Criminal Proceedings

December 16, 2020

Texas resident Rodney Mesquias, the former owner and officer of hospice services provider Merida Group, was sentenced to 20 years in prison following his conviction on fraud charges.  According to the evidence at trial, Mesquias falsely told thousands of individuals and their families that they had less than six months to live, so that he could enroll them in hospice programs, denying them from accessing curative care.  Mesquias also paid kickbacks to physicians for referring patients with long-term diseases such as Alzheimers and dementia.  Over  nearly ten years, Mesquias’ scheme resulted in the submission of $150 million in false and fraudulent claims for medically unnecessary services.  DOJ

December 3, 2020

The U.S. affiliate of one of the world’s largest energy trading firms has agreed to resolve investigations by U.S. and Brazilian authorities into alleged violations of the Foreign Corrupt Practices Act by paying a combined $135 million, as well as an additional $16 million in penalty and $12.7 million in disgorgement to the CFTC.  From 2005 to 2020, Vitol Inc. allegedly paid millions of dollars in bribes to government officials in Brazil, Ecuador, and Mexico in order to obtain competitive advantages.  Many of the bribes were paid to officials at Brazil’s state-owned and state-controlled oil company, Petróleo Brasileiro S.A., through a series of intermediaries, fictitious companies, fictitious email accounts, and code names.  This is the first action involving foreign corruption that was brought by the CFTC.  CFTC; DOJ; USAO EDNY

December 1, 2020

Singapore-based international shipping company Pacific Carriers Limited (PCL) was ordered to pay a fine of $12 million following its guilty plea to charges including its violation of the Act to Prevent Pollution from Ships.  PCL admitted that its ship the M/V Pac Antares discharged oily bilge water, oil waste, oily garbage, and plastic, without using required pollution-prevention equipment or properly recording the discharges in the vessel’s oil record book or garbage record book.  Some oily waste discharges were made through a laundry sink which discharged directly overboard, and inspectors discovered a configuration of drums, flexible hoses and flanges that were used to bypass the vessel’s oily water separator.  In addition, PCL admitted that the ship stored oily waste in the duct keel in a manner that created a hazardous condition subject to reporting.  The problems were reported to Customs and Border Protection by a crewmember who walked off the ship when it arrived in North Carolina.  DOJ

November 30, 2020

An attorney in Pennsylvania who defrauded his own clients through a $2.7 million Ponzi scheme has been sentenced to 6.5 years in prison and ordered to pay over $2.1 million in restitution and $273,091 in forfeiture.  In pleading guilty earlier this year, Todd Lahr admitted to soliciting investments from his clients for business opportunities that didn’t actually exist—including property leases in Europe and mining operations in Papua New Guinea—and then using the money that he didn’t spend on personal expenses to pay prior investors.  The monetary penalty in this criminal action will be offset by the final judgment obtained by the SEC in June; in the parallel civil action with the SEC, Lahr was ordered to pay over $1.1 million in disgorgement and pre-judgment interest.  DOJ; USAO EDPA

November 5, 2020

Lawrence Gerrans, the former CEO of medical device start-up Sanovas, was sentenced to over 11 years in prison following his conviction at trial on charges arising from his diversion of funds from Sanovas to his personal use, including by transferring nearly $3 million to shell companies he controlled.  During the criminal investigation, Gerrans provided false documents to the FBI, tampered with a witness, and violated a court-ordered bond condition.  ND Cal

October 27, 2020

Chicago-based distillery Beam Suntory Inc. (Beam) has agreed to pay over $19.5 million to settle allegations of paying bribes to Indian government officials between 2006 to 2012, in violation of the Foreign Corrupt Practices Act (FCPA).  At least some of the bribes were authorized by a high-level regional executive and paid by third parties.  Additionally, Beam intentionally failed to implement internal controls to prevent such conduct, as well as falsified books and records to conceal the bribes after they were paid.  As part of the settlement, Beam admitted to the charges and agreed to a three-year deferred prosecution agreement.  USAO NDIL

October 21, 2020

Purdue Pharma LP agreed to criminal fines and forfeitures totaling $5.544 billion following its guilty plea on charges arising from its manufacture and sale of opioid products.  Purdue falsely represented to the DEA that they maintained an effective anti-diversion program while continuing to market opioid products to healthcare providers that it had reason to believe were diverting opioids, aided and abetted the dispensing of opioids without a legitimate medical purpose, paid doctors to induce them to prescribe Purdue’s products, and paid an EHR company to boost the presence of Purdue’s products on the EHR system.  Purdue will receive a credit of up to $1.775 billion based on its prior settlements with state and local entities.  In addition to the criminal fines and forfeitures, a civil settlement provides the U.S. with an allowed claim of $2.8 billion to resolve claims that the company caused the submission of false claims to federal healthcare programs.  Individual members of the Sackler family, which owns Purdue, separately agreed to pay $225  million to resolve claims arising from their approval of a marketing program aimed at extreme high-volume prescribers and their transfer of assets into Sackler family holding companies and trusts.   DOJ