Archive

January 28, 2019

A producer of fish oil and fishmeal products, Omega Protein Corp., has agreed to pay $1 million to resolve allegations that when the company applied for a $10 million federal loan, it falsely certified that it was complying with federal environmental laws when, in fact, it was knowingly violating the Clean Water Act by discharging oil into U.S. waters. In 2013, the company pleaded guilty to criminal violations of the CWA. The civil settlement arises from a False Claim Act case filed by a former employee of Omega, Keland O. Harrison, who will receive $200,000 of the settlement proceeds. DOJ

Tagged in: Certifications, Environmental Fraud, FCA Federal, Government Loan Programs, Whistleblower Case, Whistleblower Rewards,

January 3, 2019

For-profit education company Career Education Corporation has entered in to settlement agreements with attorneys general in 48 states plus the District of Columbia to forgive $494 million in outstanding student loan debt issued by CEC and held by nearly 175,000 former students, and to provide additional protections for students enrolling in CEC programs. CEC was alleged to have mislead prospective students regarding CEC enrollment, including the total cost of attendance, job placement rates, the transferrability of credits, and program offerings. See: CT; IL; KS; PA; WA

Tagged in: Education Fraud,

December 21, 2018

Vielka Maritza McFarlane, the founder and former CEO of Celerity Educational Group, a Los Angeles-based non-profit that owned and operated charter schools, has agreed to plead guilty for misappropriating public funds and falsely certifying that Celerity was complying with applicable rules and regulations. McFarlane admitted that she directed approximately $2.5 million in public funds, including funds from the U.S. Department of Education, to improper uses. USAO CD Cal

Tagged in: Education Fraud, Government Procurement Fraud,

November 12, 2018

Following a whistleblower complaint, North Carolina-based Shaw University, and local building contractor, Freddy Novelo, have agreed to pay $316,900 to resolve allegations of violating the False Claims Act in bids for Department of Education construction contracts. To evade the department's competitive bidding requirements, the defendants had allegedly submitted false bids, then used the false bids to support their payment claims. USAO EDNC

Tagged in: FCA Federal, Grant and Research Fraud, Whistleblower Case,

October 29, 2018

The FTC has settled with an online student loan refinancer, SoFi Lending Corps, for allegedly misrepresenting the amount that student loan borrowers could save by refinancing with their company, sometimes by double the actual amount. In calculating the savings, SoFi allegedly excluded certain borrowers and failed to disclose or disclose clearly the fact that it had made those exclusions, a violation of the FTC Act. It will face civil penalties if it violates the finalized settlement order. FTC

Tagged in: Education Fraud,

October 26, 2018

A former U.S. Department of Veterans Affairs official, James King, pleaded guilty to demanding and receiving bribes from three for-profit schools, Atius Technology Institute, Eelon Training Academy, and School A, in exchange for enrolling disabled military veterans in those schools. All three school owners sent King and other VA officials false information about the education being provided to veterans. King facilitated over $2 million in improper payments from the VA using the veterans’ federal benefits. DOJ

Tagged in: Bribery and Bid-Rigging, Education Fraud,

October 18, 2018

Jean Danhong Chen, an attorney, and Tony Jianyun Ye have been charged by the SEC with securities violations arising from their sale of EB-5 securities to Chen's clients, earning over $10 million in undisclosed commissions. Chen and Ye operated an EB-5 regional center, Golden State Regional Center LLC, and advised Chen's clients to invest in the center’s projects while concealing their ownership interest. After learning of the SEC’s investigation, Chen and Ye allegedly backdated documents and scrubbed other business records to conceal their role in the alleged scheme. SEC

Tagged in: Securities Fraud, Visa Fraud,

September 28, 2018

Sentient Science Corporation has agreed to pay $2,675,000 to settle allegations that it made false claims for funding under the Small Business Innovation Research (SBIR) program administered by the National Science Foundation and Department of Energy. SBIR grants are intended to stimulate technological and research innovations by small businesses. However, the company took advantage of the program by claiming expenses that had not yet been incurred, claiming to use third-parties in order to receive additional funding, and using less qualified employees to perform work. USAO WDNY

Tagged in: Falsifying Invoices, FCA Federal, Grant and Research Fraud,

September 27, 2018

A ceramic materials company, LoTEC Inc. (dba Vesta Sciences), has agreed to pay $175,000 to settle claims that it committed multiple violations of the False Claims Act. The alleged fraud involved transferring and loaning out money awarded to them under the Small Business Innovation Research Program by the National Science Foundation and U.S. Army. Additionally, LoTEC was accused of making false certifications, and improperly recording hours worked. USAO NJ

Tagged in: FCA Federal, Grant and Research Fraud,

September 24, 2018

Azam Doost, the former owner of Equity Capital Mining LLC, which operated a marble mine in Afghanistan, was convicted for defrauding the Overseas Private Investment Corporation, a U.S. government agency in a $15.8 million loan the company obtained from OPIC. Doost had represented that he had no affiliation with mine suppliers who were paid from the loan proceeds; in fact, he had financial relationships with several of the suppliers, and diverted OPIC funds paid to those suppliers for his own use. DOJ For information on later sentencing, see here.

Tagged in: Bribery and Bid-Rigging, Criminal Proceedings, Government Loan Programs, International Whistleblowers,

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