Articles Posted in Blog Posts

All Blog posts should be tagged with this..

kickbacksIn 2009, the company Eli Lilly & Co. plead guilty to illegally marketing an antipsychotic drug, Zyprexa, for unapproved uses on patients, leading to a fine of $1.42 billion. This settlement ended a series of civil lawsuits, as well as a criminal investigation. At the time this large of a settlement was unheard of, but how did the company orchestrate such a massive kickback scheme?

The Kickback Scheme

Originally, Zyprexa was approved for a very narrow use of schizophrenia and bipolar disorder, however Eli Lilly & Co. soon began to market the drug for a variety of other purposes. In fact, it was alleged that Zyprexa was eventually marketed to treat dementia, and was even prescribed for illnesses related to pediatrics in high doses. The company was also accused of overcharging for the drug. This allowed the company to target a significantly wider audience, increasing their potential profits on the drug exponentially.

Medicare-fraud-300x200Rossana Ramirez, a once certified nursing assistant, was discovered to be helping run a business in West Miami-Dade that is responsible for $7 million in health care fraud. After pleading guilty Ramirez was stripped of her license permanently through an Emergency Suspension Order and is now serving time at a federal detention center with a release date of June 2022.

Rossana Ramirez was registered in the state corporation registration as the vice president of a company titled F&E Home Health Care. While Rossana Ramirez is currently taking the heat from the Florida Department of Health, her husband Evelio Ramirez Jr. is also involved as the president of F&E. He will soon be starting his sentence of three years and ten months in federal prison himself. Both husband and wife are 59 and will both serve their time. Their pleas of guiltily were fairly straightforward and show that this act of fraud is not very uncommon from what has already been seen from healthcare fraud schemes in South Florida.

F&E is accused of paying kickbacks, a form of negotiated bribery in which a commission of sorts is given in return for services rendered, to those who receive Medicare and Medicaid to become F&E patients. Additionally, some of these patients did not even require home healthcare and the services promised were not often necessary or even provided at times. F&E is also accused of paying recruiters of Medicare and Medicaid recipients to promote their health services for them.

Franklin Resources will pay $13,850,000 and make other provisions to settle a lawsuit alleging that defendants breached their Employee Retirement Income Security Act (ERISA) fiduciary duties by causing Franklin Templeton’s 401(k) plan to invest in funds offered and managed by Franklin Templeton when better-performing and lower-cost funds were available. The case was settled shortly before trial of the lawsuit.

The company will also select a non-proprietary target-date fund (TDF) for its 401(k) investment lineup and increase the company match contribution rate for three years. According to the settlement agreement in addition to the settlement payment, the fiduciaries to the plan with responsibility for selecting plan investment options will add a nonproprietary target-date fund option (TDF) to the investment lineup, which will be maintained as a plan investment option for the duration of the compliance period in addition to the plan’s qualified default investment alternative (QDIA)—the LifeSmart Target Date Funds. “The choice of TDF will be made by the fiduciaries responsible for selecting Plan investment options in a manner consistent with their fiduciary oversight responsibilities, following a search of nonproprietary TDF options conducted by the Plan’s independent investment consultant, Callan Associates, Inc.,” the settlement agreement says. Franklin is listed on the New York Stock Exchange under In 1973 the company’s headquarters moved from New York to California . As of March 2017, Franklin Templeton Investments had US$740 billion in assets under management (AUM) on behalf of private, professional and institutional investors.

A month before the trial in the case was set to begin, the parties in the lawsuit announced they had reached a settlement but needed 60 days to file a motion for preliminary approval.

Contractors Areva and Chicago Bridge and Iron gave kickbacks in the form of football tickets, hunting rifles, cellphones and NASCAR race tickets to get work on a factory at the Savannah River nuclear storage facility says a lawsuit filed by the U.S. Government.
The cost of those kickbacks was later charged to taxpayers, according the False Claims Act complaint filed by the U.S. Department of Justice.

The contractors were hired to build the plant which  would turn weapons-grade plutonium into fuel for nuclear power plants. The contractors  scheme defrauded hat bilked taxpayers out of $6.4 million according to the Complaint. The suit also concerns over a federal construction effort that was marred by schedule delays, cost overruns and questionable spending.

insider tradingAccording to the Securities and Exchange Commission’s 2018 Annual Report, 262 tips were received from whistleblowers regarding insider trading and resulted in a total of 56 charges throughout the year. As one of the SEC’s most successful years in combating insider trading, it is evident that the combination of whistleblower tips and modern technology are the key to securing the integrity of the securities market.

What is Insider Trading?

According to the SEC’s Investor.gov, “Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material, nonpublic information about the security. Insider trading violations may also include “tipping” such information, securities trading by the person “tipped,” and securities trading by those who misappropriate such information.”

money-laundering-300x200Two for the most popular apps for millennials and travelers are now being used to launder money for criminal elements. Airbnb and Uber are playing host to a new scheme that turns ill-gotten gains into clean and hard to track cash or cryptocurrency.

Money Laundering Scheme

Add Airbnb and Uber to the growing list of ways criminals are hiding money these days. Experts told CNBC that fake Uber drivers, questionable Airbnb hosts, and cryptocurrency specialists are being recruited via the dark web.

South CarolinaUniversity, will pay $2.5 million to settle federal claims under the False Claims Act of submitting false claims to the U.S. Department of Education in violation of the federal ban on incentive-based compensation, the Justice Department announced today.   The settlement resolves allegations that between 2014 and 2016, NGU hired Joined Inc., a company partially owned by NGU, to recruit students to NGU and compensated Joined based on the number of students who enrolled in NGU’s programs, in violation of the prohibition on incentive compensation. The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblowerprovisions of the False Claims Act by Maurice Shoe, the co-owner of Joined. Mr. Shoe is represented by the firm of  Guttman, Buschner & Brooks (“GBB”), The Act permits private parties to sue on behalf of the government for false claims and to receive a share of any recovery.  As part of today’s resolution, the whistleblower will receive $375,000.

Title IV of the Higher Education Act (HEA) prohibits any institution of higher education that receives federal student aid from compensating student recruiters with a commission, bonus, or other incentive payment based on the recruiters’ success in securing student enrollment.  The incentive compensation ban protects students against aggressive admissions and recruitment practices that serve the financial interests of the recruiter, rather than the educational needs of the student.

“Offering unlawful financial incentives for recruiting undermines the integrity of our higher education system,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “Prospective students are entitled to make enrollment decisions without the improper influence of recruiting companies who pursue their own financial gain at the expense of the students’ best interests.”“This settlement will help ensure that schools and recruitment services put the educational interests of students and potential enrollees first,” said U.S. Attorney Sherri A. Lydon for the District of South Carolina.  “It should serve as a warning to institutions that would attempt to maximize enrollments to line their own pockets, disregarding the best interests of students in the process.  Through False Claims Act cases like this one, the U.S. Attorney’s Office will continue to help protect federal taxpayer dollars from waste, fraud, and abuse.”

Google-tax-evasion-300x200Google, a renowned international technology company, was found to be using a Dutch shell company in order to reduce its foreign tax bill in 2017 by shifting $24 billion, 19.9 billion euros, of its revenue from royalties to Bermuda. The amount shifted in 2017 through the Netherlands was 4 billion euros more than what was documented in 2016. This information is according to documents filed at the Dutch Chamber of Commerce.

To further explain how this worked, Google used the subsidiary in the Netherlands, Google Netherlands Holdings BV, to shift their revenue made outside of the United States, their home country, to an affiliated base in Bermuda, which is essentially a known tax haven where companies are not required to pay an income tax. This base is called Google Ireland Holdings, and the tax strategy used here is known as the “Double Irish, Dutch Sandwich”. Surprisingly, this is a legal strategy which has allowed Google, who is owned by Alphabet, to avoid US income taxes and European withholding taxes, saving a large portion of their overseas profits.

When addressed through calls and emails about this shifting situation, Google stated that “We pay all of the taxes due and comply with the tax laws in every country we operate in around the world,” and continued in detail to say “Google, like other multinational companies, pays the vast majority of its corporate income tax in its home country, and we have paid a global effective tax rate of 26% over the last 10 years.”

Insys TherapeuticsA former Insys Therapeutics executive, accused in an opioid bribe scheme, may have once gifted a lap dance to a doctor the company was pressuring to prescribe opioids drugs to patients. The troubling allegations are emerging as part of Insys trial in Boston.

Jurors heard the “lap dance” testimony on the second day of the federal trial in Boston against Insys Therapeutics founder, John Kapoor, and four other former executives. Apparently, Sunrise Lee, was a former exotic dancer with no experience in pharmaceuticals, who was hired to be a regional sales manager.

Holly Brown, a former Insys sales representative, testified that her superiors encouraged her and others of the sale team to focus their attention on a specific doctor who was known for prescribing a high amount of opioids, named Dr. Paul Madison. She says at one party she saw Lee sitting on Madison’s lap and “bouncing around,” with Madison’s hands “inappropriately all over” Lee’s chest. The prosecutors say this was part of an opioid bribe scheme.

tax havenThe Sackler family empire comprises Purdue in America, Napp in Britain, and Mundipharma in Europe and Australasia. The companies have helped amass a £10 billion fortune, protected, in part, by the tax haven of Bermuda.

The Evening Standard in the UK released a report detailing that while their opioid painkillers are manufactured in Cambridge, the Caribbean is actually the heart of the Sacklers’ tax avoidance strategy. They report the Sackler family has allegedly diverted billions of pounds in profit to Bermuda to avoid paying millions in taxes that would have been due to the UK or Europe.

The Investigation into Opioid Companies