networks, LLC and Vision Security, LLC to resolve allegations they made false or misleading statements in door-to-door sales of security alarm systems. These misrepresentations included that the companies were affiliated with the consumers’ current security monitoring companies and that the consumers’ products were outdated, in need of upgrades or that the consumers’ current monitoring companies were going out of business.  FL

March 4, 2015 — Florida Attorney General Pam Bondi’s Office and the Federal Trade Commission have taken action to stop multiple companies engaging in an illegal robocalling operation using political surveys to sell cruise line vacations.  Caribbean Cruise Line, Inc., a marketing company, and seven associated companies participated in CCL’s massive robocalling scheme that allegedly circumvented telemarketing laws and made unlawful sales calls to consumers on the Do Not Call Registry.  Florida led a coalition of ten attorneys general and joined the FTC in their investigative efforts to shut down this illegal operation that averaged 12 to 15 million illegal sales calls a day and generated millions of dollars for the companies.  FL

March 3, 2015 — Florida Attorney General Pam Bondi’s Medicaid Fraud Control Unit arrested Christopher A. Days, owner of Better Days of North Central Florida, LLC., for more than $65,000 in Medicaid fraud for billing for services not rendered and failing to properly document for services rendered.  FL

March 2, 2015 — Ohio Attorney General Mike DeWine announced a lawsuit against BP Inc. for wrongfully obtaining more than $33.3 million in reimbursement to clean up leaks from BP-owned underground storage tanks in Ohio.  The state alleges that BP knowingly “double dipped” — taking money both from insurers and the Petroleum Board fund that comes from fees paid by the owners of underground storage tanks, such as gas station owners — to cover the cost of correcting accidental leaks from underground storage tanks at hundreds of BP gas stations throughout Ohio.  OH

February 2015

February 26, 2015 — New York Attorney General Eric T. Schneiderman announced joint lawsuits with the Federal Trade Commission aiming to shut down two abusive debt collection rings operating in the Buffalo area and targeting consumers nationwide.  According to the complaints, Four Star Resolution, LLC and Vantage Point Services, LLC used threats and abusive language, including false threats that consumers would be arrested, to collect more than $45M in supposed debts.  NY

February 26, 2015 — Florida Attorney General Pam Bondi’s Medicaid Fraud Control Unit and the U.S. Department of Health and Human Services Office of Inspector General announced the arrest of Dr. Daniel Ronchetta, Chiropractic Physician Assistant John Crowe and patient recruiter Frank Barrios for allegedly defrauding Medicaid and Medicare by paying and receiving kickbacks in return for providing false home health prescriptions and plans of care to patient recruiters.  FL

February 25, 2015 — New York Attorney General Eric T. Schneiderman announced a settlement with nonprofit Regional Aid for Interim Needs, Inc. (RAIN) for diverting $800,000 in Medicaid funds to make mortgage payments on the agency’s administrative headquarters in violation of the organization’s funding agreements with the NYC Human Resource Administration.  Under the settlement, RAIN, which provides home attendant services to elderly residents in the Bronx, must repay the illegally diverted $800,000 back to the Medicaid program.  NY

February 18, 2015 — New York Attorney General Eric T. Schneiderman announced that New York State and the United States have entered into a $6M settlement with a hospice agency regarding allegations it submitted false claims to the state Medicaid program and Medicare for hospice services not rendered or inadequately provided by Compassionate Care Hospice of New YorkNY

February 18, 2015 — New York Attorney General Eric T. Schneiderman and New York City Corporation Counsel Zachary W. Carter announced the filing of a multimillion-dollar lawsuit alleging that United Parcel Service, Inc. unlawfully shipped over 136 million contraband cigarettes across New York State in violation of federal and state laws.  NY

February 13, 2015 — New York Attorney General Eric T. Schneiderman announced a felony indictment today charging Moazzam Ifzal “Mark” Malik with stealing over $250,000 from five investors by fraudulently soliciting them to invest in his purported hedge funds, including Seven Sages Capital, L.P. and Wolf Hedge LLC.  Malik is accused of luring investors with false representations that he managed a multi-million dollar hedge fund that would guarantee high returns, and then diverted their monies for his own personal use.  NY

February 11, 2015 — Ohio Attorney General DeWine announced a lawsuit against Buffalo-based debt collector Nationwide Recovery Group LLC and its owner, Michael P. McCarthy, for violating the Ohio Consumer Sales Practices Act and the Fair Debt Collection Practices Act by allegedly impersonating Ohio government agencies and threatening consumers with arrest while attempting to collect debts.  While operating in Ohio, the business also allegedly used the fictitious names Gallagher Mediation and the Law Firm of John McGuire to mislead consumers.  OH

February 11, 2015 — New York Attorney General Eric T. Schneiderman announced the sentencing to prison (for 1 1/3 to 4 years) of Haricharan Malhotra, a Suffolk County convenience store operator who pleaded guilty for participating in a multi-year larceny scheme to illegally trade cash for almost $1M in Supplemental Nutritional Assistance Program (formerly known as the Food Stamp Program) benefits.  NY

February 11, 2015 — Pennsylvania Attorney General Kathleen G. Kane announced Advance America will pay Pennsylvania consumers $8M in restitution as part of a settlement to resolve claims the company illegally provided payday loans, some with interest rates as high as 368 percent.  PA

February 10, 2015 — Florida Attorney General Pam Bondi, along with the Illinois Attorney General and 41 other attorneys general, asked nine oil companies to collaborate with their franchisees to help eliminate synthetic drugs from retail locations operating under their brand names, including gas station and convenience stores.  Included among the oil companies addressed in the multi-state request are: British Petroleum, Chevron Corporation, Citgo Petroleum Corporation, Exxon Mobil Corporation, Marathon Petroleum Corporation, Phillips 66, Shell Oil Company, Sunoco, and Valero Energy Corporation.  According to the attorneys general, many of the well-known retail gas stations and convenience stores operating under these brands give the appearance of safety and legitimacy to dangerous synthetic products sold there.  FL

February 9, 2015 — Ohio Attorney General Mike DeWine announced a settlement of $105,000 with Massachusetts-based Integral Resources Inc. that allegedly solicited Ohioans for charitable donations while misleading consumers into thinking the calls were coming from a charity, versus a business.  OH

February 9, 2015 — New York Attorney General Eric T. Schneiderman announced felony charges against Khawaja Saud Masud for stealing over $1M from a retired pediatrician and his wife by fraudulently soliciting them to invest in his purported hedge fund RKS Capital, LPNY

February 4, 2015 — Pennsylvania Attorney General Kathleen G. Kane and the Office of Inspector General of the U.S. Department of Health & Human Services announced Medicaid fraud and other charges against Philadelphia-based Infinite Care Inc., sister company Infinite Care Special Needs Inc., and the companies’ vice president and treasurer.  According to the Grand Jury, Infinite Care fraudulently billed Medicaid by more than $1M for services not rendered from January 2010 to the present, and after the company received a Grand Jury subpoena, it held a meeting where the decision was made to destroy the fraudulent paperwork submitted to the Commonwealth for services not provided and for inflated services.  PA

February 3, 2015 — California Attorney General Kamala D. Harris, along with the DOJ and the attorneys general of 18 states and the District of Columbia, announced a settlement with Standard & Poor’s Financial Services LLC (S&P) and its parent company McGraw-Hill Financial Inc. to resolve federal and state civil claims related to S&P’s conduct in inflating ratings of residential mortgage-backed securities and structured investment vehicle notes.  Combined with a separate settlement also announced today resolving a lawsuit filed by the California Public Employees’ Retirement System (CalPERS), S&P will pay a total of $1.5B to federal and state government entities. The State of California will recover $210M in damages, from which CalPERS and the California State Teachers’ Retirement System (CalSTRS) will receive allocations for their losses on investments of certain S&P-rated securities.  Separately, S&P will also pay CalPERS $125M to settle CalPERS’ specific lawsuit.  The remainder of the total settlement proceeds will be distributed amongst the DOJ and the other nineteen attorneys general.  CA

February 3, 2015 — Florida Attorney General Pam Bondi filed a complaint against Ocean Hunters, Inc. and its owner Abdiel Falcon for violating the Florida Deceptive and Unfair Trade Practices Act by allegedly deceiving Florida consumers who purchased the company’s open water scuba diving certification courses.  FL

February 2, 2015 — New York Attorney General Eric T. Schneiderman announced his office obtained two separate judgments of nearly $800,000 against Emstar Pizza, a Papa John’s franchisee, and its owner and operator for underpaying employees.  The violations include shaving workers’ pay by under-reporting hours and rounding down hours worked to the nearest whole hour increment (and paying nothing for fractions of hours), as well as nonpayment of overtime premiums—all in violation of New York State Labor Law.  NY

January 2015

January 30, 2015 — Massachusetts Attorney General Maura Healey announced Neighborhood Diabetes, Inc. will pay more than $1.5M to settle allegations it improperly billed and received payments from the state’s Medicaid program when it automatically refilled prescription medications that were not specifically requested by MassHealth patients or caregivers.  The settlement is the second case in the Commonwealth to address a pharmacy’s operation of an improper automatic refill program with MassHealth members.  In September 2013, AllCare Pharmacy agreed to pay $1.6M to settle similar allegations.  MA

January 22, 2015 — Ohio Attorney General Mike DeWine announced a settlement with northwest Ohio residents who allegedly used their charity, most recently known as Defining Vision Ministries Inc. and previously known as Focus Up Ministries, to solicit funds for an alleged international pyramid scheme called Profitable Sunrise.

January 22, 2015 — Pennsylvania Attorney General Kathleen G. Kane announced the arrest of Claire Risoldi of Bucks County and four members of her family who allegedly conspired to defraud insurance companies in excess of $20M to live an “excessively extravagant lifestyle.”  PA

January 21, 2015 — New York Attorney General Eric T. Schneiderman joined the SEC and the office of the Massachusetts Attorney General in announcing a settlement with Standard and Poor’s Financial Services LLC regarding false and misleading statements made by S&P in connection with its rating of certain Commercial Mortgage Backed Securities (CMBS).  According to the government, from February 2011 to July 2011, S&P loosened the criteria it applied to rate eight CMBS, failed to disclose this fact to investors, and misled market participants into thinking the ratings for their investments were based on more conservative assumptions than was actually the case.  Under the settlement, New York will receive $12M in penalties, Massachussetts will receive $7M in penalties, and the SEC will receive $35M in penalties as well as $7M in disgorgement and interest.  The SEC also resolved two other matters related to S&P bringing the total government recovery to nearly $80M.  NY

January 21, 2015 — New York Attorney General Eric T. Schneiderman announced a settlement with Florida-based Vacation Tours USA, Inc., and its principals Henry J. Armand and Tony J. Armand, over a false advertising scam targeting consumers across New York State.  According to the government, the company sent letters to consumers telling them they had won a vacation package, including airfare and lodging, and invited them to attend a seminar at a local hotel but once there were subjected to a sales presentation conducted by a third-party company instead of being given vouchers for free airline tickets and hotel stays.  Under the settlement, the company must halt its deceptive, fraudulent, and illegal business practices in New York State, pay restitution to consumers, and pay $22,500 in civil penalties and costs.  NY

January 20, 2015 — Massachusetts Attorney General Martha Coakley announced South Shore Physician Hospital Organization will pay $1.77M to settle allegations of operating a recruitment grant program through which it paid kickbacks to its physician members in exchange for patient referrals.  MA

January 20, 2015 — Florida Attorney General Pam Bondi’s Medicaid Fraud Control Unit arrested six former Targeted Case Managers of DS Connections, Inc. for more than $170,000 in Medicaid fraud.  FL

January 16, 2015 — Washington Attorney General Bob Ferguson announced Sea Mar Community Health Centers agreed to pay $3.35M to settle charges of improperly billing Medicaid for thousands of dental appointments.  According to the government, Sea Mar billed fluoride treatments as stand-alone appointments with a dentist or hygienist when they could have been performed much more cheaply by dental assistants as part of a patient’s regular six-month checkups.  WA

January 16, 2015 — Massachusetts Attorney General Martha Coakley announced Bank of America, JP Morgan Chase Bank, Citi, and Wells Fargo Bank agreed to pay $2.7M million and undertake obligations to facilitate the repair of defective property titles, resolving claims they violated Massachusetts foreclosure law and the Massachusetts Consumer Protection Act by illegally foreclosing upon Massachusetts residents’ homes when the banks lacked the legal authority to do so.  MA

January 14, 2015 — Office Depot agreed to pay $68.5M to settle charges in violated the California False Claims Act by allegedly overcharging more than 1,000 cities, counties, school districts and other government entities in California for office supplies.  According to the government, Office Depot was required to but did not provide these government entities the lowest prices it was offering other government purchasers.  The allegations originated with a whistleblower lawsuit filed by former Office Depot employee David Sherwin.  Corporate Crime Reporter

January 14, 2015 — A New Jersey court has ordered New Jersey Youth Club, Inc. (NJYC), a Newark-based organization that claims to help underprivileged New Jersey youths, to temporarily cease seeking door-to-door solicitations and temporarily frozen its assets in connection with an action filed on behalf of the New Jersey Division of Consumer Affairs.  The government claims the organization violated the Charitable Registration and Investigation Act and regulations, as well as the Consumer Fraud Act, by soliciting for contributions although it is not registered as a charitable organization in New Jersey, and by making misleading and untruthful statements while soliciting donations.  NJ

January 12, 2015 — New York Attorney General Eric T. Schneiderman announced an agreement with Excellus Health Plan, Inc. requiring that its contracted health care providers issue refunds to thousands of members in New York State for charging excessive copays.  The investigation began when an Excellus member complained to the Attorney General’s Health Care Bureau Helpline that his provider billed him a specialty care co-payment of $25 after visiting his primary care physician to whom he had already paid the primary care co-payment of $15.  NY

January 9, 2015 — New York Attorney General Eric T. Schneiderman announced a settlement with Encore Capital Group, Inc., a major debt buyer, for bringing improper debt collection actions against thousands of New York consumers. According the state, Encore sued New York consumers and obtained uncontested default judgments against consumers who failed to respond to the lawsuits, even though the underlying claims were untimely under New York law. Under the settlement, Encore will seek to vacate more than 4,500 improperly obtained judgments totaling nearly $18 million. Encore will also reform its debt collection practices and pay civil penalties and costs in the amount of $675,000. NY

January 8, 2014 — Acting New Jersey Attorney General John J. Hoffman announced HIKO Energy, LLC agreed to pay $2.1 million and to significantly revise its business practices to resolve allegations it aggressively solicited consumers with written guarantees and verbal representations about its monthly prices for electric and/or natural gas service which it failed to fulfill, resulting in significant financial losses for New Jersey consumers. NJ

January 7, 2015 — Florida Attorney General Pam Bondi announced that Florida, along with California, Colorado, Kentucky, and Ohio and the federal government, entered a $22 million national settlement with DaVita Healthcare Partners, Inc., one of the leading providers of dialysis services in the US. The settlement resolves allegations originating in a whistleblower lawsuit that DaVita paid illegal kickbacks to induce the referral of patients to its dialysis clinics, causing false claims to be submitted to the Medicaid program. DaVita will pay Florida $5.6 million in restitution and other recoveries. FL

January 7, 2015 — Florida Attorney General Pam Bondi, along with eight other attorneys general, announced a settlement with Nevada-based online retailer, Inc. to resolve allegations that Zappos placed consumers’ personal data at risk by allegedly failing to protect financial information during a data breach that occurred in 2012. Zappos has agreed to pay $106,000 to the states and must take certain actions intended to better protect consumers’ information. FL

January 6, 2015 — Massachusetts Attorney General Martha Coakley announced Massachusetts retail electricity supplier Just Energy Group Inc. agreed to pay $4 million to settle allegations of deceptive marketing and sales that promised savings but charged significantly higher rates, entered consumers into agreements without their consent, and charged costly termination fees. MA

January 5, 2014 — New York Attorney General Eric T. Schneiderman announced that Apple Transportation of New York, Inc. will pay $300,000 to settle claims it overbilled Medicaid for transportation services. As part of a settlement agreement, Apple Transportation admitted that between January 1, 2004 and October 30, 2008, it frequently billed Medicaid for ambulette services even though no personal assistance was provided to Medicaid recipients. As a result, Apple was paid by Medicaid for ambulette services at rates that were higher than the applicable livery rates. NY

December 2014

December 30, 2014 — Massachusetts Attorney General Martha Coakley announced Verizon New England Inc. paid more than $1.3 million to resolve allegations it overcharged the Commonwealth for telecommunications services under a statewide procurement contract. The settlement also requires Verizon to make additional payment offers to Commonwealth towns and cities and other related entities impacted by the alleged overbilling. The settlement resulted from a whistleblower lawsuit filed under the state’s False Claims Act. MA

December 23, 2014 — Environmental services company National Water Main Cleaning Co. agreed to pay more than $650,000 to resolve claims it violated the Massachusetts False Claims Act by submitting false bills and records on multiple public contracts for sewer, storage tank and catch basin cleaning, maintenance and repair, and illegally discharged sewage and wastewater.  The complaint also alleges the company violated the Massachusetts Clean Waters Act by discharging sewage and wastewater into the waters of the Commonwealth without a valid permit.  MA

December 22, 2014 — Aspen Dental Management, Inc. and Aspen Dental Associates of New England, P.C. agreed to pay at least $990,000 to settle allegations of deceptive advertising and marketing practices, and failing to give refunds to consumers for services not provided. There are more than two dozen Aspen Dental locations in Massachusetts.  MA

December 18, 2014 — Nine hotel operators in Massachusetts agreed to cease a potentially anticompetitive practice through which a hotel receives competitive room rates and occupancy information that can be used to raise or stabilize its own prices. Three of the operators agreed to pay a total of $45,000 in civil penalties.  The hotels involved in the investigation included Morgans Hotel Group Management LLC, Pyramid Advisors, LP / Kimpton Hotel and Restaurant Group, LLC, HHLP Bulfinch Associates, LLC / Marriott International, Inc. / Omni Hotels Management Corporation / Pacific Boston Holdings Corp. / Seaport Hotel Limited Partnership / Starwood Hotels & Resorts Worldwide, Inc.  MA

December 19, 2014 — California Attorney General Kamala D. Harris announced that the California Department of Justice, along with the Attorneys General of the other 49 States and the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission, reached settlements with T-Mobile USA, Inc. to resolve allegations that T-Mobile placed charges for third-party services on consumers’ mobile telephone bills that were not authorized by the consumer, a practice known as “mobile cramming.”  The settlement terms require that T-Mobile pay at least $90M.  Consumers who have been “crammed” often complain about charges, typically $9.99 per month, for “premium” text message subscription services (also known as “PSMS” subscriptions) such as horoscopes, trivia, and sports scores, that the consumers have never heard of or requested.  T-Mobile is the second mobile telephone provider to enter into a nationwide settlement to resolve allegations regarding cramming.  AT&T agreed to pay $105M to settle similar charges in October.  CA

December 18, 2014 — Freedom Furniture, Inc., Freedom Acceptance Corporation, Military Credit Services, LLC will pay more than $2.5M for violations of state and federal laws on credit and debt collection.  Freedom Furniture is a national retailer that sells furniture, electronics, jewelry and other products online and at 14 retail locations near military bases, including one in North Carolina near Fort Bragg in Fayetteville.  FAC services credit and collects debts on behalf of Freedom Furniture, and MCS extends credit for purchases made by military consumers at independent retailers.  NC

December 12, 2014 — For-profit school Salter College will pay students $3.75M to resolve allegations of misrepresenting job placement numbers and using deceptive enrollment tactics.  This is the largest settlement to date as part of Massachusetts’ ongoing investigation of the for-profit school industry.  MA

December 4, 2014 — Illinois Attorney General Lisa Madigan joined with the attorneys general of 44 states and the District of Columbia to announce that Sirius XM Radio Inc. agreed to pay $3.8M and provide restitution to eligible consumers to resolve claims that the satellite radio company engaged in misleading advertising and billing practices.  The states’ investigation focused on consumer complaints involving: difficulty canceling contracts, cancellation requests that were not honored, misrepresentations that the consumer’s Sirius XM service would be canceled and not renewed, contracts that were automatically renewed without consumers’ notice or consent, unauthorized fees, higher and unanticipated rates after a low introductory rate, and Sirius XM failing to provide timely refunds.  IL

December 2, 2014 — Durable medical equipment supplier Regional Home Care, Inc., which does business as North Atlantic Medical Services, will pay a total of $852,378 to federal and state authorities for its violation of the False Claims Act by billing Medicare and Medicaid for unlicensed services for the treatment of respiratory ailments, such as oxygen deficiency and sleep apnea.  MA

 November 2014

November 24, 2014 — New York Attorney General Eric T. Schneiderman announced the indictment of three pharmacies and seven individuals for allegedly defrauding Medicaid of over $5M by allegedly paying customers for prescriptions obtained from a local doctor and then billing Medicaid for the drugs even though they were never dispensed.  The corporate defendants include Perfect Gift US, Inc., d/b/a Central Pharmacy, Princess RX, Inc., d/b/a Hastings Drug Corp., and Bright RX, Inc., d/b/a Buffalo DrugsNY

November 20, 2014 — California Attorney General Kamala D. Harris and Alameda County District Attorney Nancy E. O’Malley announced a settlement with AT&T to resolve allegations that hundreds of AT&T’s California facilities unlawfully disposed of hazardous waste and material over a nine-year period.  As part of the settlement, AT&T will pay $23.8M million and spend an additional $28M over the next five years to implement the enhanced environmental compliance measures required by the settlement.  CA

November 19, 2014 – Florida Attorney General Pam Bondi announced that eight residents of Miami-Dade County and three residents of Nicaragua have been charged for their alleged participation in a $25M Medicare, Medicaid, and wire fraud scheme.  As alleged in the indictment, the defendants recruited individuals who resided in Nicaragua and the Dominican Republic to enroll in Medicare Advantage plans and Florida Medicaid by falsely representing in enrollment applications that they resided in Florida.  Additionally, the defendants caused physicians associated with Pharmovisa Inc., Axis Le Professional Medical Group, Inc. and Rodney Montoya Corp. to be designated as the primary care physicians for the beneficiaries residing in Nicaragua and the Dominican Republic.  FL

November 19, 2014 — Florida Attorney General Pam Bondi’s Office and the Federal Trade Commission filed a complaint against multiple companies operating multi-million dollar schemes to sell tech support services to consumers nationwide, many of whom are senior citizens.  The defendants, Inbound Call Experts, Super PC Support, Vast Tech Support, LLC and related entities, allegedly operated a technical support scam that exploited consumers’ fears of viruses, malware and other security threats to their computers and used deceptive online advertisements and telephone calls to convince consumers to run scans on their computers to detect errors.  According to the investigation, the defendants ran scans on consumers’ computers and then charged for repairs when the computers actually had no performance problems.  Consumers paid up to $500 for repairs in addition to other charges for software.  This scheme has caused more than $22 million in consumer injury.  FL

November 19, 2014 — Ohio Attorney General Mike DeWine, the Federal Trade Commission, and Illinois Attorney General Lisa Madigan announced an agreement under which ScoreSense, owned by One Technologies, a Texas-based business that also operated MyCreditHealth and marketed through at least 50 websites, including,, and, has agreed to change its business practices and pay $22M to resolve claims it deceptively marketed its online credit monitoring services.  According to the government, ScoreSense bought advertising on search engines such as Google and Bing so that ads for the websites appeared near the top of search results when consumers looked for terms such as “free credit report,” but the company failed to adequately disclose that by accessing their score, consumers would be enrolled in a credit monitoring program costing $29.95 per month until they called to cancel.  OH

November 13, 2014 — California joined a whistle-blower lawsuit against BP alleging the company overcharged the state by as much as $300M for natural gas for almost a decade.  The case was unsealed today in San Francisco state court.  The state and two of its university systems are pursuing the case along with a whistleblower, former BP employee Christopher Schroen.  Bloomberg

November 13, 2014 — Florida Attorney General Pam Bondi’s Office and the Federal Trade Commission obtained a permanent injunction against an Orlando-based operation that used pre-recorded telephone calls, known as robocalls, to pitch purportedly free medical alert devices to senior citizens by falsely representing that the devices had been purchased for them by a relative or friend, violating the FTC Act, the Commission’s Telemarketing Sales Rule and Florida’s Deceptive and Unfair Trade Practices Act. The defendants also allegedly misled consumers to believe that the devices were endorsed by various health organizations and that they would not be charged anything before the devices were activated.  The defendants include Worldwide Info Services, Inc., Elite Information Solutions Inc., Absolute Solutions Group Inc., Global Interactive Technologies, Inc., Global Service Providers, Inc., Arcagen Inc., American Innovative Concepts, Inc., Unique Information Services Inc. and National Life Network IncFL

November 13, 2014 — Pennsylvania Attorney General Kathleen G. Kane announced a consumer protection lawsuit against Texas-based companies Think Finance Inc. (formerly ThinkCash), TC Loan Services LLC, Elevate Credit Inc., Financial U LLC and former CEO Kenneth E. Rees for allegedly engineering an illegal payday loan scheme over the Internet.  According to the lawsuit, Think Finance targets consumers in Pennsylvania using three Native American tribes, who function as the apparent lender, as a cover.  In turn, Think Finance earns significant revenues from various services it charges to the tribes.  PA

November 10, 2014 — Matthew David Harrell, owner of Revive Athletics, Inc., and Andrea Lillie Barrett, owner of Lillie Cares Health Services, LLC, were charged with Medicaid Fraud.  According to the government, through the guise of various community after-school programs, Harrell obtained Medicaid numbers from the parents of children insured by Medicaid and shared them with Barrett to use for Lillie Cares Health Services Medicaid billing.  GA

November 6, 2014 — The Florida Attorney General’s Office filed a lawsuit against Consumer Collection Advocates, Corp. and its principal Michael Robert Ettus for allegedly defrauding consumers who were victims of previous frauds or scams.  The FTC has filed a parallel lawsuit against CCA.  According to the state, the company’s actions violate Florida’s Deceptive and Unfair Practices Act by misrepresenting defendants’ business status and purported fee recovery services and making false and misleading statements to induce consumers to pay for goods or services.  According to the FTC, the company has violated the FTC Telemarketing Sales Rule by requesting or receiving upfront payment from consumers for services represented to recover or assist in the return of money paid for by the consumer in a previous telemarketing transaction.  FL AG

November 6, 2014 — Michigan Attorney General announced the distribution of $747,000 from the State’s Foreclosure Scam Restitution Fund to compensate 36 southeast Michigan victims of mortgage modification fraud from Nationwide Consulting, LLC.  The operators of the business, Kenneth Sandoval and Zacharia Ortiz were both previously convicted for their role in the scam.  MI AG

November 5, 2014 — The Florida Attorney General’s Office filed a complaint against Federal Verification Co, Inc. dba GSA Applications for allegedly misleading small businesses by claiming to be the U.S. General Services Administration or implying a government affiliation to solicit small businesses and guarantee them a GSA contract for an upfront fee ranging typically from $5,000 to $8,000.  FL AG

October 2014

October 31, 2014 — Oklahoma-based dental company, Ocean Dental PC, which operates 28 clinics in seven states, agreed to pay more than $5M to settle charges it violated the False Claims Act by submitting false claims to the Oklahoma Medicaid program for dental work never performed or billed at a higher rate than allowed. The charges apparently stem from dental restorations by former employee Robin Lockwood who was sentenced to 18 months in federal prison in a separate case. NewsOK

October 16, 2014 — Texas Attorney General Greg Abbott entered into a settlement with generic drug maker Ranbaxy Pharmaceuticals, Inc., Ranbaxy Laboratories, Inc., Ranbaxy USA, Inc. and Ranbaxy, Inc. to resolve allegations they violated the Texas Medicaid Fraud Prevention Act by fraudulently reporting inflated drug prices to the Medicaid program.  Under the settlement, Ranbaxy must pay the State of Texas about $18M.  TXAG

October 13, 2014 — California Attorney General Kamala D. Harris announced a $28.4M settlement with Aaron’s, Inc., the second largest rent-to-own business in the nation, to resolve allegations the company violated California consumer protection and privacy laws by charging improper late fees, overcharging customers who paid off contracts early, and omitting important contract disclosures.  The settlement requires Aaron’s to refund $25M to California customers who signed lease agreements between April 1, 2010 and March 31, 2014 and to pay $3.4M in civil penalties and fees.  Approximately 100,000 California customers will be eligible for restitution.  CAAG

October 9, 2014 — New York Attorney General Eric T. Schneiderman announced a settlement with retail specialty pharmacy Sorkin’s Ltd Rx. (d/b/aCareMed Pharmaceutical Services) resolving allegations it made false statements to the New York State Medicaid Program to secure expeditious prior authorizations  for the coverage of specialty drugs, and that it submitted false claims to the New York State Medicaid Program for certain prescription medications that were restocked and resold and for refills that recipients never obtained.  Sorkin’s will return $846,224 to Medicaid.  NYAG

October 9, 2014 — New York Attorney General Eric T. Schneiderman announced an agreement with Citigroup Global Markets, Inc. to reimburse more than 31,000 Citi customers who were charged higher advisory fees than they negotiated.  The agreement returns nearly $16 million to about 31,000 Citigroup customers.  NYAG

October 8, 2014 – New York Attorney General Eric T. Schneiderman announced that his office, along with the Attorneys General of 49 other states and the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission, reached a $105M settlement with AT&T Mobility LLC resolving allegations that AT&T Mobility placed on consumers’ mobile telephone bills charges for third-party services that had not been authorized by consumers, a practice known as “cramming.”  One common cramming charge is a $9.99-per-month premium text message subscription service (also known as PSMS) for horoscopes, trivia, and sports scores that consumers often never requested.  NYAG

September 2014

September 18, 2014 — New York Attorney General Eric T. Schneiderman announced that 46 states and the District of Columbia have reach a settlement agreement with Minnesota-based company Medtronic to resolve claims under the False Claims Act that Medtronic improperly induced physicians to recommend Medtronic devices to treat cardiac rhythmic disease.  New York led a national team composed of members from Oregon, Texas and California to negotiate the settlement. The federal government settled its matter in May of this year.  The agreement requires Medtronic to pay the settling states $362,362 which will go to those states’ Medicaid programs. The matter was brought by a whistleblower, Adolfo Schroeder.  NYAG

August 2014

August 20, 2014 — New York Attorney General Eric T. Schneiderman and U.S. Attorney Loretta Lynch announced they have entered into settlement agreements with New Rochelle nursing home Ralex Services, Inc., doing business as Glen Island Center for Nursing and Rehabilitation, to resolve allegations the facility and its owner Leah Friedman submitted tens of thousands of inflated claims to the New York State Medicaid Program.  According to the government, the 182-bed Glen Island facility submitted more than 62,000 false claims to New York’s Department of Health from April 2002 to November 2006.  The false claims used Medicaid reimbursement rates based, in part, on up-coded Patient Review Instruments (PRIs), which falsely represented the degree of care required by many Glen Island residents.  Under the settlement, Glen Island Center and Friedman will return $2.2M to Medicaid.  NYAG

August 12, 2014 — New York Attorney General Eric T. Schneiderman announced that the Northern Manor Multicare Center nursing home agreed to pay $6.5M to resolve allegations it was not providing services as represented in its claims for payment to Medicaid.  NYAG

August 6, 2014 — New York Attorney General Eric T. Schneiderman announced he, along with 40 other state Attorneys General and the District of Columbia, reached a $35M settlement with Pfizer arising from alleged improper marketing and promotion of the immunosuppressive drug Rapamune.  New York’s share of the settlement is over $1.7M.  Pfizer, as parent of Wyeth Pharmaceuticals Inc., agreed to be bound by the judgment and to resolve allegations that Wyeth unlawfully promoted Rapamune.  Attorney General Schneiderman’s office served on the Executive Committee of this multi-state investigation.  NYAG

July 2014

July 1, 2014 — New York Attorney General Eric T. Schneiderman announced a $24.6M settlement of his Charities Bureau’s investigation into direct mail fundraising abuses at what has become one of the country’s largest veterans’ charities, the Disabled Veterans National Foundation. The abuses, the investigation found — including misleading solicitations and failure to disclose conflicts of interest — were perpetrated by DVNF’s two outside, for-profit direct mail vendors, Quadriga Art and Convergence Direct Marketing.  Under the settlement, Quadriga, which produced and sent out the mailings and played the dominant role in running DVNF’s fundraising efforts, will pay $9.7M in damages, and Convergence, which designed the solicitations and provided other advice, will pay $300,000 in damages.  This $10M will go to help support and improve the lives of disabled American veterans.  In addition, Quadriga will forgive $13.8M in debt that DVNF owes to Quadriga, and adopt a number of significant reforms to improve transparency and set a higher ethical bar for the direct mail charitable solicitations industry. Quadriga will pay an additional $800,000 to the State of New York for costs and fees.  The settlement is believed to represent the largest amount of financial relief ever obtained in the U.S. for deceptive charitable fundraising.  NYAG

June 2014

June 24, 2014 — New York Attorney General Eric T. Schneiderman announced that his office, along with the Federal Trade Commission and the Attorney General of Florida, have reached a $15.6M settlement with The Tax Club, Inc. related to deceptive business practices and false advertising seen in telemarketing schemes that targeted consumers operating internet-based businesses.  According to the government, the operators of The Tax Club’s telemarketing schemes took millions of dollars from consumers by allegedly misleading them into believing that its purported services would help consumers’ home-based businesses succeed.  NYAG

June 4, 2014 — New York Attorney General Eric T. Schneiderman announced he, along with 43 other State Attorneys General and the District of Columbia, reached a $105M settlement with GlaxoSmithKline, LLC (GSK) arising from alleged improper marketing and promotion of the asthma drug Advair and the anti-depressant drugs Paxil and Wellbutrin.  New York’s share of the settlement is over $4.1M.  NYAG