1300.jpg
An experienced whistleblower attorney, successful trial attorney, former criminal prosecutor, and former reporter Representing whistleblowers reporting fraud on the Federal State Governments

IMG_0429-300x200Terry Anderson and his son, Rocky Anderson, were found guilty of multiple counts of health care fraud and aggravated identity theft following a 10-day trial in 2018. On Thursday, August 5th, 2019, it was announced that the duo would serve eight and seven years in prison, respectively. In total, Terry Anderson and Rocky Anderson were found to have submitted more than $27 million in fraudulent hearing aid claims to Blue Cross and Blue Shield of Texas.

According to the Department of Justice, the Andersons ran a business called Anderson Optical & Hearing Aids Center, which had multiple locations in Texas. This business was used to submit the defendants’ fraudulent claims to Blue Cross and Blue Shield, although many of the patients did not require hearing aids or never received them.

In an effort to gain additional patients for more claims, the defendants performed multiple marketing tactics, including the promise of free high-end sunglasses, gift cards, or prescription eyeglasses for participating in a complimentary hearing test. Upon completing the hearing test, many patients were told that they suffered from mild hearing loss and required the use of hearing aids. Patients were then asked to sign a consent form for the ordering of the hearing aids, which would also be provided at no cost. The Anderson pair also told patients that copayments and deductibles would be waived.

The Securities and Exchange Commission today announced that broker Cantor Fitzgerald & Co. will pay more than $647,000 and broker BMO Capital Markets Corporation will pay over $3.9 million to settle charges of improper handling of “pre-released” American Depositary Receipts (ADRs). With today’s actions, the SEC has charged 13 financial institutions in its ongoing investigation into abusive ADR pre-release practices, which, thus far, has included monetary settlements exceeding $427 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 the ADRs 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.

According to the SEC’s orders, both Cantor Fitzgerald and BMO Capital obtained pre-released ADRs when they should have known that the pre-release transactions were not backed by foreign shares. The SEC orders find that both brokers improperly obtained pre-released ADRs indirectly from other broker-dealers, and the order as to Cantor Fitzgerald finds that the firm also improperly obtained pre-released ADRs directly from depositary banks.

Minnesota health officials identified four cases of persons suffering severe lung injuries believed to be connected with their vaping, similar to more cases in nearby Wisconsin and Illinois. While officials said they don’t yet know the exact products used, both nicotine and marijuana products have been reported. “There are still many unanswered questions, but the health harms emerging from the current epidemic of youth vaping in Minnesota continue to increase,” the department’s medical director and state epidemiologist, Dr. Ruth Lynfield, said in a statement Tuesday. “We are encouraging providers and parents to be on the look-out for vaping as a cause for unexplained breathing problems and lung injury and disease.”

The announcement said some were hospitalized for “multiple weeks, with some patients being admitted to the intensive care unit.” They came in with symptoms including shortness of breath, fever, cough, vomiting, diarrhea, headache, dizziness and chest pain. Dr. Emily Chapman, chief medical officer at Children’s Minnesota, which reported the four cases, said in a statement that such cases are tricky to diagnose because they can start off looking like a common infection before leading to more serious complications.

Lincare, Inc., has paid $5.25 million to resolve allegations that it violated the federal False Claims Act and the Anti-Kickback Statute by offering illegal price reductions to Medicare beneficiaries, U.S. Attorney Steven D. Weinhoeft announced today. Headquartered in Clearwater, Florida, Lincare is one of the nation’s largest providers of oxygen and other respiratory therapy services to patients in the home, with approximately 1,000 locations across the United States.

The government alleged that, from 2011 to 2017, Lincare attempted to gain a competitive advantage in the marketplace by unlawfully waiving or reducing co-insurance, co-payments, and deductibles for beneficiaries who participated in a Medicare Advantage Plan operated through a private insurer. Lincare’s practices violated the Anti-Kickback Statute, and further caused the submission of false claims for payments to Medicare.

“Medicare is a promise to protect the elderly and disabled by providing health insurance to those who need it most. This office will aggressively defend Medicare to ensure that entities participating in government sponsored healthcare programs do so lawfully,” said U.S. Attorney Weinhoeft. “This settlement reflects our commitment to maintain the integrity of the Medicare program.”

 The Securities and Exchange Commission settled charges against a Brighton Massachusetts based blockchain company SimplyVital Health, Inc. for offering and selling approximately $6.3 million of securities to the public in unregistered transactions.

According to the SEC Cease and Desist Order Simply Vital in late 2017, SimplyVital Health, Inc. publicly announced its plan to conduct a token sale-an “Initial Coin Offering” or “ICO”-to raise money to further its development of Health Nexus, a “healthcare-related blockchain ecosystem.” SimplyVital offered a new token called Health Cash, or HLTH, which, it stated, would be used as currency in the Health Nexus. SimplyVital concurrently announced that it would conduct a “pre-sale” of its HLTH tokens, in which it offered investors Simple Agreements for Future Tokens, or SAFTs, under which it sold HLTH tokens that would not be delivered to investors unless and until created by SimplyVital. The order finds that SimplyVital did not file a registration statement with the Commission or qualify for an exemption from registration before offering and selling HLTH to the public through the SAFTs.

According to the SEC’s order, SimplyVital raised approximately $6.3 million from its unregistered sale of securities in between September 2017 and April 2018. After concluding its pre-sale in April 2018, SimplyVital ultimately decided not to offer and sell HLTH during its scheduled ICO. In 2019, SimplyVital voluntarily returned to investors substantially all of the funds raised during its pre-sale. Simply Vital is a new kind of healthcare company which seeks to enhance patient well being through better communication of patient information. Its platform is a bit complicated, so for more information read the following White Paper: Health-Nexus-White-Paper-232x300

The Securities and Exchange Commission today charged 1 Global Capital LLC’s former chief financial officer, Alan G. Heide, with defrauding retail investors. The now bankrupt Florida-based cash advance company allegedly fraudulently raised more than $322 million from 3,600 investors between 2014 and last year. The SEC previously charged 1 Global and former CEO Carl Ruderman with fraud and charged Henry J. “Trae” Wieniewitz, III for his allegedly unlawful sales of 1 Global securities. Ruderman and Wieniewitz have consented to final judgments.

The SEC  complaint said that although 1 Global promised investors profits from its short-term cash advances to businesses, the company used substantial investor funds for other purposes, including paying operating expenses and funding Ruderman’s lavish lifestyle. The SEC alleges that Heide, a certified public accountant, regularly signed investors’ monthly account statements that he knew overstated the value of their accounts and falsely represented that 1 Global had an independent auditor that had endorsed the company’s method of calculating investor returns.

“Heide’s misrepresentations gave false comfort to investors, allowing them to be duped to invest in 1 Global’s securities,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “We allege that as 1 Global’s CFO, Heide played a significant role in 1 Global’s fraud by overstating the value of investors’ accounts and their rates of return and falsely representing the role of an auditor.”

Americans with offshore accounts are being advised to apply immediately as the US Internal Revenue Service’s (IRS) Offshore Disclosure Programme (OVDP) is due to end September 28, 2019

American citizens with a foreign bank account have until September 28 to voluntarily disclose worldwide income, including interest, foreign earnings, wages, dividends and other income. The IRS’ Offshore Voluntary Disclosure Programme (OVDP) ends on 28 September, and some people are rushing to get in, as it offers some protection from severe penalties. The IRS is encouraging taxpayers who need to disclose non-compliant and unreported foreign accounts and assets to come forward before the September deadline. Qualifying taxpayers who have unreported foreign accounts can still use the OVDP to come into compliance while avoiding the risk of criminal prosecution and minimizing otherwise applicable civil penalties, but only until that date. The statute of limitations is six years. Plus, the statute of limitations never expires on tax fraud, so the IRS can pursue the citizen many years later for back taxes, interest and penalties.

For those who failed to report income, the civil liability to the IRS can include a 20% accuracy-related penalty or a 75% civil fraud penalty.

Jurors in Atlanta federal court returned a verdict finding a securities broker Raymond J. Pirrello, Jr. liable for insider trading in advance of three merger and acquisition transactions.

The SEC’s evidence at trial revealed that Pirrello received highly confidential nonpublic information about the impending acquisitions of Radiant Systems Inc., Midas Incorporated Inc., and BrightPoint Inc. from Thomas W. Avent, Jr., who performed tax work on each transaction as a partner at an international accounting firm. Pirrello, in turn, tipped his former colleague and long-time friend Lawrence J. Penna, Jr., who traded in the securities of each of the three companies. According to evidence presented during the trial, Penna and his family made at least $107,922 in illicit trading profits, and shared at least $21,500 of these profits with Pirrello.

The jury found Pirrello liable on all counts, finding that he violated Sections 10(b) and 14(e) of the Securities Exchange Act of 1934, and Rules 10b-5 and 14e-3 thereunder.

IMG_0403-300x169On Tuesday, August 13th, 2019, Peter Frazzano, 46, admitted to participating in a health care fraud scheme involving the submission of fraudulent claims for compounding prescriptions. Frazzano pleaded guilty to conspiracy to commit health care fraud, which is punishable by up to 10 years in prison and a $250,000 fine. Frazzano has also agreed to forfeit over $270,000 and pay a restitution fee of nearly $3 million.

According to the Department of Justice, Frazzano and an additional individual involved in the scheme recruited a physician to sign prescriptions for compounding drugs. These prescriptions were ordered for unsuspecting individuals who were never examined or spoken to regarding the drugs.

Once the prescriptions were issued, Frazzano fraudulently billed multiple health insurance organizations, including the New Jersey State Health Benefits plan. The compound prescriptions Frazzano billed these plans for were mainly pain creams, scar creams, and metabolic supplements.

The Securities and Exchange Commission has charged Reginald Middleton and Veritasuem Inc. and Vertaseum, LLC ,wo entities under his control, for a fraudulent scheme to sell digital securities to investors and to manipulate the market for those securities.  On Aug. 12, 2019, the court entered an emergency freeze to preserve at least $8 million of the $14.8 million the defendants raised in 2017 and 2018 in an offering of digital securities.

The complaint, filed in federal court in Brooklyn, New York, alleges that the Defendants marketed and sold securities called “VERI” tokens on the internet, inducing retail investors to invest based on multiple material misrepresentations and omissions.  Among other things, Defendants allegedly knowingly misled investors about their prior business venture and the use of offering proceeds, touted oversized – but fictitious – investor demand for VERI, and claimed to have a product ready to generate revenue when no such product existed.  The complaint further alleges that Middleton manipulated the price of the VERI tokens trading on an unregistered digital asset platform.  The complaint also alleges that Middleton recently moved a significant amount of investor assets and then dissipated a portion of those assets, transferring them to Middleton’s personal account.

“After learning about Middleton’s transfer of funds, we took quick action to prevent the further dissipation of investor assets,” said Marc P. Berger, Director of the SEC’s New York Regional Office.  “Whether in digital currency or plain cash, we will act to protect investor assets and to pursue fraud and manipulation in our securities markets.”