FDA BAD DRUG AD PROGRAM: 2010-2011 REPORT

Everyone realizes that the lack of truthfulness in the advertisement of drugs can cause severe harm and even death. In the article below, which is an excerpt from the FDA website, the FDA asks health professionals to report advertisements that are potentially harmful because the ads lack the information needed for the proper evaluation of the drug product:
“Bad Ad Program: 2010-2011 Year End Report
BackgroundOn May 11, 2010, FDA’s Center for Drug Evaluation and Research (CDER) launched the Bad Ad outreach program with the goal of encouraging health care professionals (HCPs) to recognize and report suspected untruthful or misleading drug promotion.
Led by CDER’s Division of Drug Marketing Advertising and Communications (DDMAC), this effort was primarily designed to inform HCPs about what constitutes misleading promotion —from both a legal and clinical perspective — and provide them an easy process for reporting suspected violations to FDA.
Below are key highlights of the program’s activities during its first year of operation.FDA Commissioner Hamburg kicked off the Bad Ad Program with a
Concurrently, FDA released a
DDMAC created an
DDMAC created a Bad Ad
Throughout the year, DDMAC representatives staffed exhibits at 15 medical conferences across the country, speaking with HCPs about how they can help stop misleading drug promotion. DDMAC representatives also conducted extended presentations at two U.S. teaching hospitals.
On April 28, 2011, FDA hosted a live letter ^{1press announcement 2informational video3brochure 4Bad Ad webinar5Derma-Smoothe Warning Letter issued 12/03/20106. The first action resulting from a Bad Ad complaint was on a particularly egregious website promoting a product for use in a vulnerable population. Infergen Warning Letter issued 03/21/20117. A promotional piece8 was mailed directly to a clinical pharmacist who was concerned that the information overstated the effectiveness of the promoted product. Savella Notice of Violation issued 04/28/20119. This Bad Ad complaint is representative of the types of promotion we hope to curtail in field-based settings. This regulatory action was supported by a signed statement from a physician outlining violative oral statements that were similar to statements made directly to DDMAC reviewers during the same time period. Atelvia Notice of Violation issued 05/05/201110. This video footage of a violative product detail that occurred in a physician’s office was posted to YouTube.com. Of note, is that this violation was reported to Bad Ad when the posted video had less than 20 views. As a result of this early reporting, DDMAC was able to prevent the violative video from being viewed by a much larger audience. Vyvanse Warning Letter issued 05/06/201111. This Bad Ad report came from an astute nurse, who noticed that a promotional piece that was likely viewed everyday by the office’s HCPs was misleading in that it was designed to hide the important risk information from plain view.Thank You” for medical and pharmacy professionals with more than 400 attendees. designed to educate HCPs about prescription drug promotion. about Bad Ad, citing examples of untruthful and misleading promotions. And how to report suspected violations. marking the program’s launch.} to more than 33,000 physicians, announcing FDA’s efforts to “collaborate with health care professionals to address misleading promotion, wherever it occurs.”
All of these efforts were intended to raise awareness in the medical community that HCPs can play a valuable role in helping FDA prevent untruthful and misleading prescription drug promotion.
Year One DataOf the 328 reports of potentially untruthful or misleading promotion, 188 were submitted by HCPs, 116 were submitted by consumers, and 24 were submitted by representatives of regulated industry. Historically, prior to the Bad Ad launch, FDA received an average of about 104 reports per year. This number and diversity of reports received after the Bad Ad program was launched indicates to FDA that the program was successful in raising awareness of untruthful and misleading promotion.
Of the 188 reports submitted by HCPs, 87 were identified for a comprehensive review, demonstrating a relatively strong level of knowledge in the medical community about what constitutes misleading promotion. Of the 116 reports submitted by consumers, 24 were identified for a comprehensive review. Of the 24 reports submitted by industry, 14 were identified for a comprehensive review. Many of the other reports helped to focus FDA’s surveillance efforts in other ways or were referred to other FDA Centers (i.e., potentially misleading ads for dietary supplements sent to the Center for Food, potentially misleading ads for devices sent to the Center for Devices and Radiological health, etc.).
During the Bad Ad program’s first year, FDA heard some criticisms of anonymous reporting. It was noted by some that anonymous reports could unjustly accuse some promotions of being misleading when in fact they may be appropriately aligned with regulations. For this reason it is noteworthy to mention that of all reports of potentially untruthful or misleading promotion during the first year of the Bad Ad program, only 4% were submitted anonymously.
Although FDA is encouraged by the significant increase in the number of reports of potentially untruthful or misleading drug promotion, the Agency does not view the total number of reports, or number of enforcement actions taken as the primary measures for program success. Instead, FDA’s most important measure of success for this program is the heightened sense of awareness of misleading promotion among HCPs throughout the health care community and the likely useful deterrent this awareness has on drug promoters who might run afoul of regulation absent of such messaging.
Future plansBased on the overwhelmingly positive feedback and response from the medical community, FDA expects to continue and expand its Bad Ad efforts in the coming years. Expansion includes the development of a web-based continuing education program. Aligned with the program’s primary goal of educating HCPs, FDA will focus additional efforts on students and early career HCPs. FDA will also be actively seeking opportunities to collaborate with the nation’s medical, pharmacy, and nursing schools to enhance student education and will continue conducting presentations at U.S. teaching hospitals. Future activities will also include continued attendance of DDMAC representatives at trade shows across the country, including those of the:
American Academy of Physician Assistants
American Academy of Nurse Practitioners
American Academy of Family Physicians
American Academy of Pediatrics
American College of Gastroenterology
American Society of Health System PharmacistsHighlights of Bad Ad Enforcement Actions

EXECUTIVE PLEADS GUILTY IN PRICE FIXING CASE

Companies that engage in price fixing are ergo atacking the basick concept of capitalism and the free market system.  The following is an excerpt from the Department of Justice website: BRIGID S. MARTIN (CA Bar No. 231705) JACKLIN CHOU LEM (CA Bar No. 255293) MAY LEE HEYE (CA Bar No. 209366) Antitrust Division U.S. Department of Justice 450 Golden Gate Avenue Box 36046, Room 10-0101 San Francisco, CA 94102 Telephone: (415) 436-6660 Attorneys for the United States

UNITED STATES OF AMERICA, v. CHIEN CHUNG CHEN, a/k/a ANDREW CHEN, Defendant.

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No. CR 11-0166 RS PLEA AGREEMENTFiled: 06/07/2011

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

PLEA AGREEMENT

The United States of America and Andrew Chen ("defendant") hereby enter into the following Plea Agreement pursuant to Rule 11(c)(1)(B) of the Federal Rules of Criminal Procedure ("Fed. R. Crim. P."):

RIGHTS OF DEFENDANT

1. The defendant understands his rights:
(a) to be represented by an attorney;
(b) to be charged by Indictment;
(c) to plead not guilty to any criminal charge brought against him;
(d) to have a trial by jury, at which he would be presumed not guilty of the charge and the United States would have to prove every essential element of the charged offense beyond a reasonable doubt for him to be found guilty;
(e) to confront and cross-examine witnesses against him and to subpoena witnesses in his defense at trial;
(f) not to be compelled to incriminate himself;
(g) to appeal his conviction, if he is found guilty; and
(h) to appeal the imposition of sentence against him.

AGREEMENT TO PLEAD GUILTY AND WAIVE CERTAIN RIGHTS

2. The defendant knowingly and voluntarily waives the rights set out in Paragraph 1(b)-(g) above. The defendant also knowingly and voluntarily waives the right to file any appeal, any collateral attack, or any other writ or motion, including but not limited to an appeal under 18 U.S.C. § 3742 or a motion under 28 U.S.C. § 2241 or 2255, that challenges the sentence imposed by the Court if that sentence is consistent with or below the Sentencing Guidelines range stipulated by the parties in Paragraph 8 of this Plea Agreement, regardless of how the sentence is determined by the Court. This agreement does not affect the rights or obligations of the United States as set forth in 18 U.S.C. § 3742(b). Nothing in this paragraph, however, shall act as a bar to the defendant perfecting any legal remedies he may otherwise have on appeal or collateral attack respecting claims of ineffective assistance of counsel or prosecutorial misconduct. Pursuant to Fed. R. Crim. P. 7(b), the defendant will waive indictment at arraignment and plead guilty to a one-count Information to be filed in the United States District Court for the Northern District of California. The Information will charge the defendant with participating in a conspiracy to suppress and eliminate competition by fixing the prices of aftermarket automotive lighting equipment (hereinafter "aftermarket auto lights") sold in the United States and elsewhere, from as early as September 2003 until in or about September 2005, in violation of the Sherman Antitrust Act, 15 U.S.C. § 1.
3. The defendant, pursuant to the terms of this Plea Agreement, will plead guilty to the criminal charge described in Paragraph 2 above and will make a factual admission of guilt to the Court in accordance with Fed. R. Crim. P. 11, as set forth in Paragraph 4 below. The United States agrees that at the arraignment, it will stipulate to the release of the defendant on his personal recognizance, pursuant to 18 U.S.C. § 3142, pending the sentencing hearing in this case.

FACTUAL BASIS FOR OFFENSE CHARGED

4. Had this case gone to trial, the United States would have presented evidence sufficient to prove the following facts:
(a) For purposes of this Plea Agreement, the "relevant period" is that period from in or about September 2003 to in or about September 2005. During the relevant period, the defendant was an officer or employee of Company A, an entity organized and existing under the laws of California. During the relevant period, the defendant was Executive Vice President of Company A. During the relevant period, Company A was a major United States distributor of aftermarket auto lights produced by Company B, an entity organized and existing under the laws of Taiwan. Aftermarket auto lights are incorporated into an automobile after its original sale, usually as repairs following a collision, but also as accessories and upgrades. Lighting components include items such as headlights, taillights, fog lights, turn signals, brake signals, and reflectors. Aftermarket auto lights are sold through U.S. distributors to aftermarket auto lights wholesalers, retailers, and automotive repair shops.
(b) During the relevant period, the defendant knowingly participated in a conspiracy with other persons and entities engaged in the manufacture and sale of aftermarket auto lights, the primary purpose of which was to fix the price of aftermarket auto lights sold in the United States and elsewhere. In furtherance of the conspiracy, the defendant engaged in conversations and attended meetings with representatives of other major firms engaged in the manufacture and sale of aftermarket auto lights. During such meetings and conversations, agreements were reached to fix the price of aftermarket auto lights sold in the United States and elsewhere.
(c) During the relevant period, aftermarket auto lights sold by one or more of the conspirator firms, and equipment and supplies necessary to the production and distribution of aftermarket auto lights, as well as payments for aftermarket auto lights, traveled in interstate and foreign commerce. The business activities of Company A and co-conspirators in connection with the production and sale of aftermarket auto lights that were the subjects of this conspiracy were within the flow of, and substantially affected, interstate and foreign trade and commerce.
(d) Acts in furtherance of this conspiracy were carried out within the Northern District of California. Aftermarket auto lights that were the subjects of the conspiracy were sold by one or more of the conspirators to customers in this District.

POSSIBLE MAXIMUM SENTENCE

5. The defendant understands that the statutory maximum penalty which may be imposed against him upon conviction for a violation of Section One of the Sherman Antitrust Act is:
(a) a term of imprisonment for ten (10)years (15 U.S.C. § 1);
(b) a fine in an amount equal to the greatest of (1) $1 million, (2) twice the gross pecuniary gain the conspirators derived from the crime, or (3) twice the gross pecuniary loss caused to the victims of the crime by the conspirators (15 U.S.C. § 1; 18 U.S.C. § 3571(b) and (d)); and
(c) a term of supervised release of three (3) yearsfollowing any term of imprisonment. If the defendant violates any condition of supervised release, the defendant could be required to serveup to two (2) years in prison (18 U.S.C. § 3559(a)(3); 18 U.S.C. § 3583(b)(2) and (e)(3); and United States Sentencing Guidelines ("U.S.S.G.," "Sentencing Guidelines," or "Guidelines") §5D1.2(a)(2)). 6. In addition, the defendant understands that:
(a) pursuant to U.S.S.G. §5E1.1 or 18 U.S.C. § 3663(a)(3) or 3583(d), the Court may order him to pay restitution to the victims of the offense; and
(b) pursuant to 18 U.S.C. § 3013(a)(2)(A), the Court is required to order the defendant to pay a $100.00 special assessment upon conviction for the charged crime.

SENTENCING GUIDELINES

7. The defendant understands that the Sentencing Guidelines are advisory, not mandatory, but that the Court must consider the Guidelines in effect on the day of sentencing, along with the other factors set forth in 18 U.S.C. § 3553(a), in determining and imposingsentence. The defendant understands that the Guidelines determinations will be made by the Court by a preponderance of the evidence standard. The defendant understands that although the Court is not ultimately bound to impose a sentence within the applicable Guidelines range, its sentence must be reasonable based upon consideration of all relevant sentencing factors set forth in 18 U.S.C. § 3553(a). Pursuant to U.S.S.G. §1B1.8, the United States agrees that self-incriminating information that the defendant provides to the United States pursuant to this Plea Agreement will not be used to increase the volume of affected commerce attributable to the defendant or in determining the defendant's applicable Guidelines range, except to the extent provided in U.S.S.G. §1B1.8(b).

SENTENCING AGREEMENT

8. The United States and the defendant agree that the following Sentencing Guidelines apply:
a. Base Offense Level, U.S.S.G. §2R1.1(a): 12
b. Volume of Commerce (stipulated to be $13.8 million), More than $10 million, U.S.S.G. §2R1.1(b)(2)(B): +4
c. Fine calculated as one to five percent of the volume of commerce (stipulated to be $13.8 million) but not less than $20,000, U.S.S.G. §2R1.1(c)(1): $138,000 - $690,0009. The United States agrees that it will make a motion, pursuant to U.S.S.G. §3E1.1, for a downward adjustment of three levels for acceptance of responsibility due to the defendant's timely notification of his intention to enter a guilty plea.
10. Subject to the full, truthful, and continuing cooperation of the defendant, the United States will recommend as the appropriate disposition of this case, pursuant to Fed. R. Crim. P. 11(c)(1)(B), that the Court sentence the defendant to a period of no more than twelve (12) months imprisonment (prior to any motion pursuant to U.S.S.G. §5K1.1); require the defendant to pay to the United States a fine of no more than $25,000payable in full before the fifteenth (15^th) day after the date of judgment; and impose no period of supervised release.The defendant understands that the Court will order him to pay a $100 special assessment pursuant to 18 U.S.C. §3013(a)(2)(A) in addition to any fine imposed. The United States will not object to the defendant's request that the Court make a recommendation to the Bureau of Prisons that the Bureau of Prisons designate that the defendant be assigned to a Federal Minimum Security Camp (and specifically to the Federal Minimum Security Camp at Lompoc, California) to serve his sentence and that the defendant be released following the imposition of sentence to allow him to self-surrender to the assigned prison facility on a specified date. The parties agree that there exists no aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the U.S. Sentencing Commission in formulating the Sentencing Guidelines justifying a departure pursuant to U.S.S.G. §5K2.0.
11.The United States and the defendant agree that, pursuant to U.S.S.G. §5E1.1(b), the defendant should not be ordered to pay restitution for the offense charged in the Information in light of the civil cases filed against Company A, including In re Aftermarket Automotive Lighting Products Antitrust Litigation, No. 09-ML-2007 GW, consolidated in the United States District Court, Central District of California, which potentially provide for a recovery of a multiple of actual damages.
12. The United States and the defendant are not aware of any information which would impact the defendant's Criminal History Category. If no other information were discovered, the defendant's Criminal History Category would be I. The parties understand that the defendant's Criminal History Category is determined by the Court.
13. The defendant understands that the sentence to be imposed on him is within the sole discretion of the sentencing judge. The United States cannot and does not make any promises or representations as to what sentence he will receive. However, the United States will inform the Probation Office and the Court of (a) this Agreement; (b) the nature and extent of the defendant's activities with respect to this case and all other activities of the defendant which the United States deems relevant to sentencing; and (c) the nature and extent of the defendant's cooperation with the United States. In so doing, the United States may use any information it deems relevant, including information provided by the defendant both prior and subsequent to the signing of this Agreement. The United States reserves the right to make any statement to the Court or the Probation Office concerning the nature of the criminal violation charged in the attached Information, the participation of the defendant therein, and any other facts or circumstances that it deems relevant. The United States also reserves the right to comment on or to correct any representation made by or on behalf of the defendant, and to supply any other information that the Court may require.
14. If the United States determines that the defendant has provided substantial assistance in any investigations or prosecutions, and has otherwise fully complied with all of the terms of this Plea Agreement, it will file a motion, pursuant to U.S.S.G. §5K1.1, advising the sentencing judge of all relevant facts pertaining to that determination and requesting the Court to sentence the defendant in light of the factors set forth in U.S.S.G. §5K1.1(a)(1)-(5). The defendant acknowledges that the decision whether he has provided substantial assistance in any investigations or prosecutions and has otherwise complied with the terms of this Plea Agreement is within the sole discretion of the United States. It is understood that, should the United States determine that the defendant has not provided substantial assistance in any investigations or prosecutions, or should the United States determine that the defendant has violated any provision of this Plea Agreement, such a determination will release the United States from any obligation to file a motion pursuant to U.S.S.G. §5K1.1, but will not entitle the defendant to withdraw his guilty plea once it has been entered. The defendant further understands that, whether or not the United States files a motion pursuant to U.S.S.G. §5K1.1, the sentence to be imposed on him remains within the sole discretion of the sentencing judge.
15. Subject to the ongoing, full, and truthful cooperation of the defendant described in Paragraph 17 of this Plea Agreement, and before sentencing in the case, the United States will fully advise the Court and the Probation Office of the fact, manner, and extent of the defendant's cooperation and his commitment to prospective cooperation with the United States' investigation and prosecutions, all material facts relating to the defendant's involvement in the charged offense, and all other relevant conduct. To enable the Court to have the benefit of all relevant sentencing information, the United States may request, and the defendant will not oppose, that sentencing be postponed until his cooperation is complete.
16. The United States and the defendant understand that the Court retains complete discretion to accept or reject either party's sentencing recommendation. The defendant understands that, as provided in Fed. R. Crim. P. 11(c)(3)(B), if the Court does not impose a sentence consistent with either party's sentencing recommendation, he nevertheless has no right to withdraw his plea of guilty.

DEFENDANT'S COOPERATION

17. The defendant will cooperate fully and truthfully with the United States in the prosecution of this case, the conduct of the current federal investigation of violations of federal antitrust and related criminal laws involving the manufacture or sale of aftermarket auto lights in the United States and elsewhere, any other federal investigation resulting therefrom, and any litigation or other proceedings arising or resulting from any such investigation to which the United States is a party ("Federal Proceeding"). The ongoing, full, and truthful cooperation of the defendant shall include, but not be limited to:
(a) producing all non-privileged documents, including claimed personal documents, and other materials, wherever located, in the possession, custody, or control of the defendant, requested by attorneys and agents of the United States;
(b) making himself available for interviews, not at the expense of the United States, upon the request of attorneys and agents of the United States;
(c) responding fully and truthfully to all inquiries of the United States in connection with any Federal Proceeding, without falsely implicating any person or intentionally withholding any information, subject to the penalties of making false statements (18 U.S.C. § 1001) and obstruction of justice (18 U.S.C. § 1503, et seq.);
(d) otherwise voluntarily providing the United States with any non-privileged material or information, not requested in (a) - (c) of this paragraph, that he may have that is related to any Federal Proceeding; and
(e) when called upon to do so by the United States in connection with any Federal Proceeding, testifying in grand jury, trial, and other judicial proceedings, fully, truthfully, and under oath, subject to the penalties of perjury (18 U.S.C. § 1621), making false statements or declarations in grand jury or court proceedings (18 U.S.C. § 1623), contempt (18 U.S.C. §§ 401 - 402), and obstruction of justice (18 U.S.C. § 1503, et seq.).

GOVERNMENT'S AGREEMENT

18. Subject to the full, truthful, and continuing cooperation of the defendant described in Paragraph 17 of this Plea Agreement, and upon the Court's acceptance of the guilty plea called for by this Plea Agreement and the imposition of sentence, the United States will not bring further criminal charges against the defendant for any act or offense committed before the date of this Plea Agreement that was undertaken in furtherance of an antitrust conspiracy involving the manufacture or sale of aftermarket auto lights or undertaken in connection with any investigation of such a conspiracy ("Relevant Offense"). The nonprosecution terms of this paragraph do not apply to civil matters of any kind, to any violation of the federal tax or securities laws, or to any crime of violence.
19. The defendant understands that he may be subject to administrative action by federal or state agencies other than the United States Department of Justice, Antitrust Division, based upon the conviction resulting from this Plea Agreement, and that this Plea Agreement in no way controls whatever action, if any, other agencies may take. However, the United States agrees that, if requested, it will advise the appropriate officials of any governmental agency considering such administrative action of the fact, manner, and extent of the cooperation of the defendant as a matter for that agency to consider before determining what administrative action, if any, to take.

REPRESENTATION BY COUNSEL

20. The defendant has reviewed all legal and factual aspects of this case with his attorney and is fully satisfied with his attorney's legal representation. The defendant has thoroughly reviewed this Plea Agreement with his attorney and has received satisfactory explanations from his attorney concerning each paragraph of this Plea Agreement and alternatives available to the defendant other than entering into this Plea Agreement. After conferring with his attorney and considering all available alternatives, the defendant has made a knowing and voluntary decision to enter into this Plea Agreement.

VOLUNTARY PLEA

21. The defendant's decision to enter into this Plea Agreement and to tender a plea of guilty is freely and voluntarily made and is not the result of force, threats, assurances, promises, or representations other than the representations contained in this Plea Agreement. The United States has made no promises or representations to the defendant as to whether the Court will accept or reject the recommendations contained within this Plea Agreement.

VIOLATION OF PLEA AGREEMENT

22. The defendant agrees that, should the United States determine in good faith, during the period that any Federal Proceeding is pending, that the defendant has failed to provide full and truthful cooperation, as described in Paragraph 17 of this Plea Agreement, or has otherwise violated any provision of this Plea Agreement, the United States will notify the defendant or his counsel in writing by personal or overnight delivery or facsimile transmission and may also notify his counsel by telephone of its intention to void any of its obligations under this Plea Agreement (except its obligations under this paragraph), and the defendant shall be subject to prosecution for any federal crime of which the United States has knowledge including, but not limited to, the substantive offenses relating to the investigation resulting in this Plea Agreement. The defendant may seek Court review of any determination made by the United States under this Paragraph to void any of its obligations under the Plea Agreement. The defendant agrees that, in the event that the United States is released from its obligations under this Plea Agreement and brings criminal charges against the defendant for any Relevant Offense, the statute of limitations period for such offense shall be tolled for the period between the date of the signing of this Plea Agreement and six (6) months after the date the United States gave notice of its intent to void its obligations under this Plea Agreement.
23. The defendant understands and agrees that in any further prosecution of him resulting from the release of the United States from its obligations under this Plea Agreement based on the defendant's violation of the Plea Agreement, any documents, statements, information, testimony, or evidence provided by him to attorneys or agents of the United States, federal grand juries, or courts, and any leads derived therefrom, may be used against him in any such further prosecution. In addition, the defendant unconditionally waives his right to challenge the use of such evidence in any such further prosecution, notwithstanding the protections of Fed. R. Evid. 410.

ENTIRETY OF AGREEMENT

24. This Plea Agreement constitutes the entire agreement between the United States and the defendant concerning the disposition of the criminal charge in this case. This Plea Agreement cannot be modified except in writing, signed by the United States and the defendant.
25. The undersigned attorneys for the United States have been authorized by the Attorney General of the United States to enter this Plea Agreement on behalf of the United States.

MEDICARE FRAUD GETS GUILTY PLEAS FROM COMPANY OFFICERS

Most politicians agree that Medicare fraud must be brought under control. The following is an excerpt from the Department of Justice website:

Department of Justice
Office of Public Affairs
Friday, June 10, 2011
Two Officers of Fraudulent Physical Therapy Company Plead Guilty in Tampa, Fla., to Medicare Fraud
WASHINGTON – Two Miami-area residents who were officers of a fraudulent physical therapy company in Lakeland, Fla., pleaded guilty today for their roles in a scheme to defraud Medicare, the Departments of Justice and Health and Human Services (HHS) announced.
Angel Gonzalez, 43, and Adrian Chalarca, 24, each pleaded guilty before U.S. Magistrate Judge Mark A. Pizzo in Tampa, Fla., to one count of conspiracy to commit health care fraud.
According to court documents, Gonzalez was the owner and vice president of Dynamic Therapy Inc. and Chalarca was the president and administrator of the company. Gonzalez, Chalarca and their co-conspirators purchased Dynamic from its prior owners and transformed it into a fraudulent enterprise. Under Gonzalez and Chalarca, Dynamic purported to provide physical therapy services to Medicare beneficiaries.
According to court documents, from fall 2009 to summer 2010, Gonzalez and Chalarca submitted and caused the submission of $757,654 in fraudulent claims by Dynamic to the Medicare program. Gonzalez and Chalarca admitted that they paid and caused the payment of kickbacks and bribes to Medicare beneficiaries in order to obtain their Medicare billing information and used it to submit claims to Medicare for physical therapy services that were never provided. According to court documents, Gonzalez and others also stole the identities of a physical therapist and Medicare beneficiaries in order to submit additional false claims to Medicare. Gonzalez and Chalarca admitted that they knew the Medicare beneficiaries, on whose behalf claims were submitted to Medicare, never received the services billed to Medicare.
Another vice president of Dynamic, Andres Cespedes, pleaded guilty in May 2011 for his participation in the fraud scheme.
At sentencing, Gonzalez and Chalarca each face a maximum penalty of 10 years in prison and a $250,000 fine. A sentencing date has not yet been scheduled.
Today’s guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Robert E. O’Neill of the Middle District of Florida; Steven E. Ibison, Special Agent-in-Charge of the FBI’s Tampa Division; and Christopher Dennis, Special Agent-in-Charge of the HHS Office of Inspector General (HHS-OIG), Office of Investigations’ Miami Office.
This case was prosecuted by Acting Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section and Special Assistant U.S. Attorney Christina M. Burden of the Middle District of Florida. The case was investigated by the HHS-OIG, Defense Criminal Investigative Service and FBI, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

EPA SAYS PARTS OF BELDNG MI DON'T MEET AIR QUALITY STANDARDS FOR LEAD

The followng is an excerpt form an e-mail  the EPA sent out:
 
"Chicago, Illinois (June 15, 2011) – The U.S. Environmental Protection Agency today proposed approval of the Michigan Department of Environmental Quality’s finding that parts of the City of Belding (Ionia County) do not meet the new national air quality standard for lead based on data from an air monitor there.  If designated as nonattainment later this year, Michigan will be required to submit a plan to EPA by June 2013 that will result in a reduction in lead emissions to bring this area into compliance with national air quality standards.
In 2008, EPA strengthened the nation’s air quality standards by setting a limit for lead of 0.15 micrograms of lead per cubic meter.   EPA also required that monitors be located near significant sources of lead emissions.
In response, MDEQ placed a monitor in Belding because Mueller Industries is a source of lead emissions. MDEQ has already begun taking steps to reduce elevated lead levels in Belding." 

MEDICARE FRAUDSTER SENTENCED TO PRISON

If the cost of government is ever to come into control then fraudsters have to go to prison. The following is an excerpt from the Department of Justice website:

Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Tuesday, June 7, 2011
Patient Recruiter Sentenced to 77 Months in Prison in Connection with $9 Million Medicare Fraud Scam in Detroit
WASHINGTON – Miami resident Reynel Betancourt, 51, was sentenced today to 77 months in prison for his participation in a $9 million Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida also sentenced Betancourt to three years of supervised release following his prison term and ordered him to pay approximately $6 million in restitution, jointly and severally with his co-defendants. Betancourt was originally charged by indictment in the Eastern District of Michigan and after his arrest in Miami, he consented to have his case transferred to the Southern District of Florida for his plea and sentencing.
Betancourt pleaded guilty on March 29, 2011, to one count of conspiracy to commit health care fraud and to one count of money laundering conspiracy. According to the plea documents, beginning approximately in March 2006, Betancourt entered into an agreement with the owners of Dearborn Medical Rehabilitation Center (DMRC) to recruit patients for DMRC, a business that purported to provide infusion and injection therapy services to Medicare patients.
Betancourt admitted to paying patients to sign paperwork claiming that they had received injection therapy services and specialty medications that they did not receive. DMRC billed the Medicare program for more than $9 million in purported infusion therapy treatments, which Betancourt admitted were not medically necessary and not provided. Additionally, Betancourt admitted that he laundered the proceeds of the Medicare fraud conspiracy through two sham corporations that he created solely for the purpose of concealing the fraud proceeds.
The sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Barbara L. McQuade for the Eastern District of Michigan; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
The case was prosecuted by Assistant U.S. Attorney Philip A. Ross and Special Assistant U.S. Attorney Thomas W. Biemers of the Eastern District of Michigan and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”

EDGEFUND CAPITAL LLC ACCUSED OF FRAUD BY SEC

The following excerpt came from the SEC web site:

" Litigation Release No. 21971 /May 16, 2011
The Securities and Exchange Commission filed an emergency enforcement action to halt a fraudulent scheme being conducted by John Clement of Encinitas, Calif., and his company Edgefund Capital LLC.
The SEC alleges that Clement ran a purportedly profitable day trading business out of his home and raised at least $2.1 million since August 2008 from 22 investors in the San Diego area. Clement hyped the profit potential by falsely promising returns of 1 to 2 percent per month to investors in his hedge funds (The Edgefund, LP and The Edge Fund Ltd., LP). He falsely claimed that the risk potential was limited because of his purported 5 percent stop-loss rule, and he falsely assured investors that they could request a return of their investments at any time upon written request. The SEC alleges that Clement has misappropriated and misspent all of the investor funds.
The Honorable Larry A. Burns, U.S. District Judge for the Southern District of California, granted the SEC’s requests for an immediate freeze of the assets of Clement and Edgefund Capital and an order prohibiting Clement and Edgefund Capital from destroying evidence. The court will hold a hearing on May 16, 2011, on the SEC’s motion for a preliminary injunction.
The SEC alleges that in order to conceal his fraud, Clement sent fabricated account statements to at least one investor that reflected an inflated fund balance of $8.2 million. In fact, the hedge fund accounts at that time were not even funded. Beginning March 29, 2011, Clement began telling investors that an SEC investigation had impacted his ability to communicate with them, frozen his bank accounts, and blocked his securities trading activities. Although the SEC was investigating Clement’s operations, he lied in his other assertions to investors.
The SEC’s complaint charges Clement and Edgefund Capital with violating the antifraud provisions, Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder, of the federal securities laws. In addition to the emergency relief, the complaint seeks preliminary and permanent injunctions, disgorgement, prejudgment interest, and financial penalties.”