FROM: DEPARTMENT OF LABOR
Fewer roof falls occurring in US coal mines, but challenges remain
ARLINGTON, Va. — The number of U.S. miners killed in underground coal roof falls has been dramatically reduced since 2007, and fatalities resulting from retreat mining have been virtually eliminated, according to figures from the Department of Labor’s Mine Safety and Health Administration.
“As a result of efforts undertaken by MSHA and the mining community, we have seen a significant reduction in coal mine roof fall accidents, which have traditionally been a leading source of debilitating injuries and death for coal miners,” said Joseph A. Main, assistant secretary of labor for mine safety and health
Each year during its Preventive Roof/Rib Outreach Program (PROP), MSHA educates miners and mine operators about the dangers of roof and rib falls in underground coal mines. From 2003-2007, 28 miners lost their lives in accidents involving falls of the mine’s roof and ribs. Over the next five years, from 2008 through 2012, the number of roof and rib fall fatalities dropped to 19, a 32 percent reduction. More significantly, the number of fatalities resulting from retreat mining fell from seven during the first five-year period to zero for the 2008-2012 period.
Retreat mining is the practice of mining coal and leaving pillars standing to support the mine roof. When mining is completed in that area, miners carefully collapse and remove the pillars as the work then retreats from that section of the underground mine.
“Everyone in this industry — miners and their representatives, mine operators as well as MSHA personnel — have worked together to make mines safer and more secure from roof falls,” said Main. “However, while we have made real gains in eliminating fatalities from retreat mining, we must redouble our efforts to address hazards in other areas of underground roof and rib safety.”
In 2012, 377 miners were injured from roof and rib falls. Of these, 145 were roof-bolter operators injured from roof falls, and another 20 were roof-bolter operators injured from falls of rib.
With this in mind, MSHA’s 2013 PROP effort will focus on Roof Bolter Operator Safety. Through the release of a four-part series of informational posters, the agency will target roof-bolter roof and rib fall injuries, as well as other accidents from hands-on drilling, pinch points and accidental control activation.
Saturday, August 10, 2013
Friday, August 9, 2013
SEC CHARGES BANK OF AMERICA ENTITIES WITH SECURITIES ACT VIOLATIONS RELATED TO RMBS OFFERING
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
SEC Charges Bank of America Entities with Material Misrepresentations and Omissions in Connection with an RMBS Offering
On August 6, 2013, the Securities and Exchange Commission (“Commission”) filed a civil injunctive action against Bank of America, N.A. (“BANA”), Banc of America Mortgage Securities, Inc. (“BOAMS”), and Merrill Lynch, Pierce, Fenner & Smith, Inc. f/k/a Banc of America Securities LLC (“BAS”) (collectively the “Bank of America Entities”). The Commission alleges that the Bank of America Entities made material misrepresentations and omissions in connection with the sale of residential mortgage-backed securities known as BOAMS 2008-A. Specifically, the complaint alleges that the Bank of America Entities failed to disclose the disproportionate concentration of wholesale loans (72% by unpaid principal balance) underlying BOAMS 2008-A as compared to prior BOAMS offerings. The complaint also alleges that the Bank of America Entities failed to disclose known risks associated with the high concentration of wholesale loans in BOAMS 2008-A including higher likelihood that the loans would be subject to material underwriting errors, become severely delinquent, fail early in the life of the loan, or prepay. The complaint further alleges that the Bank of America entities violated Regulation S-K and subpart Regulation AB of the Securities Act of 1933 (the “Securities Act”) by failing to disclose the material characteristics of the pool of loans underlying BOAMS 2008-A. The complaint also alleges that the Bank of America Entities made material misrepresentations and omissions in its public filings and in the loan tapes it provided to investors and rating agencies that the loans in BOAMS 2008-A complied with BANA’s underwriting standards when a material amount did not. Finally, the complaint alleges that BOAMS and BAS violated Section 5(b)(1) of the Securities Act by failing to file with the Commission certain loan tapes that it provided only to select investors.
The Commission’s complaint, filed in the United States District Court for the Western District of North Carolina, charges the Bank of America Entities with violating the antifraud provisions of the federal securities laws. The complaint alleges that that each violated Sections 17(a)(2) and 17(a)(3) of the Securities Act. The complaint also alleges that BAS and BOAMS violated Section 5(b)(1) of the Securities Act. The complaint seeks against each of the Bank of America Entities a permanent injunction, disgorgement with prejudgment interest and civil monetary penalties pursuant Section 20(d) of the Securities Act.
The Commission would like to thank the United States Attorney’s Office for the Western District of North Carolina for its substantial assistance in this matter.
SEC Charges Bank of America Entities with Material Misrepresentations and Omissions in Connection with an RMBS Offering
On August 6, 2013, the Securities and Exchange Commission (“Commission”) filed a civil injunctive action against Bank of America, N.A. (“BANA”), Banc of America Mortgage Securities, Inc. (“BOAMS”), and Merrill Lynch, Pierce, Fenner & Smith, Inc. f/k/a Banc of America Securities LLC (“BAS”) (collectively the “Bank of America Entities”). The Commission alleges that the Bank of America Entities made material misrepresentations and omissions in connection with the sale of residential mortgage-backed securities known as BOAMS 2008-A. Specifically, the complaint alleges that the Bank of America Entities failed to disclose the disproportionate concentration of wholesale loans (72% by unpaid principal balance) underlying BOAMS 2008-A as compared to prior BOAMS offerings. The complaint also alleges that the Bank of America Entities failed to disclose known risks associated with the high concentration of wholesale loans in BOAMS 2008-A including higher likelihood that the loans would be subject to material underwriting errors, become severely delinquent, fail early in the life of the loan, or prepay. The complaint further alleges that the Bank of America entities violated Regulation S-K and subpart Regulation AB of the Securities Act of 1933 (the “Securities Act”) by failing to disclose the material characteristics of the pool of loans underlying BOAMS 2008-A. The complaint also alleges that the Bank of America Entities made material misrepresentations and omissions in its public filings and in the loan tapes it provided to investors and rating agencies that the loans in BOAMS 2008-A complied with BANA’s underwriting standards when a material amount did not. Finally, the complaint alleges that BOAMS and BAS violated Section 5(b)(1) of the Securities Act by failing to file with the Commission certain loan tapes that it provided only to select investors.
The Commission’s complaint, filed in the United States District Court for the Western District of North Carolina, charges the Bank of America Entities with violating the antifraud provisions of the federal securities laws. The complaint alleges that that each violated Sections 17(a)(2) and 17(a)(3) of the Securities Act. The complaint also alleges that BAS and BOAMS violated Section 5(b)(1) of the Securities Act. The complaint seeks against each of the Bank of America Entities a permanent injunction, disgorgement with prejudgment interest and civil monetary penalties pursuant Section 20(d) of the Securities Act.
The Commission would like to thank the United States Attorney’s Office for the Western District of North Carolina for its substantial assistance in this matter.
Thursday, August 8, 2013
$490.9 MILLION PAYED BY WYETH PHARMACEUTICALS TO RESOLVE CIVIL AND CRIMINAL LIABILITIES REGARDING RAPAMUNE DRUG
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, July 30, 2013
Wyeth Pharmaceuticals Agrees to Pay $490.9 Million for Marketing the Prescription Drug Rapamune for Unapproved Uses
Wyeth Pharmaceuticals Inc., a pharmaceutical company acquired by Pfizer, Inc. in 2009, has agreed to pay $490.9 million to resolve its criminal and civil liability arising from the unlawful marketing of the prescription drug Rapamune for uses not approved as safe and effective by the U.S. Food and Drug Administration (FDA), the Justice Department announced today. Rapamune is an “immunosuppressive” drug that prevents the body’s immune system from rejecting a transplanted organ.
“FDA’s drug approval process ensures companies market their products for uses proven safe and effective,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “We will hold accountable those who put patients’ health at risk in pursuit of financial gain.”
The Federal Food, Drug and Cosmetic Act (FDCA) requires a company such as Wyeth to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. In 1999, Wyeth received approval from the FDA for Rapamune use in renal (kidney) transplant patients. However, the information alleges, Wyeth trained its national Rapamune sales force to promote the use of the drug in non-renal transplant patients. Wyeth provided the sales force with training materials regarding non-renal transplant use and trained them on how to use these materials in presentations to transplant physicians. Then, Wyeth encouraged sales force members, through financial incentives, to target all transplant patient populations to increase Rapamune sales.
“The FDA approves drugs for certain uses after lengthy clinical trials,” said Sanford Coats, U.S. Attorney for the Western District of Oklahoma. “Compliance with these approved uses is important to protect patient safety, and drug companies must only market and promote their drugs for FDA-approved uses. The FDA approved Rapamune for limited use in renal transplants and required the label to include a warning against certain uses. Yet, Wyeth trained its sales force to promote Rapamune for off-label uses not approved by the FDA, including ex-renal uses, and even paid bonuses to incentivize those sales. This was a systemic, corporate effort to seek profit over safety. Companies that ignore compliance with FDA regulations will face criminal prosecution and stiff penalties.”
Wyeth has pleaded guilty to a criminal information charging it with a misbranding violation under the FDCA. The resolution includes a criminal fine and forfeiture totaling $233.5 million. Under a plea agreement, which has been accepted by the U.S. District Court in Oklahoma City, Wyeth has agreed to pay a criminal fine of $157.58 million and forfeit assets of $76 million.
The resolution also includes civil settlements with the federal government and the states totaling $257.4 million. Wyeth has agreed to settle its potential civil liability in connection with its off-label marketing of Rapamune. The government alleged that Wyeth violated the False Claims Act, from 1998 through 2009, by promoting Rapamune for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by Medicare, Medicaid and other federal health care programs. These unapproved uses included non-renal transplants, conversion use (switching a patient from another immunosuppressant to Rapamune) and using Rapamune in combination with other immunosuppressive agents not listed on the label. The government alleged that this conduct resulted in the submission of false claims to government health care programs. Of the amounts to resolve the civil claims, Wyeth will pay $230,112,596 to the federal government and $27,287,404 to the states.
“Wyeth’s conduct put profits ahead of the health and safety of a highly vulnerable patient population dependent on life-sustaining therapy,” said Antoinette V. Henry, Special Agent in Charge, Metro-Washington Field Office, FDA Office of Criminal Investigations. “FDA OCI is committed to working with the Department of Justice and our law enforcement counterparts to protect public health.”
Pfizer is currently subject to a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services’ Office of Inspector General that it entered in connection with another matter in 2009, shortly before acquiring Wyeth. The CIA covers former Wyeth employees who now perform sales and marketing functions at Pfizer. Under the CIA, Pfizer is subject to exclusion from federal health care programs, including Medicare and Medicaid, for a material breach of the CIA, and the company is subject to monetary penalties for less significant breaches.
“We are committed to enforcing the laws protecting public health, taxpayers and government health programs, and to promoting effective compliance programs,” said Daniel R. Levinson, Inspector General, Department of Health and Human Services. “Our integrity agreement with Pfizer, which acquired Wyeth, includes required risk assessments, a confidential disclosure program, and auditing and monitoring to help prospectively identify improper marketing.”
The civil settlement resolves two lawsuits pending in federal court in the Western District of Oklahoma under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and share in any recovery. The first action was filed by a former Rapamune sales representative, Marlene Sandler, and a pharmacist, Scott Paris. The second action was filed by a former Rapamune sales representative, Mark Campbell. The whistleblowers’ share of the civil settlement has not been resolved.
"The success obtained in this case is an excellent example of how we address the threats to our nation’s health care system; the importance of the public reporting of fraud, waste, or abuse; and the significant results that can be obtained through multiple agencies cooperating in investigations,” said James E. Finch, Special Agent in Charge of the Oklahoma City Division of the FBI.
The criminal case was handled by the U.S. Attorney’s Office for the Western District of Oklahoma (USAO) and the Justice Department’s Civil Division, Consumer Protection Branch. The civil settlement was handled by USAO and the Justice Department’s Civil Division, Commercial Litigation Branch. The Department of Health and Human Services’ (HHS) Office of Counsel to the Inspector General; the HHS Office of General Counsel, Center for Medicare and Medicaid Services; the FDA’s Office of Chief Counsel; and the National Association of Medicaid Fraud Control Units. These matters were investigated by the FBI; the FDA’s Office of Criminal Investigation; HHS’ Office of Inspector General, Office of Investigations and Office of Audit Services; the Defense Criminal Investigative Service; the Office of Personnel Management’s Office of Inspector General and Office of Audit Services; the Department of Veterans’ Affairs’ Office of Inspector General; and TRICARE Program Integrity.
Except for conduct admitted in connection with the criminal plea, the claims settled by the civil agreement are allegations only, and there has been no determination of civil liability. The civil lawsuits are captioned United States ex rel. Sandler et al v. Wyeth Pharmaceuticals, Inc., Case No. 05-6609 (E.D. Pa.) and United States ex rel. Campbell v. Wyeth, Inc., Case No. 07-00051 (W.D. Okla.).
Tuesday, July 30, 2013
Wyeth Pharmaceuticals Agrees to Pay $490.9 Million for Marketing the Prescription Drug Rapamune for Unapproved Uses
Wyeth Pharmaceuticals Inc., a pharmaceutical company acquired by Pfizer, Inc. in 2009, has agreed to pay $490.9 million to resolve its criminal and civil liability arising from the unlawful marketing of the prescription drug Rapamune for uses not approved as safe and effective by the U.S. Food and Drug Administration (FDA), the Justice Department announced today. Rapamune is an “immunosuppressive” drug that prevents the body’s immune system from rejecting a transplanted organ.
“FDA’s drug approval process ensures companies market their products for uses proven safe and effective,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “We will hold accountable those who put patients’ health at risk in pursuit of financial gain.”
The Federal Food, Drug and Cosmetic Act (FDCA) requires a company such as Wyeth to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. In 1999, Wyeth received approval from the FDA for Rapamune use in renal (kidney) transplant patients. However, the information alleges, Wyeth trained its national Rapamune sales force to promote the use of the drug in non-renal transplant patients. Wyeth provided the sales force with training materials regarding non-renal transplant use and trained them on how to use these materials in presentations to transplant physicians. Then, Wyeth encouraged sales force members, through financial incentives, to target all transplant patient populations to increase Rapamune sales.
“The FDA approves drugs for certain uses after lengthy clinical trials,” said Sanford Coats, U.S. Attorney for the Western District of Oklahoma. “Compliance with these approved uses is important to protect patient safety, and drug companies must only market and promote their drugs for FDA-approved uses. The FDA approved Rapamune for limited use in renal transplants and required the label to include a warning against certain uses. Yet, Wyeth trained its sales force to promote Rapamune for off-label uses not approved by the FDA, including ex-renal uses, and even paid bonuses to incentivize those sales. This was a systemic, corporate effort to seek profit over safety. Companies that ignore compliance with FDA regulations will face criminal prosecution and stiff penalties.”
Wyeth has pleaded guilty to a criminal information charging it with a misbranding violation under the FDCA. The resolution includes a criminal fine and forfeiture totaling $233.5 million. Under a plea agreement, which has been accepted by the U.S. District Court in Oklahoma City, Wyeth has agreed to pay a criminal fine of $157.58 million and forfeit assets of $76 million.
The resolution also includes civil settlements with the federal government and the states totaling $257.4 million. Wyeth has agreed to settle its potential civil liability in connection with its off-label marketing of Rapamune. The government alleged that Wyeth violated the False Claims Act, from 1998 through 2009, by promoting Rapamune for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by Medicare, Medicaid and other federal health care programs. These unapproved uses included non-renal transplants, conversion use (switching a patient from another immunosuppressant to Rapamune) and using Rapamune in combination with other immunosuppressive agents not listed on the label. The government alleged that this conduct resulted in the submission of false claims to government health care programs. Of the amounts to resolve the civil claims, Wyeth will pay $230,112,596 to the federal government and $27,287,404 to the states.
“Wyeth’s conduct put profits ahead of the health and safety of a highly vulnerable patient population dependent on life-sustaining therapy,” said Antoinette V. Henry, Special Agent in Charge, Metro-Washington Field Office, FDA Office of Criminal Investigations. “FDA OCI is committed to working with the Department of Justice and our law enforcement counterparts to protect public health.”
Pfizer is currently subject to a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services’ Office of Inspector General that it entered in connection with another matter in 2009, shortly before acquiring Wyeth. The CIA covers former Wyeth employees who now perform sales and marketing functions at Pfizer. Under the CIA, Pfizer is subject to exclusion from federal health care programs, including Medicare and Medicaid, for a material breach of the CIA, and the company is subject to monetary penalties for less significant breaches.
“We are committed to enforcing the laws protecting public health, taxpayers and government health programs, and to promoting effective compliance programs,” said Daniel R. Levinson, Inspector General, Department of Health and Human Services. “Our integrity agreement with Pfizer, which acquired Wyeth, includes required risk assessments, a confidential disclosure program, and auditing and monitoring to help prospectively identify improper marketing.”
The civil settlement resolves two lawsuits pending in federal court in the Western District of Oklahoma under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and share in any recovery. The first action was filed by a former Rapamune sales representative, Marlene Sandler, and a pharmacist, Scott Paris. The second action was filed by a former Rapamune sales representative, Mark Campbell. The whistleblowers’ share of the civil settlement has not been resolved.
"The success obtained in this case is an excellent example of how we address the threats to our nation’s health care system; the importance of the public reporting of fraud, waste, or abuse; and the significant results that can be obtained through multiple agencies cooperating in investigations,” said James E. Finch, Special Agent in Charge of the Oklahoma City Division of the FBI.
The criminal case was handled by the U.S. Attorney’s Office for the Western District of Oklahoma (USAO) and the Justice Department’s Civil Division, Consumer Protection Branch. The civil settlement was handled by USAO and the Justice Department’s Civil Division, Commercial Litigation Branch. The Department of Health and Human Services’ (HHS) Office of Counsel to the Inspector General; the HHS Office of General Counsel, Center for Medicare and Medicaid Services; the FDA’s Office of Chief Counsel; and the National Association of Medicaid Fraud Control Units. These matters were investigated by the FBI; the FDA’s Office of Criminal Investigation; HHS’ Office of Inspector General, Office of Investigations and Office of Audit Services; the Defense Criminal Investigative Service; the Office of Personnel Management’s Office of Inspector General and Office of Audit Services; the Department of Veterans’ Affairs’ Office of Inspector General; and TRICARE Program Integrity.
Except for conduct admitted in connection with the criminal plea, the claims settled by the civil agreement are allegations only, and there has been no determination of civil liability. The civil lawsuits are captioned United States ex rel. Sandler et al v. Wyeth Pharmaceuticals, Inc., Case No. 05-6609 (E.D. Pa.) and United States ex rel. Campbell v. Wyeth, Inc., Case No. 07-00051 (W.D. Okla.).
Wednesday, August 7, 2013
COURT ORDERS HALT TO DEBT COLLECTOR'S PRACTICES AND ASSET FREEZE
FROM: FEDERAL TRADE COMMISSION
At FTC's Request, Court Orders Halt to Debt Collector's Illegal Practices, Freezes Assets
Defendants Allegedly Broke the Law by Posing as Process Servers, Threatening Lawsuits, and Contacting Consumers’ Employers and Family Members in Violation of Their Privacy
At the request of the Federal Trade Commission, a U.S. district court has halted a debt collection operation that allegedly extorted payments from consumers by using false threats of lawsuits and calculated campaigns to embarrass consumers by unlawfully communicating with family members, friends, and coworkers. The court order stops the illegal conduct, freezes the operation’s assets, and appoints a temporary receiver to take over the defendants’ business while the FTC moves forward with the case.
The lawsuit, part of the FTC’s continuing crackdown on scams that target consumers in financial distress, charged four individuals and seven companies. The FTC alleged that the defendants were part of an elaborate debt collection scheme operating from locations in Orange and Riverside counties in California, and that they used various business names including Western Performance Group, as well as fictitious names, which they changed frequently to avoid law enforcement scrutiny.
The FTC alleged that the defendants called consumers and their employers, colleagues, and family members posing as process servers or law office employees, and claimed they were seeking to deliver legal papers that purportedly related to a lawsuit. In some instances, the defendants threatened that consumers would be arrested if they did not respond to the calls. But the debt collectors were not process servers or law office employees, and the defendants did not file lawsuits against the consumers. The FTC charged that the defendants’ false and misleading claims violated the FTC Act and the Fair Debt Collection Practices Act. In addition, the FTC alleged that the defendants violated the Fair Debt Collection Practices Act by:
improperly contacting third parties about consumers’ debts; failing to disclose the name of the company they represented, or the fact that they were attempting to collect a debt, during telephone calls to consumers; and failing to notify consumers of their right to dispute and obtain verification of their debts.
The complaint names as defendants Thai Han; Jim Tran Phelps; Keith Hua; James Novella; One FC, LLC, also doing business as Western Performance Group and WPG; Credit MP, LLC, also doing business as AFGA, CMP, AFG & Associates, AF Group, Allied Financial Group, and Allied Guarantee Financial; Western Capital Group, Inc., also doing business as ERA, LMR, WCG, and WC Group; SJ Capitol LLC, also doing business as SCG; Green Fidelity Allegiance, Inc., also doing business as WRA; Asset and Capital Management Group; and Crown Funding Company, LLC.
The Commission vote authorizing the staff to file the complaint was 4-0. The FTC filed the complaint and the request for a temporary restraining order in the U.S. District Court for the Central District of California. On July 24, 2013, the court granted the FTC’s request for a temporary restraining order. The Federal Trade Commission would like to thank the U.S. Postal Inspection Service for its assistance in bringing this case.
At FTC's Request, Court Orders Halt to Debt Collector's Illegal Practices, Freezes Assets
Defendants Allegedly Broke the Law by Posing as Process Servers, Threatening Lawsuits, and Contacting Consumers’ Employers and Family Members in Violation of Their Privacy
At the request of the Federal Trade Commission, a U.S. district court has halted a debt collection operation that allegedly extorted payments from consumers by using false threats of lawsuits and calculated campaigns to embarrass consumers by unlawfully communicating with family members, friends, and coworkers. The court order stops the illegal conduct, freezes the operation’s assets, and appoints a temporary receiver to take over the defendants’ business while the FTC moves forward with the case.
The lawsuit, part of the FTC’s continuing crackdown on scams that target consumers in financial distress, charged four individuals and seven companies. The FTC alleged that the defendants were part of an elaborate debt collection scheme operating from locations in Orange and Riverside counties in California, and that they used various business names including Western Performance Group, as well as fictitious names, which they changed frequently to avoid law enforcement scrutiny.
The FTC alleged that the defendants called consumers and their employers, colleagues, and family members posing as process servers or law office employees, and claimed they were seeking to deliver legal papers that purportedly related to a lawsuit. In some instances, the defendants threatened that consumers would be arrested if they did not respond to the calls. But the debt collectors were not process servers or law office employees, and the defendants did not file lawsuits against the consumers. The FTC charged that the defendants’ false and misleading claims violated the FTC Act and the Fair Debt Collection Practices Act. In addition, the FTC alleged that the defendants violated the Fair Debt Collection Practices Act by:
improperly contacting third parties about consumers’ debts; failing to disclose the name of the company they represented, or the fact that they were attempting to collect a debt, during telephone calls to consumers; and failing to notify consumers of their right to dispute and obtain verification of their debts.
The complaint names as defendants Thai Han; Jim Tran Phelps; Keith Hua; James Novella; One FC, LLC, also doing business as Western Performance Group and WPG; Credit MP, LLC, also doing business as AFGA, CMP, AFG & Associates, AF Group, Allied Financial Group, and Allied Guarantee Financial; Western Capital Group, Inc., also doing business as ERA, LMR, WCG, and WC Group; SJ Capitol LLC, also doing business as SCG; Green Fidelity Allegiance, Inc., also doing business as WRA; Asset and Capital Management Group; and Crown Funding Company, LLC.
The Commission vote authorizing the staff to file the complaint was 4-0. The FTC filed the complaint and the request for a temporary restraining order in the U.S. District Court for the Central District of California. On July 24, 2013, the court granted the FTC’s request for a temporary restraining order. The Federal Trade Commission would like to thank the U.S. Postal Inspection Service for its assistance in bringing this case.
Tuesday, August 6, 2013
FTC GOES AFTER "FREE GIFT CARD" SCAMMERS
FROM: FEDERAL TRADE COMMISSION
FTC Acts Against Spam Text and Robocalling Operations
Case Continues FTC Crackdown on "Free Gift Card" Scammers
The Federal Trade Commission has moved to shut down an international network of scammers that sent millions of unwanted text messages to consumers, using the lure of “free” gift cards and electronics to entice consumers into an elaborate scheme designed to take their money and target them for illegal robocalls.
In its complaint, the FTC alleges that scammers sent unwanted text messages to consumers, many of whom had to pay for receiving the texts. The messages promised consumers free gifts or prizes, including gift cards worth $1,000 to major retailers such as Best Buy, Walmart and Target.
Consumers who clicked on the links in the messages found themselves caught in a confusing and elaborate process that required them to provide sensitive personal information, apply for credit or pay to subscribe to services to get the supposedly “free” cards. In addition, consumers’ phone numbers were signed up to receive unwanted automated telemarketing calls, also known as robocalls.
This complaint builds on a nationwide sweep conducted by the Commission in March to crack down on scammers who use these spam text messages to deceive consumers.
The FTC complaint names nine defendants who allegedly were involved in various aspects of the operation in violation of the FTC Act and the Telemarketing Sales Rule. It seeks injunctions against the defendants preventing them from continuing their alleged deceptive and unfair practices as well as requiring them to pay monetary relief.
According to the complaint, when consumers followed the links included in the unwanted messages, they were directed to sites that collected a substantial amount of personal information, including in some instances health information, before being allowed to continue toward receiving the supposed gift cards. In many cases, the information was requested under the guise of being shipping information for the supposed gift cards. The Commission alleges that in addition to selling the information for marketing purposes, the defendants also made unwanted automated telemarketing calls to consumers selling products such as home security, satellite television and travel services.
Once consumers entered their personal information, they were directed to another site and told they would have to participate in a number of “offers” to be eligible for their gift card. In some cases, consumers were obligated to sign up for as many as 13 of the offers. These offers frequently included recurring subscriptions for which consumers were required to provide credit card information and pay up front for “shipping and handling” charges. In other cases, they required consumers to submit applications for credit that would be reflected in their credit reports and possibly affect their credit score.
In most, if not all, instances, it would be impossible for a consumer to receive the allegedly “free” merchandise without spending money, according to the complaint.
The defendants in the case are Acquinity Interactive, LLC, located in Deerfield Beach, Fla.; 7657030 Canada Inc., located in Kirkland, Quebec, and also doing business as Acquinity Interactive; Garry Jonas, an officer of Acquinity Interactive; Revenue Path E-Consulting Pvt Ltd, located in Pune, India; Revenuepath Ltd, registered in Nicosia, Cyprus; Worldwide Commerce Associates, LLC, registered in Las Vegas, Nev., and also doing business as WCA; Sarita Somani, an officer of the Revenue Path defendants and Worldwide Commerce Associates; Firebrand Group S.L., LLC, registered in Las Vegas, Nev.; and Matthew Beucler, an officer of Firebrand.
The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of Illinois.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
FTC Acts Against Spam Text and Robocalling Operations
Case Continues FTC Crackdown on "Free Gift Card" Scammers
The Federal Trade Commission has moved to shut down an international network of scammers that sent millions of unwanted text messages to consumers, using the lure of “free” gift cards and electronics to entice consumers into an elaborate scheme designed to take their money and target them for illegal robocalls.
In its complaint, the FTC alleges that scammers sent unwanted text messages to consumers, many of whom had to pay for receiving the texts. The messages promised consumers free gifts or prizes, including gift cards worth $1,000 to major retailers such as Best Buy, Walmart and Target.
Consumers who clicked on the links in the messages found themselves caught in a confusing and elaborate process that required them to provide sensitive personal information, apply for credit or pay to subscribe to services to get the supposedly “free” cards. In addition, consumers’ phone numbers were signed up to receive unwanted automated telemarketing calls, also known as robocalls.
This complaint builds on a nationwide sweep conducted by the Commission in March to crack down on scammers who use these spam text messages to deceive consumers.
The FTC complaint names nine defendants who allegedly were involved in various aspects of the operation in violation of the FTC Act and the Telemarketing Sales Rule. It seeks injunctions against the defendants preventing them from continuing their alleged deceptive and unfair practices as well as requiring them to pay monetary relief.
According to the complaint, when consumers followed the links included in the unwanted messages, they were directed to sites that collected a substantial amount of personal information, including in some instances health information, before being allowed to continue toward receiving the supposed gift cards. In many cases, the information was requested under the guise of being shipping information for the supposed gift cards. The Commission alleges that in addition to selling the information for marketing purposes, the defendants also made unwanted automated telemarketing calls to consumers selling products such as home security, satellite television and travel services.
Once consumers entered their personal information, they were directed to another site and told they would have to participate in a number of “offers” to be eligible for their gift card. In some cases, consumers were obligated to sign up for as many as 13 of the offers. These offers frequently included recurring subscriptions for which consumers were required to provide credit card information and pay up front for “shipping and handling” charges. In other cases, they required consumers to submit applications for credit that would be reflected in their credit reports and possibly affect their credit score.
In most, if not all, instances, it would be impossible for a consumer to receive the allegedly “free” merchandise without spending money, according to the complaint.
The defendants in the case are Acquinity Interactive, LLC, located in Deerfield Beach, Fla.; 7657030 Canada Inc., located in Kirkland, Quebec, and also doing business as Acquinity Interactive; Garry Jonas, an officer of Acquinity Interactive; Revenue Path E-Consulting Pvt Ltd, located in Pune, India; Revenuepath Ltd, registered in Nicosia, Cyprus; Worldwide Commerce Associates, LLC, registered in Las Vegas, Nev., and also doing business as WCA; Sarita Somani, an officer of the Revenue Path defendants and Worldwide Commerce Associates; Firebrand Group S.L., LLC, registered in Las Vegas, Nev.; and Matthew Beucler, an officer of Firebrand.
The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of Illinois.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
Monday, August 5, 2013
FTC TARGETS MARKETERS WHO DECEIVE SMALL BUSINESSES INTO BUYING CREDIT/DEBIT CARD PROCESSING SERVICES & EQUIPMENT
FROM: FEDERAL TRADE COMMISSION
FTC Charges Marketers with Deceiving Small Businesses into Buying Credit/Debit Card Processing Services and Equipment
The Federal Trade Commission has charged an operation that sells credit and debit card payment processing services to small businesses with violating federal law. The defendants allegedly made false and unsubstantiated claims and failed to disclose material facts to storefront businesses and sole proprietorships before they applied for services and equipment to process credit and debit card payments. The FTC seeks to halt the allegedly illegal practices and return money to victims.
The defendants are Merchant Services Direct LLC (MSD), also doing business as Sphyra Inc.; Boost Commerce Inc.; Generation Y Investments LLC; Kyle Lawson Dove; and Shane Patrick Hurley. The Washington State Attorney General’s Office has simultaneously filed an action against these defendants in the Superior Court for Spokane County, Washington.
According to the FTC’s complaint, as an “independent sales organization” (ISO), MSD sells to small local businesses the ability to accept credit and debit card payments. The businesses pay fees whenever their customers pay with a credit or debit card.
As alleged in the complaint, MSD sales agents typically call small businesses and lead them to believe they are associated with the businesses’ current card processor, Visa or MasterCard, or their bank. The sales agents allegedly promise substantial savings on credit and debit card processing. They specify a much lower rate than the businesses currently pay, and quote one fee, a fixed per-transaction cost, without mentioning all the other fees the businesses will have to pay. Merchants who ask if there are other fees allegedly are told there are none.
According to the FTC’s complaint, MSD agents also dupe customers into leasing new card processing terminals for two to four years, falsely claiming their current “swipe” terminals are outdated or incompatible with its services. Sometimes they even claim the terminals are free. Agents persuade merchants to sign fine-print, binding contracts on the spot by telling them the documents are merely applications – a ruse made easier, according to the FTC, by the fact that the contracts are labeled “applications.” Merchants are often falsely told they can cancel any time. Many victims discover their new lease obligation only after being billed, still owing the balance of their previous lease, which can be thousands of dollars.
Defendants also tout on various versions of their website “Guaranteed Lowest Rates,” claiming merchants could “save 30%” with “whole sale [sic] processing” or have “anywhere from 20% to 30% savings when switching to” MSD. In fact, according to the FTC, there are no wholesale rates, as third parties process card payments, not MSD. As alleged in the complaint, those who call MSD’s customer service department reach employees who either do not help them or say they will waive fees or provide refunds but don’t. Customers who were promised they could cancel the “applications” they signed with no penalty are charged substantial cancellation fees, according to the FTC’s complaint. Generally, only in response to complaints filed with the Better Business Bureau and state attorneys general have the defendants refunded money or waived fees.
The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Eastern District of Washington. In addition to filing the lawsuit, the FTC has sought a court order immediately halting the unlawful practices along with an order freezing the defendants’ assets and appointing a receiver over the corporate defendants.
The FTC acknowledges the assistance of the Washington State Attorney General’s Office and the Better Business Bureau of Eastern Washington, North Idaho, and Montana.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
FTC Charges Marketers with Deceiving Small Businesses into Buying Credit/Debit Card Processing Services and Equipment
The Federal Trade Commission has charged an operation that sells credit and debit card payment processing services to small businesses with violating federal law. The defendants allegedly made false and unsubstantiated claims and failed to disclose material facts to storefront businesses and sole proprietorships before they applied for services and equipment to process credit and debit card payments. The FTC seeks to halt the allegedly illegal practices and return money to victims.
The defendants are Merchant Services Direct LLC (MSD), also doing business as Sphyra Inc.; Boost Commerce Inc.; Generation Y Investments LLC; Kyle Lawson Dove; and Shane Patrick Hurley. The Washington State Attorney General’s Office has simultaneously filed an action against these defendants in the Superior Court for Spokane County, Washington.
According to the FTC’s complaint, as an “independent sales organization” (ISO), MSD sells to small local businesses the ability to accept credit and debit card payments. The businesses pay fees whenever their customers pay with a credit or debit card.
As alleged in the complaint, MSD sales agents typically call small businesses and lead them to believe they are associated with the businesses’ current card processor, Visa or MasterCard, or their bank. The sales agents allegedly promise substantial savings on credit and debit card processing. They specify a much lower rate than the businesses currently pay, and quote one fee, a fixed per-transaction cost, without mentioning all the other fees the businesses will have to pay. Merchants who ask if there are other fees allegedly are told there are none.
According to the FTC’s complaint, MSD agents also dupe customers into leasing new card processing terminals for two to four years, falsely claiming their current “swipe” terminals are outdated or incompatible with its services. Sometimes they even claim the terminals are free. Agents persuade merchants to sign fine-print, binding contracts on the spot by telling them the documents are merely applications – a ruse made easier, according to the FTC, by the fact that the contracts are labeled “applications.” Merchants are often falsely told they can cancel any time. Many victims discover their new lease obligation only after being billed, still owing the balance of their previous lease, which can be thousands of dollars.
Defendants also tout on various versions of their website “Guaranteed Lowest Rates,” claiming merchants could “save 30%” with “whole sale [sic] processing” or have “anywhere from 20% to 30% savings when switching to” MSD. In fact, according to the FTC, there are no wholesale rates, as third parties process card payments, not MSD. As alleged in the complaint, those who call MSD’s customer service department reach employees who either do not help them or say they will waive fees or provide refunds but don’t. Customers who were promised they could cancel the “applications” they signed with no penalty are charged substantial cancellation fees, according to the FTC’s complaint. Generally, only in response to complaints filed with the Better Business Bureau and state attorneys general have the defendants refunded money or waived fees.
The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Eastern District of Washington. In addition to filing the lawsuit, the FTC has sought a court order immediately halting the unlawful practices along with an order freezing the defendants’ assets and appointing a receiver over the corporate defendants.
The FTC acknowledges the assistance of the Washington State Attorney General’s Office and the Better Business Bureau of Eastern Washington, North Idaho, and Montana.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
Sunday, August 4, 2013
JUSTICE SETTLES WITH MICHIGAN BARIATRIC CLINIC IN HIV DISCRIMINATION CASE
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, July 26, 2013
Justice Department Settles with Bariatric Clinic in Michigan and Pennsylvania Over Hiv Discrimination
The Justice Department announced today that, as part of its Barrier-Free Health Care Initiative, it has reached a settlement with Barix Clinics under the Americans with Disabilities Act (ADA). Barix Clinics operates bariatric treatment facilities in Michigan and Pennsylvania. The settlement resolves allegations that Barix Clinics violated the ADA by refusing or cancelling surgery for two individuals because they have HIV. This is the fifth settlement that the Justice Department has reached this year addressing HIV discrimination by a medical provider.
The Justice Department found that Barix Clinics unlawfully refused to perform bariatric surgery on a man at its Langhorne, Pa., facility because he has HIV. The department also determined that Barix Clinics cancelled bariatric surgery for another individual, Mr. Frank Hill, at its Ypsilanti, Mich., facility because of his HIV. The department’s investigation revealed that Barix Clinics’ actions were not based on individual assessments of the patients or based on current medical knowledge.
“Erecting unnecessary barriers to medical care for people with HIV can further exacerbate their condition and their marginalization in society,” said Jocelyn Samuels, Acting Assistant Attorney General for Civil Rights. “These are the barriers that the ADA and the Justice Department seek to tear down.”
“Blanket exclusions of patients with HIV are misguided and illegal," said Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan. “Under the law, caregivers cannot withhold care unless the decision is based on current medical knowledge about the particular patient and condition, not on stereotypes about a disability.”
Under the settlement, Barix Clinics must pay $20,000 to the first complainant, $15,000 to Hill and a $10,000 civil penalty. In addition, it must train its staff on the ADA and develop and implement an anti-discrimination policy.
In the past six months, the department has reached five settlement agreements with medical providers to address HIV discrimination. All five settlements are part of the Department of Justice’s Barrier-Free Health Care Initiative, a partnership of the Civil Rights Division and U.S. Attorney’s offices across the nation, to target enforcement efforts on a critical area for individuals with disabilities. The initiative, launched on the 22nd anniversary of the ADA in July 2012, includes the participation of 40 U.S. Attorney’s offices and addresses access to health care for people with HIV and those with hearing disabilities, as well as physical access to medical facilities. The department has reached a total of 18 settlements (including these five) regarding medical providers’ failure to provide access for people with HIV or who are deaf or hard of hearing.
Friday, July 26, 2013
Justice Department Settles with Bariatric Clinic in Michigan and Pennsylvania Over Hiv Discrimination
The Justice Department announced today that, as part of its Barrier-Free Health Care Initiative, it has reached a settlement with Barix Clinics under the Americans with Disabilities Act (ADA). Barix Clinics operates bariatric treatment facilities in Michigan and Pennsylvania. The settlement resolves allegations that Barix Clinics violated the ADA by refusing or cancelling surgery for two individuals because they have HIV. This is the fifth settlement that the Justice Department has reached this year addressing HIV discrimination by a medical provider.
The Justice Department found that Barix Clinics unlawfully refused to perform bariatric surgery on a man at its Langhorne, Pa., facility because he has HIV. The department also determined that Barix Clinics cancelled bariatric surgery for another individual, Mr. Frank Hill, at its Ypsilanti, Mich., facility because of his HIV. The department’s investigation revealed that Barix Clinics’ actions were not based on individual assessments of the patients or based on current medical knowledge.
“Erecting unnecessary barriers to medical care for people with HIV can further exacerbate their condition and their marginalization in society,” said Jocelyn Samuels, Acting Assistant Attorney General for Civil Rights. “These are the barriers that the ADA and the Justice Department seek to tear down.”
“Blanket exclusions of patients with HIV are misguided and illegal," said Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan. “Under the law, caregivers cannot withhold care unless the decision is based on current medical knowledge about the particular patient and condition, not on stereotypes about a disability.”
Under the settlement, Barix Clinics must pay $20,000 to the first complainant, $15,000 to Hill and a $10,000 civil penalty. In addition, it must train its staff on the ADA and develop and implement an anti-discrimination policy.
In the past six months, the department has reached five settlement agreements with medical providers to address HIV discrimination. All five settlements are part of the Department of Justice’s Barrier-Free Health Care Initiative, a partnership of the Civil Rights Division and U.S. Attorney’s offices across the nation, to target enforcement efforts on a critical area for individuals with disabilities. The initiative, launched on the 22nd anniversary of the ADA in July 2012, includes the participation of 40 U.S. Attorney’s offices and addresses access to health care for people with HIV and those with hearing disabilities, as well as physical access to medical facilities. The department has reached a total of 18 settlements (including these five) regarding medical providers’ failure to provide access for people with HIV or who are deaf or hard of hearing.
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