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An experienced whistleblower attorney, successful trial attorney, former criminal prosecutor, and former reporter Representing whistleblowers reporting fraud on the Federal State Governments

IMG_0296-300x200On July 15th, a drafted bill was leaked by a tech industry lawyer, Varun Sethi, which proposed the banning of all cryptocurrency with the exception of the “Digital Rupee”. This bill would not become official until it is debated in the 2019 Monsoon session of the Indian parliament, but demonstrates India’s resolve to end cryptocurrency related crimes.

The drafted bill is entitled, “Banning of Cryptocurrency & Regulation of Official Digital Currencies”, and defined cryptocurrencies as “any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value.”

Meanwhile, the proposal states that a “Digital Rupee” is defined as a digitally issued tender from India’s Reserve Bank, which would be approved by the Central Government for use as a legal currency.

Cambridge Analytica shut down in 2018 after the allegations surrounding Facebook data and other questions about its political tactics. The company had won political consulting work in the U.S. by promising to use data to profile and influence voters with political messages. It contracted for several Republican presidential candidates ahead of the 2016 election, including Mr. Trump’s campaign.
The settlement  exceeds the previous record penalty for violating an FTC order, a $22.5 million fine levied against Google Inc. in 2012. The commission has limited powers to impose fines for first-time privacy violations but has broad latitude to sanction repeat offenders.

Nintendo has reportedly started making  two new Switch consolesoutside of China in order to evade new tariffs on US imports. The Wall Street Journal reports that Nintendo’s supply chain have confirmed the movement of production to Southeast Asia, and that the company aims to produce enough consoles to fulfill demand in the US. Nintendo has reportedly begun producing two new variants of its Switch console, and at least some of them are being manufactured outside of China in order to evade new tariffs on US imports

 One is thought to be a high-end version of the Switch, while the other is a cheaper model that’s designed with an emphasis on portability.

The start of production reportedly means that the new consoles could be introduced soon. The WSJ initially reported that Nintendo was planning to announce the consoles at E3, but the hardware subsequently failed to make an appearance during the company’s Nintendo Direct presentation at the show.

Johnson & Johnson is facing a U.S. Justice Department criminal investigation into whether it lied about potential cancer risks of its talcum powder and has convened a grand jury in Washington, Reuters has reported.  Bloomberg has also reported an investigation into documents related to what company officials knew about any carcinogens in their products.

J&J disclosed in its annual report in February that it had received subpoenas from the Justice Department and Securities and Exchange Commission related to the ongoing baby powder litigation but did not give more details.

Johnson & Johnson faces lawsuits involving over 14,000 plaintiffs who allege use of its talc products, including Baby Powder, caused cancer.

Dr. Vasso Godiali, a vascular surgeon from Michigan, has been charged in connection with a $60 million health care fraud scheme. In addition to these charges, Godiali is also being charged for laundering over $49 million that he profited from the scheme. According to a press release by the Department of Justice, Godiali’s health care fraud scheme revolved around the submission of fraudulent claims for the placement of stents for dialysis patients, as well as arterial blood clot treatments. Through this scheme Godiali was able to manipulate medical billing software to receive higher reimbursements from Medicare, Medicaid, and Blue Cross Blue Shield of Michigan than his services would normally qualify for. Godiali is also accused of submitting claims for services that he never performed, and for falsifying the complexity of numerous procedures that were performed. 

Godiali is also facing charges regarding over $49 million that he allegedly laundered across six corporations using his profits from the health care fraud scheme. These funds were mainly used towards investment accounts which were held at well-known financial institutions. However, Godiali also used these funds to pay property taxes on a residence he owned on Houghton Lake in Michigan. 

“This is a large, significant and important prosecution. Health care fraud schemes, such as the one alleged to have been committed by Dr. Godiali, divert millions of dollars from public programs intended to help those in need for the sole purpose of lining the pockets of greedy doctors,” commented United States Attorney Matthew Schneider.


A container ship financed by JPMorgan was seized by US customs officials this week after authorities found nearly 18 tons of cocaine with an estimated street value of $1.3 billion on the vessel.

The MSC Gayane is operated by the Switzerland-based Mediterranean Shipping Co., but JPMorgan helped finance MSC’s purchase of the ship. The two reportedly structured the purchase so the ship was owned by client assets in a transportation strategy fund run for JPMorgan’s asset-management arm. The MSC Gayane sailed under the flag of Liberia, a West African country. West Africa is a popular transit route for smugglers between South America and Europe because of its porous borders, weak rule of law, largely unmonitored coastline, and limited infrastructure and resources. The proportion of cocaine seizures in Africa accounted for by West Africa rose to 78% in 2016, “reflecting the rapidly growing importance of West Africa as a transit area,” the UN Office on Drugs and Crime said. Upon application from the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the United States District Court for the Eastern District of Pennsylvania issued a seizure warrant for the vessel.

On Thursday, July 4, CBP executed the warrant and seized the MSC Gayane. CBP has various seizure and forfeiture authorities under Title 19 of the United States Code (USC).

Consumer goods maker to pay $1.4 billion to settle US investigation over Opioid sales
 The Reckitt Benckiser Group PLC will pay $1.4 billion to settle U.S. charges that its former pharma unit engaged in fraud to increase sales, according to the Wall Street Journal. Federal prosecutors had charged the  pharmaceutical company set up a telephone and online program intended to connect callers with doctors that Indivior knew were prescribing Suboxone or opioids in a “careless and clinically unwarranted manner.”

The consumer-goods company—which owns Lysol cleaner and Durex condoms—on Thursday said it struck a deal with the U.S. Department of Justice and the Federal Trade Commission to resolve their long-running investigations into the sales and marketing of Suboxone Film. This is a prescription medicine that dissolves in the mouth.   Suboxone, whose active ingredient is an opioid, is used to treat addiction to other drugs like heroin.

Securities violations by financial services company. Financial services settlement with SEC

 Wedbush Securities Inc. will pay more than $8.1 million to settle charges for improper handling of “pre-released” American Depositary Receipts (ADRs). This is the SEC’s 11th action against a bank or broker resulting from the SEC’s ongoing investigation into abusive ADR pre-release practices, which, thus far, has resulted in monetary settlements exceeding $422 million.

ADRs– U.S. securities that represent foreign shares of a foreign company – require a corresponding number of foreign shares to be held in custody at a depositary bank. The practice of “pre-release” allows ADRs to be issued without the deposit of foreign shares, provided brokers receiving them have an agreement with a depositary bank and the broker or its customer owns the number of foreign shares that corresponds to the number of shares the ADRs represent.

The owner of a substance abuse treatment center pleaded guilty today for his role in a $57 million money laundering conspiracy associated with a pass-through billing scheme involving laboratory testing services. Kyle Ryan Marcotte, 36,  pleaded guilty to a one-count information charging him with conspiracy to commit money laundering.  As part of his guilty plea, Marcotte agreed to a forfeiture judgment of $10,220,281.42.

According to admissions made as part of his guilty plea, Marcotte was the owner of a substance abuse treatment facility .  In approximately 2015, Marcotte entered into an arrangement with a laboratory owner to send urine samples for the facility’s patients to the owner’s lab for urine drug testing (UDT), in exchange for receiving 40 percent of the insurance reimbursements.  The lab owner, in turn, arranged with the managers of Campbellton–Graceville Hospital (CGH) and Regional General Hospital Williston (RGH), rural hospitals in Florida, to have the testing billed to private insurers through CGH and RGH and reimbursed at favorable rates under the hospitals’ in-network contracts with insurers.  Marcotte also admitted that he brokered deals with other substance abuse treatment centers to have their UDTs billed through CGH and RGH in exchange for Marcotte receiving 10 percent of the insurance reimbursements, while the other substance abuse facilities would receive 30 percent of the insurance reimbursements.

The lab owner subsequently acquired Chestatee Hospital, in Dahlonega, Georgia, and other rural hospitals.  Marcotte admitted that he continued to supply samples from his substance abuse treatment facility and continued to broker deals with other substance abuse treatment centers to have UDTs tested at the lab and billed to insurers through Chestatee and the other hospitals, all in exchange for a percentage of the insurance reimbursements.  The reimbursements were transmitted from the hospitals to the lab, which then transmitted them to two companies Marcotte controlled, North Florida Labs and KTL Labs using financial transactions and bank accounts that Marcotte had established to facilitate the payments.  Marcotte arranged to transfer a portion of the reimbursements from KTL Labs as kickbacks to the individuals and companies that controlled the substance abuse treatment centers in order to further the fraudulent scheme.  Marcotte also transferred a portion of the reimbursements to himself and to purchase real estate and items of real property, he admitted.

The Securities and Exchange Commission’s latest reward of  $50 million to two whistleblowers is an indicator that the program is successfully unveiling major frauds and more are anticipated. The $50 million awards relate to an SEC investigation stemming from whistleblower info which resulted in J.P. Morgan wealth management subsidiaries paying $267 million and admitting wrongdoing to settle charges that they failed to disclose conflicts of interest to clients.

An SEC investigation found that the firm’s investment advisory business J.P. Morgan Securities LLC (JPMS) and nationally chartered bank JPMorgan Chase Bank N.A. (JPMCB) preferred to invest clients in the firm’s own proprietary investment products without properly disclosing this preference.  This preference impacted two fundamental aspects of money management – asset allocation and the selection of fund managers – and deprived JPMorgan’s clients of information they needed to make fully informed investment decisions.

One whistleblower received an award of $37 million and the other received an award of $13 million.  The $37 million award is the Commission’s third-highest award to date after the $50 million award made in March 2018 to joint whistleblowers and more than $39 million award announced in September 2018.  One of the whistleblowers was represented by Attorney Jordan Thomas of the firm Labaton Sucharow