Archive

November 23, 2020

A former Purdue University professor and his wife have been sentenced to 2 years’ probation each after pleading guilty to defrauding the National Science Foundation (NSF).  Additionally, Dr. Qingyou Han and Lu Shao have been ordered to pay over $1.6 million in restitution to NSF and the Indiana Economic Development Corporation, which had provided Shao’s company, Hans Tech, LLC with a matching grant.  As part of the guilty plea, Han and Shao admitted to devising a scheme to obtain grant money under NSF’s Small Business Innovation Research (SBIR) program and Small Business Technology Transfer (STTR) program by making false statements and material omissions.  Instead, they used the funds to enrich themselves and their children.  USAO NDIN

November 3, 2020

Illinois-based charter school management company Concept Schools, NFP, will pay $4.5 million to settle allegations that it violated the False Claims Act by rigging the bidding process for E-Rate contracts with its network of charter schools between 2009 and 2012 so that its preferred technology vendors received contract awards, despite the fact that they provided equipment at higher prices than those approved by the FCC for equipment with the same functionality.  DOJ

October 30, 2020

Days and Towers, LLC will pay over $800,000 to resolve charges that it violated the False Claims Act between 2015 and 2019 through its submission of false tariff schedules to reduce its customs obligations on imported products.  USAO PR

October 27, 2020

In what appears to be one of the largest Post-9/11 G.I. Bill fraud cases ever prosecuted in the country, the owner of a technical training school in San Diego has been sentenced to over three years in prison and ordered to pay almost $30 million in restitution for defrauding the VA out of almost $30 million.  To conceal the fact that Blue Star Learning had close to 100% veteran students—which violated the VA’s “85/15 Rule” that required 85% non-veteran students per course—and to conceal the fact that most of the school’s graduates did not obtain jobs in the fields they were trained in, owner Nimesh Shah allegedly created and submitted elaborate student and graduate files to the California State Approving Agency for Veterans Education (CSAAVE) and the VA.  Because he knew the fake students and employers could be contacted by the agencies, Shah went so far as to have an employee buy 30 mobile phones outfitted with fake company voicemails, as well as hire overseas individuals to man fake email addresses that he created.  As a result of the fraud scheme, Blue Star Learning was paid over $11 million in tuition and over $18 million in housing allowances and stipends.  USAO SDCA

October 15, 2020

Seventeen defendants who collectively received nearly $900,000 in improper crop insurance indemnity payments, have agreed repay the United States.  Defendants admitted that they submitted false claims for payments to federally-backed multi-peril crop insurance policies, including by falsely stating that the tobacco crops in question had been damaged, inflating crop loss amounts, and submitted falsified documentation about the quality of the tobacco crop.  USAO ED KY

September 28, 2020

Lakeway Regional Medical Center, LLC, together with affiliated parties Surgical Development Partners LLC, Surgical Development Partners of Austin Enterprises LLC, G. Edward Alexander, Frank Sossi, and John Prater, will pay $15.3 million to resolve allegations under the False Claim Act arising from the development of the hospital.  Defendants were alleged to have made numerous false statements in applying for a federally-insured mortgage loan for construction of the hospital, including overstating physician support for the hospital and understating other credit risks.  Specifically, while some investors had requested refunds, defendants delayed making those refunds in order to overstate cash on hand, and, after the mortgage funds were obtained, defendants distributed them in contravention of FHA requirements.  The hospital later defaulted on the loan. The government previously settled with other defendants.  DOJ 

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

September 15, 2020

ITT Technical Institute settled claims with the CFPB and 48 states and the District of Columbia, agreeing to discharge outstanding student loans incurred for attendance at the for-profit college, run by holding company PEAKS.  PEAKS allegedly knew or was reckless in not knowing that many student borrowers did not understand the terms and conditions of those loans, could not afford them, or in some cases did not even know they had them. The settlement, valued at $330 million, also requires PEAKS to provide credit reporting agencies information to correct credit scores negatively affected by the illegal lending scheme, and to shut down after carrying out the settlement.  CFPB; Cal; FL; MI; PA; VA; WA

September 11, 2020

The Scripps Research Institute will pay $10 million to settle claims that overcharged the National Institutes of Health under research grants.  Under the terms of the grants, recipients may only use grant funds on tasks that specifically relate to the funded project.  Defendant was alleged to have an inadequate system for tracking researcher time and expenses, resulting in improper charges to the government for costs unrelated to funded projects, including time spent writing new grant applications, teaching, and engaging in other administrative activities. Former Scripps employee Thomas Burris, Ph.D., will receive $1.75 million as a whistleblower reward.  DOJ; USAO MD

August 26, 2020

LA-based clothing company Ambiance Apparel and its owner Sang Bum “Ed” Noh have pleaded guilty to customs violations and tax offenses, agreeing to pay a total of $118 million, which includes $36 million in previously-seized cash.  Defendants evaded import tariffs by colluding with Asian manufacturers for the submission of invoices to CBP that fraudulently understated the value of imported clothing. The fraudulent invoices indicated payment terms by letter of credit; a second invoice for the balance of the actual price was paid by defendants by wire transfer. In less than five years, Ambiance undervalued imports by about $82.6 million and failed to pay more than $17.1 million in tariffs. In addition, defendants failed to properly report cash transactions and maintained a second set of books for cash transactions, evading nearly $17 million in taxes.  The company will be placed on probation for five years and will be ordered to undertake specific compliance procedures.  USAO CD Cal