Government Enforcement Actions

April 8, 2016

Wells Fargo agreed to pay $1.2 billion in connection with the bank's improper mortgage lending practices.  As part of the settlement, Wells Fargo admitted that it certified loans ineligible for Federal Housing Administration Mortgage Insurance and that if failed to disclose thousands of faulty mortgage loans to HUD.  According to Manhattan US Attorney Preet Bharara, Wells Fargo "has been held responsible for years of reckless underwriting, while relying on government insurance to deal with the damage."  DOJ

April 8, 2016

Norwegian shipping company DSD Shipping was sentenced to pay a total corporate penalty of $2.5 million as a result of its convictions for obstructing justice, violating the Act to Prevent Pollution from Ships, and tampering with witnesses.  DOJ

April 6, 2016

Former Massey Energy CEO Don Blankenship was sentenced to a year in prison and to pay $250,000 for violating mine health and safety standards after a jury returned a guilty verdict on the federal crime.  This follows the 2010 explosion at the Upper Big Branch mine and findings of unsafe working conditions, violations of U.S. Mine Safety and Health Administration (MSHA) regulations and organized efforts to obstruct and interfere with MSHA inspectors.  DOJ

April 5, 2016

Mohammad Rafiq, owner of Detroit-area home health care agency Perfect Home Health Care, was sentenced to 57 months in prison and to pay roughly $3.5 million in restitution (and forfeit the same amount) for his role in a $3.4 million health care fraud scheme.  According to admissions made as part of his plea agreement, Rafiq paid physicians and recruiters to refer Medicare beneficiaries to Perfect and sign medical documents falsely certifying they required home health care.  Rafiq also directed patient recruiters and Perfect employees to pay cash kickbacks to Medicare beneficiaries in exchange for signing multiple blank physical therapy records.  DOJ

April 5, 2016

California gastroenterologist Ali S. Vaziri agreed to pay $400,000 to settle charges he violated the False Claims Act by billing Medicare for patient office visits that reflected more time and services than he actually spent with patients and for patient office visits that were required to be billed together with routine colonoscopies as one charge.  DOJ (NDCA)

April 1, 2016

Sharon Iglehart, a former attending psychiatrist at Riverside General Hospital in Houston, was sentenced to 144 months in prison and to pay roughly $6.4 million (and forfeit the same amount) for her role in a $158 million Medicare fraud scheme involving false claims for mental health treatment.  According to evidence presented at trial, Iglehart and others engaged in a scheme to defraud Medicare by submitting through Riverside fraudulent claims to Medicare for partial hospitalization program services, an intensive outpatient treatment for severe mental illness, when the patients for whom Riverside billed did not receive the services.  In fact, evidence proved that most of the Medicare beneficiaries rarely saw a psychiatrist and did not receive intensive psychiatric treatment at all.  To date, 12 other individuals have been convicted based on their roles in this scheme, including former Riverside president Earnest Gibson III.  DOJ

April 1, 2016

Carlos Rodriguez Nerey, a patient recruiter for several Miami-area home health agencies, was convicted for his role in a fraud and kickback scheme that resulted in the submission of millions of dollars in fraudulent claims to Medicare.  According to evidence presented at trial, Nerey claimed to work at a staffing company called Sweet Life Staffing Inc. but was in fact a patient recruiter for D&D&D Home Health Inc. and Mercy Home Care, Inc., two fraudulent home health care agencies in Miami.  Nerey created a shell company for the purpose of accepting kickbacks from Mercy and D&D&D and received approximately $250,000 as a result of his role in the scheme.  DOJ

April 7, 2016

Washington announced favorable resolutions for consumers with six student loan debt adjustors that overcharged Washington state students and collected unlawful fees. The six loan adjustors will pay a total of $162,000 to refund Washington students for illegal charges and an additional $56,000 for the Attorney General’s costs and attorney’s fees, as well as monitoring and future enforcement of the Consumer Protection Act. Student loan debt adjustment firms offer to help students fill out and submit paperwork to the U.S. Department of Education to consolidate their federal student loans. But information about repayment options and help consolidating federal student loans is available — for free — directly from the U.S. Department of Education. All 346 Washington student victims will receive full refunds of the money they paid to the various companies. The Attorney General’s Office will notify eligible consumers and distribute the refunds directly to them in July 2016. WA

April 7, 2016

A Staten Island, New York, tax return preparer and business owner was sentenced to prison for preparing false federal income tax returns. Alabi Gbangbala aka Babatunde Alabi Babaia, 52, was sentenced by U.S. District Court Judge Carol Bagley Amon to serve 18 months in prison, followed by one year of supervised release, and ordered to pay $178,209 in restitution to the Internal Revenue Service (IRS). According to court documents and in-court statements, Gbangbala was the operator of Broadfield, a tax return preparation business located in Staten Island. For tax years 2008 and 2009, Gbangbala prepared false federal individual income tax returns for Broadfield clients by, among other things, failing to report accurate exemptions, falsifying business receipts and losses on Schedules C, and inflating or fabricating charitable contributions and unreimbursed employee expenses. He also filed false tax returns for himself by underreporting his income for tax years 2008 through 2010. DOJ

April 6, 2016

The FTC is mailing 474 checks totaling more than $33,000 to consumers who lost money to a scheme that charged homeowners an up-front fee for mortgage relief services they promised but never provided. In September 2015, a federal court banned Wealth Educators and Veronica Sesma from the debt collection business. FTC