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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.

				

			

			
						
					
			

	
		
		

			

				
				
March 26, 2015

				 Pinnacle Financial Consulting, LLC and its owner Robert Burton have been ordered to pay more than $1.9 million for preying upon vulnerable consumers during the foreclosure crisis and engaging in the unauthorized practice of law.  MA				 					 

						
Tagged in:
													  Housing and Mortgage Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 26, 2015

				 Energy Services Providers Inc. (d/b/a Pennsylvania Gas and Electric) agreed to pay $2.3 million in refunds to eligible consumers in addition to the $4.5 million the company has already paid for allegedly deceptively marketing its variable electric rates to Pennsylvania consumers, many of whom filed complaints about spikes in their rates during the winter of 2014.  PA				 					 

						
Tagged in:
													  Government Investigation, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 20, 2015

				 Florida Attorney General Pam Bondi’s Medicaid Fraud Control Unit announced the arrests of four individuals for allegedly recruiting the homeless to defraud Medicaid.  According to the investigation, Christina Benson, owner of Tranquility Healthcare Solutions, billed Medicaid for services not provided or warranted for homeless men and women who were recruited by her associates to pose as patients.  In less than a year and a half, Tranquility fraudulently billed Medicaid approximately $3.2 million.  FL				 					 

						
Tagged in:
													  Healthcare Fraud, 
													  Medicaid, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 19, 2015

				 Bank of New York Mellon agreed to pay $714 million to settle charges the bank engaged in fraud and other misconduct when providing foreign exchange (“FX”) services to its customers.  As part of the settlements with the US and New York, BNYM admitted that contrary to representations to clients that it provided “best rates” and “best execution” for FX transactions, the Bank actually gave clients the worst reported interbank rates of the trading day.  The charges originated in a lawsuit brought by a whistleblower under the New York False Claims Act.				 					 

						
Tagged in:
													  Financial Institution Fraud, 
													  Foreign Exchange, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 19, 2015

				 Florida Attorney General Pam Bondi’s Division of Consumer Protection is suing dating company Singles Plus for allegedly making false claims about success rates, matches and its screening process.  FL				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 17, 2015

				 The DOJ and New York State announced a settlement with Coach USA Inc., City Sights LLC and their joint venture, Twin America LLC, to remedy competitive concerns in the New York City hop-on, hop-off bus tour market.  The settlement requires the defendants to relinquish all of City Sights’ Manhattan bus stop authorizations and disgorge $7.5 million in ill-gotten profits that the defendants obtained by operating Twin America in violation of the antitrust laws.  NY				 					 

						
Tagged in:
													  Antitrust Enforcement, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 17, 2015

				 Illinois Attorney General Lisa Madigan announced a lawsuit against Illinois-based online sports equipment retailer Great Sports, Inc. and now-defunct Legion Global Corp. for dishonest business practices that resulted in consumers losing hundreds of thousands of dollars.  According to Madigan’s lawsuit, consumers purchasing goods at any of the company’s websites, www.greaterpowersports.com, www.globaltrailer.net and www.saferwholesale.com, received incorrect orders or damaged products.  IL				 					 

						
Tagged in:
													  Government Investigation, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 16, 2015

				 New York Attorney General Eric T. Schneiderman announced that New York along with 49 other states and the District of Columbia have reached a settlement with global pharmaceutical company Daiichi Sankyo, Inc. to resolves allegations that Daiichi violated the False Claims Act by using lavish meals and speaker programs to improperly induce physicians to prescribe the drugs Azor, Benicar, Tribenzor and Welchol.  Under the agreement, Daiichi agreed to pay the US and state Medicaid programs $39 million.  The allegations originated in a whistleblower lawsuit filed by former Daiichi sales representative Kathy Fragoules under the qui tam provisions of the federal and New York State False Claims Acts.  She will receive $6.1 million of the federal recovery and an undisclosed portion of the state recoveries.  NY				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
													  Pharma Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 13, 2015

				 Florida Attorney General Pam Bondi’s Office obtained a temporary injunction and asset freeze against World Mark Wholesale and Trade, LLC for allegedly engaging in a systematic scheme to defraud owners of timeshares throughout Florida and nationwide.  FL				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 12, 2015

				 The New Jersey Bureau of Securities obtained a default judgment totaling more than $23 million in restitution, disgorgement, and civil penalties against Branded Marketing LLC (also known as 1800tarjetas.com), its successor company Branded Marketing, Inc., and its President and CEO, Richard Jackowitz, and affiliated company IT Connect, Inc., for their role in an investment scam that raised more than $4 million from unsuspecting investors.  NJ				 					 

						
Tagged in:
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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