FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
Federal Court in Massachusetts Orders Lyndon Parrilla to Pay over $17 Million in Disgorgement, Restitution, and a Penalty in Forex Fraud Scheme
In a related criminal proceeding, Parrilla sentenced to 97 months in prison and ordered to pay restitution of more than $4.6 million
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court Order awarding restitution for defrauded customers, disgorgement, and a civil monetary penalty totaling more than $17 million against defendant Lyndon Parrilla, of California, in connection with an off-exchange foreign currency (forex) fraud scheme in which Parrilla and his company, Green Tree Capital (Green Tree), defrauded over 50 customers in the United States of over $4 million.
Judge Joseph L. Tauro of the U.S. District Court for the District of Massachusetts entered the final judgment and permanent injunction Order on October 24, 2013 (see Related Link), requiring Parrilla to pay restitution of $4,197,342 to defrauded customers, disgorgement of $3,353,925, and a $10 million civil monetary penalty. The Order also imposes permanent trading and registration bans against Parrilla and prohibits him from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
The Order stems from a CFTC Complaint filed on April 12, 2011, that charged Parrilla and Green Tree with fraud, misappropriation, and other CEA violations (see CFTC Press Release 6024-11). The court previously entered judgment against Green Tree on June 30, 2011.
The final judgment Order is based on the court’s findings set forth in an earlier Order, entered on September 30, 2013 (see Related Link), that finds that Parrilla and Green Tree fraudulently solicited over $4 million from at least 50 customers in the United States, from approximately October 2009 until April 2011, for the purported purpose of trading off-exchange forex contracts on a leveraged or margined basis in managed accounts.
In soliciting the funds, the Order finds that Parrilla, on behalf of Green Tree, misrepresented that Green Tree had a record of delivering consistently profitable returns when, in fact, it incurred trading losses since its inception, and almost 80 percent of customer funds was never traded or invested in any manner. In fact, according to the Order, Parrilla misappropriated over $3.3 million of customer funds to pay personal and entertainment expenses, including Las Vegas casino expenses, purchase automobiles and clothing, and ATM or cash withdrawals. To disguise these misrepresentations, trading losses, and misappropriations, Parrilla sent false Green Tree account statements to customers by email. Further, the Order finds that Parrilla misrepresented his experience and expertise, and failed to disclose that the National Futures Association (NFA) permanently barred him from NFA membership.
As a result of a parallel criminal action brought by the U.S. Attorney’s Office in November 2012, Parrilla was sentenced to, among other things, a term of 97 months imprisonment and ordered to pay restitution in the amount of $4,675,156.
The CFTC appreciates the assistance of the Federal Bureau of Investigation and the U.S. Attorney’s Office for the District of Massachusetts.
CFTC Division of Enforcement staff members responsible for this case are Alex C. Levine, David Chu, Lindsey Evans, Melissa Glasbrenner, Mary Beth Spear, Ava M. Gould, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Thursday, November 14, 2013
Wednesday, November 13, 2013
JUSTICE ANNOUNCES OWNER OF MEDICAL CLINIC SENTENCED TO 15 YEARS IN PRISON FOR MEDICARE FRAUD
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, November 12, 2013
Brooklyn Clinic Owner Sentenced for Role in $77 Million Medicare Fraud Scheme
The owner of a Brooklyn medical clinic was sentenced today to serve 15 years in prison for her leading role in a $77 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of New York Loretta E. Lynch, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office, and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
Irina Shelikhova, 50, of Brooklyn, was sentenced by U.S. District Judge Nina Gershon of the Eastern District of New York. In addition to her prison term, Shelikhova was sentenced to serve three years of supervised release with a concurrent exclusion from Medicare, Medicaid and all Federal health programs, ordered to forfeit $36,241,545 and ordered to pay $50,943,386 in restitution. Shelikhova has been in custody since her arrest at the John F. Kennedy International Airport on June 15, 2012, after living as a fugitive in Ukraine for nearly two years. After serving her sentence, Shelikhova faces deportation from the United States.
Shelikhova pleaded guilty on Dec. 18, 2012, to one count of conspiracy to commit money laundering. Including Shelikhova, 13 individuals have been convicted in this case.
Court documents state that from 2005 to 2010, Shelikhova owned and operated a clinic in Brooklyn that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (collectively, Bay Medical clinic). Shelikhova and her employees at the Bay Medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary or never provided. The defendants billed Medicare for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.
According to trial testimony, Shelikhova masterminded the health care fraud at the Bay Medical clinic, which included hiring a medically unlicensed co-defendant to impersonate the clinic’s doctor and render medical care to patients. Shelikhova also directed employees to create phony medical notes in an attempt to back up the false billing and to forge doctors’ names on prescriptions and charts.
The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic, which showed conspirators paying cash kickbacks to corrupt Medicare beneficiaries. The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010. This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian. The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.
To generate the large amounts of cash needed to pay the patients, Shelikhova directed the recruitment and operations of a network of external money launderers who cashed checks for the clinic. Shelikhova wrote clinic checks payable to various shell companies controlled by the money launderers. These checks did not represent payment for any legitimate service at or for the Bay Medical clinic, but rather were written to launder the clinic’s fraudulently obtained health care proceeds. The money launderers cashed these checks and provided the cash back to the clinic. Shelikhova used the cash to pay illegal cash kickbacks to the Bay Medical clinic’s purported patients.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. This case is being prosecuted by Trial Attorney Sarah M. Hall of the Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Tuesday, November 12, 2013
Brooklyn Clinic Owner Sentenced for Role in $77 Million Medicare Fraud Scheme
The owner of a Brooklyn medical clinic was sentenced today to serve 15 years in prison for her leading role in a $77 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of New York Loretta E. Lynch, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office, and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
Irina Shelikhova, 50, of Brooklyn, was sentenced by U.S. District Judge Nina Gershon of the Eastern District of New York. In addition to her prison term, Shelikhova was sentenced to serve three years of supervised release with a concurrent exclusion from Medicare, Medicaid and all Federal health programs, ordered to forfeit $36,241,545 and ordered to pay $50,943,386 in restitution. Shelikhova has been in custody since her arrest at the John F. Kennedy International Airport on June 15, 2012, after living as a fugitive in Ukraine for nearly two years. After serving her sentence, Shelikhova faces deportation from the United States.
Shelikhova pleaded guilty on Dec. 18, 2012, to one count of conspiracy to commit money laundering. Including Shelikhova, 13 individuals have been convicted in this case.
Court documents state that from 2005 to 2010, Shelikhova owned and operated a clinic in Brooklyn that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (collectively, Bay Medical clinic). Shelikhova and her employees at the Bay Medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary or never provided. The defendants billed Medicare for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.
According to trial testimony, Shelikhova masterminded the health care fraud at the Bay Medical clinic, which included hiring a medically unlicensed co-defendant to impersonate the clinic’s doctor and render medical care to patients. Shelikhova also directed employees to create phony medical notes in an attempt to back up the false billing and to forge doctors’ names on prescriptions and charts.
The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic, which showed conspirators paying cash kickbacks to corrupt Medicare beneficiaries. The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010. This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian. The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.
To generate the large amounts of cash needed to pay the patients, Shelikhova directed the recruitment and operations of a network of external money launderers who cashed checks for the clinic. Shelikhova wrote clinic checks payable to various shell companies controlled by the money launderers. These checks did not represent payment for any legitimate service at or for the Bay Medical clinic, but rather were written to launder the clinic’s fraudulently obtained health care proceeds. The money launderers cashed these checks and provided the cash back to the clinic. Shelikhova used the cash to pay illegal cash kickbacks to the Bay Medical clinic’s purported patients.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. This case is being prosecuted by Trial Attorney Sarah M. Hall of the Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Sunday, November 10, 2013
CHECK CASHING COMPANY AND OWNER PLEAD GUILTY IN FRAUD CONSPIRACY
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, November 5, 2013
New York Check Cashing Company and Owner Plead Guilty for Roles in $19 Million Scheme
Belair Payroll Services Inc. (Belair), a multi-branch check cashing company in Flushing, N.Y., and its owner, Craig Panzera, 47, pleaded guilty today for failing to follow reporting and anti-money laundering requirements for more than $19 million in transactions, in violation of the Bank Secrecy Act (BSA). Panzera also pleaded guilty to conspiring to defraud the United States by willfully failing to pay income and payroll taxes.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta Lynch of the Eastern District of New York, Acting Director John Sandweg of U.S. Immigration and Customs Enforcement (ICE), and Chief Richard Weber of the Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.
As part of the guilty plea, Belair will forfeit $3,267,252.10, and Panzera will pay restitution in the amount of $946,841.17 to the IRS. Sentencing for Belair and Panzera will be determined at a later date.
According to court records, from in or about June 2009 through June 2011, certain individuals presented to Belair’s manager and other employees checks to be cashed at Belair. The checks were written on accounts of shell corporations that appeared to be health care related, but in fact, the corporations did no legitimate business. The shell corporations and their corresponding bank accounts on which the checks were written were established in the names of foreign nationals, many of whom were no longer in the United States.
Belair accepted these checks and provided cash in excess of $10,000 to the individuals. Panzera and others at Belair never obtained any identification documents or information from those individuals. Belair filed currency transaction reports (CTRs) that falsely stated the checks were cashed by the foreign nationals who set up the shell corporations, and in certain CTRs, Belair failed to indicate the full amount of cash provided to the individuals. The individuals cashed more than $19 million through Belair during the course of the scheme. Panzera and Belair willfully failed to maintain an effective anti-money laundering program by cashing these checks.
The charges in the indictment against Panzera’s and Belair’s co-defendants remain pending and are merely accusations. Those defendants are presumed innocent unless and until proven guilty.
The cases are being investigated by agents from ICE Homeland Security Investigations and IRS-CI. These cases are being prosecuted by Trial Attorneys Claiborne W. Porter and Kevin G. Mosley of the Criminal Division’s Asset Forfeiture and Money Laundering Section’s (AFMLS) Money Laundering and Bank Integrity Unit, Trial Attorney Darrin McCullough of AFMLS’s Forfeiture Unit, and Assistant U.S. Attorney Patricia Notopoulos of the Eastern District of New York.
The Money Laundering and Bank Integrity Unit investigates and prosecutes complex, multi-district and international criminal cases involving financial institutions and individuals who violate the money laundering statutes, the Bank Secrecy Act and other related statutes. The Unit’s prosecutions generally focus on three types of violators: financial institutions, including their officers, managers and employees, whose actions threaten the integrity of the individual institution or the wider financial system; professional money launderers and gatekeepers who provide their services to serious criminal organizations; and individuals and entities engaged in using the latest and most sophisticated money laundering techniques and tools.
Tuesday, November 5, 2013
New York Check Cashing Company and Owner Plead Guilty for Roles in $19 Million Scheme
Belair Payroll Services Inc. (Belair), a multi-branch check cashing company in Flushing, N.Y., and its owner, Craig Panzera, 47, pleaded guilty today for failing to follow reporting and anti-money laundering requirements for more than $19 million in transactions, in violation of the Bank Secrecy Act (BSA). Panzera also pleaded guilty to conspiring to defraud the United States by willfully failing to pay income and payroll taxes.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta Lynch of the Eastern District of New York, Acting Director John Sandweg of U.S. Immigration and Customs Enforcement (ICE), and Chief Richard Weber of the Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.
As part of the guilty plea, Belair will forfeit $3,267,252.10, and Panzera will pay restitution in the amount of $946,841.17 to the IRS. Sentencing for Belair and Panzera will be determined at a later date.
According to court records, from in or about June 2009 through June 2011, certain individuals presented to Belair’s manager and other employees checks to be cashed at Belair. The checks were written on accounts of shell corporations that appeared to be health care related, but in fact, the corporations did no legitimate business. The shell corporations and their corresponding bank accounts on which the checks were written were established in the names of foreign nationals, many of whom were no longer in the United States.
Belair accepted these checks and provided cash in excess of $10,000 to the individuals. Panzera and others at Belair never obtained any identification documents or information from those individuals. Belair filed currency transaction reports (CTRs) that falsely stated the checks were cashed by the foreign nationals who set up the shell corporations, and in certain CTRs, Belair failed to indicate the full amount of cash provided to the individuals. The individuals cashed more than $19 million through Belair during the course of the scheme. Panzera and Belair willfully failed to maintain an effective anti-money laundering program by cashing these checks.
The charges in the indictment against Panzera’s and Belair’s co-defendants remain pending and are merely accusations. Those defendants are presumed innocent unless and until proven guilty.
The cases are being investigated by agents from ICE Homeland Security Investigations and IRS-CI. These cases are being prosecuted by Trial Attorneys Claiborne W. Porter and Kevin G. Mosley of the Criminal Division’s Asset Forfeiture and Money Laundering Section’s (AFMLS) Money Laundering and Bank Integrity Unit, Trial Attorney Darrin McCullough of AFMLS’s Forfeiture Unit, and Assistant U.S. Attorney Patricia Notopoulos of the Eastern District of New York.
The Money Laundering and Bank Integrity Unit investigates and prosecutes complex, multi-district and international criminal cases involving financial institutions and individuals who violate the money laundering statutes, the Bank Secrecy Act and other related statutes. The Unit’s prosecutions generally focus on three types of violators: financial institutions, including their officers, managers and employees, whose actions threaten the integrity of the individual institution or the wider financial system; professional money launderers and gatekeepers who provide their services to serious criminal organizations; and individuals and entities engaged in using the latest and most sophisticated money laundering techniques and tools.
Friday, November 8, 2013
GOVERNMENT ISSUES MINING FATALITY REPORT, SAYS MINERS DYING IN PREVENTABLE ACCIDENTS
FROM: U.S. LABOR DEPARTMENT
MSHA issues third-quarter 2013 fatality data
Nine miners lose their lives in a three-month period
ARLINGTON, Va. — The U.S. Department of Labor's Mine Safety and Health Administration today released a summary of U.S. mining deaths that occurred during the third quarter of 2013. From July 1 to Sept. 30, there were nine mining fatalities in the United States. Five miners died in coal mining accidents and four in metal/nonmetal mining accidents. The number was two fewer than during the third quarter in 2012.
Two coal miners died in machinery accidents, and one each died in powered haulage, fall of roof or rib, and drowning accidents. Two metal/nonmetal miners died in powered haulage accidents, and one each died in machinery and falling/sliding material accidents.
Twenty-seven miners died in mining accidents in 2013 from Jan. 1 through Sept. 30, compared to 30 from Jan. 1, 2012, through Sept. 30, 2012.
"While the number of mining deaths was lower than in the same period last year, miners continue to die in accidents that could have been prevented, such as by using proximity detection equipment," said Joseph A. Main, assistant secretary of labor for mine safety and health. On July 2, a continuous mining machine operator was killed when he was struck by a battery-powered coal hauler and pinned between the coal hauler and coal rib. Proximity detection systems can be programmed to send warning signals to alert miners to the presence of moving machinery and can stop the machinery before it strikes, pins or crushes a miner working in the vicinity. As of Sept. 30, 2013, 372 proximity detection systems had been installed on continuous mining machines, coal hauling machines and scoops in underground coal mines.
"In metal/nonmetal mining, fatalities continue to occur that could be prevented by using ‘lock out/tag out' best practices," said Main. "Two of the fatalities this quarter could have been avoided by: disconnecting the power, ensuring the miner on the job has locked the power source in the safe position and tagging to prevent the power from being re-energized.
"While actions undertaken by MSHA and the mining industry continue to move mine safety in the right direction, these deaths are a reminder that much more needs to be done to protect the nation's miners and ensure they return home after every shift," said Main.
MSHA issues third-quarter 2013 fatality data
Nine miners lose their lives in a three-month period
ARLINGTON, Va. — The U.S. Department of Labor's Mine Safety and Health Administration today released a summary of U.S. mining deaths that occurred during the third quarter of 2013. From July 1 to Sept. 30, there were nine mining fatalities in the United States. Five miners died in coal mining accidents and four in metal/nonmetal mining accidents. The number was two fewer than during the third quarter in 2012.
Two coal miners died in machinery accidents, and one each died in powered haulage, fall of roof or rib, and drowning accidents. Two metal/nonmetal miners died in powered haulage accidents, and one each died in machinery and falling/sliding material accidents.
Twenty-seven miners died in mining accidents in 2013 from Jan. 1 through Sept. 30, compared to 30 from Jan. 1, 2012, through Sept. 30, 2012.
"While the number of mining deaths was lower than in the same period last year, miners continue to die in accidents that could have been prevented, such as by using proximity detection equipment," said Joseph A. Main, assistant secretary of labor for mine safety and health. On July 2, a continuous mining machine operator was killed when he was struck by a battery-powered coal hauler and pinned between the coal hauler and coal rib. Proximity detection systems can be programmed to send warning signals to alert miners to the presence of moving machinery and can stop the machinery before it strikes, pins or crushes a miner working in the vicinity. As of Sept. 30, 2013, 372 proximity detection systems had been installed on continuous mining machines, coal hauling machines and scoops in underground coal mines.
"In metal/nonmetal mining, fatalities continue to occur that could be prevented by using ‘lock out/tag out' best practices," said Main. "Two of the fatalities this quarter could have been avoided by: disconnecting the power, ensuring the miner on the job has locked the power source in the safe position and tagging to prevent the power from being re-energized.
"While actions undertaken by MSHA and the mining industry continue to move mine safety in the right direction, these deaths are a reminder that much more needs to be done to protect the nation's miners and ensure they return home after every shift," said Main.
Wednesday, November 6, 2013
COMPANY SETTLES CLAIMS IT STEERED WOMEN INTO LOWER PAYING JOBS
FROM: U.S. LABOR DEPARTMENT
G&K Services Co. settles claims of pay and hiring discrimination with the US Labor Department
Agreement includes $265,983 in back pay to 59 women steered into lower paying jobs
LOS ANGELES — G&K Services Co. has agreed to settle allegations that it discriminated against female laundry workers by steering them into lower-paying positions regardless of their qualifications. The conciliation agreement between the federal contractor's facility located in Santa Fe Springs, Calif., and the department's Office of Federal Contract Compliance Programs resolves this pay discrimination violation, as well as the related finding that the company discriminated against male applicants in hiring.
"The settlement reflects a mutual commitment between the department and the leadership of G&K Services Co. to ensure that qualified workers, irrespective of gender, have a fair shot at competing for good jobs," said OFCCP Director Patricia A. Shiu. "I am pleased by this contractor's willingness to work with us on a proactive strategy to guarantee that all their workers have an equal opportunity to succeed in the workplace."
During a compliance evaluation, OFCCP determined that G&K Services had a practice of assigning laundry workers to different tasks and different pay rates on the basis of gender. Specifically, OFCCP found that between July 1, 2009, and June 30, 2010, female employees who had been hired as general laborers were assigned to "light duty" jobs that paid less than the "heavy duty" jobs involving similar work and qualifications, which the company reserved for men. Denying women access to higher-paying opportunities because of sex stereotyping is a form of pay discrimination in violation of Executive Order 11246. Investigators also found that male applicants were frequently denied the option to compete for a majority of the open laborer opportunities during the review period because the company only considered them for so-called heavy duty work.
Under the terms of the agreement, the contractor will pay $265,983 in back wages to 59 female workers who were steered into the lower paying jobs. G&K Services will also extend to the 59 female class members job offers in the higher-paying laborer positions. In addition, G&K Services will pay $23,968 in back wages to 331 male job applicants who were denied the opportunity to compete for open lower-paying laborer positions and make three job offers. The company has also agreed to undertake extensive self-monitoring measures, and review and revise their hiring and pay practices, to ensure they fully comply with the law.
G&K Services provides textile leasing and renting services to a number of different government agencies, including the Defense Commissary Agency, Bureau of Reclamation and NASA.
In addition to Executive Order 11246, OFCCP enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans' Readjustment Assistance Act of 1974. These three laws require those who do business with the federal government, both contractors and subcontractors, to follow the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran.
G&K Services Co. settles claims of pay and hiring discrimination with the US Labor Department
Agreement includes $265,983 in back pay to 59 women steered into lower paying jobs
LOS ANGELES — G&K Services Co. has agreed to settle allegations that it discriminated against female laundry workers by steering them into lower-paying positions regardless of their qualifications. The conciliation agreement between the federal contractor's facility located in Santa Fe Springs, Calif., and the department's Office of Federal Contract Compliance Programs resolves this pay discrimination violation, as well as the related finding that the company discriminated against male applicants in hiring.
"The settlement reflects a mutual commitment between the department and the leadership of G&K Services Co. to ensure that qualified workers, irrespective of gender, have a fair shot at competing for good jobs," said OFCCP Director Patricia A. Shiu. "I am pleased by this contractor's willingness to work with us on a proactive strategy to guarantee that all their workers have an equal opportunity to succeed in the workplace."
During a compliance evaluation, OFCCP determined that G&K Services had a practice of assigning laundry workers to different tasks and different pay rates on the basis of gender. Specifically, OFCCP found that between July 1, 2009, and June 30, 2010, female employees who had been hired as general laborers were assigned to "light duty" jobs that paid less than the "heavy duty" jobs involving similar work and qualifications, which the company reserved for men. Denying women access to higher-paying opportunities because of sex stereotyping is a form of pay discrimination in violation of Executive Order 11246. Investigators also found that male applicants were frequently denied the option to compete for a majority of the open laborer opportunities during the review period because the company only considered them for so-called heavy duty work.
Under the terms of the agreement, the contractor will pay $265,983 in back wages to 59 female workers who were steered into the lower paying jobs. G&K Services will also extend to the 59 female class members job offers in the higher-paying laborer positions. In addition, G&K Services will pay $23,968 in back wages to 331 male job applicants who were denied the opportunity to compete for open lower-paying laborer positions and make three job offers. The company has also agreed to undertake extensive self-monitoring measures, and review and revise their hiring and pay practices, to ensure they fully comply with the law.
G&K Services provides textile leasing and renting services to a number of different government agencies, including the Defense Commissary Agency, Bureau of Reclamation and NASA.
In addition to Executive Order 11246, OFCCP enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans' Readjustment Assistance Act of 1974. These three laws require those who do business with the federal government, both contractors and subcontractors, to follow the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran.
Monday, November 4, 2013
ATTORNEY GENERAL HOLDER'S REMARKS ON JOHNSON & JOHNSON'S RESOLUTION OF CRIMINAL/CIVIL CLAIMS
FROM: U.S. JUSTICE DEPARTMENT
Attorney General Eric Holder Delivers Remarks at the Johnson & Johnson Press Conference
~ Monday, November 4, 2013
Good morning – and thank you all for being here. I am joined by Associate Attorney General [Tony] West; Assistant Attorney General for the Civil Division [Stuart] Delery; U.S. Attorney for the Eastern District of Pennsylvania [Zane] Memeger; U.S. Attorney for the District of Massachusetts [Carmen] Ortiz; First Assistant U.S. Attorney for the Northern District of California [Brian] Stretch; and Deputy Inspector General for Investigations at the Department of Health and Human Services [Gary] Cantrell.
We are here to announce that Johnson & Johnson and three of its subsidiaries have agreed to pay more than $2.2 billion to resolve criminal and civil claims that they marketed prescription drugs for uses that were never approved as safe and effective – and that they paid kickbacks to both physicians and pharmacies for prescribing and promoting these drugs. Through these alleged actions, these companies lined their pockets at the expense of American taxpayers, patients, and the private insurance industry. They drove up costs for everyone in the health care system and negatively impacted the long-term solvency of essential health care programs like Medicare.
This global settlement resolves multiple investigations involving the antipsychotic drugs Risperdal and Invega – as well as the heart drug Natrecor and other Johnson & Johnson products. The settlement also addresses allegations of conduct that recklessly put at risk the health of some of the most vulnerable members of our society – including young children, the elderly, and the disabled.
In the criminal information filed today, we allege that Johnson & Johnson subsidiary Janssen Pharmaceuticals Incorporated violated the Federal Food, Drug, and Cosmetic Act by introducing Risperdal into the market for unapproved uses. In its plea agreement, Janssen admits that it promoted this drug to health care providers for the treatment of psychotic symptoms and associated behaviors exhibited by elderly, non-schizophrenic patients who suffered from dementia – even though the drug was approved only to treat schizophrenia.
In separately filed civil complaints, we further allege that both Johnson & Johnson and Janssen Pharmaceuticals promoted Risperdal and Invega to doctors – and to nursing homes – as a way to control behavioral disturbances in elderly dementia patients, children, and the mentally disabled. The companies allegedly downplayed the serious health risks associated with Risperdal – including the risk of stroke in elderly patients – and even paid doctors to induce them to prescribe the drugs. As part of this scheme, the companies allegedly paid kickbacks to the nation’s largest long-term care pharmacy, whose pharmacists were supposed to be the gatekeepers to provide an independent review of patient medications. Instead, at the companies’ behest, the pharmacists allegedly recommended Risperdal for nursing home patients who exhibited behavioral symptoms associated with Alzheimer’s Disease and dementia. This alleged conduct resulted in government health care programs paying millions of dollars in false claims for these drugs.
To resolve allegations stemming from the improper promotion of Risperdal, Janssen Pharmaceuticals will plead guilty to misbranding Risperdal – and has agreed to pay $400 million in criminal fines and forfeitures. Johnson & Johnson and Janssen Pharmaceuticals have further agreed to pay over $1.2 billion to resolve their civil liability under the False Claims Act. And Johnson & Johnson will pay an additional $149 million to resolve claims relating to alleged kickbacks to a long-term care pharmacy.
In addition to these claims, we allege that Johnson & Johnson and its subsidiary, Scios Incorporated, promoted the heart failure drug Natrecor for off-label uses that caused patients to submit to costly infusions of the drug – without credible scientific evidence that it would have any health benefit for those patients. In a separate matter that was resolved in 2009, Scios pleaded guilty to misbranding Natrecor and paid a criminal fine of $85 million. To resolve current allegations associated with the settlement we announce today, the companies have agreed to pay an additional $184 million.
This significant settlement was made possible by the relentless investigative and enforcement efforts of dedicated men and women serving as part of the Health Care Fraud Prevention and Enforcement Action Team – or, HEAT – which Health and Human Services Secretary Kathleen Sebelius and I launched more than four years ago to recover taxpayer dollars, to keep the American people safe, and to aggressively pursue fraud and misconduct whenever and wherever it is found.
Put simply, this alleged conduct is shameful and it is unacceptable. It displayed a reckless indifference to the safety of the American people. And it constituted a clear abuse of the public trust, showing a blatant disregard for systems and laws designed to protect public health.
As our filings make clear, these are not victimless crimes. Americans trust that the medications prescribed for their parents and grandparents, for their children, and for themselves are selected because they are in the patient’s best interest. Laws enacted by Congress – and the enforcement efforts of the Food and Drug Administration – provide important safeguards to ensure that drugs are approved for uses that have been demonstrated as safe and effective. Efforts by drug companies to introduce their drugs into interstate commerce for unapproved uses subvert those laws. Likewise, the payment of kickbacks undermines the independent medical judgment of health care providers. It creates financial incentives to increase the use of certain drugs, potentially putting the health of some patients at risk. Every time pharmaceutical companies engage in this type of conduct, they corrupt medical decisions by health care providers, jeopardize the public health, and take money out of taxpayers’ pockets.
This settlement demonstrates that the Departments of Justice and Health and Human Services – working alongside a variety of federal, state, and local partners – will not tolerate such activities. No company is above the law. And my colleagues and I are determined to keep moving forward – guided by the facts and the law, and using every tool, resource, and authority at our disposal – to hold these corporations accountable, to safeguard the American people, and to prevent this conduct from happening in the future.
This announcement marks another step forward in our strategic, comprehensive, and effective approach to fraud prevention. We can all be encouraged by the actions that have been taken – and the results we’ve obtained – in recent years. But we cannot yet be satisfied. And that’s why, here in Washington and across the country, this critical work will continue.
I’d like to thank everyone who made this settlement possible. In particular, I want to recognize the leaders, prosecutors, trial attorneys, investigators, and staff of the Civil Division here in Washington – as well as our United States Attorney’s Offices in Philadelphia, Boston, and San Francisco. I am grateful for the committed efforts of our partners at the Department of Health and Human Services – particularly in the Office of the Inspector General – as well as the Food and Drug Administration and many other federal agencies that contributed to this outcome. And I want to thank each of the state Attorneys General and Medicaid Fraud Control units across this country who contributed to this investigation.
I would be happy to take a few questions at this time.
We are here to announce that Johnson & Johnson and three of its subsidiaries have agreed to pay more than $2.2 billion to resolve criminal and civil claims that they marketed prescription drugs for uses that were never approved as safe and effective – and that they paid kickbacks to both physicians and pharmacies for prescribing and promoting these drugs. Through these alleged actions, these companies lined their pockets at the expense of American taxpayers, patients, and the private insurance industry. They drove up costs for everyone in the health care system and negatively impacted the long-term solvency of essential health care programs like Medicare.
This global settlement resolves multiple investigations involving the antipsychotic drugs Risperdal and Invega – as well as the heart drug Natrecor and other Johnson & Johnson products. The settlement also addresses allegations of conduct that recklessly put at risk the health of some of the most vulnerable members of our society – including young children, the elderly, and the disabled.
In the criminal information filed today, we allege that Johnson & Johnson subsidiary Janssen Pharmaceuticals Incorporated violated the Federal Food, Drug, and Cosmetic Act by introducing Risperdal into the market for unapproved uses. In its plea agreement, Janssen admits that it promoted this drug to health care providers for the treatment of psychotic symptoms and associated behaviors exhibited by elderly, non-schizophrenic patients who suffered from dementia – even though the drug was approved only to treat schizophrenia.
In separately filed civil complaints, we further allege that both Johnson & Johnson and Janssen Pharmaceuticals promoted Risperdal and Invega to doctors – and to nursing homes – as a way to control behavioral disturbances in elderly dementia patients, children, and the mentally disabled. The companies allegedly downplayed the serious health risks associated with Risperdal – including the risk of stroke in elderly patients – and even paid doctors to induce them to prescribe the drugs. As part of this scheme, the companies allegedly paid kickbacks to the nation’s largest long-term care pharmacy, whose pharmacists were supposed to be the gatekeepers to provide an independent review of patient medications. Instead, at the companies’ behest, the pharmacists allegedly recommended Risperdal for nursing home patients who exhibited behavioral symptoms associated with Alzheimer’s Disease and dementia. This alleged conduct resulted in government health care programs paying millions of dollars in false claims for these drugs.
To resolve allegations stemming from the improper promotion of Risperdal, Janssen Pharmaceuticals will plead guilty to misbranding Risperdal – and has agreed to pay $400 million in criminal fines and forfeitures. Johnson & Johnson and Janssen Pharmaceuticals have further agreed to pay over $1.2 billion to resolve their civil liability under the False Claims Act. And Johnson & Johnson will pay an additional $149 million to resolve claims relating to alleged kickbacks to a long-term care pharmacy.
In addition to these claims, we allege that Johnson & Johnson and its subsidiary, Scios Incorporated, promoted the heart failure drug Natrecor for off-label uses that caused patients to submit to costly infusions of the drug – without credible scientific evidence that it would have any health benefit for those patients. In a separate matter that was resolved in 2009, Scios pleaded guilty to misbranding Natrecor and paid a criminal fine of $85 million. To resolve current allegations associated with the settlement we announce today, the companies have agreed to pay an additional $184 million.
This significant settlement was made possible by the relentless investigative and enforcement efforts of dedicated men and women serving as part of the Health Care Fraud Prevention and Enforcement Action Team – or, HEAT – which Health and Human Services Secretary Kathleen Sebelius and I launched more than four years ago to recover taxpayer dollars, to keep the American people safe, and to aggressively pursue fraud and misconduct whenever and wherever it is found.
Put simply, this alleged conduct is shameful and it is unacceptable. It displayed a reckless indifference to the safety of the American people. And it constituted a clear abuse of the public trust, showing a blatant disregard for systems and laws designed to protect public health.
As our filings make clear, these are not victimless crimes. Americans trust that the medications prescribed for their parents and grandparents, for their children, and for themselves are selected because they are in the patient’s best interest. Laws enacted by Congress – and the enforcement efforts of the Food and Drug Administration – provide important safeguards to ensure that drugs are approved for uses that have been demonstrated as safe and effective. Efforts by drug companies to introduce their drugs into interstate commerce for unapproved uses subvert those laws. Likewise, the payment of kickbacks undermines the independent medical judgment of health care providers. It creates financial incentives to increase the use of certain drugs, potentially putting the health of some patients at risk. Every time pharmaceutical companies engage in this type of conduct, they corrupt medical decisions by health care providers, jeopardize the public health, and take money out of taxpayers’ pockets.
This settlement demonstrates that the Departments of Justice and Health and Human Services – working alongside a variety of federal, state, and local partners – will not tolerate such activities. No company is above the law. And my colleagues and I are determined to keep moving forward – guided by the facts and the law, and using every tool, resource, and authority at our disposal – to hold these corporations accountable, to safeguard the American people, and to prevent this conduct from happening in the future.
This announcement marks another step forward in our strategic, comprehensive, and effective approach to fraud prevention. We can all be encouraged by the actions that have been taken – and the results we’ve obtained – in recent years. But we cannot yet be satisfied. And that’s why, here in Washington and across the country, this critical work will continue.
I’d like to thank everyone who made this settlement possible. In particular, I want to recognize the leaders, prosecutors, trial attorneys, investigators, and staff of the Civil Division here in Washington – as well as our United States Attorney’s Offices in Philadelphia, Boston, and San Francisco. I am grateful for the committed efforts of our partners at the Department of Health and Human Services – particularly in the Office of the Inspector General – as well as the Food and Drug Administration and many other federal agencies that contributed to this outcome. And I want to thank each of the state Attorneys General and Medicaid Fraud Control units across this country who contributed to this investigation.
I would be happy to take a few questions at this time.
Sunday, November 3, 2013
CONTRACTOR IN DC AREA WILL PAY $875,000 TO 381 MINORITY APPLICANTS
FROM: U.S. LABOR DEPARTMENT
DC-area construction contractor to pay $875,000 to settle discrimination case with US Labor Department
Nearly 400 minority applicants to receive back wages as company reviews hiring practices
DULLES, Va. — The U.S. Department of Labor today announced that federal construction contractor M.C. Dean Inc. has settled allegations that it failed to provide equal employment opportunity to 381 African American, Hispanic and Asian American workers who applied for jobs at the company's Dulles headquarters. A review by the department's Office of Federal Contract Compliance Programs determined that the contractor used a set of selection procedures, including invalid tests, which unfairly kept qualified minority candidates from securing jobs as apprentices and electricians.
"Our nation was built on the principles of fair play and equal opportunity, and artificial barriers that keep workers from securing good jobs violate those principles," said OFCCP Director Patricia A. Shiu. "I am pleased that this settlement will provide remedies to the affected workers and that M.C. Dean has agreed to invest significant resources to improve its hiring practices so that this never happens again."
Under the terms of the agreement, M.C. Dean will pay $875,000 in back wages and interest to 272 African American, 98 Hispanic and 11 Asian American job applicants who were denied employment in 2010. The contractor will also extend 39 job offers to the class members as opportunities become available. Additionally, M.C. Dean has agreed to undertake extensive self-monitoring measures and personnel training to ensure that all of its employment practices fully comply with Executive Order 11246, which prohibits federal contractors and subcontractors from discriminating in employment on the bases of race, color and national origin.
M.C. Dean is a construction, design-build and systems integration corporation with more than 30 offices worldwide. Since 2006, the company has held more than $600 million in contracts with federal agencies, including the U.S. Department of Defense.
In addition to Executive Order 11246, OFCCP enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans' Readjustment Assistance Act of 1974. These three laws require those who do business with the federal government, contractors and subcontractors, to follow the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran.
DC-area construction contractor to pay $875,000 to settle discrimination case with US Labor Department
Nearly 400 minority applicants to receive back wages as company reviews hiring practices
DULLES, Va. — The U.S. Department of Labor today announced that federal construction contractor M.C. Dean Inc. has settled allegations that it failed to provide equal employment opportunity to 381 African American, Hispanic and Asian American workers who applied for jobs at the company's Dulles headquarters. A review by the department's Office of Federal Contract Compliance Programs determined that the contractor used a set of selection procedures, including invalid tests, which unfairly kept qualified minority candidates from securing jobs as apprentices and electricians.
"Our nation was built on the principles of fair play and equal opportunity, and artificial barriers that keep workers from securing good jobs violate those principles," said OFCCP Director Patricia A. Shiu. "I am pleased that this settlement will provide remedies to the affected workers and that M.C. Dean has agreed to invest significant resources to improve its hiring practices so that this never happens again."
Under the terms of the agreement, M.C. Dean will pay $875,000 in back wages and interest to 272 African American, 98 Hispanic and 11 Asian American job applicants who were denied employment in 2010. The contractor will also extend 39 job offers to the class members as opportunities become available. Additionally, M.C. Dean has agreed to undertake extensive self-monitoring measures and personnel training to ensure that all of its employment practices fully comply with Executive Order 11246, which prohibits federal contractors and subcontractors from discriminating in employment on the bases of race, color and national origin.
M.C. Dean is a construction, design-build and systems integration corporation with more than 30 offices worldwide. Since 2006, the company has held more than $600 million in contracts with federal agencies, including the U.S. Department of Defense.
In addition to Executive Order 11246, OFCCP enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans' Readjustment Assistance Act of 1974. These three laws require those who do business with the federal government, contractors and subcontractors, to follow the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran.
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