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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.

				

			

			
						
					
			

	
		
		

			

				
				
January 21, 2015

				 New York Attorney General Eric T. Schneiderman joined the SEC and the office of the Massachusetts Attorney General in announcing a settlement with Standard and Poor’s Financial Services LLC regarding false and misleading statements made by S&P in connection with its rating of certain Commercial Mortgage Backed Securities (CMBS).  According to the government, from February 2011 to July 2011, S&P loosened the criteria it applied to rate eight CMBS, failed to disclose this fact to investors, and misled market participants into thinking the ratings for their investments were based on more conservative assumptions than was actually the case.  Under the settlement, New York will receive $12M in penalties, Massachussetts will receive $7M in penalties, and the SEC will receive $35M in penalties as well as $7M in disgorgement and interest.  The SEC also resolved two other matters related to S&P bringing the total government recovery to nearly $80M.  NY				 					 

						
Tagged in:
													  Financial Institution Fraud, 
													  Housing and Mortgage Fraud, 
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 21, 2015

				 New York Attorney General Eric T. Schneiderman announced a settlement with Florida-based Vacation Tours USA, Inc., and its principals Henry J. Armand and Tony J. Armand, over a false advertising scam targeting consumers across New York State.  According to the government, the company sent letters to consumers telling them they had won a vacation package, including airfare and lodging, and invited them to attend a seminar at a local hotel but once there were subjected to a sales presentation conducted by a third-party company instead of being given vouchers for free airline tickets and hotel stays.  Under the settlement, the company must halt its deceptive, fraudulent, and illegal business practices in New York State, pay restitution to consumers, and pay $22,500 in civil penalties and costs.  NY				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 20, 2015

				 Massachusetts Attorney General Martha Coakley announced South Shore Physician Hospital Organization will pay $1.77M to settle allegations of operating a recruitment grant program through which it paid kickbacks to its physician members in exchange for patient referrals.  MA				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
													  Healthcare Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 20, 2015

				 Florida Attorney General Pam Bondi’s Medicaid Fraud Control Unit arrested six former Targeted Case Managers of DS Connections, Inc. for more than $170,000 in Medicaid fraud.  FL				 					 

						
Tagged in:
													  Healthcare Fraud, 
													  Medicaid, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 16, 2015

				 Washington Attorney General Bob Ferguson announced Sea Mar Community Health Centers agreed to pay $3.35M to settle charges of improperly billing Medicaid for thousands of dental appointments.  According to the government, Sea Mar billed fluoride treatments as stand-alone appointments with a dentist or hygienist when they could have been performed much more cheaply by dental assistants as part of a patient’s regular six-month checkups.  WA				 					 

						
Tagged in:
													  FCA State, 
													  Medicaid, 
													  Medical Billing Fraud, 
													  Provider Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 16, 2015

				 Massachusetts Attorney General Martha Coakley announced Bank of America, JP Morgan Chase Bank, Citi, and Wells Fargo Bank agreed to pay $2.7M million and undertake obligations to facilitate the repair of defective property titles, resolving claims they violated Massachusetts foreclosure law and the Massachusetts Consumer Protection Act by illegally foreclosing upon Massachusetts residents’ homes when the banks lacked the legal authority to do so.  MA				 					 

						
Tagged in:
													  Financial Institution Fraud, 
													  Housing and Mortgage Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 14, 2015

				 Office Depot agreed to pay $68.5M to settle charges in violated the California False Claims Act by allegedly overcharging more than 1,000 cities, counties, school districts and other government entities in California for office supplies.  According to the government, Office Depot was required to but did not provide these government entities the lowest prices it was offering other government purchasers.  The allegations originated with a whistleblower lawsuit filed by former Office Depot employee David Sherwin.  Corporate Crime Reporter				 					 

						
Tagged in:
													  FCA State, 
													  Government Procurement Fraud, 
													  Pricing Fraud, 
													  Whistleblower Case, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 14, 2015

				 A New Jersey court has ordered New Jersey Youth Club, Inc. (NJYC), a Newark-based organization that claims to help underprivileged New Jersey youths, to temporarily cease seeking door-to-door solicitations and temporarily frozen its assets in connection with an action filed on behalf of the New Jersey Division of Consumer Affairs.  The government claims the organization violated the Charitable Registration and Investigation Act and regulations, as well as the Consumer Fraud Act, by soliciting for contributions although it is not registered as a charitable organization in New Jersey, and by making misleading and untruthful statements while soliciting donations.  NJ				 					 

						
Tagged in:
													  Government Investigation, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 12, 2015

				 New York Attorney General Eric T. Schneiderman announced an agreement with Excellus Health Plan, Inc. requiring that its contracted health care providers issue refunds to thousands of members in New York State for charging excessive copays.  The investigation began when an Excellus member complained to the Attorney General’s Health Care Bureau Helpline that his provider billed him a specialty care co-payment of $25 after visiting his primary care physician to whom he had already paid the primary care co-payment of $15.  NY				 					 

						
Tagged in:
													  Healthcare Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 9, 2015

				 New York Attorney General Eric T. Schneiderman announced a settlement with Encore Capital Group, Inc., a major debt buyer, for bringing improper debt collection actions against thousands of New York consumers. According the state, Encore sued New York consumers and obtained uncontested default judgments against consumers who failed to respond to the lawsuits, even though the underlying claims were untimely under New York law. Under the settlement, Encore will seek to vacate more than 4,500 improperly obtained judgments totaling nearly $18 million. Encore will also reform its debt collection practices and pay civil penalties and costs in the amount of $675,000. NY				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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