Government Enforcement Actions

December 16, 2014

A federal court has ordered Missouri resident Daniel Steele and his company, Champion Management International LLC, to pay over $2.5 million in sanctions.  CFTC

December 12, 2014

For-profit school Salter College will pay students $3.75M to resolve allegations of misrepresenting job placement numbers and using deceptive enrollment tactics. This is the largest settlement to date as part of Massachusetts’ ongoing investigation of the for-profit school industry. MA

December 11, 2014

A federal court has entered orders against 22 mortgage company defendants who offered financially strapped consumers fake home-loan modification services that the FTC claims violated the FTC Act and the Mortgage Assistance Relief Services Rule. The FTC alleged the defendants operated as two loan modification enterprises, each of which falsely claimed it would provide legal help to save consumers’ homes from foreclosure and lower their mortgage payments. The enterprises then charged up-front fees of between $2,500 and $3,500, but delivered little or no help, deepening the consumers’ financial distress. The orders impose monetary judgments in varying amounts to remedy the almost $51 million of consumer injury from the defendants’ activities and collectively ban the defendants from advertising, promoting, or selling unsecured debt relief products and services; misrepresenting any material facts related to financial products or services; misrepresenting material facts related to any other types of services; and benefiting from any consumer information they collected through the scheme. FTC

December 10, 2014

The CFTC has settled charges against IBFX, Inc. f/k/a Tradestation Forex, Inc., a Florida-based Retail Foreign Exchange Dealer, for violating CFTC Regulations by failing to meet the minimum net capital requirements on three separate occasions, failing to timely report one of the minimum net capital deficits, and failing to supervise its employees and agents diligently by establishing, implementing, and executing an adequate supervisory structure and compliance programs.  CFTC

December 8, 2014

Supreme Foodservice pleaded guilty and paid $288 million for overcharging the government on a contract to provide food and water to the U.S. troops in Afghanistan.  In addition, Supreme Group B.V. and several of its subsidiaries agreed to pay an additional $146 million to resolve a related civil lawsuit alleging false billings to the Department of Defense for fuel and transporting cargo to American soldiers in Afghanistan. Michael Epp, former Director, Commercial Division and Supply Chain for Supreme Group, will receive a whistleblower award of $16.2 million.  DOJ

December 5, 2014

The settlement involving Google unfairly billing for in-app purchases receives final approval. The order resolves allegations that Google billed consumers millions of dollars for charges incurred by children without consent from account holders. When Google first introduced in-app charges to the Google Play store in 2011, the FTC’s complaint alleged, Google billed for such charges without any password requirement or other method to obtain account holder authorization. FTC

December 5, 2014

The U.S. District Court for the Southern District of Florida has entered an order of default judgment against defendants Gold Distributors, Inc. of Hallandale Beach, Florida, and its sole owner Jordan Cain of Miami, Florida.  The order requires the defendants to pay restitution in the amount of $337,266 and a civil monetary penalty of $1,011,800, as well as imposing permanent trading, solicitation, and registration bans against the defendants.  CFTC

December 4, 2014

Paul Greenwood of North Salem, New York, who operated a $1.3 billion investment scam where he and a co-Defendant misappropriated at least $554 million from commodity pool participants, was sentenced to 10 years in federal prison for charges related to his participation in the scam. Earlier, on July 28, 2010, Greenwood pled guilty to a six-count criminal indictment on the charges, including a commodities fraud charge in violation of the Commodity Exchange Act (CEA).  CFTC

December 4, 2014

Illinois Attorney General Lisa Madigan joined with the attorneys general of 44 states and the District of Columbia to announce that Sirius XM Radio Inc. agreed to pay $3.8M and provide restitution to eligible consumers to resolve claims that the satellite radio company engaged in misleading advertising and billing practices. The states’ investigation focused on consumer complaints involving: difficulty canceling contracts, cancellation requests that were not honored, misrepresentations that the consumer’s Sirius XM service would be canceled and not renewed, contracts that were automatically renewed without consumers’ notice or consent, unauthorized fees, higher and unanticipated rates after a low introductory rate, and Sirius XM failing to provide timely refunds. IL

December 3, 2014

PaymentsMD, LLC settled FTC charges alleging they misled thousands of consumers who signed up for an online billing portal by failing to adequately inform them that the company would seek highly detailed medical information from pharmacies, medical labs and insurance companies. The FTC alleges the companies used the sign-up process for a “Patient Portal” — where consumers could view their billing history — as a pathway to deceptively seek consumers’ consent to obtain detailed medical information about the consumers to create patient profiles. FTC