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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

Lumber Liquidators lied to investors after a“60 Minutes” Episode and has agreed to pay a total penalty of $33 million. The payment is for filing a materially false and misleading statement to investors regarding the sale of its laminate flooring from China to its customers in the United States about the chemicals used in its wood products including formaldehyde. In 2013 and 2014, CARB informed Lumber Liquidators that flooring samples collected from its California stores failed deconstructive testing for formaldehyde emissions.  Lumber Liquidators’ own deconstructive tests of the same products yielded similar results.

A U.S. laminate supplier informed Lumber Liquidators that it tested a Chinese laminate sample purchased from one of Lumber Liquidators’ stores in the United States and that the sample emitted high levels of formaldehyde.  Lumber Liquidators took only limited steps to determine the validity of the suppliers’ concerns, and instead sought to generate support for its position that deconstructive testing was not a valid test method, the company admitted.

Lumber Liquidators, a public corporation headquartered in Toano, Virginia, and one of the largest retailers of flooring products in the United States, entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the Eastern District of Virginia charging the company with securities fraud.  The case was primarily focused on the fact that Lumber Liquidators knowingly filed a false and misleading statement to investors broadly denying the allegations featured in a March 2015 episode of 60 Minutes, and affirming that the company complied with California Air Resources Board (CARB) regulations.

Government-contractor-300x199The United States Department of Justice pressed a civil forfeiture case involving wrongfully acquired assets retained by Hikmatullah Shadman, a government contractor in Afghanistan. The DOJ settled the case with forfeiture of $25 million to the United States as recompense for the unlawful acquisition of United States assets for himself.

Hikmatullah Shadman is an Afghan national operating multiple companies serving as delivery suppliers for U.S. service members located throughout Afghanistan. One was Hikmat Shadman Logistics Services Company (HSLSC). From November 2010 to March 2012, it charged more than $77 million to the United States for delivering supplies as a government contractor in Afghanistan.

The investigation revealed that charges were disproportionate to what was transported. The prices for such transportation services were also inflated. In addition to the civil forfeiture and False Claims Allegations Act Resolutions, HSLSC will also be charged criminally by the U.S. Attorney’s Office in the Eastern District of North Carolina. This company has pleaded guilty on Jan 3rd to two accounts of paying gratuities to U.S. service members in Afghanistan, as well as one act of conspiracy to do the same. The sentence for this criminal case resulted in HSLSC paying an $810,000 fine and a forfeit of $190,000 to the United States. They will be on probation for five years from seeking any business with the United States.

town financial fraudThe New York town of Oyster Bay has been granted a settlement by the Securities and Exchange Commission (SEC) that will allow for no fines relating to a 2017 SEC lawsuit involving alleged financial fraud. This agreement is contingent on the assurance that the town hire a municipal finance consultant to review bond disclosures for three years.

The town of Oyster Bay as well as their former town supervisor John Venditto, who was not involved in the settlement, have been accused of defrauding investors by keeping vital information from them, including side deals with local restaurants to indirectly guarantee private loans. Those investigating the case have stated that during the time of the 2017 suit Oyster Bay was not disclosing loan guarantees that totaled $20 million during 26 securities offerings in the years 2010 to 2015

Allegations such as these could have resulted in much harsher punishments for the town, as they have in the past with other fraud cases. However, Oyster Bay received a light settlement that allowed them to avoid fines and seek professional financial assistance for up to three years. Initially, though the SEC sought to impose a court-appointed consultant for a five-year period with the power to prevent borrowing, but this was changed throughout the settlement.

President Donald Trump has revoked Indias preferential trade status worth $5.6 billion. This affects manufacturers of auto spare parts and casings for wires that are too low on the value chain for American manufacturers to make them in the U.S.  Trump wrote that he is taking the step because “I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India. The U.S. Generalized System of Preferences program, known as GSP, provides duty-free entry into the United States for more than 3,500products from more than 100 countries. India is the largest beneficiary of the program, with GSP imports including thousands of products and totaling $5.7 billion in 2017.

But the blanket removal of the GSP scheme for India means that about 1,900 products exported by the country to the US will be hit. “Popular items that India exports to the US under the GSP programme includes many intermediary products such as mechanical spare parts, ferroalloys, food products, gems and jewelry, textile products, electronic products like motors, wires

India has one of the fastest-growing economies, with top exports to the U.S. including precious metals and diamonds, mineral fuels and aircraft. “India is a very high-tariff nation. They charge us a lot. When we send a motorcycle to India, it’s 100 percent tariff. They charge 100 percent. When India sends a motorcycle to us, we brilliantly charge them nothing,” Trump said.

blockchain hacking In January of 2019, it was discovered that an online attacker had hacked Coinbase and processed over $1.1 million in what the cryptocurrency industry refers to as “double spends”. However, this is not the only incidence of blockchains being hacked since its increasing popularity on the market. In fact, since 2017 it is estimated that over $2 billion worth of cryptocurrency has been stolen by hackers. But, how have blockchains, which were once deemed as unhackable, become the latest source of fraudulent activity?

Two Documented Years of Hacking Activity

Since 2017, authorities have uncovered billions of dollars worth of stolen cryptocurrency due to online attackers. However, it is estimated that even more funds have been taken during this time. Two groups alone are suspected of profiting over $1 billion combined, but the extent of their reach, as well as others, is largely unknown. As the market for blockchain encryptions becomes larger and larger, it appears as though its vulnerability to hackers is also increasing. This could mean that the fraudulent activity associated with blockchain hacking is just beginning.

Common NetworkCommon Network, a startup tech company, is hoping to become a part of the next generation of wireless technology with its plan to combine 5G with technology open-sourced by Facebook. Another way Common Networks hopes to rise above in the battle for 5G is by relying on parts of the wireless spectrum that can be used without a license from the Federal Communications Commission. They also use inexpensive, commodity hardware. Common Networks does not strive to start out as the most flashy and expensive company but instead work towards innovation while keeping things affordable and easy to expand.

For $50 a month people in the city of Alameda, San Francisco have been granted access to 5G, millimeter wave, technology that delivers speeds of 1 gigabit per second. This speed matches Google Fiber’s broadband service and is not completely uncommon as a company Google Fiber obtained named Webpass offers gigabit wireless in several cities. That being said, Common Networks believes they can improve upon this by finding a way to more quickly and more affordably build 5G networks and expand beyond their competition.

Based in San Francisco, Common Networks is using 5G to offer home broadband, not mobile, in order to stay on par with big brand internet provides such as Comcast and AT&T. They revealed that their Millimeter wave service in Alameda relies on hardware designed by Facebook called Terragraph. Terragraph is open sourced by Facebook as a part of the Telecom Infrastructure Project. While Facebook has been connecting with other carries from across the globe in hopes of getting a clear analysis on Terragraph, Common Networks is one of the first to utilize it as a way to deliver internet connectivity to U.S. customers.

NC-health-care-fraud-300x199Mental health company owner, Catinia Denise Farrington of Cyprus, Texas, pleaded guilty to health care fraud and tax evasion in September of 2018. As of March 1st, 2019, she has been sentenced to 60 months in prison after profiting $4 million from Medicaid and just under $400,000 from her tax evasion scheme.

Health Care Fraud Conspiracy

According to prosecutors, Farrington owned a mental health care company out of North Carolina, Durham County Mental Health and Behavioral Health Services, LLC. Through this company, she submitted thousands of fraudulent claims to Medicaid for services that were never performed. These incidents occurred between 2011 and 2015, but this is not the only fraudulent activity that Farrington participated in during this time.

Capitol Hill was in suspense as seven giants of the drug industry made their presence there known in order to discuss the issue concerning drug prices. Lawmakers were there to hear their reasoning for these high prices while mildly criticizing them for their inability to put patients first.

The leaders of these pharmaceutical companies showed no hesitation in agreeing that their prices are high, but they also showed no hesitation in placing the blame elsewhere. They testified that the reason drug prices are so high is because of those running the insurance industry as well the government and pharmacy benefit managers that act as middlemen within the industry. While each pharmaceutical CEO is willing to acknowledge that they play some role in lowering prices, they still stand firm in saying that this problem is much more a group effort.

Ron Wyden, one of the more verbal senators involved in this situation, makes his stance on these defenses clear by saying “Prescription drugs did not become outrageously expensive by accident” and continues to put the pressure on by stating his belief that “Drug prices are astronomically high because that’s where pharmaceutical companies and their investors want them.”

Puerto RicoIn 2011, the U.S. issued $877.9 million in bonds in an effort to build and renovate 100 schools in Puerto Rico. Now the IRS is auditing for four Series 2011 R taxable of school construction bonds that totaled $756.4 million and $121.5 million in Series 2011 T direct-pay qualified zone academy bonds.

In a letter dated February 7th, the IRS notified the Puerto Rico Fiscal Agency and Financial Advisory Authority that it will be examining certain forms related to these Series R and Series T bonds. This information was filed on the Municipal Securities Rulemaking Board’s EMMA website on behalf of the Public Buildings Authority.

The bonds granted for the construction and renovation of these schools were issued in accordance with a provision set by the 2009 American Recovery and Reinvestment Act, which was enacted during the Obama administration.

Pharmacy fraudHolly Blakely, a former San Antonio pharmaceutical rep in Texas, plead guilty and confessed her involvement in an $8.8 million healthcare fraud scheme.

Initially, Holly Blakely was charged in a 30-count indictment. This allegedly means that she paid more than $400,000 in bribes and kickbacks to clinicians for prescribing compounded medications. Compound medication is basically personalized medications produced in order to fit an individual’s exact medical needs. In this case, these compound medications, in particular, were designed to ease pain, but the people these were being given to did not require them.

Blakely confessed that she worked with two compounding pharmacies in order to push prescriptions for compound drugs. The pharmacies would then submit claims to health plans such as Tricare. In exchange for her part of the fraud, Blakely was paid $1.15 million.