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Government Enforcement Actions

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December 19, 2023

Indiana-based Community Health Network Inc. has agreed to pay $345 million to resolve claims by its former CFO and COO Thomas Fischer, which alleged the healthcare system submitted claims to Medicare that were tainted by violations of the Stark Law.  In order to capture physicians’ downstream referrals, Community paid physicians salaries that were sometimes double market rate, and awarded them bonuses based on the number of referrals.  Community then submitted claims resulting from these referrals for reimbursement.  DOJ

Tagged in: Anti-Kickback and Stark, FCA Federal, Healthcare Fraud, Medicare, Provider Fraud, Whistleblower Case,

December 18, 2023

Heart monitoring device manufacturer BioTelemetry Inc. and its subsidiary, LifeWatch Services Inc., have agreed to pay more than $14.7 million for causing false claims to be submitted to federal healthcare programs.  The claims were brought in two separate qui tam suits, one by an employee of one of LifeWatch’s customers, Michael Pelletier, and the other by SFP I LLC.  The whistleblowers alleged that the companies knew the design of their enrollment portal would steer clinical staff into enrolling patients in telemetry, which is reimbursed at a higher rate, rather than holter monitoring and event monitoring, which is reimbursed at a lower rate.  DOJ

Tagged in: FCA Federal, Healthcare Fraud, Medical Devices and DME, Medicare, Other Government Health Programs, Whistleblower Case,

December 14, 2023

Freepoint Commodities LLC will pay more than $98 million in civil penalties and disgorgement for improperly obtaining and trading on material non-public information. Freepoint paid millions in bribes to government officials in Brazil to obtain highly confidential information related to the purchase and sale of fuel oil. Certain members of Freepoint's oil trading team knew of and took steps to conceal the fraud by using code words, fake names, and private email addresses, all to gain unlawful competitive advantages in oil products trading. DOJ; CFTC

Tagged in: Bribery and Bid-Rigging, FCPA, Fraud in CFTC-Regulated Markets, Market Manipulation and Trading Violations, Misrepresentations, Regulatory Violations,

December 13, 2023

Credit Suisse Securities (USA) LLC and two affiliates will pay more than $10 million for providing prohibited underwriting and advising services to mutual funds, in violation of an October 2022 Superior Court of New Jersey consent order. Per the order, Credit Suisse was prohibited from serving as principal underwriter or investment adviser to mutual funds and employees' securities companies; however, Credit Suisse acted in that capacity prior to receiving a time-limited exemption to such prohibitions in June 2023. SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Misrepresentations,

November 28, 2023

Bank of America has been ordered to pay $12 million into the CFPB’s victims relief fund for violating the Home Mortgage Disclosure Act, which requires financial institutions to report demographic information about mortgage applicants. For at least four years, hundreds of BoA loan officers falsely reported that applicants failed to answer those questions, when in reality the officers had failed to ask them.  CFPB

Tagged in: Misrepresentations,

November 21, 2023

Rio Tinto plc, Rio Tinto Limited, and Rio Tinto's former CEO Thomas Albanese have agreed to entry of a final judgment, ordering it to pay $28 million and permanently restraining Rio Tinto from violating Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20 and 13a-16 thereunder. The judgment stems from the SEC's 2017 complaint which alleged that Rio Tinto's public filings contained misleading statements about the value of its Mozambican coal assets. Rio Tinto has agreed to retain an independent consultant to review its compliance with accounting standards. Albanese will pay a $50,000 civil penalty and is required to cooperate in the SEC's continuing investigation into Rio Tinto's former CFO Guy Elliott. SEC

Tagged in: Accounting Fraud, Misrepresentations, Regulatory Violations, Securities Fraud,

November 21, 2023

Ingredion Incorporated, which makes plant-based ingredients, has settled with the EPA, Indiana Department of Environmental Management, and the Indiana Attorney General’s Office for violating the Clean Air Act at its corn wet milling facility.  Ingredion allegedly failed to operate and monitor certain equipment, resulting in its facility emitting particulate matter above allowable limits.  Under the settlement, Ingredion will pay a civil penalty of over $1.1 million and implement measures costing almost $7 million to help reduce and offset their emissions.  DOJ

Tagged in: Environmental Fraud,

November 20, 2023

Hospital chain PeaceHealth, which operates in Washington State, has been ordered to refund more than 15,000 low-income patients up to $13.4 million after the Washington Attorney General’s Office found it billed patients without notifying them of their eligibility to obtain financial assistance.  PeaceHealth must also pay $2 million to the Attorney General’s Office to reimburse the cost of the government’s investigation.  WA AG

Tagged in: Healthcare Fraud,

November 20, 2023

Toyota Motor Credit Corporation, the U.S.-based auto-financing arm of Toyota Motor Corporation, has been ordered to pay $60 million—including $48 million in consumer redress and $12 million in penalties—for illegal lending and credit reporting misconduct in violation of the Consumer Financial Protection Act and Fair Credit Reporting Act. According to aggrieved consumers, dealers misled them about optional products and services that could be sold bundled with vehicles, either representing that they were mandatory or including them on contracts without their knowledge.  Toyota Motor Credit then stymied attempts to cancel bundled products and services, directing consumers to a dead-end cancellation hotline, delaying or withholding refunds, and providing inaccurate refund information.  CFPB

Tagged in: Misrepresentations,

November 20, 2023

Student lender Prehired has been ordered to shut down permanently, pay more than $4.2 million in restitution, and void nearly $27 million in outstanding loans for allegedly trapping students with unlawful loans and employing abusive debt collection practices.  According to the CFPB and the attorneys general of 10 states, Prehired’s 12-week online training program made false promises about its ability to help students obtain six-figure paying jobs, while keeping them in the dark about key loan information.  CFPB; DE AG; NC AG

Tagged in: Education Fraud,

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