ACUTE CARE HOSPITAL WILL PAY $2.25 MILLION SETTLE FALSE CLAIMS ALLEGATIONS

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, December 19, 2014

St. Helena Hospital Agrees To Pay $2.25 Million To Settle False Claims Act Allegations

SAN FRANCISCO – St. Helena Hospital, an acute care hospital within the Adventist Health System, has agreed to pay the United States $2,250,000 to settle allegations that it submitted false claims to Medicare for certain cardiac procedures and related inpatient admissions, United States Attorney Melinda Haag announced today.

The settlement resolves allegations that St. Helena Hospital knowingly charged Medicare for medically unnecessary percutaneous coronary interventions during the period Jan. 1, 2008 through July 31, 2011. Percutaneous coronary intervention, commonly referred to as angioplasty, is a procedure to open narrowed or blocked blood vessels that supply blood to the heart. The United States also alleged that St. Helena Hospital unnecessarily admitted angioplasty patients who should have been treated on a less costly, outpatient basis.

This settlement resolves a lawsuit filed in the U.S. District Court for the Northern District of California by Kacie Carroll, a former employee of St. Helena Hospital, under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens to bring lawsuits on behalf of the United States and obtain a portion of the government’s recovery. Carroll will receive $450,000.

Assistant U.S. Attorney Steven J. Saltiel handled the matter on behalf of the U.S. Attorney?s Office, with the assistance of Michael Zehr and Kathy Terry.

The case is captioned United States ex rel. Carroll v. Adventist Health Systems, et al., Case No. CV-10-4925 DMR. The claims resolved by this settlement are allegations only and there has been no determination of liability.      

REMARKS BY ASSISTANT AG CALDWELL REGARDING ALSTON BRIBERY PLEA

FROM:  U.S. JUSTICE DEPARTMENT 
Remarks for Assistant Attorney General Leslie R. Caldwell Press Conference Regarding Alstom Bribery Plea
Washington, DCUnited States ~ Monday, December 22, 2014

Today represents a significant milestone in the global fight against corruption.  It demonstrates the Department of Justice’s strong commitment to fighting foreign bribery and ensuring that both companies and individuals are held accountable when they violate the FCPA.  The guilty pleas and resolutions announced today also highlight what can happen when corporations refuse to disclose wrongdoing and refuse to cooperate with the department’s efforts to identify and prosecute culpable individuals.

Let me first explain how the scheme worked.  To conceal that it was the source of payments to government officials, Alstom funneled the bribes through third-party consultants who did little more than serve as conduits for corruption.  Alstom then dummied up its books and records to cover up the scheme.

Alstom’s corruption spanned the globe, and was its way of winning business.  For example, in Indonesia, Alstom and certain of its subsidiaries used consultants to bribe government officials – including high-ranking members of the Indonesian Parliament and the state-owned and state-controlled electricity company – to win several contracts to provide power-related services.  According to internal documents, when certain officials expressed displeasure that a particular consultant had provided only “pocket money,” Alstom retained a second consultant to ensure that the officials were satisfied.

In Saudi Arabia, Alstom retained at least six consultants, including two close family members of high-ranking government officials, to bribe officials at a state-owned and state-controlled electricity company to win two projects valued at approximately $3 billion.  As evidence that Alstom employees recognized that their conduct was criminal, internal company documents refer to the consultants only by code name.

Alstom similarly used consultants to bribe officials in Egypt and the Bahamas, and again Alstom employees clearly knew that the conduct violated the law.  In connection with a project in Egypt, a member of Alstom’s finance department sent an email questioning an invoice for consultant services and, in response, was advised that her inquiry could have “several people put in jail” and was further instructed to delete all prior emails regarding the consultant.

If approved by the court, Alstom’s criminal penalty of $772 million represents the largest penalty ever assessed by department in a FCPA case.  Through Alstom’s parent-level guilty plea and record-breaking criminal penalty, Alstom is paying a historic price for its criminal conduct -- and for its efforts to insulate culpable corporate employees and other corporate entities.  Alstom did not voluntarily disclose the misconduct to law enforcement authorities, and Alstom refused to cooperate in a meaningful way during the first several years of the investigation.  Indeed, it was only after the department publicly charged several Alstom executives – three years after the investigation began – that the company finally cooperated.  

One important message of this case is this:  While we hope that companies that find themselves in these situations will cooperate with the department of Justice, we do not wait for or depend on that cooperation. When Alstom refused to cooperate with the investigation, we persisted with our own investigation.  We built cases against the various corporate entities and against culpable individuals.  To date, the department publicly has charged four Alstom corporate executives in connection with the corrupt scheme in Indonesia, which also chose not to cooperate, and another company’s executive in connection with the scheme in Egypt.  Four of these individuals already have pleaded guilty.  In addition, Marubeni Corporation, a Japanese trading company that partnered with Alstom in Indonesia, pleaded guilty to conspiracy to violate the anti-bribery provisions of the FCPA and substantive violations of the FCPA, and paid an $88 million criminal penalty.

Another important message from this case is that the U.S. increasingly is not alone in the fight against transnational corruption.  Earlier this year, Indonesia’s Corruption Eradication Commission, the KPK, assisted the department in its investigation.  And, in turn, the department shared with the KPK information that federal investigators had obtained, which the KPK used in its prosecution of a former member of the Indonesian Parliament for accepting bribes from Alstom-funded consultants.  This past spring, that Indonesian official was found guilty and sentenced to three years in an Indonesian prison.  Our partnership with Indonesian law enforcement authorities in this case means that both the bribe payors and bribe takers have been prosecuted.  And our investigation is not over yet.

This case is emblematic of how the Department of Justice will investigate and prosecute FCPA cases – and other corporate crimes.  We encourage companies to maintain robust compliance programs, to voluntarily disclose and eradicate misconduct when it is detected, and to cooperate in the government’s investigation.  But we will not wait for companies to act responsibly.  With cooperation or without it, the department will identify criminal activity at corporations and investigate the conduct ourselves, using all of our resources, employing every law enforcement tool, and considering all possible actions, including charges against both corporations and individuals.

I especially would like to thank the prosecutors from the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the District of Connecticut, and the talented agents from the FBI, for their extraordinary work in this matter.  I also would like to thank the U.S. Attorney’s Office for the District of New Jersey and the U.S. Attorney’s Office for the District of Maryland for their work on related cases.  And I am grateful to the Criminal Division’s Office of International Affairs for the substantial and expert assistance that it provided.

In addition to our Indonesian counterparts, I would like to acknowledge the valuable assistance that our law enforcement partners in Switzerland, the United Kingdom, Singapore, Italy, Saudi Arabia, Taiwan, Cyprus, and Germany have provided in this matter.  We are grateful for their assistance and look forward to working with them and our other international partners in the future.

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FDIC: Professional Liability Lawsuits

FDIC: Professional Liability Lawsuits

FTC REPORTS SHUTING DOWN PHONY MORTGAGE RELIEF SCAM

FROM:  U.S. FEDERAL TRADE COMMISSION 
FTC Shutters Wide-Ranging Operation That Perpetrated Phony Mortgage Relief Scam
Defendants Victimized Thousands of Consumers Facing the Possibility of Foreclosure
12-11-2014

A federal court has entered orders against 22 defendants who offered financially strapped consumers fake home-loan modification services that the FTC claims violated the FTC Act and the Mortgage Assistance Relief Services (MARS) Rule. The MARS Rule bans mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they deem acceptable.

The orders collectively ban 21 of the defendants from advertising, promoting, or selling unsecured debt relief products and services; misrepresenting any material facts related to financial products or services; misrepresenting material facts related to any other types of services; and benefiting from any consumer information they collected through the scheme. The remaining defendant, Business Team, must turn over its proceeds from the defendants’ activities. The orders against all of the defendants impose monetary judgments in varying amounts to remedy the almost $51 million of consumer injury from the defendants’ activities.

“It’s appalling when scammers take money from people already struggling to pay their mortgages,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “We shut down this phony mortgage relief operation, and we’ll continue to stick up for people in financial distress.”

The FTC filed its original complaint in this action in June 2013 against 10 defendants and an amended complaint in December 2013, adding another 12. According to the FTC's amended complaint, the defendants operated as two loan modification enterprises, each of which falsely claimed it would provide legal help to save consumers’ homes from foreclosure and lower their mortgage payments. The enterprises then charged up-front fees of between $2,500 and $3,500, but delivered little or no help, deepening the consumers’ financial distress.

Both enterprises marketed their scheme using an official looking mailer that urged consumers to act quickly before they “FORFEIT LEGAL RIGHTS,” or face a “statute of limitations and government program deadlines.” They falsely promised lower monthly payments and interest rates, and the conversion of adjustable-rate to fixed-rate mortgages.

The enterprises also marketed their scheme online, through telemarketing calls, and with television and radio ads. Their websites touted a range of services, including bankruptcy advice, credit counseling, and “forensic mortgage audits,” falsely claiming that such “audits” could uncover any “lending violations” committed by lenders.

Each defendant is subject to a court order, resulting from either a negotiated settlement, a default judgment (for the defendant’s failure to respond to the Commission’s amended complaint), or a sanction for failing to participate in the litigation:

A to Z Marketing, Inc.; Apex Members, LLC; Apex Solutions, Inc.; Expert Processing Center, Inc.; Smart Funding Corp.; Ratan Baid; and Madhulika Baid entered into a stipulated final order;
Top Legal Advocates, P.C., entered into a stipulated final order;
Backend, Inc., entered into a stipulated final order;
William D. Goodrich and William D. Goodrich Atty, Inc. had a judgment entered against them as a sanction. Both defendants answered the amended complaint but then failed to respond to discovery or otherwise participate in the litigation.
Evergreen Law Offices, PLLC, had a default judgment entered against it for its failure to respond to the Commission’s amended complaint;
Backend Services, Inc.; Emax Loans, Inc.; Legal Marketing Group, Inc.; Nationwide Law Center, Inc.; United States Law Center, P.C.; Interstate Law Group, LLC; Millennium Law Center, P.C.; and SC Law Group, P.C., had default judgments entered against them for their failures to respond to the Commission’s amended complaint;
Amir Montazeran had a default judgment entered against him for his failure to respond to the Commission’s amended complaint;
Business Team, LLC, had a default judgment entered against it for its failure to respond to the Commission’s amended complaint.
Business Team and Montazeran are appealing the judgments against them.

Each Commission vote approving the stipulated final orders was 5-0. The stipulated final orders were filed in the U.S. District Court for the Central District of California, and have now all been entered by the Court.

For consumer information about avoiding mortgage and foreclosure rescue scams, see Home Loans.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.