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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:

Page 27 of 37

September 12, 2019

Ronald Hardy and Dennis Verdosa, both formerly associated with Power Traders Press and My Street Research, were sentenced to, respectively, 10 years and 6 years in prison following their 2018 guilty pleas for their roles in a "boiler room" operation that defrauded investors, many elderly, of $147 million.  Defendants artificially inflated the price and trading volume of stock in certain publicly-traded companies, and misrepresented the advisability of purchasing the stock and its potential profitability to victim investors.  The defendants often themselves held interests in the companies, and profited when their victims lost.   USAO EDNY

September 12, 2019

Following his conviction earlier this year, Philip Esformes was sentenced to 20 years in prison for his role in orchestrating a Medicare and Medicaid fraud scheme through his network of assisted living and skilled nursing facilities.  Esformes bribed physicians to admit patients, then provided them with inadequate, inappropriate, or unnecessary services.  To ensure his facilities maintained state licenses, he bribed Florida state regulators.  DOJ; USAO SD FL

September 5, 2019

The owner of two defense contracting firms, Tico Manufacturing Inc. (TICO) and Military and Commercial Spares Inc. (MCS), has been sentenced to 3 years in prison and ordered to pay $8 million in restitution for conspiring to defraud the Department of Defense.  Between 2011 and 2015, Roger Sobrado fraudulently obtained DoD contracts by claiming that conforming parts for critical military equipment, including fighter jets and helicopters, would be supplied through authorized manufacturers.  Instead, Sobrado supplied non-conforming parts through non-authorized manufacturers, recruited family members to commit the same fraud, and collected DoD payments from his family members.  Additionally, he failed to report almost half of his taxable income for three years, causing the United States to lose a total of $509,962.  USAO NJ

August 29, 2019

Following a guilty plea, Treyton Lee Thomas was sentenced to over 21 years in prison and ordered to pay $14.6 million in restitution and forfeiture to the U.S. and victims of his investment fraud ponzi scheme.  Thomas's victims included his own father, his father's company, his wife, and his father-in-law. Thomas also pleaded guilty to income tax evasion, having failed to file returns for two decades, while using sham offshore entities to conceal his income.  USAO EDNC

August 20, 2019

The founder of Mantria Corporation, Troy Wragg, has been sentenced to 22 years in prison and ordered to pay $54 million in restitution for his role in a multi-million dollar Ponzi scheme.  Together with co-defendants Wayde McKelvy and Amanda Knorr, Wragg convinced investors across the country that they stood to gain returns of 50% or higher on their investments through Mantria, even coaching investors to take out loans so they could invest more in the company.  While awaiting sentencing for the Mantria fraud, Wragg committed a second fraud, causing an investor to lose her entire investment.  USAO EDPA; See 2021 sentencing of McKelvy

August 15, 2019

North Carolina ambulance company Gate City Transportation has been ordered to pay $5.25 million in restitution for falsely billing the state's Medicaid program for convalescent ambulance services when, in fact, the company was providing only medical van service to ambulatory and wheelchair-bound patients.  During the investigation, agents confiscated more than $5 million in cash and property, which will be applied to the restitution.  USAO MD NC

August 12, 2019

The CEO of a Colorado-based technology company has been sentenced to over 6 years in prison for defrauding the IRS, impeding the administration of tax laws, and stealing money from his employees’ healthcare and 401(K) plans.  As the head of Touchbase USA (TBUSA) and its successor company Touchbase Global Services, Inc. (TBGSI), Riordan Maynard allegedly stole over $50,000 from his employees’ healthcare plan and $68,000 from their 401(K) plans for use on company expenses.  He also caused TBUSA to be closed and TBGSI to be opened in order to avoid paying more than $2.5 million in unpaid payroll taxes.  After running up another $2.5 million in unpaid payroll taxes, Maynard also conspired to work around IRS levies sent to his customers.  USAO CO

August 8, 2019

Lee Elbaz was found guilty of orchestrating a scheme to defraud U.S. investors, wrongfully obtaining $145 million in investor funds.   Yukom Communications, Ltd., with Elbaz as the CEO, used the websites BinaryBook and BigOption to market "binary options" to investors.  Elbaz and Yukom falsely claimed to represent the interests of investors when, in fact, they profited when investors lost money, and made false statements about binary option suitability and expected returns, their identity and qualifications, and the ability of investors to withdraw funds.  Elbaz was sentenced in December, 2019.  DOJ

July 11, 2019

Reckitt Benckiser Group plc, which marketed and sold the opioid addiction treatment drug Suboxone until 2014 through its then-subsidiary Indivior Inc., will pay a total of $1.4 billion in a global settlement resolving criminal, civil, and administrative claims.  In marketing Suboxone Film, Indivior allegedly made unsupported claims that the drug was less-divertable and less-abusable than other buprenorphine drugs, and steered patients to doctors known to have a history of over-prescribing Suboxone and other opioids.  In addition, Indivior was alleged to have discontinued its tablet Suboxone for pretextual reasons, claiming a concern for pediatric exposure when, in fact, the company was seeking to delay FDA approval of a generic form of tablet Suboxone.  In a non-prosecution agreement, RB Group will forfeit $647 million in proceeds it received from Indivior, will cooperate with ongoing investigations, and will not manufacture or market controlled substances in the U.S. for three years.  In resolution of civil claims with the U.S. and states, including six lawsuits filed by whistleblowers under the False Claims Act, RB Group will pay $700 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to federal- and state-funded government healthcare programs.  Finally, RB Group has agreed to pay $50 million in a settlement with the Federal Trade Commission to resolve claims that it engaged in unfair competition in seeking to impede generic equivalents of Suboxone.  DOJ; USAO W.D.Va.; FTC; VA; NY; PA

July 8, 2019

Anthony Camillo, the owner of Illinois-based Allegiance Medical Laboratory and AMS Medical Laboratory, has been sentenced to 2.5 years in prison and ordered to pay $3.5 million in restitution for defrauding Medicare and Medicaid.  According to the DOJ, Camillo paid Missouri-based marketers between $150-$200 for urine and saliva samples sent to his labs.  His conduct incentivized other fraudulent conduct, including medically unnecessary testing of disabled and elderly patients living in residential care facilities, and the use of doctors’ names on test orders without the doctors’ knowledge.  USAO EDMO
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