FTC WANTS PLASTIC LUMBER COMPANY TO SUBSTANTIATE ENVIRONMENTAL CLAIMS

FROM:  U.S. FEDERAL TRADE COMMISSION

Too Good To Be Green: Company’s Plastic Lumber Claims Don’t Hold Up
FTC Order Requires Firm to Be Able to Substantiate Environmental Claims
An Illinois-based firm that manufactures, markets, and sells plastic lumber is the latest to find itself in trouble with the Federal Trade Commission, after allegedly making deceptive claims in its advertising and marketing material that many of its products are made entirely of recycled plastic. In reality, according to the FTC, the products were made of less than three-quarters recycled plastic.

Under a proposed FTC settlement, the company, Engineered Plastics Systems, LLC (EPS), must have credible evidence to support any environmental benefit claims it makes, with scientific proof, if necessary. It also requires EPS to be able to specifically substantiate any claims it makes about the amount of recycled content in its products.

“This is the second case the FTC has brought in the last two months related to environmental claims for plastic lumber products,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “Companies know that consumers are increasingly looking to buy products with ‘green’ attributes. But companies can’t sell products by make false environmental claims – that’s against the law.”

EPS is based in Elgin, Illinois, and makes, advertises, sells, and distributes plastic lumber products, including picnic tables and benches. According to the complaint, since at least June of 2011, the company has run ads and distributed promotional material for its plastic lumber products describing their environmental attributes. For example, the company claimed, among other things, that some of its benches and tables were:

“Made entirely of recycled plastic lumber”;
“All recycled plastic design”; and
“Constructed using 2x4 recycled plastic lumber profiles.”
In its administrative complaint, the FTC alleges that while a reasonable consumer would likely interpret EPS’s claims to mean that its products are made from all, or virtually all, recycled plastic, in fact, between June 2011 and 2014, they contained, on average, only about 72 percent recycled plastic. The products also contained some non-recycled plastic and a mineral component.

Specifically, the complaint charges that the company made deceptive environmental claims for its Eco, Hexagonal, and Perennial tables; and its Garden, Geneva, and Trailside benches. None of these products, the FTC alleged, are made of “all or virtually all recycled plastic,” and the company’s claims therefore violate the FTC Act, which prohibits deceptive and misleading advertising.

The proposed consent order is designed to prevent EPS from making similarly deceptive environmental claims in the future. It prohibits the company from making any representations regarding the recycled content or environmental benefit of any product or package, unless they are true, not misleading, and substantiated by competent and reliable evidence. If necessary, the company may be required to provide scientific evidence that the claims are true. Further, consistent with the FTC’s Green Guides for Environmental Marketing (commonly known as the Green Guides), EPS specifically must substantiate recycled content claims with evidence that the content is made from materials recovered from the waste stream.

The proposed order, which also contains compliance and reporting requirements, will expire in 20 years. Its terms are similar to those in the proposed order setting similar FTC charges earlier this year against American Plastic Lumber, Inc.

Information for Consumers

The FTC has information for consumers in a blog post on its website on environmental claims for plastic products.  Also, the FTC provides detailed guidance to businesses on such claims in the Green Guides.

The Commission vote to accept the proposed consent order for public comment was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through August 18, 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 the “Invitation To Comment” part of the “Supplementary Information” section.

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.

Contact Information
MEDIA CONTACT:
Mitchell J. Katz,
Office of Public Affairs

"COMMERCIALS CLAIMED JUST THREE MINUTES A DAY WOULD MAKE YOU THIN"

FROM:  U.S. FEDERAL TRADE COMMISSION 

FTC Sends Refund Checks Totaling $9.3 Million to Nearly 200,000 Consumers Who Bought ‘Ab Circle Pro’ Device

Commercials Claimed just Three Minutes a Day would Make You Thin

An administrator working for the Federal Trade Commission is mailing 196,969 checks averaging $47.51 each to consumers who purchased an abdominal exercise device known as the Ab Circle Pro.

In August 2012, the FTC settled with  Ab Circle Pro marketers Fitness Brands, four individuals, and seven other companies, after alleging that the defendants had deceptively advertised that exercising on the device for just three minutes a day would cause consumers to lose 10 pounds in two weeks.

The checks, which total $9.3 million, must be cashed within 60 days after they are issued.  The deadline for filing a refund request has expired.    For general refund information, see www.FTC.gov/refunds. The FTC never requires consumers to pay money or provide information before redress checks can be cashed.

Consumers should carefully evaluate advertising claims for exercise equipment. For more information see:  Tips for Buying Exercise Equipment.      

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 . 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.

MEDIA CONTACT:
Office of Public Affairs

President Obama Announces Members of the National Council on Federal Labor-Management Relations | The White House

President Obama Announces Members of the National Council on Federal Labor-Management Relations | The White House

FOUR PATIENT RECRUITERS PLEAD GUILTY FOR SCHEME INVOLVING DEFUNCT HOME HEALTH CARE COMPANY

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, July 10, 2014

Four Patient Recruiters Plead Guilty in Miami for Roles in $20 Million Health Care Fraud Scheme

Four patient recruiters pleaded guilty in connection with a $20 million health care fraud scheme involving Trust Care Health Services Inc. (Trust Care), a defunct home health care company.

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.

At a hearing today before U.S. District Judge Darrin P. Gayles of the Southern District of Florida, Estrella Perez, 57, and Solchys Perez, 34, both pleaded guilty to conspiracy to commit health care fraud, and Abigail Aguila, 40, pleaded guilty to conspiracy to defraud the United States and receive health care kickbacks.   Sentencing for all three defendants is set for Sept. 18, 2014 in front of Judge Gayles.   On June 17, 2014, another co-defendant, Monica Macias, 52, pleaded guilty to conspiracy to defraud the United States and receive health care kickbacks before U.S. Magistrate Judge Chris M. McAliley of the Southern District of Florida.  Sentencing for Macias is set for Sept. 10, 2014 before Judge Gayles.

According to court documents, the defendants worked as patient recruiters for the owners and operators of Trust Care, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.   Trust Care was operated 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.

The defendants recruited patients for Trust Care and solicited and received kickbacks and bribes from the owners and operators of Trust Care in return for allowing the agency to bill the Medicare program on behalf of the recruited Medicare patients.   These Medicare beneficiaries were billed for home health care and therapy services that were not medically necessary and/or were not provided.

Estrella Perez and Solchys Perez also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for providing home health and therapy prescriptions, plans of care, and medical certifications for their recruited patients.   Co-conspirators at Trust Care then used these prescriptions, plans of care and medical certifications to fraudulently bill the Medicare program for home health care services.

From approximately March 2007 through at least January 2010, Trust Care submitted more than $20 million in claims for home health services.   Medicare paid Trust Care more than $15 million for these fraudulent claims.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.   This case is being prosecuted by Trial Attorneys A. Brendan Stewart and Anne P. McNamara 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.

U.S. FILES COMPLAINT AGAINST DIETARY SUPPLEMENT COMPANY, COO AND QUALITY ASSURANCE MANAGER

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, July 1, 2014

U.S. Files Complaint and Consent Decree Against Mira Health and Senior Officers

The United States has filed a complaint and the U.S. District Court for the Eastern District of New York has entered a consent decree against Mira Health Ltd. (Mira), its chief operating officer, Michael S. Ragno Sr., and its quality assurance manager, Michael S. Ragno Jr., all of Farmingdale, New York.

Assistant Attorney General Stuart F. Delery of the Justice Department’s Civil Division and U.S. Attorney Loretta E. Lynch of the Eastern District of New York made the announcement.

The lawsuit alleges that the defendants violated the Federal Food, Drug and Cosmetic Act (FDCA) by manufacturing and distributing dietary supplements that were adulterated.  Under the FDCA dietary supplement manufacturers are required have systems in place to ensure that their products meet specifications for identity, purity, strength and composition.   The government’s actions resulted from a series of inspections of Mira’s manufacturing facility, which revealed, among other things, that Mira failed to ensure that components, dietary supplements, packaging and labels were not mixed-up, contaminated or deteriorated.

In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from committing violations of the FDCA.   The consent decree requires the dietary supplement manufacturer to cease all operations and requires that if the defendants wish to resume manufacturing dietary supplements in the future, the FDA first must determine that Mira’s manufacturing practices have come into compliance with the law.   The consent decree was entered by the court today.

Mira gained national attention in July 2013 when Purity First Health Ltd, a company that sold dietary supplements manufactured by Mira, became the subject of an FDA recall.   Anabolic steroids were found to be present in the Healthy Life Chemistry By Purity B-50 dietary supplement.   At the time of the recall, 29 illnesses and one hospitalization had been documented.

The FDA referred this matter to the Department of Justice.  The Consumer Protection Branch of the Justice Department’s Civil Division together with the U.S. Attorney’s Office for the Eastern District of New York filed this case on behalf of the United States.

RELOCATION SERVICES COMPANY WILL PAY NEARLY $510,000 TO SETTLE OVERBILLING CHARGES

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, July 8, 2014

Virginia-Based Move Management Company Pays More Than $500,000 to Settle Overbilling Claims in Connection with Transportation of Personal Property in Relocating Federal Employees

RE/MAX Allegiance Relocation Services, a Virginia-based move management company, has agreed to pay the government $509,807 to resolve allegations that it violated the False Claims Act by overbilling for transportation services, the Department of Justice announced today.

 “Today’s settlement demonstrates our continuing vigilance to ensure that those doing business with the government do so legally and honestly and that taxpayer funds are not misused,” said Assistant Attorney General for the Civil Division Stuart F. Delery.  “Government contractors who seek to profit at the expense of taxpayers will be held accountable.”

The settlement relates to allegations involving contracts to transport personal property of federal employees relocating duty stations within the United States and between the United States and Canada.  The government alleged that the defendant charged for move management services that were not provided and overbilled agencies on other moves by charging inapplicable tariff rates.

“We encourage whistleblowers to provide us with useful information to help us combat all manners of fraud on the U.S. Government,” said U.S. Attorney for the Eastern District of Virginia Dana J. Boente.

“We will continue to investigate allegations of federal contractors fraudulently maximizing their profits at the expense of American taxpayers,” said U.S. General Services Administration Acting Inspector General Robert C. Erickson.
         
The settlement resolves allegations filed in a lawsuit by Michael Angel, a former employee of RE/MAX Allegiance Relocation Services, in federal court in Alexandria, Virginia.  The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  The act also allows the government to intervene and take over the action, as it did in this case.  Angel will receive $86,667.

The settlement was the result of a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Eastern District of Virginia, the General Services Administration Office of Inspector General, U.S. Department of Homeland Security Office of Inspector General, Department of Agriculture Office of Inspector General and NASA Office of Inspector General.    

The case is captioned United States ex rel. Michael Angel v. Franconia Real Estate Services, Inc., d/b/a RE/MAX Allegiance Relocation Services; No. 1:12cv764 (E.D.Va.).  The claims resolved by the settlement are allegations only; there has been no determination of liability.

THREE FOAM MANUFACTURERS PLEAD GUILTY IN PRICE FIXING SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 

Companies Agree to Pay a Total of $6.1 Million in Criminal Fines

WASHINGTON — Three manufacturers of polyurethane foam used to create interior components for automobiles pleaded guilty today to participating in a scheme to fix prices to customers, the Department of Justice announced.

Riverside Seat Co., Woodbridge Foam Fabricating Inc. and SW Foam LLC pleaded guilty to a one-count felony charge in the U.S. District Court for the Eastern District of New York in Brooklyn.  According to the charge, the companies conspired with others to fix prices for polyurethane flexible slab stock automotive foam in the U.S. and elsewhere from at least as early as June 9, 2008 until at least April 20, 2009.  The companies have agreed to pay a total of $6,148,800 in criminal fines and to cooperate with the department’s ongoing investigation.

“Today’s charges demonstrate the Antitrust Division’s commitment to holding companies accountable for conspiracies that affect components used in products that consumers rely on every day,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The Antitrust Division will vigorously prosecute companies that engage in price-fixing schemes that subvert normal competitive processes and defraud American consumers and businesses.”

Riverside Seat, Woodbridge, and SW Foam manufactured polyurethane flexible slab stock automotive foam – a low-density, slab stock, flexible foam used as a component of automotive interior parts, including seats, headliners, headrests, door panels and armrests.  Polyurethane flexible slab stock automotive foam includes only the foam itself and does not include any automotive parts in which such foam may be a component.

According to the charge, the companies and their co-conspirators discussed polyurethane foam prices and agreed to coordinate the timing and amount of price increases to customers.  The companies carried out the agreement and exchanged information for the purpose of monitoring and enforcing adherence to the agreement.

The three manufacturers are charged with price fixing in violation of the Sherman Act, which carries maximum penalties of a $100 million 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 of those amounts is greater than the statutory maximum fine.

Today’s pleas are the result of an ongoing federal antitrust investigation being handled by the Antitrust Division’s New York Office, with assistance from the Cleveland Field Office of the FBI and the New York Field Office of the FBI.