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Criminal Proceedings

This archive displays posts tagged as involving criminal law proceedings relevant to whistleblowers. You may also be interested in our pages:

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July 1, 2020

Leonard J. Cipolla of Richmond, Virginia, was sentenced to ten years in prison for bilking more than $7 million in investor funds from customers of his Tate Street Trading, Inc..  Cipolla falsely told the investors that he was a successful commodities trader and could guarantee them a fixed rate of return.  In fact, Cipolla diverted the investor funds that he did not lose through speculative trading, and provided his customers with false account statements.  USAO EDVA

July 1, 2020

Raeann Gibson of Palm City, Florida, was sentenced to ten years in prison based on her role in an investment fraud conspiracy.  Gibson served as the Chief Operating Officer of Dominion Investment Group, which defrauded elderly investors of over $25 million by diverting investment funds to the personal use of Gibson and co-defendant Daryl Bank.  Gibson created numerous shell companies, laundered investment funds through multiple accounts, and spoke with investors.  USAO EDVA

June 30, 2020

Clifford P. Shomake and Kimberly Clyde “Casey” Conner, the owners of Guam Medical Transport, were sentenced to 6 years and 5.25 years, respectively, following their guilty pleas to charges arising from their conspiracy to defraud Medicare and TRICARE by submitting claims for reimbursement for medically unnecessary ambulance services that GMT provided to patients with end stage renal disease, despite knowing that the individuals did not qualify for ambulance transport under applicable regulations.  Defendants admitted that the conspiracy resulted in improper payments to GMT of approximately $10.8 million, and restitution in that amount was also ordered.  DOJ

June 25, 2020

George Philip Tompkins of Houston, Texas, the former owner of Piney Point Pharmacy, was sentenced to ten years in prison following his conviction on charges of healthcare fraud, unlawful kickbacks, money laundering, and wire fraud.  Tompkins billed $21.8 million to federal and state worker’s compensation programs for medically unnecessary compound gels and creams, paying kickbacks to generate prescriptions while claiming that the kickbacks were legitimate marketing expenses. Thompson was also ordered to pay restitution of $12.3 million. DOJ

Catch of the Week — Tacoma foundry pays 10.8M settlement over deficient steel parts destined for U.S. Navy submarines, falsified tests

Posted  06/18/20
US-Navy-ships-in-the-middle-of-the-ocean
The latest in our Catch of the Week series features Bradken Inc.’s $10.8 million payment to resolve allegations that its Tacoma foundry violated the False Claims Act (“FCA”) when it produced and sold substandard steel parts for U.S. Navy submarines and falsified test results to hide the failures. Bradken and its former lab director Elaine Thomas also face criminal charges. The company accepted responsibility and...

June 16, 2020

The U.S. Navy’s leading supplier of high-yield steel for submarines, Bradken Inc., has agreed to pay $10.8 million and comply with a three-year deferred prosecution agreement in order to settle allegations it violated the False Claims Act through its Tacoma foundry producing and selling steel that failed to meet certain strength standards required by the Navy.  In 2017, the defense contractor discovered and self-disclosed that test results for a substantial portion of its steel productions, spanning thirty years, had been improperly altered by then director of metallurgy, Elaine Thomas, causing shipbuilders to submit false claims to the Navy.  DOJ; USAO WDWA

DOJ Charges Healthcare CEO with Criminal Securities and Healthcare Fraud

Posted  06/12/20
Hands in handcuffs behind back of white man in business suit
In 2008, Rahm Emanuel, then-President Obama’s chief of staff, famously said, “You never want a serious crisis to go to waste.  I mean, it’s an opportunity to do things that you think you could not do before.”  However poorly phrased, generations of political and business leaders have understood the kernel of truth in his admonition. So have scammers and rip-off artists. We have been following the...

June 10, 2020

Alutiiq International Solutions LLC (AIS), an Alaskan Native Corporation and government contractor, has agreed to pay $1.25 million and enter into a non-prosecution agreement to settle allegations of violating the Anti-Kickback Act in connection with a multi-million dollar General Services Administration (GSA) contract to modernize the Harry S. Truman Federal Building in Washington, D.C.  Beginning in 2010, a project manager formerly employed by AIS allegedly accepted kickbacks from a subcontractor in exchange for steering more work to the subcontractor, while also fraudulently billing GSA for a non-existent on-site supervisor and overinflating costs from its subcontractor.  AIS and its parent company, Afognak Native Corporation, cooperated fully with the investigation and have since engaged in extensive remedial actions.  DOJ

June 10, 2020

A South Korean engineering company has been ordered to pay $68 million in criminal fines, civil penalties, and restitution after pleading guilty to defrauding the U.S. Army in a 2008 contract worth hundreds of millions of dollars.  According to the press release, SK Engineering & Construction Co. Ltd. (SK) submitted documents to the Army that were doctored to conceal $2.6 million in payments to a fake construction company that had bribed an Army Corps of Engineers official on SK’s behalf.  The company also took steps to hamper investigations by U.S. and Korean officials by withholding and destroying relevant documents, attempting to tamper with a potential witness, and failing to properly discipline the employees involved with the bribery scheme.  SK was suspended from participating in certain contracts with the U.S. government in 2017; with this plea agreement, it will undergo another three years of probation.  DOJ

May 6, 2020

The United States has obtained a settlement of $49 million in the 1Malaysia Development Berhad (1MDB) scandal, in which high-level officials of 1MDB and their associates allegedly robbed the people of Malaysia by misappropriating over $4.5 billion in public funds, which they laundered through financial institutions based in the United States and other countries and squandered on expensive properties and possessions.  With the conclusion of the case against Emirati businessman Khadem al-Buraisi, the United States has recovered over $1.1 billion in assets arising from the 1MDB scandal, representing the largest civil forfeiture by the DOJ and the largest recovery to date under the agency’s Kleptocracy Asset Recovery Initiative.  DOJ; USAO CDCA
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