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State Enforcement Actions

Each state enforces its laws and defends its interests, and states often work with the federal government in investigating and prosecuting corporate frauds.  Whistleblowers with knowledge of fraud or wrongful conduct that involves state or local funds or programs may be able to bring a claim under a state or local False Claims Act, and may be eligible to receive a monetary reward and protection against retaliation.

Below are summaries of recent settlements, successful prosecutions, and enforcement actions by states. If you believe you have information about fraud which could give rise to a claim under a State or Local False Claims Act or other whistleblower reward provision, please contact us to speak with one of our experienced whistleblower attorneys.

May 28, 2019

California Attorney General, Xavier Becerra, recovers $1,498,574 in a lawsuit against telemarketing company, Consumer Rights Legal Services (CRLS), and four individuals. President and owner of CRLS, James Davitt, and three others, scammed more than 150 victims by offering phony “investment recovery services” that they said would recover the money that the victims had lost from prior investments. The victims, many of them elderly, had to pay an up-front fee for the fraudulent service. State of California DOJ

May 23, 2019

Sixteen states have reached a settlement with the Medical Informatics Engineering and NoMoreClipboard, LLC, which have agreed to pay $900,000 to resolve allegations that the companies violated the Health Insurance Portability and Accountability Act (HIPAA), unfair and deceptive practice laws, notice of data breach statutes, and state personal information protection laws. The companies provide patient portals to healthcare providers, enabling patients to access their health records. Hackers allegedly infiltrated the companies' servers in May 2015, stealing the information of more than 3.9 million individuals. A consent judgment with specific compliance agreements was also entered by the court.  FL; NC

May 8, 2019

Cosmetics retailer Sephora USA Inc. paid $159,349 to the State of Indiana to resolve claims brought by a whistleblower under the Indiana False Claims Act alleging that Sephora made false statements in connection with failing to collect sales tax on internet sales shipped to Indiana consumers.  IN AG

May 2, 2019

Chimes Delaware, which provides services to individuals with developmental disabilities in Delaware, will return $4.5 million in Medicaid funding to the state to resolve claims of billing errors in its supported employment programs and transportation services.  Chimes also agreed to institute new internal controls and billing procedures.  DE

April 30, 2019

Home healthcare company Avenue Homecare Services, Inc, of Dracut, Massachusetts, will pay $8.3 million to resolve allegations that between 2013 and 2016 it defrauded the state's Medicaid program, MassHealth, by submitting false bills for unauthorized services not supported by a valid plan of care from a physician.  In some cases, Avenue submitted bills for home healthcare services for patients who were hospitalized at the time of the alleged services.  The settlement also requires the company to implement a compliance program to continue as a MassHealth provider.  MassAG

April 30, 2019

Home healthcare company Amigos Homecare, LLC, of Lawrence, Massachusetts, will pay $2.13 million to resolve allegations that between 2014 and 2018 it defrauded the state's Medicaid program, MassHealth, by submitting false bills for unauthorized services not supported by a valid plan of care from a physician.  In some cases, Amigos submitted bills for home healthcare services for patients who were hospitalized at the time of the alleged services.  The settlement also requires the company to implement a compliance program to continue as a MassHealth provider.  MassAG

April 29, 2019

In Washington State, St. Joseph Medical Center of Tacoma, along with seven other hospitals of its parent company CHI Franciscan, have agreed to provide $22 million in debt forgiveness and refunds to patients who qualified for charity care but did not receive it, despite requirements that hospitals screen patients for charity care eligibility and provide notice of the availability of charity care.  WA AG

April 25, 2019

Morgan Stanley will pay $150 million to the State of California to resolve allegations under the California False Claims Act, Corporate Security Law and False Advertising Law, that the bank concealed the risk of residential mortgage-backed securities sold to the California Public Employees’ Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS) between 2003 to 2007. CA

April 15, 2019

Munich-based UniCredit Bank AG (UCB AG) and affiliated entities have agreed to pay more than $1.3 billion to resolve criminal charges and related allegations of unlawful conduct by the Department of Justice, Department of Treasury Office of Foreign Assets Control (OFAC), the Federal Reserve, the New York Department of Financial Services, and the New York County District Attorney's Office. As part of the settlement, UniCredit admitted that between 2002 and 2011 it processed financial transactions worth hundreds of millions of dollars through U.S. financial institutions on behalf of the Islamic Republic of Iran Shipping Lines and other entities subject to sanctions under the International Emergency Economic Powers Act (IEEPA).  DOJ; Treasury; Fed; DANY

April 9, 2019

London-based Standard Chartered Bank has agreed to pay $1.1 billion to resolve criminal charges and related allegations of unlawful conduct by the Department of Treasury Office of Foreign Assets Control (OFAC), the Federal Reserve, the New York Department of Financial Services, the New York County District Attorney's Office, and the United Kingdom's Financial Conduct Authority. As part of the settlement, Standard Chartered admitted that it processed thousands of financial transactions worth hundreds of millions of dollars through U.S. financial institutions for the benefit of Iranian and other entities and individuals subject to sanctions. In addition, Standard Chartered admitted that it had deficiencies in its compliance programs and had falsified the records of New York financial institutions.  In addition to the financial penalties, Standard Chartered agreed to the extension of an existing deferred prosecution agreement through 2021, and committed to undertaking specified compliance initiatives.  DOJ; Treasury; Fed; DANY; UK
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