AG LYNCH'S REMARKS ON $712 MEDICARE FRAUD

FROM:  U.S JUSTICE DEPARTMENT
Attorney General Loretta Lynch Delivers Remarks at the Press Conference to Announce a National Medicare Fraud Takedown
Washington, DCUnited States ~ Thursday, June 18, 2015
Remarks as prepared for delivery

Good morning. Before we begin today’s announcement, I want to take a moment to address the heartbreaking and deeply tragic events at Emanuel AME Church in Charleston, South Carolina – a crime that has reached into the heart of that community.  The Department of Justice has opened a hate crime investigation into this shooting incident.  The FBI, ATF, U.S. Marshals Service, Civil Rights Division and U.S. Attorney’s Office are working closely with our state and local partners, and we stand ready to offer every resource, every means and every tool that we possess in order to locate and apprehend the perpetrator of this barbaric crime.  Acts like this one have no place in our country.  They have no place in a civilized society.  And I want to be clear: the individual who committed these unspeakable acts will be found and will face justice.

As we move forward, my thoughts and prayers – and those of our entire law enforcement community, here at the Department of Justice and around the country – are with the families and loved ones of the victims in Charleston.  Even as we struggle to comprehend this heartbreaking event, I want everyone in Charleston – and everyone who has been affected by this tragedy – to know that we will do everything in our power to help heal this community and make it whole again.

I encourage the people of Charleston and the wider area to continue circulating the photos of the alleged perpetrator and report any tip, no matter how minor, to the tip line, which can be reached at 1-800-CALL-FBI.

Today, I’m joined by Secretary [Sylvia] Burwell from the Department of Health and Human Services; Director [Jim] Comey of the FBI; Assistant Attorney General [Leslie] Caldwell of the Justice Department’s Criminal Division; Inspector General [Daniel] Levinson of the HHS Office of Inspector General; and Deputy Administrator and Director Dr. [Shantanu] Agrawal of the Centers for Medicare and Medicaid Services in announcing a major advance in the federal government’s fight against fraud in our nation’s health care system.

Over the last three days, as part of a coordinated, nationwide takedown, the Medicare Fraud Strike Force – a joint initiative of the Departments of Justice and Health and Human Services comprising federal, state and local investigators and law enforcement officials from across the country – joined seven additional U.S. Attorney’s Offices in charging or unveiling charges against 243 defendants in 17 federal districts for their alleged participation in Medicare fraud schemes involving approximately $712 million. This is the largest takedown in the Strike Force’s eight-year history.  It is the largest criminal health care fraud takedown in the history of the Department of Justice.  And it adds to an already remarkable record of enforcement.

The defendants charged include doctors, patient recruiters, home health care providers, pharmacy owners, and others.  They are accused of an array of serious crimes ranging from conspiracy to commit health care fraud to wire fraud to money laundering.  They billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered.  In one of the more egregious allegations of exploitation of both the Medicare system and vulnerable patients, the owners of a mental health facility in Miami billed for intensive psychotherapy sessions that resulted in tens of millions in reimbursements for the doctors based on treatment that was nothing more than moving patients to different locations.  Several of these patients suffered from illnesses like Alzheimer’s and dementia and were unable even to communicate with their supposed caregivers.

Further, nearly 50 of the defendants in this takedown are charged with fraud related to the Medicare prescription drug benefit program known as Part D, which is the fastest-growing component of the Medicare program overall.  One owner of a health care provider in the Southern District of Florida received $1.6 million from Medicare Part D for prescription drugs the provider never purchased and never dispensed.  Another defendant – a doctor in the Eastern District of Michigan – is alleged to have prescribed unnecessary narcotic pain medications to patients in exchange for the use of their identification information to generate false billings.  Patients who attempted to withdraw from the scheme were threatened with loss of access to prescription narcotics.  Having deepened these patients’ addiction, the doctors then used that addiction to keep patients bound to their scheme.  Taken in total, today’s action represents the first large-scale effort to focus on Medicare Part D fraud – and demonstrates an expanded federal focus on this important issue.

The charges we are announcing today are the culmination of a truly national effort, involving approximately 900 law enforcement personnel acting in concert to execute a set of highly complex and highly coordinated law enforcement activities stretching across the country from Florida to Alaska.  This takedown, like those before it, would not have been possible without the key partnerships forged by the Strike Force over the last eight years among federal, state, and local officials, and the cooperation spurred by the joint initiative known as the Health Care Fraud Prevention and Enforcement Action Team, or HEAT, that was launched by DOJ and HHS in 2009.  As a result of Strike Force operations since 2007, we’ve filed charges against more than 2,300 individuals, accounting for over $7 billion in Medicare losses.  This is a crucial part of the department’s health care fraud enforcement efforts, which include recovery of a total of $15.3 billion through False Claims Act cases involving fraud against federal health care programs since 2009.

Those are extraordinary figures, and they reflect our administration-wide commitment to safeguard precious public resources, to rid our health-care systems of fraud and abuse, and to sustain the integrity of programs that are essential to the public welfare.  In the days ahead, we will continue our focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives.  The Department of Justice is prepared – and I am personally determined – to continue working with our federal, state and local partners to bring about the vital progress that all Americans deserve.

I want to thank all of the law enforcement officials who were part of the team that made this sweeping takedown possible.  Their tireless efforts enabled us to move quickly and aggressively and their inspiring collaboration will be a model for us going forward.

At this time, I’d like to turn things over to Secretary [Sylvia] Burwell, who has been a dedicated leader and indispensable partner in this important work and who will provide additional details on today’s announcement.

CAR DEALER TO PAY $90,000 CIVIL PENALTY FOR NOT DISPLAYING 'BUYERS GUIDES'

FROM:  U.S. FEDERAL TRADE COMMISSION 

FTC Action Leads Arkansas Car Dealer to Pay $90,000 Civil Penalty for not Displaying ‘Buyers Guides’ on Used Cars

An Arkansas auto dealer and its owners have agreed to pay a $90,000 civil penalty to settle Federal Trade Commission charges that they failed to display a “Buyers Guide” on used vehicles offered for sale, as required by the FTC’s Used Car Rule.

In March 2014, the FTC charged Abernathy Motor Company, Wesley Abernathy and David Abernathy with violating the Rule, which is designed to ensure that consumers have important purchasing and warranty information when shopping for a used car.

The Buyers Guide informs consumers:

whether the vehicle comes with a warranty and, if so, whether it is a “full” or limited warranty;
which systems are covered by the warranty and its duration;
if it is a limited warranty, what percentage of the cost for covered parts and labor the dealer will pay for; or
whether the car is sold with no written or implied warranty (“As Is”); and
whether the car is sold with no written warranty, but with implied warranties. (Some states and Washington, D.C. do not allow dealers to sell cars without implied warranties.)
The Rule also provides that the Buyers Guide becomes a part of the sales contract and overrides any contrary provisions in the contract.

In addition to the $90,000 civil penalty, under the proposed final order, Abernathy Motor Company and its owners are prohibited from misrepresenting material facts about used vehicles offered for sale, including mechanical condition, the terms of any warranty offered, and that there is a warranty when a vehicle is sold without one. They are also barred from failing to disclose, before a sale, material terms and conditions, including that a used vehicle is sold without a warranty if none is offered, and the terms of any warranty.

The proposed order also requires the defendants to display prominently a properly completed Buyers Guide on used vehicles, with all of the disclosures required by the Used Car Rule and reflecting the warranty coverage, and to include this statement in sales contracts: “The information you see on the window form for this vehicle is part of this contract. Information on the window form overrides any contrary provisions in the contract of sale.” For sales conducted in Spanish, the defendants are barred from failing to provide the same information in Spanish.

The Commission vote authorizing the staff to file the proposed stipulated order for permanent injunction was 5-0. It was filed in the U.S. District Court for the Eastern District of Arkansas, Jonesboro Division.

Statement from U.S. Secretary of Education Arne Duncan on House Republicans Proposing to Block Gainful Employment Regulations

Statement from U.S. Secretary of Education Arne Duncan on House Republicans Proposing to Block Gainful Employment Regulations

DOL REPORTS HEATER IGNITED VAPORS IN RAILCAR CAUSING INJURIES

FROM:  U.S. LABOR DEPARTMENT 

Explosive Combination' as Heater Ignites Vapors in Railcar in Kansas

Two workers in Kansas endured several weeks of skin graft surgery and physical therapy after suffering second-degree burns when gas vapors exploded in a railcar last December. Owned by GBW Railcar Services LLC of Cummings, the railcar was being prepared for cleaning when an electric heater ignited the flammable gas. Five other workers were injured and hospitalized. After the incident, Occupational Safety and Health Administration inspectors identified 11 serious safety violations and proposed penalties totaling $46,900. "Two employees suffered painful injuries that put them out of work for three months because GBW Railcar Services ignored worker safety," said Judy Freeman, OSHA's area director in Wichita. "Failing to eliminate potential ignition sources from areas where flammable substances were likely to be present proved an explosive combination."

NORWEGIAN SHIPPING COMPANY CHARGED WITH ENVIRONMENTAL CRIMES AND OBSTRUCTION OF JUSTICE

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, June 12, 2015

Norwegian Shipping Company and Engineering Officers Charged in Second Indictment with Environmental Crimes and Obstruction of Justice

A federal grand jury in Lafayette, Louisiana, has returned a three-count indictment charging Det Stavangerske Dampskibsselskab AS (DSD Shipping) and four employees with violating the Act to Prevent Pollution from Ships (APPS) and obstruction of justice in connection with the illegal discharge of contaminated waste-water directly into the sea, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Stephanie A. Finley for the Western District of Louisiana.  DSD Shipping is a Norwegian-based shipping company that operates the oil tanker M/T Stavanger Blossom, a vessel engaged in the international transportation of crude oil.  Also indicted were four engineering officers employed by DSD Shipping to work aboard the vessel: Daniel Paul Dancu, 51, of Romania; Bo Gao, 49, of China; Xiaobing Chen, 34, of China; and Xin Zhong, 28, of China.

The operation of marine vessels, like the M/T Stavanger Blossom, generates large quantities of waste oil and oil-contaminated waste water.  International and U.S. law requires that these vessels use pollution prevention equipment to preclude the discharge of these materials.  Should any overboard discharges occur, they must be documented in an oil record book, a log that is regularly inspected by the U.S. Coast Guard.

“Companies operating vessels in navigable waterways have a responsibility to prevent oil spills and protect the public and the environment,” said U.S. Attorney Finley.  “One of our priorities is to help preserve the natural resources of this state.  Violators should be clear - charges will be filed against entities and persons who harm these resources and obstruct investigations.”

According to the indictment, in 2014, DSD Shipping and its employees discharged oil-contaminated waste water generated aboard the M/T Stavanger Blossom directly into the sea.  To hide the illegal discharges, DSD Shipping and its employees maintained a fictitious oil record book that failed to record the disposal, transfer, or overboard discharge of oil from the vessel.  The indictment further alleges that prior to an inspection by the U.S. Coast Guard, Chen ordered crewmembers to remove piping connected to the vessel’s overboard discharge valve, install new piping, and repaint the piping to hinder an inspection by the U.S. Coast Guard.

DSD Shipping and the engineering officers were charged with violating the APPS for failing to record overboard discharges in the vessel’s oil record book and with obstruction of justice for presenting false documents and deceiving the Coast Guard during an inspection in the Port of Lake Charles.  If convicted, DSD Shipping could be fined up to $500,000 per count, in addition to other possible penalties.  Dancu, Gao, Chen and Zhong face a maximum penalty of 20 years in prison for the obstruction of justice charges.  An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until and unless proven guilty.

This is the second indictment arising from a joint, multi-district investigation by the U.S. Coast Guard, Sector Mobile, U.S. Coast Guard Investigative Services and the Criminal Investigation Division for the Environmental Protection Agency.  DSD Shipping, Dancu, Gao, Chen and Zhong were previously indicted in the Southern District of Alabama with a seven-count indictment charging related conduct.  Assistant U.S. Attorney Howard Parker with the U.S. Attorney's Office for the Western District of Louisiana, Assistant U.S. Attorney Mike Anderson with the U.S. Attorney’s Office for the Southern District of Alabama and Trial Attorney Shane N. Waller Environmental Crimes Section are prosecuting the case.