FTC APPROVES FINAL ORDER IN CASE ALLEGING FALSE ADVERTISING

FROM:  U.S. FEDERAL TRADE COMMISSION 

FTC Approves Modified Final Order in Four Loko Deceptive Advertising Case

The Federal Trade Commission has approved a modified order with the marketers of the supersized, high-alcohol malt beverage Four Loko – Phusion Projects, LLC.

Phusion Projects settled with the FTC in 2013 to resolve FTC charges of deceptive advertising. The Commission alleged that Phusion Projects, LLC and its principals falsely claimed that a 23.5-ounce, 11 or 12 percent alcohol by volume can of Four Loko contains alcohol equivalent to one or two regular 12-ounce beers, and that a consumer could drink one can safely in its entirety on a single occasion.

The 2013 order required Phusion Projects to file applications with the Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB) to include an “Alcohol Facts” disclosure panel, using a specified format, on labels of products containing more than 1.2 ounces of pure alcohol (the amount in two regular drinks), and to feature those disclosure panels on its products beginning 90 days after receiving TTB approval.
Phusion Projects submitted the required applications to TTB; however, due to changes in TTB policy, Phusion’s requests were denied. The modified order provides for revised “Alcohol Facts” disclosures that are consistent with TTB’s current guidance. It also eliminates the requirement that certain Phusion products be resealable.

Strengthening Money Market Funds to Reduce Systemic Risk

Strengthening Money Market Funds to Reduce Systemic Risk

HOME HEALTH CARE COMPANY OWNER PLEADS GUILTY FOR ROLE IN $74 MILLION FRAUD

FROM:  U.S. JUSTICE DEPARTMENT  

Wednesday, July 23, 2014

Owner and Administrator of Miami Home Health Companies Pleads Guilty for Role in $74 Million Health Care Fraud Scheme

A Miami resident who owned a home health care company and was the administrator of another home health care company pleaded guilty today for her participation in a $74 million Medicare fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Acting Special Agent in Charge Ryan Lynch of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office made the announcement.

Elsa Ruiz, 45, pleaded guilty today before U.S. District Judge Marcia G. Cooke in the Southern District of Florida to one count of conspiracy to commit health care fraud.   Her sentencing is scheduled for Oct. 8, 2014.

According to court documents, Ruiz was an owner of Professional Home Care Solutions Inc. (Professional Home Care) and an administrator of LTC Professional Consultants Inc. (LTC), Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.  Ruiz and her co-conspirators operated LTC and Professional Home Care for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided.

Also according to court documents, Ruiz ran and oversaw the schemes operating out of LTC and Professional Home Care.   Ruiz and co-conspirators paid kickbacks and bribes to patient recruiters, who provided patients to LTC and Professional Home Care , as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries.   Ruiz and her co-conspirators used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for unnecessary home health care and therapy services.

From approximately January 2006 to June 2012, LTC and Professional Home Care submitted approximately $74 million in claims for home health care services that were not medically necessary and/or not provided, and Medicare paid approximately $45 million on those claims.

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 Southern District of Florida.   The case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 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.

MADE IN USA BRAND, LLC AGREES TO STOP USING DECEPTIVE CERTIFICATION CLAIMS

FROM:  U.S. FEDERAL TRADE COMMISSION 

Made in USA Brand, LLC Agrees to Drop Deceptive Certification Claims

Company Claimed to Evaluate Made in USA Claims, but Instead Relied on Companies to Self Certify that Products Met Standard

A company that  provides a “Made in USA” certification seal to marketers has agreed to settle Federal Trade Commission charges that it deceived consumers by allowing companies to use the seal without either independently verifying that those companies’ products were made in the United States, or disclosing that the companies had certified themselves.

The company, Made in USA Brand, LLC, is required under the proposed settlement to stop its deceptive claims.

The FTC’s Enforcement Policy Statement on U.S.-Origin Claims provides that products advertised or labeled as “Made in the USA” must be “all or virtually all” made in the United States. Made in the USA Brand, LLC charges companies to use its certification mark and to be listed in a database of “certified” companies that comply with the FTC’s standard.
The Columbus, Ohio-based Made in the USA Brand, LLC charged $250 to $2,000 for a one-year license to use the certification mark, according to the FTC. But the company did not independently evaluate the products before certifying them, and had no procedures to determine whether marketers complied with the FTC’s Made in USA standard, according to the complaint.

In fact, the FTC charged that Made in the USA Brand has never rejected a company’s application to use its Certification Mark or terminated a company’s use of the mark. Instead, Made in the USA Brand, LLC awarded licenses to any company that self-certified that it was complying with the FTC’s standard.

“Seals can be very helpful when consumers purchase products based on claims that are difficult to verify – like the Made-in-the-USA claim,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “When marketers provide seals without any verification, or without telling consumers the seal is unverified, consumers are deceived and the value of all marketers’ seals is diminished.  This case makes it clear that the FTC will not let that happen.”

In a promotional flyer, Made in the USA Brand, LLC claimed:

“The Made in USA Brand Certification Mark provides a standard symbol for Made in USA product identification . . . When printed on labels by accredited manufacturers, consumers are able to identify at a glance which products are
made in the USA.”

“The Certification Mark is available to be downloaded by U.S. businesses that meet the accreditation standards based on the Federal Trade Commission’s regulations for complying with Made in USA origin claims.”

According to the complaint, Made in the USA Brand, LLC:

falsely advertised that it independently and objectively evaluated whether certified products met its accreditation standard.
made false or unsupported claims that companies listed in its database as certified marketers were in fact selling products that complied with the FTC’s Made in USA standard.
provided the companies it licensed with the means to deceive consumers into believing that the companies were marketing products that were made in the United States.
Under the proposed administrative order, respondent Made in the USA Brand, LLC, is prohibited from:

claiming that any products or companies meet its certification standard unless it either conducts an independent and objective evaluation, or discloses on its logo and all its promotional materials that companies and products are self-certified.
claiming that any product is made in the USA or in any other country unless the claim is true and supported by competent and reliable evidence, or – if the certification mark is used –unless it discloses that companies and products are self-certified.
providing the companies it certifies with the means to deceive consumers.
The Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 5-0.

The FTC will publish a description of the consent agreement in the Federal Register shortly.  The agreement will be subject to public comment for 30 days, beginning today and continuing through August 22, 2014, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit written comments electronically or in paper form by following the instructions in “Supplementary Information” section of the Federal Register notice. Comments should be submitted electronically using the online form here.

Instructions for submitting comments in paper form are listed in the “Accessibility” portion of the form.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.  When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

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BRANCH OF CANADIAN COMPANY TO PAY $2.5 MILLION FOR VIOLATIONS OF WASTEWATER PLANT IN SHREVEPORT, LA

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, July 10, 2014

U.S. Branch of Canadian Company to Pay $2.5 Million Penalty for Shreveport, La., Wastewater Plant

Settlement Resolves Water, Hazardous Waste and Air Violations

Houston-based CCS (USA) Inc. and several of its operating subsidiaries will pay a $2.5 million civil penalty relating to operations at its Shreveport, Louisiana, industrial wastewater treatment plant, the Department of Justice, U.S. Environmental Protection Agency (EPA) and the state of Louisiana announced today.  The settlement will resolve violations of the Clean Water Act, the Clean Air Act and the hazardous waste law known as RCRA.

CCS acquired the plant in 2006 through its purchase of two closely held companies owned by John Emerson Tuma.  Tuma is now serving a five-year prison sentence for illegally discharging untreated and improperly treated wastewater from the plant into the Red River and Shreveport Publicly Owned Treatment Works (POTW).  Inspections by EPA and the Louisiana Department of Environmental Quality following the sale led to the discovery of these violations and others, including unpermitted storage and improper handling of hazardous wastes and sludge, unpermitted stormwater discharges and noncompliance with Clean Air Act requirements for benzene-containing wastes.

After discovering these violations, CCS ceased wastewater treatment operations at the facility.  Under EPA supervision, CCS removed the hazardous wastes illegally stored there.

The $2.5 million civil penalty will be split evenly between the United States and state of Louisiana.

The stipulation of settlement, filed in the U.S. District Court for the Western District of Louisiana, is subject to a 45-day public comment period and approval by the federal court.