Government Enforcement Actions

May 12, 2015

The FTC charged Lunada Biomedical with misleading claims about weight loss. The FTC has filed a federal court complaint seeking to prohibit the company and its principals from advertising that their dietary supplement Amberen causes substantial weight loss for women over 40, and that the weight loss is clinically proven. Between 2010 and 2013, Lunada sold almost $65 million worth of Amberen nationwide. Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, said “Lunada marketed Amberen to women over 40 as ‘clinically proven’ to cause weight loss, but their own studies didn’t support those claims.”

May 12, 2015

California Attorney General Kamala D. Harris announced that the California Department of Justice, along with the Attorneys General of the other 49 States and the District of Columbia, the Consumer Financial Protection Bureau, and the Federal Communications Commission, reached settlements with Sprint Corporation and Cellco Partnership (d/b/a Verizon Wireless) to resolve allegations that Sprint and Verizon placed charges for third-party services on consumers’ mobile telephone bills that were not authorized by the consumers, a practice known as “mobile cramming.” The state of California will receive $549,731.29 in the Sprint settlement, and $733,298.41 in the Verizon settlement. In total, Sprint will pay $68 million and Verizon will pay $90 million the bulk of which will go to consumers who were victims of cramming. Sprint and Verizon are the third and fourth mobile telephone providers to enter into a nationwide settlement to resolve allegations regarding cramming. In December 2014, Attorney General Harris reached a $90 million settlement with T-Mobile and a $105 million settlement with AT&T in October of 2014. CA

May 11, 2015

Acting New Jersey Attorney General John J. Hoffman announced guilty plea of Rehan Zuberi and his wife Humara Paracha to charges they bribed dozens of doctors in exchange for referrals, worth several million dollars, to the medical imaging centers they owned and operated under the umbrella group Diagnostic Imaging Affiliates which managed numerous diagnostic imaging facilities throughout northern and central New Jersey. NJ

May 11, 2015

The CFTC ordered Libero Commodities SA, an agricultural trading company, to pay $480,000 for failing to comply with its legal obligation as a reportable trader to submit weekly CFTC Form 304 Reports that show its call cotton purchases and sales, in violation of CFTC Regulation 19.02.  CFTC

May 8, 2015

New York Attorney General Eric T. Schneiderman announced an agreement in principle to settle kickback claims against Medco Health Solutions subsidiary Accredo Health Group, Inc. to resolve allegations that Accredo recommended the drug Exjade to Medicaid patients in exchange for kickbacks from Novartis Pharmaceuticals Corporation which markets the drug. Under the settlement, Accredo will pay $60 million to the federal government, New York, and several other states. About $3.4 million of the settlement will resolve claims relating to New York’s Medicaid program. In January 2014, another pharmacy, BioScrip, Inc., agreed to pay $15 million to resolve similar claims. The case against Novartis is ongoing. NY

May 7, 2015

California Attorney General Kamala D. Harris announced an $11.5 million settlement with Phillips 66 and ConocoPhillips to resolve allegations they violated state laws governing the proper operation and maintenance of underground storage tanks used to store gasoline for retail sale. The companies failed to comply with hazardous materials and hazardous waste laws at over 560 gasoline stations owned or operated by the companies in the state of California. CA

May 6, 2015

New York Attorney General Eric T. Schneiderman announced that Carewell Ambulette, Inc. and its owner, Kurien Palliankal have pleaded guilty to stealing more than $200,000 from the New York Medicaid program. Palliankal will be sentenced to six months in jail, followed by five years of probation, and will also be required to pay full restitution to Medicaid. Carewell will be fined $10,000. From July 2006 through March 2010, Palliankal and Carewell defrauded the Medicaid system by doctoring the request forms received from the medical providers. These forms authorized taxi service, but Palliankal changed the forms to appear as though they authorized the more expensive ambulette service, which Medicaid pays at a rate four times higher than taxi service. NY

May 5, 2015

The CFTC filed a civil enforcement action in the U.S. District Court for the Southern District of New York against Heet Khara and Nasim Salim, residents of the United Arab Emirates for engaging in unlawful disruptive trading practices known as “spoofing” in the gold and silver futures markets.  CFTC

May 1, 2015

The CFTC ordered FCStone, LLC, headquartered in New York, NY, to pay a $140,000 penalty for failing to provide and maintain an adequate program of supervision and for failing to diligently supervise its employees.  CFTC

April 30, 2015

The CFTC charged Barry C. Taylor of Franklin, North Carolina, with operating a multi-million dollar fraudulent forex scheme through his firms, OTC Investments LLC and Forex Currency Trade Advisors, LLC.  CFTC