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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.

				

			

			
						
					
			

	
		
		

			

				
				
April 21, 2016

				 New York announced a settlement with the national drugstore chain Walgreen, Co. and its subsidiary Duane Reade (collectively, “Walgreens”) for overcharging New York consumers and using misleading advertisements.  In addition to paying $500,000 in penalties, fees, and costs, Walgreens has agreed to several important reforms of its current advertising and business practices in New York.  The Attorney General’s undercover investigation had found that Walgreens deceptively induced New York consumers to purchase products. Among other claims, the investigation found that Walgreens represented to consumers that they would receive the price published in print advertisements and on store shelf tags, but charged consumers a different price at the register. Walgreens operates approximately 251 Walgreens and 214 Duane Reade stores across New York State. NY				 			
	
		
		
	


 			




	
		
		

			

				
				
April 21, 2016

				 New York announced four separate settlements with auto dealers that return nearly $2 million in restitution to nearly 5,000 consumers and $174,000 in penalties and costs to the state for selling “after-sale” products. The dealerships, Koeppel Auto Group, Plaza Dealerships, Manfredi Auto Group, and Huntington Honda have locations in Staten Island, Brooklyn, Queens, Long Island and Westchester. The Attorney General charged the dealerships with unlawfully selling “after-sale” products and services, including credit repair and identity theft protection services, that often added thousands of dollars to the purchase price of the vehicle. These settlements are part of the Attorney General’s wider initiative to end the practice engaged in by many dealers of “jamming,” or unlawfully charging consumers without their consent or knowledge for purchases. NY				 			
	
		
		
	


 			




	
		
		

			

				
				
April 20, 2016

				 New York announced the arrest of Certified Nurse Aide Jessicka Cohen in Ballston Spa.  Cohen was arraigned on one count of Grand Larceny in the Fourth Degree and one count of Criminal Possession of Stolen Property in the Fourth Degree, both Class E felonies.  In July 2015, she allegedly stole a unique wedding ring from a resident at Saratoga Center for Rehabilitation and Skilled Nursing Center.  She then allegedly sold the ring at a local store.  Cohen worked at Saratoga Center through Favorite Healthcare Staffing, a local agency from at least May through July of 2015.  The ring was reported missing to the staff at Saratoga Center and pursuant to the investigation, documentation was discovered that the defendant sold the ring at Ballston Coin and Jewelry, in Ballston Spa.  The ring was a wedding ring that the victim never took off of her finger. NY				 			
	
		
		
	


 			




	
		
		

			

				
				
April 19, 2016

				 New Jersey announced that Lawrence Durr – a longtime committeeman, mayor and planning board member in Chesterfield Township – pleaded guilty to a criminal charge that he filed fraudulent ethics disclosure forms that failed to disclose his financial relationship to a developer. A state investigation revealed that Durr entered into an undisclosed deal to sell transferrable development rights on a 104-acre farm to the developer, and then used his official positions to advance the developer’s plan to build a major residential and commercial project at another site in the township. In pleading guilty, Durr admitted that from February 2006 through October 2007, he filed false ethics disclosure forms with the Township of Chesterfield that failed to disclose his financial relationship with Renaissance Properties Inc. He is permanently barred from public office or employment. NJ				 			
	
		
		
	


 			




	
		
		

			

				
				
April 15, 2016

				 A former North Jersey chiropractor who was stripped of his license to practice more than a decade ago, has been charged with masterminding a medical fraud ring that allegedly bilked nearly $4 million from numerous insurance carriers. In an indictment handed up in Morris County Superior Court, Philip Potacco was charged with conspiracy, money laundering, and a host of other crimes in connection with the scheme he allegedly ran from his South Orange Medical Facility Consulting Group LLC (“SOTC”), 2010 to 2015. Potacco, whose chiropractic license was revoked in 2002, allegedly hired a licensed chiropractor to act as a straw owner of SOTC while he ran it covertly. Potacco allegedly used illegal “runners” to recruit accident patients to the facility, including people who had staged their crashes. Potacco then fraudulently submitted insurance claims for those patients, using the billing information of the licensed chiropractor he had hired, prosecutors said. Some of those claims were for services that were never rendered, according to prosecutors. NJ				 					 

						
Tagged in:
													  Chiropractic, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
April 15, 2016

				 Pennsylvania announced the arrest of a daughter and mother from Jefferson County charged with defrauding the Victims Compensation Assistance Program, a state program created to provide financial assistance to crime victims. The arrests of Monica Greene, 26, and Melissa L. Greene-Balbo, 46, are the result of an investigation by the Office of Attorney General’s Bureau of Criminal Investigations. According to investigators, Greene was physically assaulted and subsequently received $3,792 for moving expenses and lost wages that she was not entitled to by submitting false documentation to VCAP. Greene-Balbo, Greene’s mother, is accused of conspiring with her daughter to carry out the fraud, in part by providing false documentation, according to investigators. PA				 			
	
		
		
	


 			




	
		
		

			

				
				
April 13, 2016

				 Florida announced the arrest of a Florida dentist in connection to a scheme to fraudulently obtain oxycodone. Dr. Joseph Gorfien, D.D.S., is a partner at Gorfien & Jacobsohn, P.A., a dental practice, along with partner and director Dr. Henry Jacobsohn, D.M.D. According to the investigation, Gorfien used Jacobsohn’s professional license information and prescription pad to forge, then later fill, unlawful prescriptions for oxycodone without his partner’s knowledge. Gorfien is charged with 11 counts of purchase of oxycodone, each a second-degree felony, one count of obtaining controlled substances by fraud or forgery, a third-degree felony, and one count of criminal use of personal identification information, a third-degree felony. If convicted, Gorfien faces up to 175 years in prison. FL				 			
	
		
		
	


 			




	
		
		

			

				
				
April 12, 2016

				 Florida arrested two Miami-Dade County residents for allegedly billing the Medicaid program more than $100,000 for in-home support services not rendered. According to the investigation, David Krochmal, 43, owner of Peer Link Programs, and Cecilia Ines Krochmal, 47, operated a Home Health Agency that specialized in servicing individuals with developmental disabilities. Cecilia Krochmal, David Krochmal’s sister-in-law, managed the day-to-day operations of the business. The defendants allegedly falsified service logs for individual Medicaid recipients to include in-home services, such as assisting with personal hygiene; however, told clients that the business could not afford to visit clients’ homes to provide individual services. Instead, the defendants picked up multiple Medicaid recipients to participate in group activities on the weekends. FL				 			
	
		
		
	


 			




	
		
		

			

				
				
April 11, 2016

				 Illinois announced a $41 million settlement with Goldman Sachs as a result of the investment bank’s misconduct in its marketing and sale of risky residential mortgage-backed securities (RMBS) leading up to the 2008 economic collapse. The agreement is part of a $5 billion national settlement forged by the U.S. Department of Justice (DOJ), state attorneys general from New York and California and other federal entities. The settlement includes $25 million in relief for Illinois’ pension systems and $16 million in relief for Illinois consumers. The agreement stems from an investigation concerning the investment bank’s failure to disclose the true risk of RMBS investments. IL				 			
	
		
		
	


 			




	
		
		

			

				
				
April 7, 2016

				 Washington announced favorable resolutions for consumers with six student loan debt adjustors that overcharged Washington state students and collected unlawful fees. The six loan adjustors will pay a total of $162,000 to refund Washington students for illegal charges and an additional $56,000 for the Attorney General’s costs and attorney’s fees, as well as monitoring and future enforcement of the Consumer Protection Act. Student loan debt adjustment firms offer to help students fill out and submit paperwork to the U.S. Department of Education to consolidate their federal student loans. But information about repayment options and help consolidating federal student loans is available — for free — directly from the U.S. Department of Education.  All 346 Washington student victims will receive full refunds of the money they paid to the various companies. The Attorney General’s Office will notify eligible consumers and distribute the refunds directly to them in July 2016. WA				 					 

						
Tagged in:
													  Education Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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