Criminal Proceedings

October 4, 2019

Zaldy Sabino, formerly a contracting officer with the U.S. State Department, has been convicted of charges related to contracting fraud.  Sabino received hundreds of thousands of dollars in cash from the owner of a construction firm in Turkey that had multiple multi-million dollar contracts with the State Department.  Sentencing is set for February, 2020.  DOJ

October 4, 2019

Florida man Brock Lovelace has been sentenced to nearly six years in federal prison following his conviction at trial on charges related to his payment of kickbacks to medical clinics in the Miami area in exchange for the clinics providing him with DNA samples for submission to a DNA testing laboratory between 2013 and 2014.  Lovelace requested that the medical clinics collect the DNA of all the patients who visited the clinics; in turn, the clinics provided food and other inducements to beneficiaries to get them to visit.  Lovelace then submitted the DNA swabs to a testing lab, which billed Medicare.  The patients were not provided with the results of the DNA testing, and typically did not have any medical need for the DNA testing.  Lovelace was previously sentenced to 14 years in prison on other healthcare fraud charges; he will serve the present sentence consecutively.  DOJ

September 27, 2019

In an investigation dubbed Operation Double Helix, charges have been brought against 35 defendants associated with a number of telemedicine and cancer genetic testing laboratories involved in a scheme that resulted in the submission of more than $2.1 billion in fraudulent Medicare claims.  Cancer genetic testing laboratories involved in the scheme are alleged to have paid illegal kickbacks to providers and others working with fraudulent telemedicine companies in exchange for the referral of Medicare beneficiaries for expensive and medically unnecessary cancer genetic tests, which Medicare was then billed for. Some of the defendants allegedly controlled a telemarketing network that lured hundreds of thousands of elderly and/or disabled patients into signing up for unnecessary genetic tests, often without any interaction with the provider who would prescribe the testing.  DOJ; USAO ED LA

September 26, 2019

Pharmaceutical manufacturer Avanir Pharmaceuticals will pay approximately $116 million to resolve civil and criminal charges related to its marketing of Nuedextra for off-label purposes and payment of kickbacks to prescribers and others.  The government alleged that Avanir marketed Nuedextra to long-term care facilities, suggesting that it could be used as an alternative to anti-psychotics for dementia patients, even though Nuedextra had only been approved by the FDA for treatment of particular symptoms secondary to a neurologic disease or brain injury.  In addition, Avanir provided certain physicians and other healthcare professionals with unlawful remuneration in the form of money, honoraria, travel, and food to induce them to write prescriptions for Nuedexta. The civil settlement for $103 million, which includes a five-year corporate integrity agreement, resolves whistleblower actions brought under federal and state False Claims Acts by former Avanir employees Kevin Manieri, Duane Arnold, and Mark Shipman.  Manieri will receive $12.4 million, and Arnold and Shipman will receive $5.4 million. In addition to the civil settlement, Avanir will pay a criminal penalty of $7.8 million, forfeit $5.1 million, and enter into a deferred prosecution agreement admitting to payment of kickbacks and requiring cooperation in ongoing in ongoing criminal investigations of individuals involved in marketing and prescribing Nuedextra.  Indictments against four individuals, including former Avanir employees and one of the top prescribers of Nuedexta in the country, were announced, charging the individuals with conspiracy to solicit, receive, offer and pay health care kickbacks.  DOJ

September 20, 2019

Pradyumna Kumar Samal, the former CEO of two Bellevue, Washington IT firms, has been sentenced to more than seven years in prison for his role in a long-running H1-B visa fraud scheme.  Samal's companies, Divensi and Azimetry, were employment agencies in the business of providing IT workers to major corporate clients.  Samal would submit fraudulent applications on behalf of foreign workers, claiming that they were being brought to the U.S. to perform a specific job, and instructing them to lie in their own applications, when, in fact, after being admitted, the employees would be benched and unpaid until Samal's companies were able to place them at actual client jobs.  In addition, Samal's companies failed to pay employment taxes on behalf of the foreign workers, instead diverting those funds to his personal use.  USAO WD WA

September 19, 2019

Following his conviction at trial in September 2018, Azam Doost, the owner of a marble mining company in Afghanistan, has been sentenced to 4.5 years in prison, and ordered to pay $8.9 million in forfeiture and restitution to the government.  Doost had been convicted for his role in fraudulently obtaining and failing to repay a $15.8 million loan from the Overseas Private Investment Corporation, a U.S. government agency, to Equity Capital Mining LLC, which Doost owned at the time.  DOJ

September 16, 2019

Stephen Condon Peters of Raleigh, North Carolina, was sentenced to 40 years in prison for investment advisor fraud, fraud in the sale of unregistered securities, and related charges.  Peters, a registered investment advisor, defrauded clients by steering them to investments in which he had a personal financial interest, stole clients' funds, and made misstatements to the SEC.  In addition to his prison sentence, the court ordered Peters to pay restitution of more than $15 million.  USAO EDNC

September 13, 2019

Texas hospital administrator Starsky Bomer was convicted of violating the Anti-Kickback Statute and conspiring to commit healthcare fraud for paying kickbacks to group homes and others in exchange for referrals to outpatient treatments for severe mental illness at his affiliated hospital, resulting in $16 million dollars of false claims to Medicare. The kickbacks came in the form of salary payments and payments for transportation to owners of group homes. Mr. Bomer was sentenced to ten years in prison for his involvement in the scheme. DOJ