EPA ISSUES ORDER TO STOP SALE OF OXITITAN

FROM:  U.S. ENVIRONMENTAL PROTECTION AGENCY 

EPA Takes Action to Protect the Public from an Unregistered Pesticide/EPA issues order to stop the sale of OxiTitan

ATLANTA - The U.S. Environmental Protection Agency (EPA) has issued an order to EcoActive Surfaces, Inc. in Pompano Beach, Fla.; WellShield, LLC in Boca Raton, Fla.; and, BioRelief, Inc. in Fort Lauderdale, Fla. to stop the sale, use or removal of “OxiTitan.” The order includes other trade names such as “Bio Defender OxiTitan Anti-Microbial Treatment,” and any related products containing the same formulation. OxiTitan is being marketed by these companies for use in sites that include hospitals and schools.

The companies claim in advertisements and labeling that OxiTitan uses zinc nanoparticle as an active ingredient, to reduce and/or kill bacteria, viruses and fungi. The companies also make unsubstantiated efficacy claims that “OxiTitan” can last for 24 hours, 7 days a week, and as long as a year against harmful microorganisms and viruses when applied. Such public health claims can only be made on products that have been properly tested and are registered with the EPA.

Under federal pesticide law, products that contain a pesticide as an active ingredient or claim to kill or repel bacteria or germs are considered pesticides and must be registered with the EPA prior to distribution or sale. The Agency will not register a pesticide until it has been determined that it will not pose an unreasonable risk when used according to the label directions.

The EPA is committed to ensuring that products making public health claims in the marketplace meet stringent effectiveness and safety standards, since the public cannot readily determine with the naked eye the effectiveness and safety of antimicrobial pesticides. Due to potential human health implications if the pesticides are not effective or meet our safety standards, the EPA continues to place a priority on actions regarding non-complying pesticides.

U.S. Department of Education Fines Corinthian Colleges $30 million for Misrepresentation

U.S. Department of Education Fines Corinthian Colleges $30 million for Misrepresentation

SEC CHARGES COMPANY SELLING LIFE SETTLEMENT INVESTMENTS WITH FRAUD

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION 

Litigation Release No. 23233 / April 7, 2015

Securities and Exchange Commission v. Pacific West Capital Group Inc., et al., Civil Action No. 2:15-CV-02563 (C.D. Cal., filed April 7, 2015)

SEC Charges Los Angeles-Based Pacific West Capital Group with Fraud in Sale of Life Settlement Investments

The Securities and Exchange Commission today charged Los Angeles-based Pacific West Capital Group, Inc. and its owner Andrew B Calhoun IV with fraud in the sale of "life settlement" investments.

Life settlements are securities structured around when life insurance policies "mature" & after the insured individual dies and benefits are paid. Life settlement investors purchase an interest in a life insurance policy and in exchange receive a share of the death benefit.

The SEC's complaint alleges that since 2004, Pacific West and Calhoun, a Beverly Hills, California, life insurance agent, have raised nearly $100 million from life settlement investors. Since at least 2012, Pacific West and Calhoun are alleged to have defrauded investors by using proceeds from the sale of new life settlements to continue funding life settlement investments sold years earlier. The complaint alleges that Pacific West and Calhoun did not disclose this practice to investors and undertook it to make life settlement investments appear successful when in fact, Pacific West had used up the primary reserves to pay premiums on those policies.

According to the complaint, Pacific West and Calhoun also made false and misleading statements about the risks of investing in life settlements, including the risk of investors having to make increased premium payments as insured individuals lived longer than Pacific West and Calhoun anticipated. Pacific West and Calhoun also are alleged to have misled investors about annual returns and to have falsely represented to investors that their investments had nothing to do with Pacific West's efforts and fortunes.

The complaint charges Pacific West and Calhoun with violating Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. Pacific West and Calhoun are also charged with the unregistered offer and sale of the life settlements in violation Sections 5(a) and 5(c) of the Securities Act and acting as unregistered brokers in violation of Section 15(a) of the Exchange Act. The SEC's complaint further alleges that in the alternative, under Section 20(a) of the Exchange Act, Calhoun is liable as Pacific West's control person for its alleged violations of Exchange Act Sections 10(b) and 15(a) and Rule 10b-5 thereunder. Also named as defendants are Ohio-based PWCG Trust, which held and serviced the insurance policies, and five sales agents of Pacific West, Brenda C. Barry of Issaquah, Washington, and her company BAK West, Inc., Andrew B Calhoun Jr. of Anderson, South Carolina, Eric C. Cannon of Lakewood, California, and his company Century Point, LLC, and Michael W. Dotta and Caleb A. Moody, both of Los Angeles. PWCG Trust and the sales agents are all charged with the unregistered offer and sale of the life settlements in violation of Sections 5(a) and 5(c) of the Securities Act; the sales agents were also charged with acting as unregistered brokers in violation of Section 15(a) of the Exchange Act. The complaint seeks permanent injunctions against all defendants and return of allegedly ill-gotten gains with interest and penalties against Pacific West, Calhoun, and the sales agents.

Todd Brilliant, Dora Zaldivar, Kelly Bowers, and Robert Conrrad conducted the SEC's investigation. The litigation will be led by John Bulgozdy and Kristin Escalante.

CO. & OWNER TO PAY $250,000 TO RESOLVE FCA VIOLATIONS BY ALLEGEDLY FALSELY CLAIMING CONTRACT ELIGIBILITY

FROM:  U.S. JUSTICE DEPARTMENT  

Wednesday, April 8, 2015

Florida Company and Owner Agree to Resolve Alleged False Claims Act Violations Regarding Historically Underutillized Business Zone Program

Orlando, Florida, based Air Ideal Inc. and its majority owner, Kim Amkraut, have agreed to pay the United States $250,000 to resolve allegations that they made false statements to the Small Business Administration (SBA) to obtain certification as a Historically Underutilized Business Zone (HUBZone) company, the Justice Department announced today.  Under the settlement, the defendants must also pay five percent of Air Ideal’s gross revenues over the next five years.

“When companies falsely claim eligibility for government contracts set aside for HUBZone businesses, they not only misuse taxpayer funds, but they also deprive HUBZone communities of the benefits of the program,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “This settlement shows that there is a stiff price to pay for obtaining government contracts through false statements.”

“The HUBZone program is an important tool in the government’s effort to strengthen our economy by encouraging businesses to grow in underutilized and disadvantaged areas,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida.  “We will not tolerate contractors who use deception to undermine its objectives and effectiveness.”

The purpose of the HUBZone program is to stimulate job growth in areas that have historically had low business investment.  Under the HUBZone program, companies that maintain their principal office in a designated HUBZone and meet certain other requirements can apply to the SBA for certification as a HUBZone small business company.  HUBZone companies can then use this certification when bidding on government contracts.  In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.

The United States’ complaint alleged that Air Ideal and Amkraut originally applied to the HUBZone program in 2010 by claiming that Air Ideal’s principal office was located in a designated HUBZone.  The complaint further alleged that, in fact, this location was a “virtual office” where no Air Ideal employees worked, and that Air Ideal was actually located in a non-HUBZone location.  Allegedly, the defendants not only misrepresented the location of Air Ideal’s principal office to the SBA, but also submitted to the SBA a fabricated lease agreement and other fabricated documents for its purported HUBZone office.  The complaint further alleged that during the government’s investigation of this case, the defendants fabricated another version of its agreement for the virtual office and submitted that false document to the government.

The complaint alleged that Air Ideal used its fraudulently-procured HUBZone certification to obtain contracts from the U.S. Coast Guard, U.S. Army, U.S. Army Corps of Engineers and the U.S. Department of the Interior.  Each of those contracts had been set aside for qualified HUBZone companies.  The United States’ complaint asserted claims against Air Ideal and Amkraut under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

“The OIG will aggressively investigate intentional misrepresentations made by individuals who lie in order to claim eligibility for SBA set-aside programs,” said Inspector General Peggy E. Gustafson of the SBA.  “I want to thank the U.S. Department of Justice for its dedication to pursuing justice in this case.”

The settlement resolves allegations brought in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act by Patricia Hopson, who is employed in the construction industry.  Under the act, a private citizen can sue on behalf of the United States and share in any recovery.  The United States is entitled to intervene in the lawsuit, as it did here.  As part of the resolution, Ms. Hopson will receive $42,500.

This matter was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Middle District of Florida, in conjunction with the SBA’s Office of Inspector General (OIG) and Office of General Counsel, the Department of Homeland Security’s Office of Inspector General, and the Defense Criminal Investigative Service.