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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.

				

			

			
						
					
			

	
		
		

			

				
				
October 18, 2023

				 For-profit Sollers College, its parent company, Sollers Inc., and its founder and president Siba Padhi have been ordered to cancel $3.4 million in student debt and pay $1.2 million in civil penalties for misrepresenting its job placements rates and relationships with prominent companies in order to lure students to the school.  Since 2018, Sollers claimed that 90% of its graduates were placed in jobs within 3 months of graduation, when in reality the number was as low as 52%.  Sollers also encouraged students into paying tuition with illegal income-sharing agreements, wherein students would pay the school a fixed percentage of their future income for about two years.  Nearly 400 students nationwide were affected by this misconduct, with more than 60 of them being residents of New Jersey.  NJ AG; FTC				 					 

						
Tagged in:
													  Education Fraud, 
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 17, 2023

				 Healthcare clearinghouse Inmediata, which facilitates transactions between healthcare providers and insurers, has agreed to pay $1.4 million to 33 states in connection with a data breach that affected approximately 1.5 million consumers for nearly three years.  Despite being alerted to the data breach in 2019, Inmediata failed to notify consumers for over three months.  When it finally did send notice, the notices were misaddressed or unclear, leaving many consumers to believe the notices were fraudulent.  DE AG; NC AG				 					 

						
Tagged in:
													  Cybersecurity and Data Breaches, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 17, 2023

				 ACI Worldwide, a third-party payment processor for clients such as mortgage service provider Nationstar Mortgage (a/k/a Mr. Cooper), has agreed to pay $10 million to all 50 states for its role in a 2021 testing error that impacted 477,000 Mr. Cooper clients nationwide.  While testing out a platform being offered to Mr. Cooper clients, ACI accidentally submitted live consumer data into the ACH system, which caused ACI to erroneously withdraw $2.3 billion from consumer accounts through 1.4 million transactions, and consequently caused consumers to incur overdraft or insufficient funds fees.  A government investigation ultimately attributed this to ACI’s defective privacy and data security procedures and technical infrastructure.  CA AG; DE AG; PA AG; OR AG; VA AG				 					 

						
Tagged in:
													  Cybersecurity and Data Breaches, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 5, 2023

				 Software company Blackbaud has agreed to pay $49.5 million to 50 states in connection with a 2020 data breach that exposed the personal information of millions of consumers.  Additionally, the company failed to immediately report, and after failed to reveal the full scope and impact, of the breach.  In addition to the monetary penalty, Blackbaud will overhaul its data security and breach notification practices.  NJ AG; OR AG; PA AG; NC AG; VA AG				 					 

						
Tagged in:
													  Cybersecurity and Data Breaches, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 14, 2023

				 Following a multi-year investigation by the State of California, Google has agreed to pay $93 million to resolve allegations of deceiving its users about its collection, storage, and use of their location data.  Google was found to have misled users into believing their location data would not be collected, stored, or used for location-based advertising if they turned off “Location History” in their settings.  CA AG				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 11, 2023

				 Tempoe, LLC has agreed to pay $35 million to 41 states, the District of Columbia, and the CFPB, after an investigation found the Ohio-based consumer finance company misled customers who sought financing at major retailers into believing they were signing up for an installment plan, when in fact they were being locked into expensive leasing agreements with unreasonable return policies.  Tempoe ultimately caused many customers to pay double or triple the original purchase price.  In addition to the monetary penalty, the company has been ordered to release customers from existing lease agreements and be banned from engaging in future leasing activities.  CFPB; DE AG; GA AG; VA AG				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 8, 2023

				 Grocery store chain Kroger, which owns and operates a number of subsidiaries, has agreed to pay $1.37 billion to a number of states, including California, Illinois, North Carolina, Oregon, Tennessee, and Virginia.  The settlement in principle would absolve Kroger for its role in the opioid crisis.  CA AG; NC AG; OR AG				 					 

						
Tagged in:
													  Healthcare Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 8, 2023

				 Kaiser Foundation Health Plan, Inc., and Kaiser Foundation Hospitals have agreed to pay $49 million to settle claims of unlawfully disposing hazardous medical waste and protected health information for 16 different facilities.  The misconduct violated California’s Hazardous Waste Control Law, Medical Waste Management Act, Confidentiality of Medical Information Act, Customer Records Law, Unfair Competition Law, and the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA).  Under the settlement, Kaiser must also retain an independent third-party auditor to ensure Kaiser’s compliance with applicable laws.  CA AG				 					 

						
Tagged in:
													  Cybersecurity and Data Breaches, 
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 30, 2023

				 Lompoc Valley Medical Center (LVMC) has agreed to pay $5 million to resolve allegations of causing false claims to be submitted to California’s Medicaid program.  Under the Patient Protection and Affordable Care Act (ACA), Medi-Cal received federal funds to expand coverage to previously uninsured adults.  However, LVMC knowingly claimed and received payments from the government for services that were duplicative, not reimbursable, or not priced at fair market value.  CA AG				 					 

						
Tagged in:
													  FCA Federal, 
													  FCA State, 
													  Healthcare Fraud, 
													  Medicaid, 
													  Medical Billing Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 18, 2023

				 A doctor who defrauded California’s Medicaid program of over $20 million has been sentenced to 5 years in jail, ordered to pay $2.3 million in restitution, and forced to surrender his medical license.  Mohamed Waddah El-Nachef had pleaded guilty to prescribing medically unnecessary anti-psychotics, HIV medications, and opioids to over a thousand Medi-Cal beneficiaries, many of whom then sold the drugs for cash.  CA AG				 					 

						
Tagged in:
													  Healthcare Fraud, 
													  Lack of Medical Necessity, 
													  Medicaid, 
													  Provider Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

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