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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.

				

			

			
						
					
			

	
		
		

			

				
				
December 22, 2014

				 Aspen Dental Management, Inc. and Aspen Dental Associates of New England, P.C. agreed to pay at least $990,000 to settle allegations of deceptive advertising and marketing practices, and failing to give refunds to consumers for services not provided. There are more than two dozen Aspen Dental locations in Massachusetts.  MA				 			
	
		
		
	


 			




	
		
		

			

				
				
December 19, 2014

				 California Attorney General Kamala D. Harris announced that the California Department of Justice, along with the Attorneys General of the other 49 States and the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission, reached settlements with T-Mobile USA, Inc. to resolve allegations that T-Mobile placed charges for third-party services on consumers’ mobile telephone bills that were not authorized by the consumer, a practice known as “mobile cramming.”  The settlement terms require that T-Mobile pay at least $90M.  Consumers who have been “crammed” often complain about charges, typically $9.99 per month, for “premium” text message subscription services (also known as “PSMS” subscriptions) such as horoscopes, trivia, and sports scores, that the consumers have never heard of or requested.  T-Mobile is the second mobile telephone provider to enter into a nationwide settlement to resolve allegations regarding cramming.  AT&T agreed to pay $105M to settle similar charges in October.  CA				 			
	
		
		
	


 			




	
		
		

			

				
				
December 18, 2014

				 Nine hotel operators in Massachusetts agreed to cease a potentially anticompetitive practice through which a hotel receives competitive room rates and occupancy information that can be used to raise or stabilize its own prices. Three of the operators agreed to pay a total of $45,000 in civil penalties.  The hotels involved in the investigation included Morgans Hotel Group Management LLC, Pyramid Advisors, LP / Kimpton Hotel and Restaurant Group, LLC, HHLP Bulfinch Associates, LLC / Marriott International, Inc. / Omni Hotels Management Corporation / Pacific Boston Holdings Corp. / Seaport Hotel Limited Partnership / Starwood Hotels & Resorts Worldwide, Inc.  MA				 			
	
		
		
	


 			




	
		
		

			

				
				
December 18, 2014

				 Freedom Furniture, Inc., Freedom Acceptance Corporation, Military Credit Services, LLC will pay more than $2.5M for violations of state and federal laws on credit and debt collection.  Freedom Furniture is a national retailer that sells furniture, electronics, jewelry and other products online and at 14 retail locations near military bases, including one in North Carolina near Fort Bragg in Fayetteville.  FAC services credit and collects debts on behalf of Freedom Furniture, and MCS extends credit for purchases made by military consumers at independent retailers.  VA				 			
	
		
		
	


 			




	
		
		

			

				
				
December 12, 2014

				 For-profit school Salter College will pay students $3.75M to resolve allegations of misrepresenting job placement numbers and using deceptive enrollment tactics.  This is the largest settlement to date as part of Massachusetts’ ongoing investigation of the for-profit school industry.  MA				 			
	
		
		
	


 			




	
		
		

			

				
				
December 4, 2014

				 Illinois Attorney General Lisa Madigan joined with the attorneys general of 44 states and the District of Columbia to announce that Sirius XM Radio Inc. agreed to pay $3.8M and provide restitution to eligible consumers to resolve claims that the satellite radio company engaged in misleading advertising and billing practices.  The states’ investigation focused on consumer complaints involving: difficulty canceling contracts, cancellation requests that were not honored, misrepresentations that the consumer’s Sirius XM service would be canceled and not renewed, contracts that were automatically renewed without consumers’ notice or consent, unauthorized fees, higher and unanticipated rates after a low introductory rate, and Sirius XM failing to provide timely refunds.  IL				 			
	
		
		
	


 			




	
		
		

			

				
				
December 2, 2014

				 Durable medical equipment supplier Regional Home Care, Inc., which does business as North Atlantic Medical Services, will pay a total of $852,378 to federal and state authorities for its violation of the False Claims Act by billing Medicare and Medicaid for unlicensed services for the treatment of respiratory ailments, such as oxygen deficiency and sleep apnea.  MA				 					 

						
Tagged in:
													  Improper Medical Personnel, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 24, 2014

				 New York Attorney General Eric T. Schneiderman announced the indictment of three pharmacies and seven individuals for allegedly defrauding Medicaid of over $5M by allegedly paying customers for prescriptions obtained from a local doctor and then billing Medicaid for the drugs even though they were never dispensed.  The corporate defendants include Perfect Gift US, Inc., d/b/a Central Pharmacy, Princess RX, Inc., d/b/a Hastings Drug Corp., and Bright RX, Inc., d/b/a Buffalo Drugs.  NY				 			
	
		
		
	


 			




	
		
		

			

				
				
November 20, 2014

				 California Attorney General Kamala D. Harris and Alameda County District Attorney Nancy E. O’Malley announced a settlement with AT&T to resolve allegations that hundreds of AT&T’s California facilities unlawfully disposed of hazardous waste and material over a nine-year period.  As part of the settlement, AT&T will pay $23.8M million and spend an additional $28M over the next five years to implement the enhanced environmental compliance measures required by the settlement.  CA				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 19, 2014

				 Florida Attorney General Pam Bondi announced that eight residents of Miami-Dade County and three residents of Nicaragua have been charged for their alleged participation in a $25M Medicare, Medicaid, and wire fraud scheme.  As alleged in the indictment, the defendants recruited individuals who resided in Nicaragua and the Dominican Republic to enroll in Medicare Advantage plans and Florida Medicaid by falsely representing in enrollment applications that they resided in Florida.  Additionally, the defendants caused physicians associated with Pharmovisa Inc., Axis Le Professional Medical Group, Inc. and Rodney Montoya Corp. to be designated as the primary care physicians for the beneficiaries residing in Nicaragua and the Dominican Republic.  FL				 			
	
		
		
	


 			


											

						

								

									
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