Texas Man Allegedly Spends COVID Funds on Lamborghini, Rolex, and Strip Clubs

Updated: Sep 13, 2020

Weekly Newsletter | August 7, 2020 | Subscribe

COVID-19 Related Fraud

----------------------------------------------------------------------------------- NBCNews: Texas businessman spent coronavirus relief funding on Lamborghini, strip clubs, federal officials say A Texas businessman who received $1.6 million in coronavirus relief funds spent the money on a Lamborghini, a Rolex, and on strip clubs. He has been charged with wire fraud, bank fraud, making false statements to a financial institution and other crimes after submitting a fraudulent loan application for the Paycheck Protection Program.

The Washington Post: Defense contractor with billions in sales got millions in pandemic loans intended for small businesses Atlantic Diving Supply has been accused of fraudulently misrepresenting its size in order to benefit from privileges associated with being a small business and has received a Paycheck Protection Program loan of $2 million. Last year, the current CEO paid $20 million to resolve False Claims Act allegations that he fraudulently obtained federal set-aside contracts for small businesses that his company was ineligible to receive.

Bloomberg Tax: SEC Co-Head of Enforcement Steven Peikin to Depart This Month Steven Peikin, the U.S. Securities and Exchange Commission's co-head of enforcement will depart the Wall Street regulator on August 14. His three-year tenure prioritized protecting retail investors but is best known for a landmark case against Elon Musk.

The Washington Post: Nursing Home Companies Accused of Misusing Federal Money Received Hundreds of Millions of Dollars in Pandemic Relief More than a dozen companies that have settled civil lawsuits with the Justice Department in recent years, all alleging improper Medicare billing, forged documents, substandard care, or other abuses, have received federal funding.

Law360: Free COVID-19 Tests Are Not Kickbacks, HHS Watchdog Says The Office of Inspector General for the U.S. Department of Health and Human Services stated on Tuesday that clinical laboratories aren’t violating anti-fraud laws when they give free COVID-19 antibody tests to Medicare and Medicaid patients who are already getting other important blood tests.

Case Settlements & Opinions


Morning Call: Lehigh University to pay $200,000 to settle allegations related to ex-professor’s NASA fraud Lehigh University has agreed to pay $200,000 to settle allegations related to a former professor’s fraudulent applications for grants from NASA. Lehigh will also have to follow compliance requirements in connection with future applications for federal grants or agreements with federal agencies.

Dept. of Justice: Health Care Executive Sentenced to 20 Years in TRICARE Fraud Case A health care executive at the center of a $70 million compounded pain and scar cream fraud has been sentenced to 20 years in federal prison. A federal jury convicted him to one count of conspiracy to commit health care fraud, one count of receipt of illegal kickbacks, and six counts of payment of illegal kickbacks.

Dept. of Justice: VP of Genetics Company Pleads Guilty to Paying Physicians Sham Clinical Research Fees as Part of $21 Million Medicare Fraud Scheme The former Vice President of Market Development for Proove Biosciences. Inc., pleaded guilty in federal court to conspiring to pay physicians kickbacks to order genetic tests for Medicare beneficiaries in violation of the Anti-Kickback Statute. His sentencing is set for October. The maximum penalty is 5 years of imprisonment and a $250,000 fine.

Dept. of Justice: Pharmaceutical Company Agrees to Pay $3.5 Million to Resolve Allegations of Violating False Claims Act Pacira Pharmaceuticals Inc. agreed to pay $3.5 million to resolve allegations that it paid kickbacks to doctors in the form of bogus research grants to induce them to prescribe its analgesic Exparel. The allegations rose from a whistleblower, a pharmacist, who brought the misconduct to the government’s attention.

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