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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 14, 2022

				 An energy service company has agreed to pay $2.15 million in restitution to New York consumers after an investigation found that its dishonest business practices caused consumers to pay hundreds of dollars extra per year for gas and electricity.  In addition to the monetary penalty, Family Energy is also required to take measures to prevent future abuses, including adequately training its representatives, monitoring and recording telephone communications, refraining from misleading marketing, and implementing disciplinary actions for any violations.  NY AG				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 11, 2022

				 California state and local entities secured a $3.25 million settlement with Brookdale Senior Living, Inc. resolving allegations that the skilled nursing facility company misrepresented its services and quality of care, fraudulently inflating the star ratings for specific Brookdale facilities in California.  The government alleged that Brookdale failed to timely provide required notice to residents of transfers or discharges, and over-reported its nursing staffing hours to CMS.  CA DOJ				 					 

						
Tagged in:
													  Healthcare Fraud, 
													  SNF, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 7, 2022

				 Ashford University, an online, for-profit school, and its parent company, Zovio, Inc., have been ordered to pay $22.37 million in penalties after a California court ruled in favor of the state attorney general’s office by finding that they presented false and misleading information to students to encourage them to enroll.  The lawsuit had alleged that Ashford’s promises about career outcomes, cost and financial aid, and ability to transfer credits caused many students to be saddled with debt and nothing to show for it.  CA AG				 					 

						
Tagged in:
													  Education Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 3, 2022

				 Multiple chemical companies agreed to pay a collective total of $11.7 million to resolve claims by state and local entities that from 1997 through at least 2011, they participated in a nationwide conspiracy to allocate territories and customers, unlawfully rig bids, and fix prices paid by government entities for the purchase of coagulant liquid aluminum sulfate, a chemical used in water treatment and purification.  The defendants include General Chemical entities, GenTek, Inc., Chemtrade entities, GEO Specialty Chemicals, Inc., C&S Chemicals, Inc., USALCO, LLC, Delta Chemical Corporation, and American Securities, LLC.  The Commonwealth of Virginia recovered $1.1 million in a whistleblower case initiated under the Virginia Fraud Against Taxpayers Act by Lawrence McShane.  VA				 					 

						
Tagged in:
													  Bribery and Bid-Rigging, 
													  FCA State, 
													  Government Procurement Fraud, 
													  Whistleblower Case, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 24, 2022

				 The National Bank of Pakistan and its New York branch will pay a total of $55.4 million to resolve investigations by the New York State Department of Financial Services and the Federal Reserve Bank of New York into Bank Secrecy Act/Anti-Money Laundering compliance deficiencies.  The bank had previously entered into agreements with the government entities, acknowledging BSA/AML weaknesses and agreeing to undertake remedial measures.  However, the bank had failed to undertake adequate remedial  measures, as found in examinations by the government entities.  NY DFS; Fed				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Financial Institution Fraud, 
													  Money Laundering, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 14, 2022

				 BlockFi, Inc. will pay a total of $100 million to resolve SEC and state claims arising from its sale to retail customers of cryptocurrency lending products, including its BlockFi Interest Accounts.  Through the “BIAs,” investors lent cryptocurrency assets to BlockFi in exchange for the company’s promise to provide a variable monthly interest payment.  The SEC alleged that the BIAs were securities, offered without registration, that BlockFi operated as an unregistered investment company, and made false and misleading statements about risk levels. The total settlement includes a $50 million SEC civil penalty and $50 million to be divided equally between U.S. jurisdictions that are members of North American Securities Administrators Association.   SEC; NASAA				 					 

						
Tagged in:
													  Cryptocurrency, 
													  Financial and Investment Fraud, 
													  Misrepresentations, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 11, 2022

				 Transportation company Academy Bus, LLC, together with related entities and individuals, will pay $20.5 million to resolve claims brought in a whistleblower lawsuit under New Jersey’s False Claims Act that the defendants defrauded New Jersey Transit, for whom defendants operated bus routes.  Defendants were paid by NJ Transit based, in part, on miles and hours driven, with deductions for missed bus trips; they were alleged to have over-reported miles and hours driven, and underreported their missed bus trips to the state.  The settlement also required Academy to implement specific compliance procedures.  The whistleblower, former Academy employee Hector Peralta, will receive an award totaling $3.9 million.  NJ				 					 

						
Tagged in:
													  Certifications, 
													  Contract Non-Compliance, 
													  FCA State, 
													  Government Procurement Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 1, 2022

				 Two North Carolina medical providers will pay nearly $1.5 million combined for submitting false claims to the Medicaid program. Knowles, Smith, & Associates LLP will pay $1,150,000 to resolve allegations spanning five years of failure to monitor their anesthesia billing by not providing services billed, administering medically unnecessary procedures, or failing to maintain sufficient supporting documentation. Stacy Benton Lewis, M.D., and the Center for Women’s Health, P.A. will pay $340,000 to resolve false billing allegations covering a four-year period for submitting claims for complex visits that did not occur. NC DOJ				 					 

						
Tagged in:
													  Healthcare Fraud, 
													  Medicaid, 
													  Medical Billing Fraud, 
													  Provider Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 13, 2022

				 One of the nation’s largest student loan servicers, Navient, f/k/a Sallie Mae, has agreed to a $1.85 billion settlement with 39 states to resolve allegations of widespread deceptive and predatory lending practices in the early-to-mid 2000s.  $95 million of the settlement proceeds will be in the form of restitution payments of approximately $260 each to about 357,000 borrowers, while the remaining $1.7 billion will be in the form of cancelled debts for about 7,400 borrowers.  In addition to the monetary settlement, Navient has also agreed to substantial injunctive terms.  CA AG; FL AG; VA AG				 					 

						
Tagged in:
													  Education Fraud, 
												
						

					
	
							
	
		
		
	


 			


 			


											

						

								

									
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