FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
CFTC Orders Florida Resident Isaac Grossman and His Company, London Metals Market LLC, to Pay over $121,000 in Restitution for Illegal, Off-Exchange Precious Metals Transactions
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Isaac Grossman, a resident of Parkland, Florida, and his company, London Metals Market LLC (London Metals), of Deerfield Beach, Florida, for engaging in illegal, off-exchange precious metals transactions.
The CFTC Order requires Grossman and London Metals to pay $121,665.75 in restitution to their customers. In addition, the Order imposes permanent registration and trading bans on Grossman and London Metals and requires them to cease and desist from violating Section 4(a) of the Commodity Exchange Act.
As explained in the Order, financed transactions in commodities with retail customers, like those engaged in by London Metals, must be executed on or subject to the rules of an exchange approved by the CFTC. The CFTC Order finds that, from September 2012 through February 2013, London Metals solicited retail customers to buy and sell precious metals on a financed basis.
According to the Order, Grossman directly solicited customers and supervised London Metals’ other telemarketers. In making their solicitations, Grossman and the other London Metals telemarketers represented that customers could purchase a desired quantity of precious metals with a 25% deposit, and borrow the remaining 75%, as well as pay a finance charge on the loan, a service charge, a commission, and a mark-up on the spot price of the metal, the Order finds.
If the customer agreed to the transaction, the customer sent the deposit, commission, and mark-up to London Metals, and the funds were ultimately transferred to Hunter Wise Commodities, LLC (Hunter Wise) to be executed, according to the Order. In return, Hunter Wise paid London Metals a portion of the customer commissions and fees, with London Metals ultimately receiving $121,665.75 in commissions and fees for the retail financed precious metals transactions executed through Hunter Wise, the Order finds.
However, according to the Order, neither London Metals nor Hunter Wise bought, sold, loaned, stored, or transferred any physical metals for these transactions, and neither actually delivered any precious metals to any customer. Since London Metals’ transactions were executed off exchange, they were illegal.
Saturday, September 7, 2013
Friday, September 6, 2013
IMPORT FIRM AND OWNER AGREE TO PAY OVER $3.5 MILLION TO SETTLE CAR ENGINE CLEAN AIR ACT VIOLATIONS
FROM: U.S. JUSTICE DEPARTMENT
Thursday, August 29, 2013
Two California Firms and Owner Agree to Settle Clean Air Act Violations Stemming from Illegal Import of Vehicles
Two Los Angeles-based consulting firms, MotorScience Inc., and MotorScience Enterprise Inc., (MotorScience) and their owner, Chi Zheng, have agreed to settle alleged Clean Air Act (CAA) violations stemming from the illegal import of 24,478 all-terrain, recreational vehicles into the U.S. from China without testing to ensure emissions would meet applicable limits on harmful air pollution, announced the Department of Justice, the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (ARB).
MotorScience and Zheng have agreed to have a stipulated judgment entered against them for a $3.55 million civil penalty and to pay an additional $60,000 civil penalty within six months. The United States will receive 80 percent of collected penalties, and California will receive the remaining 20 percent.
“Vehicles and engines that are manufactured overseas and sold in the U.S. must meet the same Clean Air standards as domestically-made products,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “We will continue to vigorously enforce these laws to ensure that American consumers get environmentally sound products that do not pollute the atmosphere and violators do not gain an unfair economic advantage by skirting the law.”
“This illegal importation of over 20,000 vehicles evaded federal emission standards, jeopardizing human health,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Engines operating without proper emissions controls can emit excess carbon monoxide, hydrocarbons and oxides of nitrogen which can cause respiratory illnesses, aggravate asthma and contribute to the formation of ground level ozone or smog.”
“The integrity of new vehicle standards are the foundation for achieving our air quality goals in California,” said ARB Enforcement Chief James Ryden. “When a manufacturer circumvents these requirements, they not only cheat their customers and competitors, but they also shortchange every citizen of our state who relies upon our shared actions to clean the air.”
Today’s settlement also requires that for the next 15 years, before either MotorScience or Zheng may engage in any further work involving non-road vehicles and engines, they must follow a rigorous compliance plan to ensure that any emissions testing and certification applications submitted to EPA or the ARB accurately represent those vehicles and engines. Non-road vehicles and engines include recreational vehicles, generators, lawn and garden equipment, and other non-road internal combustion engines.
EPA’s investigation showed that MotorScience obtained EPA certificates of conformity for numerous vehicles without conducting required emissions testing. As alleged in separate complaints filed in federal district court by the United States and the state of California in September 2011, MotorScience arranged for emissions testing of a limited number of vehicles, and then reused those results to obtain certificates of conformity for numerous other, dissimilar vehicles. For at least three of those vehicles, EPA confirmed that their emissions exceeded the federal limits for hydrocarbons and nitrogen oxides.
MotorScience and its president, Zheng, provide consulting services for vehicle manufacturers and other clients interested in obtaining certificates of conformity from EPA to allow import of their vehicles into the U.S. In 2010, EPA voided 12 certificates held by four of the defendants’ clients, who were U.S.-based importers for Chinese recreational vehicle manufacturers. The complaints filed by the U.S. and California alleged that defendants caused four of their clients to illegally import vehicles under federal certificates and California executive orders that were voided. The complaints further alleged that defendants caused their clients to fail to create and maintain required records on emissions testing.
The CAA prohibits any vehicle or engine from being imported into or sold in the United States unless it is covered by a valid, EPA-issued certificate of conformity demonstrating that the vehicle or engine meets applicable federal emission standards. The CAA also prohibits any actions that cause the importation of uncertified vehicles or that cause recordkeeping violations. Similarly, the California Health and Safety Code prohibits any vehicle or engine from being distributed or sold in California, unless such vehicle or engine is covered by a valid, ARB-issued executive order demonstrating that the vehicle or engine meets applicable California emission standards.
The certificate of conformity is the primary way EPA ensures that vehicles and engines meet emission standards. This enforcement action is part of an ongoing effort by EPA to ensure that all imported vehicles and engines comply with the CAA’s requirements.
Thursday, August 29, 2013
Two California Firms and Owner Agree to Settle Clean Air Act Violations Stemming from Illegal Import of Vehicles
Two Los Angeles-based consulting firms, MotorScience Inc., and MotorScience Enterprise Inc., (MotorScience) and their owner, Chi Zheng, have agreed to settle alleged Clean Air Act (CAA) violations stemming from the illegal import of 24,478 all-terrain, recreational vehicles into the U.S. from China without testing to ensure emissions would meet applicable limits on harmful air pollution, announced the Department of Justice, the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (ARB).
MotorScience and Zheng have agreed to have a stipulated judgment entered against them for a $3.55 million civil penalty and to pay an additional $60,000 civil penalty within six months. The United States will receive 80 percent of collected penalties, and California will receive the remaining 20 percent.
“Vehicles and engines that are manufactured overseas and sold in the U.S. must meet the same Clean Air standards as domestically-made products,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “We will continue to vigorously enforce these laws to ensure that American consumers get environmentally sound products that do not pollute the atmosphere and violators do not gain an unfair economic advantage by skirting the law.”
“This illegal importation of over 20,000 vehicles evaded federal emission standards, jeopardizing human health,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Engines operating without proper emissions controls can emit excess carbon monoxide, hydrocarbons and oxides of nitrogen which can cause respiratory illnesses, aggravate asthma and contribute to the formation of ground level ozone or smog.”
“The integrity of new vehicle standards are the foundation for achieving our air quality goals in California,” said ARB Enforcement Chief James Ryden. “When a manufacturer circumvents these requirements, they not only cheat their customers and competitors, but they also shortchange every citizen of our state who relies upon our shared actions to clean the air.”
Today’s settlement also requires that for the next 15 years, before either MotorScience or Zheng may engage in any further work involving non-road vehicles and engines, they must follow a rigorous compliance plan to ensure that any emissions testing and certification applications submitted to EPA or the ARB accurately represent those vehicles and engines. Non-road vehicles and engines include recreational vehicles, generators, lawn and garden equipment, and other non-road internal combustion engines.
EPA’s investigation showed that MotorScience obtained EPA certificates of conformity for numerous vehicles without conducting required emissions testing. As alleged in separate complaints filed in federal district court by the United States and the state of California in September 2011, MotorScience arranged for emissions testing of a limited number of vehicles, and then reused those results to obtain certificates of conformity for numerous other, dissimilar vehicles. For at least three of those vehicles, EPA confirmed that their emissions exceeded the federal limits for hydrocarbons and nitrogen oxides.
MotorScience and its president, Zheng, provide consulting services for vehicle manufacturers and other clients interested in obtaining certificates of conformity from EPA to allow import of their vehicles into the U.S. In 2010, EPA voided 12 certificates held by four of the defendants’ clients, who were U.S.-based importers for Chinese recreational vehicle manufacturers. The complaints filed by the U.S. and California alleged that defendants caused four of their clients to illegally import vehicles under federal certificates and California executive orders that were voided. The complaints further alleged that defendants caused their clients to fail to create and maintain required records on emissions testing.
The CAA prohibits any vehicle or engine from being imported into or sold in the United States unless it is covered by a valid, EPA-issued certificate of conformity demonstrating that the vehicle or engine meets applicable federal emission standards. The CAA also prohibits any actions that cause the importation of uncertified vehicles or that cause recordkeeping violations. Similarly, the California Health and Safety Code prohibits any vehicle or engine from being distributed or sold in California, unless such vehicle or engine is covered by a valid, ARB-issued executive order demonstrating that the vehicle or engine meets applicable California emission standards.
The certificate of conformity is the primary way EPA ensures that vehicles and engines meet emission standards. This enforcement action is part of an ongoing effort by EPA to ensure that all imported vehicles and engines comply with the CAA’s requirements.
Thursday, September 5, 2013
CONSUMER VICTIMS OF DVD VENDING MACHINE BUSINESS FRAUD RECEIVE $950,000
FROM: FEDERAL TRADE COMMISSION
FTC Returns Additional $950,000 to Consumer Victims in DVD Vending Scam
The Federal Trade Commission is mailing 426 refund checks totaling more than $950,000 to consumers who were victimized by a scam that promoted video rental machines as a business opportunity. This mailing, combined with checks previously mailed by the FTC, will increase the total funds returned to consumers by the FTC in this matter to nearly $4 million.
The additional funds are a result of the FTC’s court victory in a collection action against the estate of the tenth and final defendant, Anthony Andreoni. The FTC is continuing to liquidate assets awarded in this case so that additional funds may be returned to injured consumers in the future.
The FTC alleged in its case against American Entertainment Distributors, Inc., that the defendants – five companies and five individuals – deceived consumers into paying $28,000 to $37,500 apiece for video rental vending machines by telling them they could expect to earn between $60,000 and $80,000 a year, or recoup their initial investment in six to 14 months. In fact, according to the FTC, the defendants had no reasonable basis for their claims and all investors lost money.
The refund amounts will vary depending on the amount lost by each consumer; over 400 refund checks will be for more than $1,000. The checks will be mailed by an administrator working for the FTC on August 30, 2013, and must be cashed on or before October 29, 2013. Consumers who have questions, or who have not yet filed a claim with the FTC and wish to do so, should call the Redress Administrator, Gilardi & Co. LLC, toll free, at 1-866-271-9147.
Remember: The FTC never requires consumers to pay money or provide information before redress checks can be cashed. Consumers should carefully evaluate claims about business opportunities.
FTC Returns Additional $950,000 to Consumer Victims in DVD Vending Scam
The Federal Trade Commission is mailing 426 refund checks totaling more than $950,000 to consumers who were victimized by a scam that promoted video rental machines as a business opportunity. This mailing, combined with checks previously mailed by the FTC, will increase the total funds returned to consumers by the FTC in this matter to nearly $4 million.
The additional funds are a result of the FTC’s court victory in a collection action against the estate of the tenth and final defendant, Anthony Andreoni. The FTC is continuing to liquidate assets awarded in this case so that additional funds may be returned to injured consumers in the future.
The FTC alleged in its case against American Entertainment Distributors, Inc., that the defendants – five companies and five individuals – deceived consumers into paying $28,000 to $37,500 apiece for video rental vending machines by telling them they could expect to earn between $60,000 and $80,000 a year, or recoup their initial investment in six to 14 months. In fact, according to the FTC, the defendants had no reasonable basis for their claims and all investors lost money.
The refund amounts will vary depending on the amount lost by each consumer; over 400 refund checks will be for more than $1,000. The checks will be mailed by an administrator working for the FTC on August 30, 2013, and must be cashed on or before October 29, 2013. Consumers who have questions, or who have not yet filed a claim with the FTC and wish to do so, should call the Redress Administrator, Gilardi & Co. LLC, toll free, at 1-866-271-9147.
Remember: The FTC never requires consumers to pay money or provide information before redress checks can be cashed. Consumers should carefully evaluate claims about business opportunities.
Wednesday, September 4, 2013
FTC FILES COMPLAINT AGAINST LABMD FOR FAILURE TO PROTECT PERSONAL INFORMATION
FROM: U.S. FEDERAL TRADE COMMISSION
FTC Files Complaint Against LabMD for Failing to Protect Consumers' Privacy
Commission Alleges Exposure of Medical and Other Sensitive Information Over Peer-to-Peer Network
The Federal Trade Commission filed a complaint against medical testing laboratory LabMD, Inc. alleging that the company failed to reasonably protect the security of consumers’ personal data, including medical information. The complaint alleges that in two separate incidents, LabMD collectively exposed the personal information of approximately 10,000 consumers.
The complaint alleges that LabMD billing information for over 9,000 consumers was found on a peer-to-peer (P2P) file-sharing network and then, in 2012, LabMD documents containing sensitive personal information of at least 500 consumers were found in the hands of identity thieves.
The case is part of an ongoing effort by the Commission to ensure that companies take reasonable and appropriate measures to protect consumers’ personal data.
LabMD conducts laboratory tests on samples that physicians obtain from consumers and then provide to the company for testing. The company, which is based in Atlanta, performs medical testing for consumers around the country. The Commission’s complaint alleges that LabMD failed to take reasonable and appropriate measures to prevent unauthorized disclosure of sensitive consumer data – including health information – it held. Among other things, the complaint alleges that the company:
did not implement or maintain a comprehensive data security program to protect this information;
did not use readily available measures to identify commonly known or reasonably foreseeable security risks and vulnerabilities to this information;
did not use adequate measures to prevent employees from accessing personal information not needed to perform their jobs;
did not adequately train employees on basic security practices; and
did not use readily available measures to prevent and detect unauthorized access to personal information.
The complaint alleges that a LabMD spreadsheet containing insurance billing information was found on a P2P network. The spreadsheet contained sensitive personal information for more than 9,000 consumers, including names, Social Security numbers, dates of birth, health insurance provider information, and standardized medical treatment codes. Misuse of such information can lead to identity theft and medical identity theft, and can also harm consumers by revealing private medical information.
P2P software is commonly used to share music, videos, and other materials with other users of compatible software. The software allows users to choose files to make available to others, but also creates a significant security risk that files with sensitive data will be inadvertently shared. Once a file has been made available on a P2P network and downloaded by another user, it can be shared by that user across the network even if the original source of the file is no longer connected.
“The unauthorized exposure of consumers’ personal data puts them at risk,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to ensuring that firms who collect that data use reasonable and appropriate security measures to prevent it from falling into the hands of identity thieves and other unauthorized users.”
The complaint also alleges that in 2012 the Sacramento, California Police Department found LabMD documents in the possession of identity thieves. These documents contained personal information, including names, Social Security numbers, and in some instances, bank account information, of at least 500 consumers. The complaint alleges that a number of these Social Security numbers are being or have been used by more than one person with different names, which may be an indicator of identity theft.
The complaint includes a proposed order against LabMD that would prevent future violations of law by requiring the company to implement a comprehensive information security program, and have that program evaluated every two years by an independent, certified security professional for the next 20 years. The order would also require the company to provide notice to consumers whose information LabMD has reason to believe was or could have been accessible to unauthorized persons and to consumers’ health insurance companies.
The Commission vote to issue the administrative complaint and notice order was 4-0.
Because LabMD has, in the course of the Commission’s investigation, broadly asserted that documents provided to the Commission contain confidential business information, the Commission is not publicly releasing its complaint until the process for resolving any claims of confidentiality is completed and items in the complaint deemed confidential, if any, are redacted.
NOTE: The Commission issues an administrative 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 issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.
FTC Files Complaint Against LabMD for Failing to Protect Consumers' Privacy
Commission Alleges Exposure of Medical and Other Sensitive Information Over Peer-to-Peer Network
The Federal Trade Commission filed a complaint against medical testing laboratory LabMD, Inc. alleging that the company failed to reasonably protect the security of consumers’ personal data, including medical information. The complaint alleges that in two separate incidents, LabMD collectively exposed the personal information of approximately 10,000 consumers.
The complaint alleges that LabMD billing information for over 9,000 consumers was found on a peer-to-peer (P2P) file-sharing network and then, in 2012, LabMD documents containing sensitive personal information of at least 500 consumers were found in the hands of identity thieves.
The case is part of an ongoing effort by the Commission to ensure that companies take reasonable and appropriate measures to protect consumers’ personal data.
LabMD conducts laboratory tests on samples that physicians obtain from consumers and then provide to the company for testing. The company, which is based in Atlanta, performs medical testing for consumers around the country. The Commission’s complaint alleges that LabMD failed to take reasonable and appropriate measures to prevent unauthorized disclosure of sensitive consumer data – including health information – it held. Among other things, the complaint alleges that the company:
did not implement or maintain a comprehensive data security program to protect this information;
did not use readily available measures to identify commonly known or reasonably foreseeable security risks and vulnerabilities to this information;
did not use adequate measures to prevent employees from accessing personal information not needed to perform their jobs;
did not adequately train employees on basic security practices; and
did not use readily available measures to prevent and detect unauthorized access to personal information.
The complaint alleges that a LabMD spreadsheet containing insurance billing information was found on a P2P network. The spreadsheet contained sensitive personal information for more than 9,000 consumers, including names, Social Security numbers, dates of birth, health insurance provider information, and standardized medical treatment codes. Misuse of such information can lead to identity theft and medical identity theft, and can also harm consumers by revealing private medical information.
P2P software is commonly used to share music, videos, and other materials with other users of compatible software. The software allows users to choose files to make available to others, but also creates a significant security risk that files with sensitive data will be inadvertently shared. Once a file has been made available on a P2P network and downloaded by another user, it can be shared by that user across the network even if the original source of the file is no longer connected.
“The unauthorized exposure of consumers’ personal data puts them at risk,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to ensuring that firms who collect that data use reasonable and appropriate security measures to prevent it from falling into the hands of identity thieves and other unauthorized users.”
The complaint also alleges that in 2012 the Sacramento, California Police Department found LabMD documents in the possession of identity thieves. These documents contained personal information, including names, Social Security numbers, and in some instances, bank account information, of at least 500 consumers. The complaint alleges that a number of these Social Security numbers are being or have been used by more than one person with different names, which may be an indicator of identity theft.
The complaint includes a proposed order against LabMD that would prevent future violations of law by requiring the company to implement a comprehensive information security program, and have that program evaluated every two years by an independent, certified security professional for the next 20 years. The order would also require the company to provide notice to consumers whose information LabMD has reason to believe was or could have been accessible to unauthorized persons and to consumers’ health insurance companies.
The Commission vote to issue the administrative complaint and notice order was 4-0.
Because LabMD has, in the course of the Commission’s investigation, broadly asserted that documents provided to the Commission contain confidential business information, the Commission is not publicly releasing its complaint until the process for resolving any claims of confidentiality is completed and items in the complaint deemed confidential, if any, are redacted.
NOTE: The Commission issues an administrative 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 issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.
Tuesday, September 3, 2013
COMPANY FOUND LIABLE FOR OVER $1.4 MILLION IN BACK WAGES, DAMAGES TO EMPLOYESS
FROM: U.S. LABOR DEPARTMENT
Judge finds Ohio-based Cascom Inc. liable for nearly $1.5 million in back wages, damages to employees misclassified as independent contractors
US Department of Labor filed lawsuit to recover wages for 250 employees
DAYTON, Ohio — The U.S. District Court for the Southern District of Ohio has found Cascom Inc. liable for back wages and liquidated damages totaling $1,474,266 owed to approximately 250 cable installers the Fairfield, Ohio, company misclassified as independent contractors in violation of the Fair Labor Standards Act.
The findings of fact were issued following a damages hearing in a lawsuit filed by the U.S. Department of Labor in 2009, after an investigation conducted by the Columbus District Office of the department's Wage and Hour Division. The court ruled in September 2011 that Cascom Inc. and its owner, Julia J. Gress, violated the FLSA by failing to compensate employees for hours worked in excess of 40 per work week because they were misclassified as independent contractors.
"The findings in this case bring justice to workers and their families by providing them with their rightfully earned wages," said Secretary of Labor Thomas E. Perez. "Cascom's business model also hurt law-abiding employers, who were undercut by this illegal practice. The Labor Department is committed to ensuring compliance to protect middle-class workers and to level the playing field for responsible employers."
The installers were found to be employees covered by the FLSA, rather than independent contractors. Cascom Inc. was found to be liable for $737,133 in back wages and an equal amount in liquidated damages, which can be collected both from the company and its owner. The company has ceased operations, so the department will seek to collect from the owner as well.
The misclassification of employees as something other than employees, such as independent contractors, presents a serious problem for affected employees, employers and the economy. Misclassified employees are often denied access to critical benefits and protections — such as family and medical leave, overtime, minimum wage and unemployment insurance — to which they are entitled. Employee misclassification also generates substantial losses to the Treasury and the Social Security and Medicare funds, as well as to state unemployment insurance and workers' compensation funds.
Under the FLSA, an employment relationship must be distinguished from a strictly contractual one. An employee — as distinguished from a person who is engaged in a business of his or her own — is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business that he or she serves.
Judge finds Ohio-based Cascom Inc. liable for nearly $1.5 million in back wages, damages to employees misclassified as independent contractors
US Department of Labor filed lawsuit to recover wages for 250 employees
DAYTON, Ohio — The U.S. District Court for the Southern District of Ohio has found Cascom Inc. liable for back wages and liquidated damages totaling $1,474,266 owed to approximately 250 cable installers the Fairfield, Ohio, company misclassified as independent contractors in violation of the Fair Labor Standards Act.
The findings of fact were issued following a damages hearing in a lawsuit filed by the U.S. Department of Labor in 2009, after an investigation conducted by the Columbus District Office of the department's Wage and Hour Division. The court ruled in September 2011 that Cascom Inc. and its owner, Julia J. Gress, violated the FLSA by failing to compensate employees for hours worked in excess of 40 per work week because they were misclassified as independent contractors.
"The findings in this case bring justice to workers and their families by providing them with their rightfully earned wages," said Secretary of Labor Thomas E. Perez. "Cascom's business model also hurt law-abiding employers, who were undercut by this illegal practice. The Labor Department is committed to ensuring compliance to protect middle-class workers and to level the playing field for responsible employers."
The installers were found to be employees covered by the FLSA, rather than independent contractors. Cascom Inc. was found to be liable for $737,133 in back wages and an equal amount in liquidated damages, which can be collected both from the company and its owner. The company has ceased operations, so the department will seek to collect from the owner as well.
The misclassification of employees as something other than employees, such as independent contractors, presents a serious problem for affected employees, employers and the economy. Misclassified employees are often denied access to critical benefits and protections — such as family and medical leave, overtime, minimum wage and unemployment insurance — to which they are entitled. Employee misclassification also generates substantial losses to the Treasury and the Social Security and Medicare funds, as well as to state unemployment insurance and workers' compensation funds.
Under the FLSA, an employment relationship must be distinguished from a strictly contractual one. An employee — as distinguished from a person who is engaged in a business of his or her own — is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business that he or she serves.
Monday, September 2, 2013
TWO COMPANIES TO PAY $61 MILLION FOR NOT PROVIDING DISCOUNTS TO GOVERNMENT
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, August 28, 2013
RPM International Inc. and Tremco Inc. Pay Nearly $61 Million for Failing to Provide Government Discounts Provided to Others
Companies Allegedly Submitted False Claims Under Defectively-priced Roofing Contracts
Ohio-based RPM International Inc. and its subsidiary, Tremco Inc., have paid $60.9 million to resolve allegations that Tremco filed false claims in connection with two multiple award schedule (MAS) contracts with the General Services Administration (GSA) for roofing supplies and services, the Justice Department announced today. Tremco failed to provide the government with price discounts provided to non-federal government customers. Tremco also allegedly marketed expensive materials to government purchasers without disclosing the availability of the same materials at lower cost that were manufactured and sold by the company. Tremco is a manufacturer of construction products and services and is a subsidiary of the RPM Building Solutions Group.
“Companies that knowingly skirt the rules for securing government business undermine the integrity of the procurement process and create an unfair advantage against companies that are playing by the rules,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division. “We are committed to ensuring a level playing field and protecting taxpayer dollars.”
Allegedly, from January 2002 to March 2011, Tremco knowingly violated its contractual obligations to provide GSA with current, accurate and complete information about its commercial sales practices, to report changes in discounts to comparable commercial customers and to pass those discounts on to government customers. As a result, the government allegedly paid more than it should have for Tremco’s services and products. In addition, Tremco allegedly improperly marketed generic products as a superior line of the same product and used a defective adhesive formula in its roofing systems.
The GSA MAS program provides government purchasers with a streamlined process for procurement of commonly used commercial goods and services. To be awarded a MAS contract, and thereby gain access to the broad government marketplace and ease of administration that comes from selling to hundreds of government purchasers under one contract, contractors must agree to disclose commercial pricing policies and practices.
GSA Inspector General Brian Miller said, “GSA OIG auditors and investigators worked diligently to make sure the taxpayers got the benefit of required price reductions, and received a fair price for the products and services purchased with taxpayer funds.”
“These companies are paying the price for trying to cheat the American taxpayer out of a fair deal,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia. “We thank this whistleblower for coming forward to reveal this wrongdoing. Other contractors who are considering bilking the government should take heed: false and fraudulent claims on the U.S. Treasury will not be tolerated.”
The settlement resolves a qui tam, or whistleblower, lawsuit filed on behalf of the government by former Tremco vice president Gregory Rudolph, who will receive more than $10.9 million as his share of the recovery in the case. Under the whistleblower provisions of the False Claims Act, private citizens can bring lawsuits on behalf of the government and share in any recovery. Rudolph’s lawsuit also includes allegations on behalf of several states under their false claims statutes. The settlement with the federal government does not resolve the state actions.
This settlement was the result of a coordinated effort by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia and GSA’s Office of Inspector General to investigate the allegations and resolve the case. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Wednesday, August 28, 2013
RPM International Inc. and Tremco Inc. Pay Nearly $61 Million for Failing to Provide Government Discounts Provided to Others
Companies Allegedly Submitted False Claims Under Defectively-priced Roofing Contracts
Ohio-based RPM International Inc. and its subsidiary, Tremco Inc., have paid $60.9 million to resolve allegations that Tremco filed false claims in connection with two multiple award schedule (MAS) contracts with the General Services Administration (GSA) for roofing supplies and services, the Justice Department announced today. Tremco failed to provide the government with price discounts provided to non-federal government customers. Tremco also allegedly marketed expensive materials to government purchasers without disclosing the availability of the same materials at lower cost that were manufactured and sold by the company. Tremco is a manufacturer of construction products and services and is a subsidiary of the RPM Building Solutions Group.
“Companies that knowingly skirt the rules for securing government business undermine the integrity of the procurement process and create an unfair advantage against companies that are playing by the rules,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division. “We are committed to ensuring a level playing field and protecting taxpayer dollars.”
Allegedly, from January 2002 to March 2011, Tremco knowingly violated its contractual obligations to provide GSA with current, accurate and complete information about its commercial sales practices, to report changes in discounts to comparable commercial customers and to pass those discounts on to government customers. As a result, the government allegedly paid more than it should have for Tremco’s services and products. In addition, Tremco allegedly improperly marketed generic products as a superior line of the same product and used a defective adhesive formula in its roofing systems.
The GSA MAS program provides government purchasers with a streamlined process for procurement of commonly used commercial goods and services. To be awarded a MAS contract, and thereby gain access to the broad government marketplace and ease of administration that comes from selling to hundreds of government purchasers under one contract, contractors must agree to disclose commercial pricing policies and practices.
GSA Inspector General Brian Miller said, “GSA OIG auditors and investigators worked diligently to make sure the taxpayers got the benefit of required price reductions, and received a fair price for the products and services purchased with taxpayer funds.”
“These companies are paying the price for trying to cheat the American taxpayer out of a fair deal,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia. “We thank this whistleblower for coming forward to reveal this wrongdoing. Other contractors who are considering bilking the government should take heed: false and fraudulent claims on the U.S. Treasury will not be tolerated.”
The settlement resolves a qui tam, or whistleblower, lawsuit filed on behalf of the government by former Tremco vice president Gregory Rudolph, who will receive more than $10.9 million as his share of the recovery in the case. Under the whistleblower provisions of the False Claims Act, private citizens can bring lawsuits on behalf of the government and share in any recovery. Rudolph’s lawsuit also includes allegations on behalf of several states under their false claims statutes. The settlement with the federal government does not resolve the state actions.
This settlement was the result of a coordinated effort by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia and GSA’s Office of Inspector General to investigate the allegations and resolve the case. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Sunday, September 1, 2013
RESULTS OF MSHA'S IMPACT INSPECTIONS
FROM: U.S. LABOR DEPARTMENT
MSHA announces results of July impact inspections
ARLINGTON, Va. — The U.S. Department of Labor's Mine Safety and Health Administration today announced that federal inspectors issued 149 citations and 16 orders during special impact inspections conducted at nine coal mines and four metal/nonmetal mines last month.
The monthly inspections, which began in force in April 2010 following the explosion at the Upper Big Branch Mine, involve mines that merit increased agency attention and enforcement due to their poor compliance history or particular compliance concerns. These matters include: high numbers of violations or closure orders; frequent hazard complaints or hotline calls; plan compliance issues; inadequate workplace examinations; a high number of accidents, injuries or illnesses; fatalities; adverse conditions, such as increased methane liberation, faulty roof conditions and inadequate ventilation; and respirable dust.
One impact inspection conducted at Affinity Coal Company LLC's Affinity Mine in Raleigh County, W.Va., resulted in 13 citations, 10 unwarrantable failure orders and one imminent danger order. MSHA inspectors secured communications from the surface to prevent the possibility of advance notice.
The imminent danger order was issued when a foreman was seen riding as a passenger in the bucket of a rubber-tired scoop in a wet, rough and uneven entry. Riding in the bucket violated a safeguard MSHA issued on Sept. 17, 2012. A miner riding in the bucket of a scoop can be thrown from the bucket and crushed. There have already been two fatalities involving scoops this year at the Affinity Mine.
Five of the unwarrantable failure orders were issued for violations of the mine's ventilation plan. MSHA measured no ventilation on a section where two miners were operating a roof bolter, and only 150 cubic feet per minute of ventilation on another section where the ventilation plan required 7,800 cfm and the operator was actively mining coal. These conditions have the potential to result in methane and dust accumulations that may result in an explosion or fire, and expose miners to conditions that can lead to black lung. Other similar conditions of airflow significantly below the mine's ventilation plan requirements were found by MSHA inspectors.
The operator also allowed excessive accumulations of combustible materials in the form of dry coal and coal dust ranging from 5 inches to 2 feet deep.
Enforcement personnel identified 10 areas where the operator failed to apply rock dust along the mine roof and ribs for up to 80 feet, creating conditions that exposed miners to potential ignition and explosion hazards. The mine was cited for inadequate pre-shift examinations.
In addition, one unwarrantable failure order was issued for a violation of the roof control plan where the operator did not install reflectors to signal the last row of roof supports. Warning signals are required to prevent miners from entering areas where the mine roof is not supported and could collapse on them.
"While many mine operators have improved working conditions at their mines, we continue to see unacceptable conditions at some mines that put lives at risk," said Assistant Secretary of Labor for Mine Safety and Health Joseph A. Main. "The type of conditions found by inspectors during this surprise inspection are the type that can expose miners to methane and coal dust explosions and black lung, and cannot be tolerated in the mining industry."
Since April 2010, MSHA has conducted 642 impact inspections and issued 10,789 citations, 996 orders and 45 safeguards.
MSHA announces results of July impact inspections
ARLINGTON, Va. — The U.S. Department of Labor's Mine Safety and Health Administration today announced that federal inspectors issued 149 citations and 16 orders during special impact inspections conducted at nine coal mines and four metal/nonmetal mines last month.
The monthly inspections, which began in force in April 2010 following the explosion at the Upper Big Branch Mine, involve mines that merit increased agency attention and enforcement due to their poor compliance history or particular compliance concerns. These matters include: high numbers of violations or closure orders; frequent hazard complaints or hotline calls; plan compliance issues; inadequate workplace examinations; a high number of accidents, injuries or illnesses; fatalities; adverse conditions, such as increased methane liberation, faulty roof conditions and inadequate ventilation; and respirable dust.
One impact inspection conducted at Affinity Coal Company LLC's Affinity Mine in Raleigh County, W.Va., resulted in 13 citations, 10 unwarrantable failure orders and one imminent danger order. MSHA inspectors secured communications from the surface to prevent the possibility of advance notice.
The imminent danger order was issued when a foreman was seen riding as a passenger in the bucket of a rubber-tired scoop in a wet, rough and uneven entry. Riding in the bucket violated a safeguard MSHA issued on Sept. 17, 2012. A miner riding in the bucket of a scoop can be thrown from the bucket and crushed. There have already been two fatalities involving scoops this year at the Affinity Mine.
Five of the unwarrantable failure orders were issued for violations of the mine's ventilation plan. MSHA measured no ventilation on a section where two miners were operating a roof bolter, and only 150 cubic feet per minute of ventilation on another section where the ventilation plan required 7,800 cfm and the operator was actively mining coal. These conditions have the potential to result in methane and dust accumulations that may result in an explosion or fire, and expose miners to conditions that can lead to black lung. Other similar conditions of airflow significantly below the mine's ventilation plan requirements were found by MSHA inspectors.
The operator also allowed excessive accumulations of combustible materials in the form of dry coal and coal dust ranging from 5 inches to 2 feet deep.
Enforcement personnel identified 10 areas where the operator failed to apply rock dust along the mine roof and ribs for up to 80 feet, creating conditions that exposed miners to potential ignition and explosion hazards. The mine was cited for inadequate pre-shift examinations.
In addition, one unwarrantable failure order was issued for a violation of the roof control plan where the operator did not install reflectors to signal the last row of roof supports. Warning signals are required to prevent miners from entering areas where the mine roof is not supported and could collapse on them.
"While many mine operators have improved working conditions at their mines, we continue to see unacceptable conditions at some mines that put lives at risk," said Assistant Secretary of Labor for Mine Safety and Health Joseph A. Main. "The type of conditions found by inspectors during this surprise inspection are the type that can expose miners to methane and coal dust explosions and black lung, and cannot be tolerated in the mining industry."
Since April 2010, MSHA has conducted 642 impact inspections and issued 10,789 citations, 996 orders and 45 safeguards.
Subscribe to:
Posts (Atom)