Government Enforcement Actions

June 17, 2016

New Jersey concluded its investigation of Walker Cancer Research Institute, Inc., a Maryland-based charity, through entry of a Consent Order, which includes a $375,000 voluntary payment to the Rutgers Cancer Institute of New Jersey to support cancer research in the state. As part of the settlement, Walker Cancer Research has also agreed to pay the Division $95,000 in reimbursement of its attorney’s fees and investigative costs, and agreed to certain practices, among other things, in its direct mail solicitation of contributions. Walker Cancer Research entered into the settlement without any admission of liability. NJ

June 17, 2016

New York announced the unsealing of an indictment charging Renee Kanas, 63, a resident of Tamarac, Florida, with Grand Larceny in the Second Degree, a Class C felony. Kanas is charged in Albany County Court with stealing over $148,000 in pension payments from the New York State and Local Employees Retirement System paid to her father, Jacob Yudenfreund, a New York State pensioner who died in March 2010. According to the indictment and statements made by the prosecutor at arraignment, Kanas’ father was a New York State pensioner who elected to receive reduced monthly benefits so his wife, Doris Yudenfreund, would continue to receive benefits after his death. Mrs. Yudenfreund, however, predeceased Mr. Yudenfreund. As such, upon Mr. Yudenfreund’s passing in March 2010, his pension benefits ceased. NY

June 16, 2016

A Pembroke Pines, Florida couple was sentenced to prison for their role in a stolen identity tax refund fraud scheme, announced the Justice Department’s Tax Division. According to court documents and evidence presented at the sentencing hearing, between July 2009 and August 2014, Walther Wilson Godfrey, Rhonda Perry Gittens and others conspired to defraud the United States by filing false federal income tax returns using stolen identities. Gittens owned and operated 2G, Inc., a tax return preparation business, and G&G Check Cashing Inc., a check cashing business, both of which were located in Pembroke Pines. Godfrey and Gittens obtained the personal identification information of actual individuals, some deceased, including names, social security numbers, addresses and dates of birth, without the individuals’ authorization, to prepare and file false income tax refund claims for the years 2009 through 2011. Judge Bloom also ordered Godfrey and Gittens to pay $792,442 in restitution to the IRS. DOJ

June 15, 2016

The Justice Department’s Tax Division announced that a Brooklyn, New York, tax return preparer was sentenced to 36 months in prison following her guilty plea on Sept. 21, 2015, to two counts of aiding and assisting in the preparation of false income tax returns. Awilda Rosario, 40, owned and operated a tax preparation business in Brooklyn called Edujas Multiservices Corporation. Rosario prepared false individual income tax returns for clients for tax years 2008 through 2013. She attached false schedules that reported business losses the taxpayers did not incur and attached schedules that reported inflated or fictitious deductions. She also attached forms claiming fictitious education and fuel tax credits that the taxpayers were not entitled to receive. After the Internal Revenue Service (IRS) revoked the Electronic Filing Identification Number (EFIN) for Edujas Multiservices Corporation, Rosario obtained at least two different EFINs and continued to prepare and submit false tax returns for her clients that listed a different paid tax return preparer and tax preparer firm. DOJ

June 14, 2016

Florida and the Federal Trade Commission obtained a federal district court order to temporarily shut down a Central Florida-based operation allegedly causing more than $15 million in consumer harm. The operation blasted consumers with robocalls designed to deceive consumers into paying up-front fees for phony credit card interest-rate-reduction and debt-elimination services. The defendants, claiming to be Bank Card Services and the Credit Assistance Program, allegedly called consumers promising to substantially and permanently lower credit card interest rates, pay off consumers’ debts faster and save consumers thousands of dollars. According to the complaint filed in court, the defendants charged between $500 to $5,000 in illegal up-front fees and rarely, if ever, delivered the promised services. For an additional fee paid in advance, the defendants also allegedly claimed they would pay off credit card balances using money obtained from bogus government funds, leaving some victims in even greater debt. FL

June 14, 2016

The FTC is mailing 191,748 refund checks totaling $9,190,842.68 to consumers who bought Pure Health or Genesis Today green coffee bean extract weight-loss supplements. Consumers who purchased the products online will receive a full refund, with the average check totaling $47.93. Consumers who bought the supplements in a retail store such as Walmart did not receive a check in this mailing. These consumers can file a claim form with the FTC, and may be eligible for a partial refund. FTC

June 10, 2016

Amin al-Baroudi was sentenced to 32 months in prison for conspiring to export U.S.-origin goods from the United States to Syria in violation of sanctions imposed on Syria by the U.S. government.  According to court documents, Baroudi admitted that from at least December 2011 through March 2013 he and his co-conspirators exported U.S. tactical equipment to Syria for the purpose of supplying and arming Ahrar al-Sham and other insurgent groups in Syria whose stated goal is to overthrow the Assad government and install an Islamic state.  DOJ

June 9, 2016

Raleigh, North Carolina-based specialty pharmacy Salix Pharmaceuticals, Inc., which sells products used to treat various gastroenterology conditions, agreed to pay $54 million to settle charges it violated the federal Anti-Kickback Statute and False Claims Act by using its “speaker programs” as a mechanism to pay kickbacks to doctors to induce them to prescribe Salix drugs and medical devices.  Specifically, the government alleged Salix held sham speaker programs, frequently at high-end restaurants, where doctors were paid substantial honoraria purportedly to educate other doctors about a Salix product, but in reality spent little or no time discussing the product.  $16,578,000 of the settlement amount will go to the Medicaid programs of different states including Ohio.  The allegations originated in two whistleblower lawsuits filed under the qui tam provisions of the False Claims Act.  The whistleblowers will receive a yet-to-be-determined award from the proceeds of the government's recovery.  DOJ (SDNY), OH

June 9, 2016

Ivan Dwight Brannan and David R. Nelson, a former agent and a former driver for a large national trucking company, were sentenced to prison for 48 months (and a $120,000 fine) and 24 months (and a $10,000 fine) for paying bribes to officials at the Marine Corps Logistics Base in Albany, Georgia, in order to obtain lucrative freight-hauling business.  The officials who they bribed, Mitchell Potts and Jeffrey Philpot, were previously sentenced to 10 years and 7 years in prison, respectively.  DOJ

June 9, 2016

Wenxia Man was convicted of conspiring to export fighter jet engines, a drone and related technical data to China, in violation of the Arms Export Control Act.  DOJ