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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.

				

			

			
						
					
			

	
		
		

			

				
				
February 29, 2016

				 New Jersey announced that two men pleaded guilty to conspiring in a $1.5 million series of thefts involving tractor-trailers loaded with cargo, including clothing, beauty products, auto parts and beer, which the defendants stole and fenced.  Seven men pleaded guilty previously to taking part in the theft ring, which operated in New Jersey, New York and Pennsylvania.  Between June 2012 and April 2015, ring members engaged in nine thefts and two purchases of additional stolen goods in which the total value of the cargo and tractor-trailers stolen exceeded $1.5 million.  NJ				 			
	
		
		
	


 			




	
		
		

			

				
				
February 17, 2016

				 New York announced an agreement with Buffalo Biodiesel, a company that collects cooking oil waste and converts it into biodiesel, over claims that the company filed lawsuits against hundreds of small businesses across Western New York and several surrounding states. The over 600 lawsuits, most of which were filed in Buffalo City Court, made various breach of contract claims against small businesses that had entered into a contract with the company. Buffalo Biodiesel sought thousands of dollars, sometimes as much as tens of thousands of dollars, in damages from ‘mom and pop’ restaurants. The agreement requires Buffalo Biodiesel to withdraw all applications it made for default judgments, to vacate default judgments it has taken against unrepresented businesses, and return any money it might have collected on judgments. NY				 			
	
		
		
	


 			




	
		
		

			

				
				
February 26, 2016

				 Illinois filed a lawsuit against a Delaware coal company, the American Coal Company, for a coal slurry release near an Illinois mine that resulted in the relocation of at least one resident. The complaint alleges that an injection well located around the village of Raleigh, was leaking unknown quantities of coal slurry, a byproduct of coal preparation. The complaint further alleges the slurry flowed into the nearby Bethel Creek and contaminated soil and groundwater, resulting in at least one resident having to be relocated. IL				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 25, 2016

				 Florida announced a multimillion dollar settlement with entities doing business as InterFACE Talent and the entities’ president and CEO, Roman Vintfeld. The Florida Attorney General’s Office obtained a stipulated permanent injunction and a final consent judgment against the defendants, resolving allegations of unfair and deceptive business practices in selling talent marketing services to Florida consumers. InterFACE, a New Jersey-based talent company, allegedly falsely promised to help Florida consumers get modeling and acting jobs, but instead took large up-front fees for nothing more than photo shoots and introductions to industry professionals. FL				 			
	
		
		
	


 			




	
		
		

			

				
				
February 25, 2016

				 Pennsylvania announced a recent Commonwealth Court ruling imposed a civil penalty of $10.8 million on two individuals who will be barred from soliciting charitable donations in Pennsylvania until the penalty is paid in full. According to legal filings in the case, the defendants operated commercial telemarketing firms, Phil’s Productions, LLC  and MVP Productions, based in Ohio that sold concert tickets and advertising on behalf of local firefighters unions. Telemarketers led consumers to believe they were firefighters or police officers when they were not. They also made misrepresentations about how much they were paid. PA				 			
	
		
		
	


 			




	
		
		

			

				
				
February 24, 2016

				 New York, together with 21 other states, announced multimillion dollar settlements with Natixis Funding Corp. and Societe Generale for fraudulent and anticompetitive conduct in municipal bond derivative transactions with state and local government entities and nonprofits across the country. Natixis and Societe Generale will pay $29,950,000 and $26,750,000 respectively as part of a coordinated 22-state and private class settlement. Pursuant to the settlements, $53,865,000 will be paid into a Settlement Fund and largely applied to restitution for municipalities, counties, government agencies, school districts and nonprofits that the states allege were harmed when they entered into municipal derivatives contracts with Natixis or Societe Generale. NY, NJ, FL				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Financial Institution Fraud, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 22, 2016

				 Michigan filed felony charges against a former Motor City Casino dealer and six others for their roles in an alleged scheme to steal money from the casino involving hundreds of dollars of individual player payouts on lost bets during games of Texas Hold ‘em. The charges were filed following an investigation by the Michigan State Police after they were asked by Motor City Casino to investigate possible dealer/player collusion. The felony complaints allege that Darryl Green, who was employed as a dealer at Motor City Casino in 2014 when the alleged acts took place, conspired with the other six defendants to make payouts to them on losing bets or simply not collect payment on lost bets. MI				 			
	
		
		
	


 			




	
		
		

			

				
				
February 18, 2016

				 National mortgage lender and servicer HSBC has agreed to pay $4 million to resolve allegations that it received commissions and other kickbacks relating to force-placed insurance policies that it procured for struggling Massachusetts homeowners. Force-placed insurance is property insurance that mortgage servicers obtain on behalf of homeowners when they believe homeowners have failed to maintain adequate homeowners insurance. Force-placed insurance often occurs in circumstances where a borrower has fallen behind on his or her mortgage payments. The settlement provides for refunds to thousands of Massachusetts borrowers who were improperly charged force-placed insurance premiums that included commissions or other payments to HSBC. MA				 			
	
		
		
	


 			




	
		
		

			

				
				
February 17, 2016

				 Maryland announced that the Office of the Secretary of State has shut down a purported charity for veterans which allegedly falsified marketing materials and other documents and has not accounted for donations. The Secretary of State issued a cease-and-desist order against the Southern Maryland Veterans Association, along with principal Dan Brashear, and alleged former associate Norman Randolph McDonald. In response to multiple complaints, an investigation by the Secretary of State’s Charities and Legal Services Division, aided by the Office of the Attorney General, showed that the organization was allegedly not assisting the housing needs of veterans as claimed in marketing materials. The charity was also not registered with the Secretary of State.				 			
	
		
		
	


 			




	
		
		

			

				
				
February 16, 2016

				 New York announced the conviction and sentencing of Frederick E. Monroe, Jr., 59, of Queensbury, New York, for stealing over $5 million from investors by fraudulently soliciting them to reinvest their retirement monies. In December 2015, Monroe pleaded guilty in Albany County Court to Scheme to Defraud, Grand Larceny, Money Laundering and Securities Fraud for luring clients with whom he had established relationships with over his 20-year career as a financial planner, and then diverting their monies for his own personal use, as well as to pay back earlier investors he had defrauded. NY				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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