Criminal Proceedings
This archive displays posts tagged as involving criminal law proceedings relevant to whistleblowers. You may also be interested in our pages:
May 13, 2021
Financial services company State Street Corporation will pay a $115 million criminal penalty and enter into a deferred prosecution agreement following its voluntary disclosure to authorities that, over the course of 17 years, the bank defrauded its clients out of $290 million. State Street admitted that it secretly marked up “out-of-pocket” (OOP) expenses charged to clients, despite telling clients that OOP expenses were passed through without markups. State Street executives took steps to conceal the mark-ups from clients, including by misleading clients when they inquired about what they were being charged for OOP expenses. As part of the settlement, defendant agreed to cooperate with ongoing investigations, to enhance its compliance program, and to retain an independent corporate compliance monitor for a period of two years. DOJMay 12, 2021
Technology company MobileActive will pay $500,000, and its principal Katrin Verclas will serve two years in prison in civil and criminal resolutions arising from the defendants' scheme to defraud the U.S. State Department's Bureau of Democracy, Human Rights, and Labor ("DRL"). In 2010, MobileActive applied for and was awarded a $1.4 million DRL grant to develop and promote a "mobile security toolkit" for human rights organizations and activists to use in assessing and mitigating risks associated with mobile communications. After claiming $1.2 million in grant funds, Verclas failed to respond to requests for information from the State Department; she has admitted that she failed to comply with grant requirements, and directed the funds to her personal use while concealing the nature of the transactions from MobileActive's bank. USAO MDMay 4, 2021
DaRayl Davis, who owned and operated Financial Assurance Corp. and Affluent Advisory Group LLC, has been sentenced to 13 years in prison and ordered to pay restitution of $7.1 million on charges arising from his sale of fictitious financial products to investors with false promises that the investors would receive fixed annual interest payments and guaranteed protection against losses. In fact, Davis diverted investor funds to his personal use. USAO ND IL; SECApril 23, 2021
Bobby Rouse, a former executive with Continuum Healthcare LLC, which owned Houston hospital Westbury Community Hospital as well as area mental health centers, was sentenced to ten years in prison following his guilty plea on charges arising from an unlawful kickback scheme. At the direction of Rouse and co-conspirators, Continuum paid kickbacks for the referral of patients to partial hospitalization programs at Continuum facilities, many of whom did not qualify for PHP services. In total, Continuum billed Medicare approximately $189 million for fraudulent PHP services, and Medicaid paid approximately $66 million on those clams. Fourteen individuals have been charged for the fraud. USAO SD TXCatch of the Week: Final Merida Hospice Fraudster Sentenced in $150 Million Scheme
Posted 04/23/21
