Government Enforcement Actions

February 4, 2015

Pennsylvania Attorney General Kathleen G. Kane and the Office of Inspector General of the U.S. Department of Health & Human Services announced Medicaid fraud and other charges against Philadelphia-based Infinite Care Inc., sister company Infinite Care Special Needs Inc., and the companies’ vice president and treasurer. According to the Grand Jury, Infinite Care fraudulently billed Medicaid by more than $1M for services not rendered from January 2010 to the present, and after the company received a Grand Jury subpoena, it held a meeting where the decision was made to destroy the fraudulent paperwork submitted to the Commonwealth for services not provided and for inflated services. PA

February 3, 2015

Judge Cormac J. Carney of the U.S. District Court for the Central District of California entered an emergency restraining order freezing assets and prohibiting the destruction or concealment of books and records of defendants Christopher Valois, Cynthia Wong, and their companies, Bertram Trade LLC and Churchhill Commodities Trading LLC, all of Orange County California.  The judge set a hearing date for February 12, 2015.  CFTC

February 3, 2015

California Attorney General Kamala D. Harris, along with the DOJ and the attorneys general of 18 states and the District of Columbia, announced a settlement with Standard & Poor’s Financial Services LLC (S&P) and its parent company McGraw-Hill Financial Inc. to resolve federal and state civil claims related to S&P’s conduct in inflating ratings of residential mortgage-backed securities and structured investment vehicle notes. Combined with a separate settlement also announced today resolving a lawsuit filed by the California Public Employees’ Retirement System (CalPERS), S&P will pay a total of $1.5B to federal and state government entities. The State of California will recover $210M in damages, from which CalPERS and the California State Teachers’ Retirement System (CalSTRS) will receive allocations for their losses on investments of certain S&P-rated securities. Separately, S&P will also pay CalPERS $125M to settle CalPERS’ specific lawsuit. The remainder of the total settlement proceeds will be distributed amongst the DOJ and the other nineteen attorneys general. CA

February 3, 2015

Florida Attorney General Pam Bondi filed a complaint against Ocean Hunters, Inc. and its owner Abdiel Falcon for violating the Florida Deceptive and Unfair Trade Practices Act by allegedly deceiving Florida consumers who purchased the company’s open water scuba diving certification courses. FL

February 2, 2015

New York Attorney General Eric T. Schneiderman announced his office obtained two separate judgments of nearly $800,000 against Emstar Pizza, a Papa John’s franchisee, and its owner and operator for underpaying employees. The violations include shaving workers’ pay by under-reporting hours and rounding down hours worked to the nearest whole hour increment (and paying nothing for fractions of hours), as well as nonpayment of overtime premiums—all in violation of New York State Labor Law. NY

January 30, 2015

The FTC reached settlements with First American Title Lending and Finance Select, two car title lenders, that will require them to stop their use of deceptive advertising to market title loans. The FTC charged that the companies advertised, both online and in print, zero percent interest rates for a 30-day car title loan without disclosing important loan conditions or the increased finance charge imposed after the introductory period ended. “This type of loan is risky for consumers because if they fail to pay, they could lose their car – an asset many of them can’t live without,” said Jessica Rich, director, FTC’s Bureau of Consumer Protection. “Without proper disclosures, consumers can’t know what they’re getting, so when we see deceptive marketing of these loans we’re going to take action to stop it.” FTC

January 30, 2015

Massachusetts Attorney General Maura Healey announced Neighborhood Diabetes, Inc. will pay more than $1.5M to settle allegations it improperly billed and received payments from the state’s Medicaid program when it automatically refilled prescription medications that were not specifically requested by MassHealth patients or caregivers. The settlement is the second case in the Commonwealth to address a pharmacy’s operation of an improper automatic refill program with MassHealth members. In September 2013, AllCare Pharmacy agreed to pay $1.6M to settle similar allegations. MA

January 28, 2015

TracFone, the largest prepaid mobile provider in the U.S., has agreed to pay $40 million to the FTC to settle charges that it deceived millions of consumers with hollow promises of “unlimited” data service. The FTC’s complaint alleges TracFone advertised prepaid monthly mobile plans for about $45 per month with “unlimited” data under various brands, including Straight Talk, Net10, Simple Mobile, and Telcel America. But despite emphasizing unlimited data in its advertisements, TracFone drastically slowed or cut off consumers’ mobile data after they used more than certain fixed limits in a 30-day period. FTC

January 26, 2015

Lindsey Duncan, Pure Health LLC, and Genesis Today, Inc. have agreed to settle FTC charges that they deceptively touted the supposed weight-loss benefits of green coffee bean extract through a campaign that included appearances on The Dr. Oz Show, The View, and other television programs. Under the settlement, the defendants are barred from making deceptive claims about the health benefits or efficacy of any dietary supplement or drug product, and will pay $9 million for consumer redress. “Lindsey Duncan and his companies made millions by falsely claiming that green coffee bean supplements cause significant and rapid weight loss,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “This case shows that the Federal Trade Commission will continue to fight deceptive marketers’ attempts to prey on consumers trying to improve their health.” FTC

January 26, 2015

The CFTC ordered Anthony Lauria and his company, Gold Coast Bullion, Inc. to pay more than $9.6 million to settle charges of engaging in an illegal, off-exchange precious metals scheme and for committing fraud in connection with those illegal transactions.  CFTC