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September 28, 2020

Fiat Chrysler N.V. will pay an SEC penalty of $9.5 million to settle charges that it made misleading disclosures.  Specifically, in February 2016, the company publicly stated that it had conducted an internal audit to confirm that its vehicles complied with emissions standards.  This statement misleadingly failed to disclose the limited nature of the internal audit and other related material facts, including about the existence of ongoing government investigations into the company’s diesel vehicle emissions systems.  SEC

Tagged in: Financial and Investment Fraud, Misrepresentations, Securities Fraud,

September 25, 2020

A multinational industrial engineering company headquartered in Germany has agreed to pay $22 million to settle allegations of violating the False Claims Act.  In order to avoid paying certain import duties over a six year period, Linde GmbH and its Houston-based subsidiary, Linde Engineering North America LLC knowingly misrepresented the nature, classification, and valuation of its merchandise, which is used in the construction of natural gas and chemical manufacturing plants.  The misconduct was first brought to the government’s attention by a whistleblower, who will receive a $3.7 million share of the settlement proceeds.  The defendant later made a partial disclosure to the government prior to the government’s disclosure of its investigation.  DOJ; USAO EDPA

Tagged in: Customs Fraud, FCA Federal, Misrepresentations, Whistleblower Case, Whistleblower Rewards,

September 24, 2020

BMW AG and two of its U.S. subsidiaries will pay $18 million to resolve charges that its public reporting inflated retail sales in the U.S. between 2015 and 2017, allowing it to meet sales targets.  This information, which BMW allegedly knew to be inaccurate, was then provided to investors in bond offerings by BMW’s U.S. subsidiary.  SEC

Tagged in: Accounting Fraud, Financial and Investment Fraud, Misrepresentations, Securities Fraud,

August 25, 2020

American Honda Motor Co., and Honda of America Mfg., Inc. (Honda) has reached a settlement with the Attorney Generals of 48 states and agreed to pay $85.1 million to resolve allegations of failing to disclose certain airbag safety failures to regulators and ­­­customers of Honda and Acura vehicles sold in the United States.  According to the complaint, Honda engineers were aware that the propellant used in Takata-manufactured airbags—used in Honda and Acura vehicles since 2001—could burn aggressively, cause the inflator to burst, and ultimately harm drivers and passengers, yet continued to represent that its cars were safe even as it began recalling affected vehicles in 2008.  Although the company eventually recalled approximately 12.9 million vehicles, the recalls came too late and the failures resulted in at least 14 deaths and over 200 injuries nationwide.  AG CA; AG FL; AG NY; AG GA

Tagged in: Auto Safety, Misrepresentations,

August 20, 2020

TD Bank, N.A. has been ordered to pay an estimated $97 million in restitution to about 1.42 million customers, as well as a civil monetary penalty of $25 million, for engaging in deceptive practices that violated the Consumer Financial Protection Act of 2010 and the Fair Credit Reporting Act.  In connection with its optional Debit Card Advance (DCA) service, TD Bank allegedly interfered with its customers’ ability to understand terms and conditions by misrepresenting DCA as “free” or a “feature” of their new checking accounts, when in reality it could result in fees of $35 per overdraft transaction.  Furthermore, in connection with consumer account information, TD Bank allegedly failed to implement policies that would ensure the accuracy of that information before it was provided to consumer reporting agencies.  CFPB

Tagged in: Financial Institution Fraud, Misrepresentations,

August 19, 2020

The Bank of Nova Scotia (Scotiabank) has been ordered to pay $127.4 million to the CFTC and $60.4 million in criminal fines, forfeiture, and restitution to the DOJ for attempting to manipulate prices and spoofing in precious metals futures contracts, making false and misleading statements to investigators, and failing to comply with swap dealer conduct and supervision requirements.  The alleged misconduct occurred over the eight years ending in 2016 and involved four precious metals traders in New York, London, and Hong Kong.  From the penalty paid to the CFTC, a record-breaking $42 million will go toward resolving the price manipulation and spoofing allegations, and a record-breaking $17 million will go toward resolving the false and misleading statements allegations.  In addition to the fines, Scotiabank has entered into a deferred prosecution agreement and agreed to retain an independent monitor.  CFTC; DOJ; USAO NJ 

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Financial Institution Fraud, Fraud in CFTC-Regulated Markets, Misrepresentations,

July 31, 2020

Canadian company Bausch Health, formerly known as Valeant Pharmaceuticals, will pay a $45 million penalty to resolve charges that its executives engaged in improper revenue recognition and misleading disclosures in SEC filings and earnings presentations between 2014 and 2015.  The company was alleged to have recorded false sales of products to specialty pharmacy Philidor Rx Services and its affiliates, which were controlled by Valeant.  In addition, Valeant allegedly misrepresented the source and materiality of revenue it received following a 500% increase in the price of its diabetes drug Glumetza.  Former CEO J. Michael Pearson will pay a civil penalty of $250,000; former CFO Howard B. Schiller will pay a civil penalty of $100,000; former controller Tanya Carro will pay a civil penalty of $75,000.  The individuals also agreed to return specified portions of their incentive compensation to the company.  SEC

Tagged in: Accounting Fraud, Drug and DME Pricing, Financial and Investment Fraud, Misrepresentations, Pharma Fraud, Securities Fraud,

July 28, 2020

Savraj Gata-Aura, a British citizen, has been sentenced to four years in prison and ordered to forfeit nearly $3 million for his role in a massive Ponzi scheme involving coworking space Bar Works that defrauded over 800 investors of more than $40 million.  Together with fellow British citizen Renwick Haddow—who was widely reported to be disqualified from serving as the director of a U.K. company and was managing Bar Works under the alias “Jonathan Black”—Gata-Aura solicited investors by making material misrepresentations about Bar Works’ management and the company’s financial condition.  Haddow is due to be sentenced later this year.  USAO SDNY

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Misrepresentations, Ponzi Schemes,

July 27, 2020

The owner and operator of three California-based companies, Brandon Frere, has been sentenced to over three years in prison for using deceptive sales tactics to draw customers to his companies’ student loan repayment services programs.  Between 2014 and 2018, Frere allegedly instructed employees of American Financial Benefits Center (AFBC), the Financial Education Benefits Center (FEBC), and Ameritech Financial (Ameritech) to make false statements concerning the companies’ abilities, engage in improper enrollment practices that made customer payments look smaller, and hide monthly fees.  A hearing later this year will determine the amount of restitution that Frere will be required to pay.  USAO NDCA

Tagged in: Criminal Proceedings, Misrepresentations,

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