Financial and Investment Fraud

December 6, 2021

Dialysis provider American Renal Associates Holdings, Inc. and three of its former financial executives have entered into a settlement agreement resolving allegations of accounting fraud; ARA will pay a $2 million civil penalty. The company and it executives allegedly manipulated revenue by improperly recognizing payments from insurance companies for patient services, overstating net income by more than 30% in 2017 and by more than 200% for the first three quarters of 2018.  The company issued restated financial in 2019.  SEC

November 24, 2021

Guy Scott Griffithe, who controlled an entity called Renewable Technologies Solutions, Inc., and Robert William Russell, who owned an entity called SMRB, LLC, have been ordered to pay more than $6 million to resolve charges that they mislead investors by falsely stating that investments in Renewable would be used to operate SMRB, which held a license to grow marijuana under Washington’s recreational cannabis laws.  To create the illusion that the marijuana business was profitable and paying dividends as promised, Griffithe allegedly paid out purported profit distributions to some investors, which were partially funded in a Ponzi-like fashion using funds from other investors.  Griffithe was found liable for more than $5.3 million in disgorgement, prejudgment interest, and civil penalties; Russell was found liable for more than $698,000 in disgorgement, prejudgment interest, and civil penalties.  SEC

November 22, 2021

Two whistleblowers who provided the SEC with new and significant information during an existing investigation, including information about misconduct occurring in different geographic areas, received awards of approximately $6.2 million and $1.3 million.  The award to the first claimant was also based in part on a recovery in a related action, based on findings that the whistleblower provided information to the relevant other agency.  In support of the first claimant’s larger award, the SEC also cited that their information was more significant, that the majority of the relief ordered was based on information provided by them, that they reported their concerns internally prior than reporting to the SEC, and they reported more expeditiously.  SEC

November 22, 2021

A whistleblower whose information prompted the opening of an SEC investigation and provided key evidence, and a second whistleblower whose information significantly contributed to the ongoing investigation, will receive awards totaling more than $2.4 million.  SEC

November 22, 2021

Three whistleblowers will receive a total of $435,000 based on determinations that two jointly provided information that prompted the opening of an SEC investigation, and the third provided new, detailed and highly valuable information early in the investigation that was instrumental in assisting the staff to develop the case.  SEC

November 17, 2021

In relation to CFTC charges against Digital Platinum, Inc. and related entities arising from the dissemination of fraudulent solicitations promising free access to purportedly successful automated trading systems that traded on behalf of clients in binary options involving commodity interests and digital assets, a court has ordered Daniel Fingerhut, Itay Barak, Tal Valariola and Digital Platinum Limited to pay a combined $7 million in disgorgement and civil monetary penalties for violations of the Commodity Exchange Act (CEA) and CFTC regulations.  CFTC

November 16, 2021

Richard Ayvazyan was sentence to 17 years in prison, his wife Marietta Terabelian to six years, and his brother Artur Ayvazyan to five years, following their convictions at trial on charges related to their scheme to fraudulently obtain more than $20 million in Paycheck Protection Program and Economic Injury Disaster Loan COVID-19 relief funds.  The defendants used dozens of false identities to submit fraudulent applications for approximately 150 PPP and EIDL loans, supporting applications with false and fictitious documents including fake identity documents, tax documents and payroll records. DOJ; USAO CD Cal