Government Enforcement Actions

September 4, 2014

A federal jury returned guilty verdicts against former Virginia Governor Robert F. McDonnell and former First Lady of Virginia Maureen G. McDonnell for participating in a scheme to violate federal public corruption laws. According to the government, McDonnell and his wife turned public service into a money-making enterprise, abusing the Commonwealth’s highest office to benefit a Virginia businessman in exchange for more than $170,000 in gifts and loans, including luxury items, designer clothes, free vacations and an offer to pay the costs of their daughter’s wedding. In return, McDonnell put the weight of the governor’s mansion behind the businessman’s corporate interests. DOJ

August 29, 2014

Former CEO of ArthroCare Corporation Michael Baker and former ArthroCare CFO Michael Gluk were sentenced to serve 20 years and 10 years in prison, respectively, for their leading roles in a $750 million securities fraud scheme. On June 2, 2014, they were convicted by a jury of wire fraud, securities fraud, and conspiracy to commit wire and securities fraud in connection with their scheme to artificially inflate the share price of ArthroCare stock through sham transactions. DOJ

August 29, 2014

Austin, Texas-based Omni Surgical L.P. (doing business as Spine 360), a manufacturer of devices used in spinal surgery, and Dr. Jamie Gottlieb, an Indiana spinal surgeon, agreed to pay $2.6 million to settle allegations that Spine 360 paid illegal kickbacks to Gottlieb to induce him to use the company’s products in violation of the False Claims Act and Anti-Kickback Statute. According to the government, Spine 360 made payments to an entity controlled by Gottlieb which were purportedly made pursuant to a series of intellectual property agreements but in reality were sham payments to compensate Gottlieb for using Spine 360 products in his surgeries. DOJ

August 27, 2014

E.I. du Pont de Nemours and Company (DuPont) agreed to pay $1.3 million and take corrective actions to settle government charges of releasing harmful levels of hazardous substances in the Kanawha River in West Virginia in violation of the Clean Air Act, the Comprehensive Environmental Response, Compensation and Liability Act, and the Emergency Planning and Community Right-to-Know Act. DOJ August

August 26, 2014

ExxonMobil Pipeline Company (ExxonMobil) agreed to pay $1.4 million to settle charges it violated the Clean Water Act stemming from a 2012 crude oil spill from ExxonMobil’s “North Line” pipeline near Torbert, Louisiana. DOJ

August 26, 2014

Annarella Garcia, a co-owner of Professional Medical Home Health LLC, a Miami home health agency, was sentenced to 70 months in prison and ordered to pay $6.2 million in restitution for her participation in a health care fraud scheme involving the now defunct home health care company. According to the government, Garcia and others engaged in a scheme to bill Medicare for expensive physical therapy and home health care services that were not medically necessary or were not provided. DOJ

August 25, 2014

Former Hanover Corporation CFO Robert Haley and former Hanover salesman Daryl Bornstein were sentenced to serve 60 months and 70 months in prison, respectively, and ordered to pay $14.5 million in restitution for their roles in an $18 million Ponzi scheme. Hanover’s former CEO was previously sentenced to 14 years in prison and ordered to pay $14.7 million in restitution in this case. DOJ

August 25, 2014

Zahid Imran, a Louisiana psychiatrist, was sentenced in federal court in Baton Rouge, Louisiana to serve 86 months in prison and to pay $43.5 million in restitution for his role in a $258.5 million Medicare fraud scheme involving partial hospitalization psychiatric services. According to court documents, Dr. Imran served as the medical director of Shifa Community Mental Health Center of Baton Rouge, and co-owned Serenity Center of Baton Rouge and Shifa Community Mental Health Center of Texas. As part of the scheme, Imran admitted mentally ill patients to the facilities, some of whom were inappropriate for partial hospitalization, and then re-certified the patients’ appropriateness for the program in an effort to continue to bill Medicare for services. Imran pleaded guilty on May 13, 2014, to conspiracy to commit health care fraud. DOJ

August 21, 2014

Bank of America agreed to pay $16.65 billion to resolve federal and state mortgage fraud claims against the bank and its former and current subsidiaries, including Countrywide Financial Corporation andMerrill Lynch. It is the largest civil settlement with a single entity in American history. And it includes a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), the largest FIRREA penalty ever. As part of the settlement, BofA acknowledged misrepresenting the quality of billions of dollars worth of risky mortgage loans. Whistleblower Insider

August 20, 2014

Muhammad Aamir, owner of the three Michigan home health agencies Prestige Home Health Services, Platinum Home Health Services, and Empirical Home Health Care, pleaded guilty for his role in a $22 million home health care fraud scheme. Specifically, Aamir and his co-conspirators billed Medicare for home health care services that were not actually rendered, not medically necessary, and procured through paying illegal kickbacks. DOJ