Government Enforcement Actions

April 7, 2015

Dr. Punyamurtula Kishore along with his company Preventive Medicine Associates, Inc. pleaded guilty for running a Medicaid fraud scheme involving millions of dollars in taxpayer funds. Kishore was sentenced to 360 days in jail and ordered to pay $9.3 million in restitution. Based on the government’s investigation, Dr. Kishore used bribes, or kickbacks, to induce sober house owners to send their residents’ urine drug screening business to his laboratories for testing. MA

April 7, 2015

Texas Attorney General Ken Paxton announced New Jersey-based pharmaceutical product manufacturer Glenmark Generics Inc. USA agreed to pay $25 million to resolve the State’s investigation under the Texas Medicaid Fraud Prevention Act against Glenmark for fraudulently reporting inflated drug prices to the Medicaid program. TX

April 6, 2015

A U.S. district court has ruled that LeadClick Media, an affiliate marketing network, and its parent company, CoreLogic, Inc., must turn over $16 million in ill-gotten gains they received from a deceptive marketing scheme that sold purported weight-loss products. In granting the FTC’s request for summary judgment, the court ruled that LeadClick was responsible for the false claims made by affiliate marketers it recruited on behalf of LeanSpa, LLC, a company that sold acai berry and “colon cleanse” weight-loss products. According to the FTC’s Complaint, LeanSpa used a “free trial” ploy to enroll consumers into its recurring purchase program that cost $79.99 a month and that was difficult to cancel. FTC

April 6, 2015

The CFTC secured a permanent injunction against RFF GP, LLC, KGW Capital Management, LLC, and Kevin G. White, all of The Woodlands, Texas, requiring the defendants to pay $7.5 million for operating a fraudulent commodity pool.  CFTC

April 2, 2015

Medical device maker Medtronic plc and affiliated Medtronic companies,Medtronic Inc., Medtronic USA Inc., and Medtronic Sofamor Danek USA Inc., agreed to pay $4.41 million to resolve allegations they violated the False Claims Act by making false statements to the Department of Veterans Affairs and the Department of Defense regarding the country of origin of certain Medtronic products sold to the US.  Specifically, the government charged Medtronic with selling to the VA and DoD products it certified would be made in the US or other designated countries when in fact they were manufactured in China and Malaysia, which are prohibited countries under the Trade Agreements Act of 1979.  The allegations were first raised in a whistleblower lawsuit filed by three unidentified whistleblowers under the qui tam provisions of the False Claims Act. They will receive a whistleblower award of $749,700.  Whistleblower Insider

April 1, 2015

The New Jersey Bureau of Securities has ordered Charles J. Boyer III and James A. Wilson to pay $1 million for allegedly operating a Ponzi scheme under which they transferred approximately $177,000 of investor funds into their own personal accounts rather than investing the funds as represented to investors. NJ

April 1, 2015

Keli House Community Services, Inc., a nonprofit serving New Yorkers with disabilities and their families, agreed to reimburse New York’s Medicaid program $363,643 for using unqualified individuals to provide services to Medicaid recipients who participated in the Home and Community Based Services Program offered by the New York State Office of Persons with Developmental Disabilities. NY

April 1, 2015

The CFTC filed a civil enforcement complaint in the District Court for the Northern District of Illinois against Kraft Foods Group, Inc. and Mondelēz Global LLC, headquartered in Northfield and Deerfield, Illinois, respectively, for manipulation and attempted manipulation of the prices of cash wheat and wheat futures.  CFTC

March 31, 2015

The FTC has entered into a settlement with Phoebe Putney Health System, Inc., the Hospital Authority of Albany-Dougherty County, and HCA Inc. resolving the Commission’s charge that the Hospital Authority’s acquisition of Palmyra Park Hospital, Inc. from HCA Inc. – which created an effective hospital monopoly in the Albany, Georgia area – was anticompetitive. This consent agreement follows a significant Supreme Court victory in 2013 that reaffirmed the narrow scope of state action immunity and allowed the Commission to challenge this transaction. Due to the unavailability of structural relief, the consent does not require a divestiture. FTC

March 31, 2015

New York Attorney General Eric T. Schneiderman announced his office and the Attorneys General of Oregon, Minnesota, Missouri and Texas filed lawsuits against Orbital Publishing Group, Inc. for mailing millions of unauthorized and allegedly misleading magazine and newspaper subscription notices to consumers nationwide. The solicitations were sent without the permission of the publishers and overcharged consumers. NY