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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

body-armour-300x200The founder and former president of Second Chance Body Armor, Richard Davis, has agreed to settle with the government after a sale of defective bullet proof vests that lead to life-threatening situations. The vests were purchased for federal, state, local and tribal law enforcement agencies. Under the False Claims Act, Davis will have to relinquish over a million dollars in assets.

The Bullet Proof Vests

Second Chance sold body armor to government agencies and then was reimbursed by the Department of Justice Bulletproof Vest Partnership (BVP) program. The DOJ alleged that Second Chance’s vests were defective when exposed to heat and humidity. They basically lose the ability to stop ballistic fire. The Department of Justice also claims that Davis knew about the faulty nature of the vests.

https://www.whistleblowerlawyernews.com/files/2018/07/Jeffrey-A.-Newman-240x300.jpg                                                             Contact: Jeffrey A. Newman Esq.

                                                            www.JeffreyNewmanLaw.com

                                                            jeffrey@jeffreynewmanlaw.com

Ford Motor Co has agreed to pay $299.1 million in settlement for the faulty Takata air bag inflators. The settlement relates to nearly six million vehicles which were affected by the faulty air bags. The settlement covers several forms of economic damages linked to the inflators, including claims that vehicles were inaccurately represented to be safe, buyers had overpaid for cars with defective or substandard air bags and faced out of pocket costs to deal with recalls. Six automakers have previously agreed to similar settlements worth over $1.2 billion combined, including: Honda Motor Co ; Toyota Motor Corp ; Nissan Motor Co ; Mazda Motor Corp ; Subaru Corp  and BMW AG . At least 23 deaths worldwide are linked to the rupturing of faulty Takata air bag inflators. The issue has sparked the largest auto industry safety recall in history, involving about 100 million inflators among 19 major automakers. More than 290 injuries worldwide are also linked to Takata inflators that can explode, unleashing metal shrapnel inside cars and trucks.

To date, 21 deaths have been reported in Honda vehicles and two in Ford vehicles. The settlement also covers out-of-pocket costs, including lost wages and child care costs, Ford owners may face, or already incurred, to get vehicles repaired. Under the settlement, Ford will also provide free rental or loaner vehicles to owners of recalled vehicles who are awaiting repairs when parts are not available. Nearly 30 million U.S. vehicles remain unrepaired in the recall.

Takata last year pleaded guilty to a felony charge of wire fraud to resolve a U.S. Justice Department investigation and agreed to a $1 billion settlement.

The whistleblower which I featured in yesterday’s blog who was awarded $30 million by the Commodities Futures Trading Commission for blowing the whistle on JPMorgan Chase, will also receive an additional $48 million from the Securities and Exchange Commission. That means he will receive $78 million!  His name is Edward Siedle and he is  a former lawyer for the Securities and Exchange Commission, now turned forensic investigator, who alerted the SEC to the bank’s wrongdoing. Prior to this, Mr. Siedle, investigated  pension funds for overcharging beneficiaries, alerted regulators of a mutual fund scam being run by JPMorgan Chase in 2011, The Post has learned.

The larger part of his whistleblower award comes from  a $267 million settlement between JPMorgan and the SEC, which investigated the bank for steering high-net-worth clients toward its own investment funds that could cost more than those managed by rivals. The CFTC joined the investigation because some of the JPM investment products involved commodities. The bank agreed to pay $100 million to settle the CFTC probe. Siedle said he has filed about two whistleblower suits a year since the program started, and has no immediate plans for the award.

–Jeffrey A. Newman

Whistleblower Lawyer News has learned that the Commodity Futures Trading Commission (CFTC) today announced an award of approximately $30 million to a whistleblower who voluntarily provided key original information that led to a successful enforcement action. Previously, the highest award amount paid to a CFTC whistleblower was in March 2016 of more than $10 million (see CFTC Press Release 7351-16CFTC Announces Whistleblower Award of More Than $10 Million).  The award is the largest award made by the CFTC’s Whistleblower Program to date and is the fifth award made by the program. The CFTC’s Whistleblower Program was created by section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).  The CFTC pays monetary awards to eligible whistleblowers who voluntarily provide the CFTC with original information on violations of the CEA that leads the CFTC to bring a successful enforcement action resulting in monetary sanctions exceeding $1,000,000.  By law, the CFTC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.  Under the Dodd-Frank Act, employers may not retaliate against whistleblowers for reporting possible violations of the CEA to the CFTC.

“The Whistleblower Program has become an integral component in the agency’s enforcement arsenal,” said CFTC Chairman, J. Christopher Giancarlo.  “We hope that an award of this magnitude will incentivize whistleblowers to come forward with valuable information and provide notice to market participants that individuals are reporting quality information about violations of the Commodity Exchange Act [CEA].”

James McDonald, Director of the Division of Enforcement, stated: “Whistleblower submissions have become a significant part of our enforcement program, allowing us to pursue violations we might otherwise have been unable to detect.  That’s one reason why we’ve worked hard to expand our Whistleblower Program, including by increasing the protections afforded to whistleblowers that come forward.  I expect the Whistleblower Program to contribute even more substantially to our enforcement efforts going forward.”

 

Corey Thompson, the former general manager of a Spruce Head Island seafood company of Maine says he was fired after telling the president of the parent corporation about illegal actions that included repackaging expired seafood as new. He says that he was ultimately fired. The claims are part of a lawsuit filed June 18 in the Knox County court by Corey Thompson of St. George against Atwood Lobster LLC; Maine Lobster & Processing Inc.; Jorzac Inc.; Mazzetta Co. LLC; Beach Point,LLC; Londonderry Freezer LLC; Highwood Cold Storage; and Gloucester Seafood Processing

Mazzetta is one of the largest importer and producers of shrimp, mussels, lobsters, crab and fin fish, producing more than 100 million pounds of finished seafood product each year, according to its website. After he raised these concerns to Mazzetta Chief Executive Officer and President Tom Mazzetta, the suit alleges, Thompson was demoted to a maintenance position in March 2017. He repeated his concerns on May 21 that year, and was fired five days later. Mazzetta Co., founded in 1987, is a global importer and producer of shrimp, mussels, lobsters, crab and finfish, producing more than 100 million pounds of finished seafood product each year, according to its website.

Quincy Massachusetts Granite City Electric Supply Co. of Quincy will pay  $2.3 million to settle allegations that it overbilled hundreds of state entities for supplies it sold them under a five-year contract with the Executive Office for Administration and Finance’s Operational Services Division, The Attorney General’s Office announced Monday. An agreement filed in Suffolk Superior Court resolves allegations that Granite City Electric Supply Co. violated the Massachusetts False Claims Act and Consumer Protection Act by failing to price goods as required in its contracts with 285 public entities, including public school districts, towns and cities, state agencies and housing authorities.

The company will refund $1.18 million in overcharges and $1.18 million to the Attorney General’s Office. Granite City also agreed not to participate in public contracts for one year and to change its business practices, including training and compliance reviews. The refunds will be made within 30 days.Granite City was a vendor on a statewide contract administered that cities and towns, school districts and libraries, hospitals and other agencies to buy maintenance, repair and operations supplies and equipment at discounted rates.

The investigation began when the Inspector General identified problems with the company’s pricing and billing on state contracts.

 

A U.S. District Court judge sentenced a former CEO of defrauding American Senior Communities among other entities. James Burkhart will spend 9½ in years in prison for fraud. Burkhart is one of four people accused of a massive fraud and kickback scheme that netted $19 million dollars. Burkhart pleaded guilty in December after a years long investigation by the FBI. During that investigation, agents discovered safe deposit boxes at his office and home with 350 gold coins and gold bars, and more than $1 million cash. The FBI was tipped by a vendor who was approached about their fraud and kickback scheme. Burkhart has been considered the ringleader of the conspiracy and the public interest in his case has been great. In fact, the courtroom was standing room only for his sentencing. American Senior Communities filed suit, accusing Burkhart, other former top executives and former vendors for “systematically looting” the long-term care provider from 2008 to 2015. Also named in the lawsuit were the company’s former COO Daniel Benson, former CFO Roger Werner, Burkhart’s business associate Steven Ganote, and Burkhart’s brother Joshua Burkhart.

Authorities said that over a six-year period, the accused used shell companies to falsify and inflate costs of goods and services, allowing them to steal discounts and rebates, and conceal kickbacks. They have all agreed to plea deals to settle the investigation. Burkhart must also pay full restitution. Burkhart was board chairman of the Indiana Health Care Association at the time of the FBI raids. At the time, American Senior Communities operated nearly 100 skilled nursing, hospice and assisted living facilities in Indiana and Kentucky. The 4, including Buckhart, spent millions on sporting events, private flights and gift cards alone. They were indicted on charges of defrauding American Senior Communities, the Medicare and Medicaid programs, the local county health department, a health foundation and others.

 

 

 

 

 

 

Investigators said Burkhart and Benson, along with two others, took part in a criminal scheme between January 2009 and September 2015 that netted them $16 million. Prosecutors say Benson used his position “to play an integral part in the sweeping conspiracy to defraud the victims in this case: the owners of ASC and Health and Hospital Corporation of Marion County.”Burkhart and Benson were indicted in 2016 along with associates Steven Ganote and Joshua Burkhart, who is James Burkhart’s brother.

Authorities say the four used shell companies and inflated invoices to enrich themselves. The victims of the fraud were Indianapolis-based ASC, which is owned by the Jackson family of Indianapolis; the Health & Hospital Corporation of Marion County, which hired ASC to operate its nearly 70 nursing homes; and federal health care programs. The kickbacks covered all sorts of purchased goods and services, from landscaping and nurse call lights to American flags and pharmacy and hospice services.

Credit Suisse  a Swiss-based issuer of publicly traded securities in the United States, will pay a $47 million to the United States as a criminal penalty for its role in a scheme to corruptly win banking business by awarding employment to friends and family of Chinese officials.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue of the Eastern District of New York and Assistant Director-in-Charge William F. Sweeney Jr. of the FBI’s New York Field Office made the announcement.

According to CSHK’s admissions, between 2007 and 2013, several senior CSHK managers in the Asia Pacific (APAC) region engaged in a practice to hire, promote and retain candidates referred by or related to government officials and executives of clients that were state-owned entities (SOEs).  The employment of these “relationship hires” or “referral hires” was part of a quid pro quo with the officials who referred the candidates for employment, whereby CSHK bankers sought to and did win business from the referral sources.  Employees of other subsidiaries of CSAG were aware of the referral hires and facilitated the conduct.