Government Enforcement Actions

February 26, 2015

New York Attorney General Eric T. Schneiderman announced joint lawsuits with the Federal Trade Commission aiming to shut down two abusive debt collection rings operating in the Buffalo area and targeting consumers nationwide. According to the complaints, Four Star Resolution, LLC and Vantage Point Services, LLC used threats and abusive language, including false threats that consumers would be arrested, to collect more than $45M in supposed debts. NY

February 26, 2015

Florida Attorney General Pam Bondi’s Medicaid Fraud Control Unit and the U.S. Department of Health and Human Services Office of Inspector General announced the arrest of Dr. Daniel Ronchetta, Chiropractic Physician Assistant John Crowe and patient recruiter Frank Barrios for allegedly defrauding Medicaid and Medicare by paying and receiving kickbacks in return for providing false home health prescriptions and plans of care to patient recruiters. FL

February 26, 2015

Kevin G. White of The Woodlands, Texas, who orchestrated a $7.4 million commodity pool investment scam during which he misappropriated approximately $1.7 million from pool participants, was sentenced to over eight years in federal prison.  CFTC

February 25, 2015

New York Attorney General Eric T. Schneiderman announced a settlement with nonprofit Regional Aid for Interim Needs, Inc. (RAIN) for diverting $800,000 in Medicaid funds to make mortgage payments on the agency’s administrative headquarters in violation of the organization’s funding agreements with the NYC Human Resource Administration. Under the settlement, RAIN, which provides home attendant services to elderly residents in the Bronx, must repay the illegally diverted $800,000 back to the Medicaid program. NY

February 23, 2015

The FTC has challenged marketers of “melanoma detection” apps, MelApp and Mole Detective, for deceptively claiming their mobile apps could detect symptoms of melanoma, even in its early stages, without scientific evidence to back up its claims. FTC

February 18, 2015

New York Attorney General Eric T. Schneiderman and New York City Corporation Counsel Zachary W. Carter announced the filing of a multimillion-dollar lawsuit alleging that United Parcel Service, Inc. unlawfully shipped over 136 million contraband cigarettes across New York State in violation of federal and state laws. NY

February 13, 2015

The FTC approved a final order against Dallas auto dealer TXVT Limited Partnership (doing business as Trophy Nissan) involving deceptive advertising charges. Under the settlement, Trophy is prohibited from misrepresenting in any advertisement the material terms of any promotion or other incentive, including that it will pay off a consumers’ trade-in or the cost of leasing or purchasing a vehicle. Trophy is also prohibited from failing to clearly and conspicuously disclose material terms of its promotions or other incentives and must comply with the Consumer Leasing Act and Regulation M and the Truth in Lending Act and Regulation Z. FTC

February 13, 2015

New York Attorney General Eric T. Schneiderman announced a felony indictment today charging Moazzam Ifzal “Mark” Malik with stealing over $250,000 from five investors by fraudulently soliciting them to invest in his purported hedge funds, including Seven Sages Capital, L.P. and Wolf Hedge LLC. Malik is accused of luring investors with false representations that he managed a multi-million dollar hedge fund that would guarantee high returns, and then diverted their monies for his own personal use. NY

February 13, 2015

A federal court ordered Scott M. Ross, formerly of Gilberts, Illinois, and his companies, Maize Capital Management, LLC and Maize Asset Management, LLC, to pay $6.7 million in restitution and civil penalties for defrauding investors, mishandling customer funds, and failing to register as a commodity pool operator.  CFTC

February 11, 2015

The FTC named Sereika Savariau and Lawrence Goodison in a case against a phony debt relief and credit repair scheme that allegedly deceived consumers about non-existent federal programs to pay off their bills and fix poor credit. The case was originally brought in August 2014 against the American Bill Pay and American Benefits Foundation. The amended complaint was accepted by the court, and the case remains in litigation. The FTC is seeking to have the scam permanently shut down, and obtain refunds for consumers who paid for the scammers’ bogus debt and credit services. FTC