Government Enforcement Actions

June 13, 2023

The owner of Grace Healthcare Services, a home health company in Texas, has been sentenced to almost 5 years in prison and ordered to pay almost $1.5 million in restitution for defrauding the state’s Medicaid program.  Akintunde Oyewale was convicted of paying illegal kickbacks to medical clinics in exchange for false home health certifications and patient referrals, then billing the Texas Medicaid program for services that were medically unnecessary and not actually provided.  TX AG

June 8, 2023

Billy Joe Taylor of Lavaca, Arkansas, will spend 15 years in prison and will pay nearly $30 million in restitution for submitting false and fraudulent claims to Medicare. During the COVID-19 pandemic, Taylor and his co-conspirators misused medical information and private personal information for Medicare beneficiaries, and then used that information to repeatedly submit fraudulent claims for medically unnecessary diagnostic laboratory testing. USAO WDAR

June 8, 2023

Steven King, chief compliance officer of A1C Holdings LLC, a pharmacy holding company, was convicted for violating Medicare and pharmacy benefit manager rules by securing prescriptions and refills for medically unnecessary lidocaine and diabetic testing supplies. King and his co-conspirators fraudulently billed Medicare over $50 million, taking steps to conceal their scheme by enrolling their mail order pharmacies as brick-and-mortar retail locations, shipping prescription refills for high-reimbursing medications and supplies without patient consent, concealing the ownership of A1C Holdings LLC and its pharmacies, and transferring patients among pharmacies without patient consent. King faces a maximum penalty of 20 years in prison for committing health care fraud and wire fraud. DOJ

June 7, 2023

Anthony Merritt and Andrew De Moya have sentencing dates in October 2023 for bribing a former employee of the D.C. Office of Tax and Revenue to fraudulently remove millions in tax liabilities of businesses owned by De Moya, Arman Amirshahi, Charles Zhou, and others. Merritt acted as a middleman to facilitate the bribes and took a cut of the bribe payments as well. USAO DC

June 6, 2023

Coinbase, Inc. has been ordered to pay $5 million for offering unregistered securities through staking offerings, in violation of New Jersey’s securities laws.  Not registering offerings with the CFTC subjected Coinbase’s 3.5 million staking investors to increased risk. NJ AG

June 5, 2023

Microsoft Corp. will pay $20 million in civil penalties for violating the Children’s Online Privacy Protection Act for allowing children under 13 to provide personal information—first and last name, email address, and their date of birth—when creating a user account for Microsoft’s Xbox system, without parental consent. Microsoft retained this data even when the account was not finalized, allowing Microsoft to send promotional messages and to share user data with advertisers. Microsoft failed to comply with COPPA’s notice provisions and will be required under the proposed order to clearly communicate with parents about their child’s data and follow set procedures to monitor Microsoft’s compliance with federal statutes regarding children’s online privacy. DOJ, FTC

June 5, 2023

Indivior Inc., maker of Suboxone, agreed to a $102.5 million multi-state settlement with 42 state attorneys general for allegedly trying to preserve its drug monopoly by illegally switching the Suboxone market from tablets to film, attempting to destroy the market for tablets. As part of the settlement, Indivior is required to disclose all of the citizen petitions to the FDA, introduction of new products, or if there is a change in corporate control. NC DOJ, CA AG, WA AG, OR DOJ

June 2, 2023

Cycra and its officer, Chad James, will pay $221,385.66 and stop making deceptive claims about products being “Made in USA.” The company is prohibited from making unqualified U.S.-origin claims for any product, unless it can show the final assembly or processing, as well as all significant processing, occurs in the US. On qualified claims, the company must provide a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients or components, or processing. And for assembly claims, Cycra must ensure that the product is last substantially transformed in the U.S. FTC

May 31, 2023

One of the largest non-depository personal installment lenders in the country, OneMain Financial, has been ordered to pay $20 million in penalties and restitution for tricking borrowers into signing up for optional products and failing to refund interest on purchases they claimed were fully refundable.  As part of the settlement, OneMain was also ordered to adjust its cancellation policies.  CFPB

May 31, 2023

VHS of Michigan Inc., d/b/a, The Detroit Medical Center, Vanguard Health Systems Inc., and Tenet Healthcare Corporation will pay nearly $30 million for causing the submission of false or fraudulent claims to Medicare. From January 1, 2014 through December 31, 2017, DMC, Vanguard, and Tenet violated the Anti-Kickback Statute when they provided the services of mid-level practitioners to 13 physicians at no cost or below fair market value. The physicians were selected for their high number of referrals, which DMC hoped would cause an increase in referrals to their facilities. Whistleblower Dr. Jay Meythaler will receive $5.2 million as part of the settlement. DOJ