The Criminal Case:
From 2010 through 2015, Porsal Equities Ltd., a company based in the British Virgin Islands, certified it was exempt from paying sales tax on the basis that the art was purchased for resale. In reality, Porsal Equities purchased the artwork for personal use, including for display at New York City apartments belonging to the company’s sole director. Porsal Equities also failed to pay use tax on artwork purchased outside New York and shipped into New York for display at the same apartments.
New York law requires sellers of goods to charge sales tax on sales of goods. A purchaser may claim an exemption where it is also a seller that is purchasing retail property exclusively for resale. In such cases, the purchaser may submit a document known as a resale certificate to certify its intent to purchase for resale. If, after purchase, the purchaser ends up using the goods it initially bought exclusively for resale, then it must pay a compensating use tax at the same aggregate rate as the sales tax. Use tax may also be due where state sales tax was not collected at the time of purchase because property was delivered outside the state, but the property was subsequently used within the state.
Wellco required the Chinese manufacturer acility to include “USA” on labels of boot uppers. Two shipments of these deceptively marked boots were seized by the U.S. Department of Homeland Security’s Customs and Border Protection.
These activities violated the federal Berry Amendment, which bars the Defense Department from buying foreign-made clothing. The Berry Amendment states that the Department of Defense may not purchase any food, clothing and materials used to make clothing, tents and other goods that were not produced in the United States. Representing foreign made goods as American made qualifies as a False Claims Act violation as the vendor certifies that the products conform with all contract provisions.
The Food and Drug Administration has come under harsh criticism for approving a painkiller called Dsuvia which is 1,000 times stronger than morphine. FDA commissioner Scott Gottlieb, MD, addressed the timing in a statement released late last week. “The crisis of opioid addiction is an issue of great concern for our nation,” he said. “Addressing it is a public health priority for the FDA. The agency is taking new steps to more actively confront this crisis while also paying careful attention to the needs of patients and physicians managing pain.”
Critics cite the fact that the opioid epidemic is still rising and has resulted in the deaths of over 72,000 people in the U.S.
The Air Force entered into two contracts with NGSC for battlefield communications services: the Battlefield Airborne Communications Node contract and the Dynamic Re-tasking Capability contract. Today’s settlement resolves allegations that NGSC billed the Air Force for labor hours purportedly incurred between July 1, 2010, and December 31, 2013, by individuals stationed in the Middle East who had not actually worked the hours claimed. NGSC also entered into a separate agreement with the Criminal Division of the U.S. Attorney’s Office for the Southern District of California related to these contracts under which it has agreed to forfeit an additional $4.2 million.
The civil settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Southern District of California, the Defense Contract Audit Agency, the Air Force Office of Special Investigations, the Defense Criminal Investigative Service, and the Air Force Materiel Command Law Office Fraud Division.
Rats in the studies were exposed to radiation nine hours a day for two years — far longer even than heavy users of cell phones. The exposures started before birth and continued until they were about 2 years old. 2 to 3 percent of the male rats exposed to the radiation developed malignant gliomas, a deadly brain cancer, compared to none in a control group that received no radiation. Many epidemiologists see no overall rise in the incidence of gliomas in the human population. The study also found that about 5 to 7 percent of the male rats exposed to the highest level of radiation developed certain heart tumors, called malignant schwannomas, compared to none in the control group. Malignant schwannomas are similar to acoustic neuromas, benign tumors that can develop in people, in the nerve that connects the ear to the brain. The rats were exposed to radiation at a frequency of 900 megahertz — typical of the second generation of cellphones that prevailed in the 1990s, when the study was first conceived.
Current cellphones represent a fourth generation, known as 4G, and 5G phones are expected to debut around 2020. They employ much higher frequencies, and these radio waves are far less successful at penetrating the bodies of humans and rats. See the article in the New York Times on the study https://www.nytimes.com/2018/11/01/health/cellphone-radiation-cancer.html .
The lawsuit also alleges that It is alleged that Harris Jewelry targets and then entices local servicemembers into the stores with “Operation Teddy Bear”— a purported charitable program in which Harris Jewelry sells teddy bears in military uniforms with promises of charitable donations. In fact, the complaint alleges that this is nothing more than a marketing ploy to dupe servicemembers into high-priced, illegal in-house financing contracts for vastly overpriced jewelry.
Making matters worse, Harris sells lines of military-themed jewelry and other commemorative items, such as the “Mother’s Medal of Honor,” “Token of Pride Coin,” and “Forever as One Dog Tag Necklace,” on credit it provides under the name Consumer Adjustment Corp. USA. However, the Consumer Adjustment Corp. is merely the alter ego of Harris Originals of NY, Inc., which, the AG says was never clearly disclosed to the consumer and is used to finance more than 90% of its sales. The complaint further alleges that Harris Jewelry tells servicemembers it can provide them with an opportunity to build or improve their credit score through “The Harris Program”— the company’s own financing. Only after the servicemember agrees to participate in this “credit-improving program” does Harris Jewelry begin to discuss jewelry or its other products with the servicemember in an effort to max out the credit limit.
According to an article in STAT https://www.statnews.com/2018/10/29/er-patients-given-ketamine-powerful-drugs-without-consent/?utm_source=STAT+Newsletters&utm_campaign=56d4d18dfb-Daily_Recap&utm_medium=email&utm_term=0_8cab1d7961-56d4d18dfb-118516237, a Minnesota hospital tested powerful antipsychotics and potent anesthetic on emergency room patients without their knowledge or consent. This is a violation of law say federal inspectors have determined.
According to FDA inspectors, the hospital’s Institutional Review Board contended that researchers did not need consent to make patients part of a clinical trial in which they were given antipsychotic drugs that they might not receive as part of usual care. A public citizen group responded that the hospital IRB, “appears to lack even a basic understanding of federal regulations for the protection of human subjects and is clearly incapable of fulfilling its obligation” to do so.
In August, FDA sent inspectors to the hospital. The FDA report, says STAT, examined additional clinical trials beyond those initially flagged. It found that in four, the hospital IRB “did not determine that informed consent would be sought from each prospective subject” as required by law, while in another five, the IRB granted fast-track review to studies that didn’t qualify for it.
The settlement resolves allegations that, between 2006 and 2008, Abbott knowingly paid kickbacks to physicians in order to induce TriCor® prescriptions. Abbott, through its sales representatives, allegedly provided physicians with improper gift baskets, gift cards, and other items to induce prescriptions of TriCor®. Abbott also engaged health care providers for consulting services and speaking engagements, where one purpose of the remuneration for the programs was to induce or reward physicians for TriCor® prescriptions. As a result of the $25 million settlement, the federal government will receive $23.2 million, and state Medicaid programs will receive $1.8 million.
This settlement resolves allegations in a lawsuit filed in the Eastern District of Pennsylvania by Amy Bergman, a former Abbott sales representative, under the qui tam, or whistleblower, provisions of the False Claims Act. The qui tam provisions permit private parties to sue for false claims on behalf of the government and to receive a share of any recovery. Ms. Bergman will receive $6.5 million as her share of the recovery in the case. Attorneys Marc Raspanti, Pam Brecht, Mike Morse and Bob Nicholson of Pennsylvania represented Ms. Bergman.
The IRS pays awards to people who provide specific and credible information to the IRS if the information results in the collection of taxes, penalties, interest or other amounts from the noncompliant taxpayer. The IRS looks for solid information, not guesses or speculation.
If the taxes, penalties, interest and other amounts in dispute exceed $2 million, and a few other qualifications are met, the IRS will pay 15 percent to 30 percent of the amount collected. If the case deals with an individual, his or her annual gross income must be more than $200,000. If the whistleblower disagrees with the outcome of the claim, he or she can appeal to the Tax Court. These rules are found at Internal Revenue Code IRC Section 7623(b) – Whistleblower Rules.
An IRS tax whistleblower claim is independent of other whistleblower claims. Reporting an SEC claim, for example, will not cause the IRS to investigate the tax issues of the company. Likewise, filing a federal or state False Claims Act qui tam action is a separate process from filing an IRS tax whistleblower claim. Sometimes, for example, where a company is publicly traded and violates tax laws, there may also be a potential claim to file before the Securities and Exchange Commission.