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January 30, 2023

International Vitamins Corporation (IVC), which imports and sells vitamins and supplements from China, has agreed to pay $22.8 million to settle claims of defrauding the United States.  The U.S.-based company allegedly avoided U.S. customs duties by misclassifying over 30 of its products, then failed to pay back duties owed after realizing it had underpaid millions of dollars.  The alleged fraud occurred between 2015 and 2019, and only came to scrutiny through a whistleblower’s lawsuit.  USAO SDNY

January 24, 2023

Popular Bank was fined $2.3 million by the Federal Reserve Board following an investigation into its processing of Paycheck Protection Program loans.  Popular Bank was approved as a PPP lender by the Small Business Administration, and was required to follow the Bank Secrecy Act and program guidelines, including verification of customer identity and the documentation, investigation, and reporting of suspicious activities.  The Board’s Consent Order found that in August 2020, the Bank processed and funded six PPP loans, totaling approximately $1.1 million, despite having detected that the loan applications contained significant indicia of potential fraud.  The Bank self-reported to the Board.  Fed

December 21, 2022

Biotechnology companies iSense, LLC and Specific Diagnostics, Inc., together with their founder Paul Andrew Rhodes, will pay a total of $10.1 million to resolve allegations that they submitted false claims under grants from the DOD and HHS.  The government alleged that the firms improperly billed for costs incurred by another business, billed for compensation in excess of authorized federal limits, backdated services and cost-sharing agreements, and knowingly presented a backdated agreement to the government. USAO NDCal

November 21, 2022

Ruixue “Serena” Shi will spend 20 years in federal prison and has been ordered to pay nearly $36 million in restitution for defrauding investors out of tens of millions of dollars. Shi, convicted on one count of wire fraud, was the general manager of Global House Buyer LLC, a China-based real estate company with an office in Los Angeles. Shi inked a deal with Dakota Development, a subsidiary of SBE Entertainment, to build a real estate development in the City of Coachella consisting of luxury condos, a hotel complex, and conference facilities. Shi solicited investments from mostly Chinese investors, preying on their ignorance of English and trust in the American economy, and led them to believe their investment would help them obtain an American visa. USAO CDCA

October 5, 2022

Quin Ngoc Rudin has been sentenced to 10 years in prison after causing more than $62 million in losses to the IRS and Paycheck Protection Program (PPP) while on supervised release for another fraud scheme.  Through his California-based tax preparation business, Mana Tax Services, Rudin and his brother Thanh had filed a series of false PPP loan applications, with supporting false income tax returns, on behalf of professional athletes, small businesses, shell companies, and other business entities.  His actions caused over $19 million in losses to the IRS, and over $43 million in losses to the PPP.  USAO EDVA

August 15, 2022

Flight instruction company Universal Helicopters Inc. will pay $7 million, and Dodge City Community College will pay $500,000, to resolve claims that the defendants made false statements to the VA in order to receive funding through the Post-9/11 GI Bill program for training programs they jointly ran.  Specifically, the defendants were alleged to have falsely certified that no more than 85 percent of the students in helicopter flight instructor programs were receiving VA benefits.  The government’s investigation was initiated by a whistleblower suit brought under the False Claims Act by a veteran and former student in the program, William Rowe.  Rowe will receive $1.125 million of the settlement.  DOJ

August 11, 2022

Menswear company Luchiano Visconti Loutie LLC d/b/a Luchiano Visconti and its manager Sasha Hourizadeh will pay $3.64 million for violating the False Claims Act by underreporting the value of imported apparel, resulting in over $1.8 million in evaded customs duties. Visconti and Hourizadeh regularly provided falsified invoices to customs brokers that significantly understated the true value of the imported menswear. In some instances, a complicit foreign manufacturer would provide Visconti two sets of invoices—one reflecting itemized pricing details at a reduction, and the second reflecting “services” provided which, when combined, reflected the actual value of the goods. A related whistleblower suit was filed prior to the Government joining the matter. USAO SDNY

August 11, 2022

Industrial battery maker Eos Energy Storage LLC will pay $1.02 million, after a whistleblower filed suit alleging violations of the False Claims Act. From mid-2018 to mid-2019, Eos failed to declare the value of certain components shipped overseas to be assembled and then imported back into the United States. Eos also failed to declare transportation and packing costs on more than 60 occasions, which Eos further acknowledged was their responsibility as importer of record. The whistleblower will receive 20% of the settlement amount. USAO NJ

August 3, 2022

William Richard “Rick” Carter, Jr. will spend 66 months in prison and pay over $1.3 million in restitution for his scheme to defraud the Alabama State Department of Education, in a conspiracy to commit wire fraud, wire fraud, and aggravated identity theft. Carter and his co-conspirators fraudulently enrolled students in public virtual schools to receive payments from Alabama’s Education Trust Fund, and then took portions of the money for their own use through direct cash payments and payments to third-party contractors owned by the various co-conspirators—William L. (“Trey”) Holladay, III, Gregory (“Greg”) Earl Corkren, David Webb Tutt, and Thomas Michael SiskUSAO MDAL

August 2, 2022

Denver Public Schools paid over $2.1 million to resolve a False Claims Act investigation into its misuse of AmeriCorps funds. AmeriCorps funds are used to address critical community needs such as fighting poverty, mentoring youth, and increasing academic achievement. To that end, AmeriCorps provides education awards to their volunteers a/k/a “members” for performing a specified number of service hours in these communities. DPS recruited their existing employees for AmeriCorps programs and double-counted hours spent on their employment duties as being on service, which is disallowed as it deprives the students of the net benefit of the additional support they would have received from non-DPS-employed AmeriCorps members. USAO CO
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