FROM: COMMODITY FUTURES TRADING COMMISSION
CFTC Charges Florida-Based Worth Group Inc. and Its Principals, Andrew Wilshire and Eugenia Mildner, in Multi-Million Dollar Fraudulent Precious Metals Scheme
CFTC alleges that Defendants, who took in more than $73 million, defrauded customers in connection with precious metals transactions and engaged in illegal off-exchange commodity transactions.
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that on August 13, 2013, it filed a civil injunctive enforcement action in the U.S. District Court for the Southern District of Florida against Worth Group Inc. (Worth), as well as its owner, Andrew Wilshire, and its sole officer and director, Eugenia Mildner, all of Jupiter, Florida. The CFTC’s Complaint charges that Defendants defrauded retail precious metals customers and engaged in illegal, off-exchange retail commodity transactions from July 16, 2011, through the present.
According to the Complaint, Worth purported to sell physical metal, including gold, silver, platinum, and palladium, on a fully-paid basis, as well as on a financed basis, to hundreds of retail customers located throughout the United States. The Complaint alleges that Worth falsely represented to customers that, within 28 days of a customer’s purchase, Worth would deliver metal either to the customers directly or to a depository that would hold the metal for the customer. The Complaint alleges that pursuant to the scheme, Worth took in over $73 million in customer funds between July 18, 2011, and December 31, 2012.
As alleged, in connection with fully-paid transactions, customers paid the full purchase price to Worth for metals, having been told that Worth would deliver metal in return. The Complaint alleges that from at least August 15, 2011, through November 8, 2012, however, Worth did not actually deliver metal to most customers. Instead, rather than deliver actual metal, Worth’s typical practice after receiving customer money was to purchase metals derivatives in accounts owned by Worth. These derivatives purportedly “covered” customer transactions, but, contrary to Worth’s representations to customers, did not involve the purchase, transfer, or physical delivery of precious metals to Worth, let alone to its retail customers.
Retail customers engaging in financed transactions with Worth were told that they were borrowing money to purchase precious metals. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), a financed transaction such as that conducted by Worth is an illegal off-exchange transaction unless it results in actual delivery of metal within 28 days. The Complaint alleges that Worth often failed to make such delivery on a timely basis. Worth thus defrauded its customers and subjected them to undisclosed exposure to Worth’s credit, as they were left with only Worth’s commitment to deliver metal rather than the promised metal itself.
The Complaint further alleges that as persons controlling Worth’s precious metals operations, Wilshire and Mildner are liable for Worth’s violations of the Commodity Exchange Act and a CFTC Regulation.
In its continuing litigation against Defendants, the CFTC seeks preliminary and permanent civil injunctions in addition to other remedial relief, including restitution, civil monetary penalties, and disgorgement of ill-gotten gains.
This is the third action the CFTC has brought against entities and individuals who purport to buy precious metals and transfer ownership of those metals to customers, when insufficient metal, or no metal at all, is in fact purchased and delivered (see CFTC Press Releases 6447-12 and 6655-13).
David Meister, the CFTC’s Enforcement Director, stated: “The rules of the new Dodd-Frank law are simple: Companies and individuals who purport to sell precious metals to the retail public, and who say they are supplying real metal, must actually deliver real metal. As today’s case shows, along with previously filed Complaints against Hunter Wise Commodities, LLC and AmeriFirst Management, LLC, we will not hesitate to pursue wrongdoers who say they are providing investments in real precious metals to the American public when in fact they are providing nothing of the sort.”
The CFTC thanks the U.K. Financial Conduct Authority for its assistance in this matter.
The CFTC Division of Enforcement staff members responsible for this matter are Theodore Z. Polley III, Melissa Glasbrenner, William P. Janulis, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
CFTC’s Precious Metals Fraud Advisory
In January 2012, the CFTC issued a Precious Metals Consumer Fraud Advisory to alert customers to precious metals fraud. The Advisory states that the CFTC had seen an increase in the number of companies offering customers the opportunity to buy or invest in precious metals. The CFTC’s Advisory specifically warns that companies often fail to purchase any physical metals for their customers, instead simply keeping the customer’s funds. The Advisory further cautions customers that leveraged commodity transactions are unlawful unless executed on a regulated exchange.
Saturday, August 17, 2013
Friday, August 16, 2013
AIRLINE FUEL SUPPLY COMPANY INDICTED FOR ROLE IN SCHEME TO DEFRAUD RYAN INTERNATIONAL AIRLINES
FROM: U.S. DEPARTMENT OF JUSTICE
FLORIDA AIRLINE FUEL SUPPLY COMPANY AND ITS OWNER INDICTED FOR ROLE IN SCHEME TO DEFRAUD ILLINOIS-BASED RYAN INTERNATIONAL AIRLINES
WASHINGTON — A Florida-based airline fuel supply service company and its former owner and operator were indicted yesterday on charges of participating in a scheme to defraud Illinois-based Ryan International Airlines, the Department of Justice announced.
A federal grand jury in the U.S. District Court for the Southern District of Florida in West Palm Beach, Fla., returned an indictment against Sean E. Wagner and his company Aviation Fuel International Inc. (AFI), an airline fuel supply company. The indictment alleges that Wagner and AFI participated in a conspiracy to defraud Ryan, a charter airline company based in Rockford, Ill., by making kickback payments to Wayne Kepple, a former vice president of ground operations for Ryan, in exchange for awarding business to AFI. Wagner was arrested on July 19, 2013, in Weston, Fla., on a one-count criminal complaint in connection with these charges.
Ryan provided air passenger and cargo services for corporations, private individuals and the U.S. government – including the U.S. Department of Defense and the U.S. Department of Homeland Security.
The indictment alleges, among other things, that from at least as early as December 2005 through at least August 2009, Wagner, AFI and others made kickback payments totaling more than $200,000, in the form of checks, wire transfers, cash and gift cards, to Kepple while working at Ryan.
“The conspirators traded contracts for kickbacks and took affirmative steps to hide their illegal scheme, including wiring payments to personal bank accounts and making secret cash payments,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will continue to aggressively prosecute companies and individuals that seek to defraud the government and U.S. taxpayers by thwarting the competitive process.”
Wagner and AFI are charged with one count of conspiracy to commit wire fraud and honest services fraud, as well as two counts of wire fraud and two counts of mail fraud. Each count carries a maximum sentence of 20 years in prison and a $250,000 criminal fine for individuals and a $500,000 criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either amount is greater than the statutory maximum fine.
As a result of this ongoing investigation, four individuals have pleaded guilty to date. Three of the individuals have been ordered to serve sentences ranging from 16 to 24 months in prison and to pay more than $220,000 in restitution. The fourth individual, Kepple, pleaded guilty and is currently awaiting sentencing.
The charges are the result of an investigation being conducted by the Antitrust Division’s National Criminal Enforcement Section and the U.S. Department of Defense’s Office of Inspector General with assistance from the U.S. Attorney’s Office for the Southern District of Florida.
FLORIDA AIRLINE FUEL SUPPLY COMPANY AND ITS OWNER INDICTED FOR ROLE IN SCHEME TO DEFRAUD ILLINOIS-BASED RYAN INTERNATIONAL AIRLINES
WASHINGTON — A Florida-based airline fuel supply service company and its former owner and operator were indicted yesterday on charges of participating in a scheme to defraud Illinois-based Ryan International Airlines, the Department of Justice announced.
A federal grand jury in the U.S. District Court for the Southern District of Florida in West Palm Beach, Fla., returned an indictment against Sean E. Wagner and his company Aviation Fuel International Inc. (AFI), an airline fuel supply company. The indictment alleges that Wagner and AFI participated in a conspiracy to defraud Ryan, a charter airline company based in Rockford, Ill., by making kickback payments to Wayne Kepple, a former vice president of ground operations for Ryan, in exchange for awarding business to AFI. Wagner was arrested on July 19, 2013, in Weston, Fla., on a one-count criminal complaint in connection with these charges.
Ryan provided air passenger and cargo services for corporations, private individuals and the U.S. government – including the U.S. Department of Defense and the U.S. Department of Homeland Security.
The indictment alleges, among other things, that from at least as early as December 2005 through at least August 2009, Wagner, AFI and others made kickback payments totaling more than $200,000, in the form of checks, wire transfers, cash and gift cards, to Kepple while working at Ryan.
“The conspirators traded contracts for kickbacks and took affirmative steps to hide their illegal scheme, including wiring payments to personal bank accounts and making secret cash payments,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will continue to aggressively prosecute companies and individuals that seek to defraud the government and U.S. taxpayers by thwarting the competitive process.”
Wagner and AFI are charged with one count of conspiracy to commit wire fraud and honest services fraud, as well as two counts of wire fraud and two counts of mail fraud. Each count carries a maximum sentence of 20 years in prison and a $250,000 criminal fine for individuals and a $500,000 criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either amount is greater than the statutory maximum fine.
As a result of this ongoing investigation, four individuals have pleaded guilty to date. Three of the individuals have been ordered to serve sentences ranging from 16 to 24 months in prison and to pay more than $220,000 in restitution. The fourth individual, Kepple, pleaded guilty and is currently awaiting sentencing.
The charges are the result of an investigation being conducted by the Antitrust Division’s National Criminal Enforcement Section and the U.S. Department of Defense’s Office of Inspector General with assistance from the U.S. Attorney’s Office for the Southern District of Florida.
Thursday, August 15, 2013
LAWSUIT FILED AGAINST PHARMERCIA CORP. FOR VIOLATING FALSE CLAIMS ACT
FROM: U.S. JUSTICE DEPARTMENT
Friday, August 9, 2013
United States Files Lawsuit Against PharMerica Corporation for Violations of the False Claims Act and the Controlled Substances Act
Government Alleges That Long-term Care Pharmacy Billed Medicare for Schedule II Controlled Substances That Were Dispensed Without a Valid Prescription
The United States has filed suit against PharMerica Corp. in the U.S. District Court for the Eastern District of Wisconsin, the Justice Department announced today. The lawsuit alleges that PharMerica violated the False Claims Act and the Controlled Substances Act by dispensing controlled drugs without valid prescriptions and causing claims for illegally dispensed drugs to be submitted to the Medicare program.
PharMerica is a long-term care pharmacy that dispenses drugs to residents of long-term care facilities, including nursing homes and skilled nursing facilities. PharMerica services approximately 300,000 residents of long-term care facilities and fills approximately 40 million prescriptions annually. Many of the prescriptions filled by PharMerica are for controlled substances listed in Schedule II under the Controlled Substances Act. Schedule II drugs, such as oxycodone and fentanyl, can cause significant harm if used improperly and have a high potential for abuse.
“Pharmacies are prohibited by law from dispensing Schedule II narcotics, which have the highest potential for abuse of any prescription drug, without a valid prescription from a physician,” said Stuart Delery, Assistant Attorney General for the Civil Division of the Department of Justice. “As we have done today, the Department of Justice will take action to protect the integrity of Federal health care program funds and hold those who violate the law accountable.”
The government’s complaint alleges that PharMerica routinely dispensed Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription from a treating physician. According to the complaint, PharMerica’s actions violated both the spirit and the letter of the Controlled Substances Act by enabling nursing home staff to order narcotics, and pharmacists to dispense narcotics, before confirming that a physician had made a medical judgment about whether these narcotics were necessary and should be used by the resident. The complaint alleges that PharMerica knowingly caused the submission of false claims to Medicare for these improperly dispensed Schedule II drugs, in violation of the False Claims Act.
The lawsuit was initiated by former PharMerica employee Jennifer Denk who filed a complaint against PharMerica in July 2009. The complaint was filed under the qui tam provisions of the False Claims Act, which permit parties, known as “relators,” to sue on behalf of the United States when they believe that defendants submitted false claims for government funds. Under the False Claims Act, the government may intervene in the suit and recover three times its damages plus civil penalties. Denk’s complaint was later consolidated with a subsequent complaint filed in May 2010 by Eric Beeders and Lesa Martino.
“ The complaint that we are filing today reflects the abiding commitment of the Justice Department to the qui tam process, encouraging people with information about alleged fraud and abuse to report it in a timely and effective manner,” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin. “The False Claims Act allegations in this case, which involve Medicare billings for the dispensing of Schedule II controlled substances absent valid prescriptions, are precisely the type of allegations that our office and the Civil Division examine carefully, investigate fully, and prosecute vigorously—to protect taxpayer monies and to promote the delivery of professional health care to all of our constituents.”
The investigation was conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Wisconsin, the Drug Enforcement Administration (DEA), and the Office of Inspector General of the Department of Health and Human Services.
"When the most restrictive class of pharmaceutical controlled substances are dispensed by a pharmacy it is crucial to patient safety, as well as mandatory by federal law, to ensure that the patient's physician prescribed and intended for the drug to be administered. As alleged in this complaint, PharMerica did not perform that standard of patient care by failing to obtain a valid prescription prior to dispensing and is now being held accountable," stated Jack Riley, Special Agent in Charge of the DEA’s Chicago Field Division.
The government’s involvement in this case is part of the United States’ emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal health care programs.
The lawsuit is captioned U.S. ex rel. Denk v. PharMerica Corporation, Case No. 09-cv-720. The claims asserted in the complaint against PharMerica are allegations only, and there has been no determination of liability.
Friday, August 9, 2013
United States Files Lawsuit Against PharMerica Corporation for Violations of the False Claims Act and the Controlled Substances Act
Government Alleges That Long-term Care Pharmacy Billed Medicare for Schedule II Controlled Substances That Were Dispensed Without a Valid Prescription
The United States has filed suit against PharMerica Corp. in the U.S. District Court for the Eastern District of Wisconsin, the Justice Department announced today. The lawsuit alleges that PharMerica violated the False Claims Act and the Controlled Substances Act by dispensing controlled drugs without valid prescriptions and causing claims for illegally dispensed drugs to be submitted to the Medicare program.
PharMerica is a long-term care pharmacy that dispenses drugs to residents of long-term care facilities, including nursing homes and skilled nursing facilities. PharMerica services approximately 300,000 residents of long-term care facilities and fills approximately 40 million prescriptions annually. Many of the prescriptions filled by PharMerica are for controlled substances listed in Schedule II under the Controlled Substances Act. Schedule II drugs, such as oxycodone and fentanyl, can cause significant harm if used improperly and have a high potential for abuse.
“Pharmacies are prohibited by law from dispensing Schedule II narcotics, which have the highest potential for abuse of any prescription drug, without a valid prescription from a physician,” said Stuart Delery, Assistant Attorney General for the Civil Division of the Department of Justice. “As we have done today, the Department of Justice will take action to protect the integrity of Federal health care program funds and hold those who violate the law accountable.”
The government’s complaint alleges that PharMerica routinely dispensed Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription from a treating physician. According to the complaint, PharMerica’s actions violated both the spirit and the letter of the Controlled Substances Act by enabling nursing home staff to order narcotics, and pharmacists to dispense narcotics, before confirming that a physician had made a medical judgment about whether these narcotics were necessary and should be used by the resident. The complaint alleges that PharMerica knowingly caused the submission of false claims to Medicare for these improperly dispensed Schedule II drugs, in violation of the False Claims Act.
The lawsuit was initiated by former PharMerica employee Jennifer Denk who filed a complaint against PharMerica in July 2009. The complaint was filed under the qui tam provisions of the False Claims Act, which permit parties, known as “relators,” to sue on behalf of the United States when they believe that defendants submitted false claims for government funds. Under the False Claims Act, the government may intervene in the suit and recover three times its damages plus civil penalties. Denk’s complaint was later consolidated with a subsequent complaint filed in May 2010 by Eric Beeders and Lesa Martino.
“ The complaint that we are filing today reflects the abiding commitment of the Justice Department to the qui tam process, encouraging people with information about alleged fraud and abuse to report it in a timely and effective manner,” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin. “The False Claims Act allegations in this case, which involve Medicare billings for the dispensing of Schedule II controlled substances absent valid prescriptions, are precisely the type of allegations that our office and the Civil Division examine carefully, investigate fully, and prosecute vigorously—to protect taxpayer monies and to promote the delivery of professional health care to all of our constituents.”
The investigation was conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Wisconsin, the Drug Enforcement Administration (DEA), and the Office of Inspector General of the Department of Health and Human Services.
"When the most restrictive class of pharmaceutical controlled substances are dispensed by a pharmacy it is crucial to patient safety, as well as mandatory by federal law, to ensure that the patient's physician prescribed and intended for the drug to be administered. As alleged in this complaint, PharMerica did not perform that standard of patient care by failing to obtain a valid prescription prior to dispensing and is now being held accountable," stated Jack Riley, Special Agent in Charge of the DEA’s Chicago Field Division.
The government’s involvement in this case is part of the United States’ emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal health care programs.
The lawsuit is captioned U.S. ex rel. Denk v. PharMerica Corporation, Case No. 09-cv-720. The claims asserted in the complaint against PharMerica are allegations only, and there has been no determination of liability.
Wednesday, August 14, 2013
SHIPPING COMPANY AND TWO ENGINEERS CONVICTED ON CHARGES RELATED TO ILLEGAL DISCHARGES
FROM: U.S. JUSTICE DEPARTMENT
Thursday, August 8, 2013
Shipping Corporation and Two Engineers Convicted in ‘Magic Pipe’ Case in Norfolk, Va.
Diana Shipping Services S.A., a Panamanian corporation headquartered in Greece, Ioannis Prokakis and Antonios Boumpoutelos, both citizens of Greece, were convicted today after an 12-day bench trial on charges related to the illegal discharge of waste oil and oil-contaminated waste water from the M/V Thetis, a cargo vessel operated by Diana Shipping Services, announced Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia, Otis E. Harris, Jr., Special Agent in Charge, Coast Guard Investigative Service, Chesapeake Region, and David G. McLeod, Jr., Special Agent in Charge of EPA’s criminal enforcement program for the Middle Atlantic States.
All the defendants were convicted of conspiracy, knowing failure to fully maintain an oil record book, falsification of records and concealing tangible objects in a federal investigation. In addition, Prokakis was also convicted of obstruction of justice for ordering crewmembers to lie to U.S. Coast Guard inspectors on board the ship. The guilty verdicts were handed down by U.S. District Judge Mark S. Davis of the Eastern District of Virginia.
“The pollution of our oceans, the falsification of environmental records, and lying to the U.S. Coast Guard are serious crimes,” said Acting Assistant Attorney General Dreher. “Companies and individuals that intentionally attempt to cover up these crimes and obstruct U.S. Coast Guard investigations, will be prosecuted to the fullest extent of the law.”
“These defendants not only violated the law when they illegally discharged contaminated waste into our waters, but then conspired to cover up their nefarious conduct,” said United States Attorney Neil H. MacBride. “Those who choose to continue to violate the law, even after being confronted, will find themselves in the same, serious trouble as these defendants.”
“The Coast Guard protects not only the environment of our nation, but the world’s,” said Capt. John Little, Commander of Coast Guard Sector Hampton Roads. “Our Port State Control Teams board thousands of vessels annually to ensure compliance with U.S. law, regulations, and international treaties on pollution prevention. This case affirms the strength of our partnerships with the Department of Justice, the U.S. Attorney’s Office and our Coast Guard Investigative Service in holding accountable those vessel operators who deliberately discharge oil and falsify ship records.”
“The oceans must be protected from shipping companies that cut corners and dump waste improperly,” said David G. McLeod, Jr., Special Agent in Charge of EPA’s criminal enforcement program for the Middle Atlantic States. “The defendants conspired to discharge oily waste from the M/V Thetis into the open water, falsified the ship’s record books and attempted to thwart the investigation. Today's guilty verdict should send a clear message that our collaborative efforts will lead to the vigorous prosecution of those who despoil our oceans and violate our nation’s environmental laws.”
Diana Shipping Services, S.A. faces a maximum fine of $5.5 million and five years of probation. Prokakis and Boumpoutelos face a maximum sentence of five years for the conspiracy conviction, six years per failure to maintain an oil record book conviction, and 20 years per falsification of record conviction. Prokakis faces an additional five year sentence for obstruction of justice. All three defendants will be sentenced on Nov. 8, 2013.
Diana Shipping Services S.A., Prokakis, and Boumpoutelos, were indicted on May 22, 2013, in an 11-count superseding indictment alleging the illegal discharging of waste oil and oil-contaminated waste water in violation of the Act to Prevent Pollution from Ships. In September 2012, crewmembers of the M/V Thetis, a cargo vessel operated by Diana Shipping Services, reported that the vessel was discharging its bilge waste and sludge illegally by various means, including a “magic pipe” that bypassed the oily water separator. Coast Guard inspectors boarded the vessel when it entered port in Norfolk and discovered the “magic pipe” and that the oily water separator was non-functioning. The inspectors were also presented with an oil record book that contained false entries made by the ship’s Chief Engineer, Ioannis Prokakis and the Second Engineer Antonios Boumpoutelos. During the inspection, Prokakis lied to inspectors about the “magic pipe” and told other members of the engineering crew to not disclose its existence to the Coast Guard inspectors.
This case was investigated by the Coast Guard Investigative Service and the EPA’s Criminal Investigations Division. Assistant U.S. Attorney Joseph L. Kosky of the Eastern District of Virginia and Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division are prosecuting the case on behalf of the United States.
Thursday, August 8, 2013
Shipping Corporation and Two Engineers Convicted in ‘Magic Pipe’ Case in Norfolk, Va.
Diana Shipping Services S.A., a Panamanian corporation headquartered in Greece, Ioannis Prokakis and Antonios Boumpoutelos, both citizens of Greece, were convicted today after an 12-day bench trial on charges related to the illegal discharge of waste oil and oil-contaminated waste water from the M/V Thetis, a cargo vessel operated by Diana Shipping Services, announced Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia, Otis E. Harris, Jr., Special Agent in Charge, Coast Guard Investigative Service, Chesapeake Region, and David G. McLeod, Jr., Special Agent in Charge of EPA’s criminal enforcement program for the Middle Atlantic States.
All the defendants were convicted of conspiracy, knowing failure to fully maintain an oil record book, falsification of records and concealing tangible objects in a federal investigation. In addition, Prokakis was also convicted of obstruction of justice for ordering crewmembers to lie to U.S. Coast Guard inspectors on board the ship. The guilty verdicts were handed down by U.S. District Judge Mark S. Davis of the Eastern District of Virginia.
“The pollution of our oceans, the falsification of environmental records, and lying to the U.S. Coast Guard are serious crimes,” said Acting Assistant Attorney General Dreher. “Companies and individuals that intentionally attempt to cover up these crimes and obstruct U.S. Coast Guard investigations, will be prosecuted to the fullest extent of the law.”
“These defendants not only violated the law when they illegally discharged contaminated waste into our waters, but then conspired to cover up their nefarious conduct,” said United States Attorney Neil H. MacBride. “Those who choose to continue to violate the law, even after being confronted, will find themselves in the same, serious trouble as these defendants.”
“The Coast Guard protects not only the environment of our nation, but the world’s,” said Capt. John Little, Commander of Coast Guard Sector Hampton Roads. “Our Port State Control Teams board thousands of vessels annually to ensure compliance with U.S. law, regulations, and international treaties on pollution prevention. This case affirms the strength of our partnerships with the Department of Justice, the U.S. Attorney’s Office and our Coast Guard Investigative Service in holding accountable those vessel operators who deliberately discharge oil and falsify ship records.”
“The oceans must be protected from shipping companies that cut corners and dump waste improperly,” said David G. McLeod, Jr., Special Agent in Charge of EPA’s criminal enforcement program for the Middle Atlantic States. “The defendants conspired to discharge oily waste from the M/V Thetis into the open water, falsified the ship’s record books and attempted to thwart the investigation. Today's guilty verdict should send a clear message that our collaborative efforts will lead to the vigorous prosecution of those who despoil our oceans and violate our nation’s environmental laws.”
Diana Shipping Services, S.A. faces a maximum fine of $5.5 million and five years of probation. Prokakis and Boumpoutelos face a maximum sentence of five years for the conspiracy conviction, six years per failure to maintain an oil record book conviction, and 20 years per falsification of record conviction. Prokakis faces an additional five year sentence for obstruction of justice. All three defendants will be sentenced on Nov. 8, 2013.
Diana Shipping Services S.A., Prokakis, and Boumpoutelos, were indicted on May 22, 2013, in an 11-count superseding indictment alleging the illegal discharging of waste oil and oil-contaminated waste water in violation of the Act to Prevent Pollution from Ships. In September 2012, crewmembers of the M/V Thetis, a cargo vessel operated by Diana Shipping Services, reported that the vessel was discharging its bilge waste and sludge illegally by various means, including a “magic pipe” that bypassed the oily water separator. Coast Guard inspectors boarded the vessel when it entered port in Norfolk and discovered the “magic pipe” and that the oily water separator was non-functioning. The inspectors were also presented with an oil record book that contained false entries made by the ship’s Chief Engineer, Ioannis Prokakis and the Second Engineer Antonios Boumpoutelos. During the inspection, Prokakis lied to inspectors about the “magic pipe” and told other members of the engineering crew to not disclose its existence to the Coast Guard inspectors.
This case was investigated by the Coast Guard Investigative Service and the EPA’s Criminal Investigations Division. Assistant U.S. Attorney Joseph L. Kosky of the Eastern District of Virginia and Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division are prosecuting the case on behalf of the United States.
Tuesday, August 13, 2013
GOVERNMENT FILES LAWSUIT AGAINST TEXAS BUS COMPANY FOR ALLEGEDLY DISCRIMINATING AGAINST U.S. CITIZENS
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, August 5, 2013
Justice Department Files Lawsuit Against Texas Bus Company Alleging Employment Discrimination Against U.S. Citizens and Other Individuals
The Justice Department announced today the filing of a lawsuit with the Executive Office of Immigration Review’s Office of the Chief Administrative Hearing Officer (OCAHO), against Autobuses Ejecutivos LLC, d/b/a Omnibus Express, a bus company based in Houston.
The complaint alleges Omnibus Express violated the Immigration and Nationality Act’s (INA) anti-discrimination provision by preferring to hire temporary nonimmigrant visa holders over U.S. citizens, certain lawful permanent residents and other protected individuals for bus driver positions. Specifically, the complaint states that from at least September 2012 to February 2013, Omnibus Express failed to consider the applications of many qualified U.S. citizens and other protected individuals, or actively discouraged them from pursuing their applications, while at the same time petitioning the U.S. Department of Labor (DOL) and U.S. Citizenship and Immigration Services (USCIS) for permission to hire up to 50 foreign workers on H-2B visas. The H-2B program allows U.S. employers to bring foreign nationals to the United States to fill temporary nonagricultural jobs when there are not enough U.S. workers who are able, willing or qualified to do the temporary work. The complaint further alleges that Omnibus Express hired 42 H-2B workers during this period, and in doing so, represented to the DOL and USCIS that there were not enough qualified workers in the United States to fill the 50 bus driver positions. The complaint seeks an order prohibiting future discrimination by Omnibus Express, civil penalties, back pay for injured parties and injunctive relief. The INA’s anti-discrimination provision prohibits employers from discriminating in hiring against certain workers based on their citizenship status.
“The nation’s current immigration law protects individuals in the United States, such as U.S. citizens, certain lawful permanent residents, refugees and asylees, from unlawful discrimination in hiring based on their citizenship status,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. “We are committed to enforcing the INA so that work-authorized individuals have equal access to employment in the United States.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which prohibits employers from discriminating against work-authorized individuals on the basis of citizenship status or national origin in hiring, firing, recruitment or referral for a fee.
Monday, August 5, 2013
Justice Department Files Lawsuit Against Texas Bus Company Alleging Employment Discrimination Against U.S. Citizens and Other Individuals
The Justice Department announced today the filing of a lawsuit with the Executive Office of Immigration Review’s Office of the Chief Administrative Hearing Officer (OCAHO), against Autobuses Ejecutivos LLC, d/b/a Omnibus Express, a bus company based in Houston.
The complaint alleges Omnibus Express violated the Immigration and Nationality Act’s (INA) anti-discrimination provision by preferring to hire temporary nonimmigrant visa holders over U.S. citizens, certain lawful permanent residents and other protected individuals for bus driver positions. Specifically, the complaint states that from at least September 2012 to February 2013, Omnibus Express failed to consider the applications of many qualified U.S. citizens and other protected individuals, or actively discouraged them from pursuing their applications, while at the same time petitioning the U.S. Department of Labor (DOL) and U.S. Citizenship and Immigration Services (USCIS) for permission to hire up to 50 foreign workers on H-2B visas. The H-2B program allows U.S. employers to bring foreign nationals to the United States to fill temporary nonagricultural jobs when there are not enough U.S. workers who are able, willing or qualified to do the temporary work. The complaint further alleges that Omnibus Express hired 42 H-2B workers during this period, and in doing so, represented to the DOL and USCIS that there were not enough qualified workers in the United States to fill the 50 bus driver positions. The complaint seeks an order prohibiting future discrimination by Omnibus Express, civil penalties, back pay for injured parties and injunctive relief. The INA’s anti-discrimination provision prohibits employers from discriminating in hiring against certain workers based on their citizenship status.
“The nation’s current immigration law protects individuals in the United States, such as U.S. citizens, certain lawful permanent residents, refugees and asylees, from unlawful discrimination in hiring based on their citizenship status,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. “We are committed to enforcing the INA so that work-authorized individuals have equal access to employment in the United States.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which prohibits employers from discriminating against work-authorized individuals on the basis of citizenship status or national origin in hiring, firing, recruitment or referral for a fee.
Monday, August 12, 2013
OWNER MICHIGAN HEMATOLOGY AND ONCOLOGY CENTERS CHARGED IN $35 MILLION MEDICARE FRAUD SCHEME
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, August 6, 2013
Oakland County Doctor and Owner of Michigan Hematology and Oncology Centers Charged in $35 Million Medicare Fraud Scheme
Dr. Farid Fata, 48, of Oakland Township, Michigan, was arrested this morning and charged in a criminal complaint for his role in a health care fraud scheme which involved submitting false claims to Medicare for services that were medically unnecessary, including chemotherapy treatments.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, FBI Special Agent in Charge Robert D. Foley III and Special Agent in Charge Lamont Pugh of the Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
“Dr. Fata allegedly perpetrated a brazen and dangerous fraud that time and again jeopardized his patients’ wellbeing,” said Acting Assistant Attorney General Raman. “The conduct alleged today is chilling, with the defendant endangering patient safety through misdiagnoses, over- or mis-prescription of chemotherapy and other treatments, and delay of hospital care for patients with serious injuries. Through the work of our dedicated prosecutors and agents, today we have taken swift action to safeguard patient safety and hold the defendant to account.”
“Our first priority is patient care,” said U.S. Attorney McQuade. “The agents and attorneys acted with great attention to detail to stop these allegedly dangerous practices as quickly as possible, and we have set up a victim hotline so that patients can access their files and get questions answered.”
“Violating a patient's trust and placing them at risk through fraudulent abuse of our nation's health care system is deplorable and a crime which the FBI takes most seriously,” said FBI Special Agent in Charge Foley. “The FBI remains committed to the arrest and prosecution of those who commit health care fraud.”
“The conduct alleged in this complaint is serious, not only in terms of potential Medicare dollars improperly obtained, but patient safety as well,” said HHS-OIG Special Agent in Charge Pugh. “The OIG will aggressively investigate allegations of this nature in order to ensure the safety of Medicare patients and to protect vital taxpayer dollars.”
According to the complaint, Dr. Fata owns and operates Michigan Hematology Oncology Centers (MHO), which has offices in Clarkston, Bloomfield Hills, Lapeer, Sterling Heights, Troy and Oak Park. It was through MHO that Dr. Fata allegedly submitted fraudulent claims to Medicare for medically unnecessary services, including chemotherapy treatments, Positron Emission Tomograph (PET) scans and a variety of cancer and hematology treatments for patients who did not need them. In the course of the scheme, Dr. Fata falsified and directed others to falsify documents to justify cancer treatments for billing purposes. MHO billed Medicare for approximately $35 million dollars over a two-year period, approximately $25 million of which is attributable to Dr. Fata.
The complaint further alleges that Dr. Fata directed the administration of unnecessary chemotherapy to patients in remission; deliberate misdiagnoses of patients as having cancer to justify unnecessary cancer treatment; administration of chemotherapy to end-of-life patients who would not have benefitted from the treatment; deliberate misdiagnoses of patients without cancer to justify expensive testing; fabrication of other diagnoses such as anemia and fatigue to justify unnecessary hematology treatments, and distribution of controlled substances to patients without medical necessity or through administering the drugs at dangerous levels.
Dr. Fata will be making his initial appearance in federal court this afternoon at 1 p.m. in Detroit.
Patients who have questions concerning their medical records and/or information regarding this investigation and prosecution can call the United States Attorney’s Office Information Line at 888-702-0553.
The case is being prosecuted by Assistant Chief Catherine Dick, supervisor of the Detroit Medicare Fraud Strike Force and Trial Attorney Matthew Thuesen of the Department of Justice as well as Sarah Resnick Cohen, Deputy Chief of the Health Care Fraud Unit at the U.S. Attorney’s Office, and Justin Bidwell, Special Assistant United States Attorney. The investigations were conducted jointly by the FBI and HHS-OIG, along with the assistance of the Michigan Attorney General’s Office.
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, August 6, 2013
Oakland County Doctor and Owner of Michigan Hematology and Oncology Centers Charged in $35 Million Medicare Fraud Scheme
Dr. Farid Fata, 48, of Oakland Township, Michigan, was arrested this morning and charged in a criminal complaint for his role in a health care fraud scheme which involved submitting false claims to Medicare for services that were medically unnecessary, including chemotherapy treatments.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, FBI Special Agent in Charge Robert D. Foley III and Special Agent in Charge Lamont Pugh of the Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
“Dr. Fata allegedly perpetrated a brazen and dangerous fraud that time and again jeopardized his patients’ wellbeing,” said Acting Assistant Attorney General Raman. “The conduct alleged today is chilling, with the defendant endangering patient safety through misdiagnoses, over- or mis-prescription of chemotherapy and other treatments, and delay of hospital care for patients with serious injuries. Through the work of our dedicated prosecutors and agents, today we have taken swift action to safeguard patient safety and hold the defendant to account.”
“Our first priority is patient care,” said U.S. Attorney McQuade. “The agents and attorneys acted with great attention to detail to stop these allegedly dangerous practices as quickly as possible, and we have set up a victim hotline so that patients can access their files and get questions answered.”
“Violating a patient's trust and placing them at risk through fraudulent abuse of our nation's health care system is deplorable and a crime which the FBI takes most seriously,” said FBI Special Agent in Charge Foley. “The FBI remains committed to the arrest and prosecution of those who commit health care fraud.”
“The conduct alleged in this complaint is serious, not only in terms of potential Medicare dollars improperly obtained, but patient safety as well,” said HHS-OIG Special Agent in Charge Pugh. “The OIG will aggressively investigate allegations of this nature in order to ensure the safety of Medicare patients and to protect vital taxpayer dollars.”
According to the complaint, Dr. Fata owns and operates Michigan Hematology Oncology Centers (MHO), which has offices in Clarkston, Bloomfield Hills, Lapeer, Sterling Heights, Troy and Oak Park. It was through MHO that Dr. Fata allegedly submitted fraudulent claims to Medicare for medically unnecessary services, including chemotherapy treatments, Positron Emission Tomograph (PET) scans and a variety of cancer and hematology treatments for patients who did not need them. In the course of the scheme, Dr. Fata falsified and directed others to falsify documents to justify cancer treatments for billing purposes. MHO billed Medicare for approximately $35 million dollars over a two-year period, approximately $25 million of which is attributable to Dr. Fata.
The complaint further alleges that Dr. Fata directed the administration of unnecessary chemotherapy to patients in remission; deliberate misdiagnoses of patients as having cancer to justify unnecessary cancer treatment; administration of chemotherapy to end-of-life patients who would not have benefitted from the treatment; deliberate misdiagnoses of patients without cancer to justify expensive testing; fabrication of other diagnoses such as anemia and fatigue to justify unnecessary hematology treatments, and distribution of controlled substances to patients without medical necessity or through administering the drugs at dangerous levels.
Dr. Fata will be making his initial appearance in federal court this afternoon at 1 p.m. in Detroit.
Patients who have questions concerning their medical records and/or information regarding this investigation and prosecution can call the United States Attorney’s Office Information Line at 888-702-0553.
The case is being prosecuted by Assistant Chief Catherine Dick, supervisor of the Detroit Medicare Fraud Strike Force and Trial Attorney Matthew Thuesen of the Department of Justice as well as Sarah Resnick Cohen, Deputy Chief of the Health Care Fraud Unit at the U.S. Attorney’s Office, and Justin Bidwell, Special Assistant United States Attorney. The investigations were conducted jointly by the FBI and HHS-OIG, along with the assistance of the Michigan Attorney General’s Office.
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, August 11, 2013
WAL-MART SIGNS SETTLEMENT TO RESOLVE OSHA CITATIONS
FROM: U.S. DEPARTMENT OF LABOR
Wal-Mart signs corporate-wide settlement with US Labor Department
Agreement resolves OSHA citations at Rochester, N.Y., store following 2011 inspections
WASHINGTON —Wal-Mart Stores, Inc., has entered into a corporate-wide settlement agreement with the U.S. Department of Labor to improve safety and health conditions in all 2,857 Wal-Mart and Sam’s Club stores under federal jurisdiction. The settlement, which resolves two enforcement cases that began in 2011, includes provisions for the Bentonville, Ark.-based retailer to enhance safety and health practices and training related to trash compactors, cleaning chemicals and hazard communications corporate-wide.
“This settlement will help to keep thousands of exposed Wal-Mart workers safe and healthy on the job,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “We hope this sends a strong message that the law requires employers to provide safe working conditions, and OSHA will use all the tools at our disposal to ensure that all employers follow the law.”
Under the settlement, trash compactors must remain locked while not in use, and may not be operated except under the supervision of a trained manager or other trained, designated monitor. Wal-Mart will also improve its hazard communications training; and, for cleaning chemicals, will enhance its procedures to ensure that employees do not handle undiluted chemicals. Also, the company must ensure that a protective protocol is in place in case of any malfunctions with a store’s cleaning chemicals dispensing equipment. Wal-Mart will ensure employees are trained on the new procedures in a language, format, and vocabulary that the workers can understand.
For the safety citations pertinent to the corporate-wide trash compactor abatement, the settlement affirms one repeat lockout/tagout citation, two serious lockout/tagout citations, two serious confined space citations, and one serious machine guarding citation.
For the health citations pertinent to the corporate-wide cleaning chemical and hazard communication abatement, the settlement affirms two serious citations related to personal protective equipment, and two serious hazard communication citations.
A summary of the agreement will be posted in each affected store.
Settlement negotiations followed issuance of citations from two separate inspections conducted at the Wal-Mart Supercenter store in Rochester, N.Y. A safety inspection was initiated on Aug. 2, 2011, and a health inspection began Aug. 17, 2011. As part of the settlement, Wal-Mart has also agreed to abate other hazards in the Rochester store unrelated to the corporate-wide remedy, and will pay $190,000 in civil penalties.
For the citations not related to the corporate-wide abatement, citations affirmed in the settlement include one repeat electrical hazard citation, one serious citation for obstructed exit routes, two serious machine guarding citations, one repeat other-than-serious platform fall hazard citation, and 11 serious bloodborne pathogens citations.
Wal-Mart signs corporate-wide settlement with US Labor Department
Agreement resolves OSHA citations at Rochester, N.Y., store following 2011 inspections
WASHINGTON —Wal-Mart Stores, Inc., has entered into a corporate-wide settlement agreement with the U.S. Department of Labor to improve safety and health conditions in all 2,857 Wal-Mart and Sam’s Club stores under federal jurisdiction. The settlement, which resolves two enforcement cases that began in 2011, includes provisions for the Bentonville, Ark.-based retailer to enhance safety and health practices and training related to trash compactors, cleaning chemicals and hazard communications corporate-wide.
“This settlement will help to keep thousands of exposed Wal-Mart workers safe and healthy on the job,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “We hope this sends a strong message that the law requires employers to provide safe working conditions, and OSHA will use all the tools at our disposal to ensure that all employers follow the law.”
Under the settlement, trash compactors must remain locked while not in use, and may not be operated except under the supervision of a trained manager or other trained, designated monitor. Wal-Mart will also improve its hazard communications training; and, for cleaning chemicals, will enhance its procedures to ensure that employees do not handle undiluted chemicals. Also, the company must ensure that a protective protocol is in place in case of any malfunctions with a store’s cleaning chemicals dispensing equipment. Wal-Mart will ensure employees are trained on the new procedures in a language, format, and vocabulary that the workers can understand.
For the safety citations pertinent to the corporate-wide trash compactor abatement, the settlement affirms one repeat lockout/tagout citation, two serious lockout/tagout citations, two serious confined space citations, and one serious machine guarding citation.
For the health citations pertinent to the corporate-wide cleaning chemical and hazard communication abatement, the settlement affirms two serious citations related to personal protective equipment, and two serious hazard communication citations.
A summary of the agreement will be posted in each affected store.
Settlement negotiations followed issuance of citations from two separate inspections conducted at the Wal-Mart Supercenter store in Rochester, N.Y. A safety inspection was initiated on Aug. 2, 2011, and a health inspection began Aug. 17, 2011. As part of the settlement, Wal-Mart has also agreed to abate other hazards in the Rochester store unrelated to the corporate-wide remedy, and will pay $190,000 in civil penalties.
For the citations not related to the corporate-wide abatement, citations affirmed in the settlement include one repeat electrical hazard citation, one serious citation for obstructed exit routes, two serious machine guarding citations, one repeat other-than-serious platform fall hazard citation, and 11 serious bloodborne pathogens citations.
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