tafefedfundThe TAFEF Newsletter is Back
Updated: Aug 11, 2020
Weekly Newsletter | June 12, 2020 | Subscribe
Dear readers,
After listening to feedback from our members, we're reviving the Taxpayers Against Fraud Education Fund Weekly Newsletter and this is its first return issue. This newsletter will break down weekly cases and settlements, developments around whistleblower laws, and highlight fraud around the COVID-19 pandemic. It will be delivered on Fridays and we will sometimes send other emails with important announcements. Feel free to send any feedback to digital@taf.org!
COVID-19 Related Fraud
----------------------------------------------------------------------------------- Dept. of Justice: Arkansas Project Manager Charged in Oklahoma with COVID-Relief Fraud
A project manager was charged after allegedly filing fraudulent bank loans seeking more than $8 million in forgivable loans that are guaranteed by the Small Business Administration (SBA) under the CARES act. He has been charged with wire fraud, bank fraud, making false statements to a financial institution, and making false statements to the SBA.
Dept. of Justice: Senate Judiciary Committee Remarks
On Tuesday, the Senate Judiciary Committee held a hearing centered on COVID-19 fraud and the response from law enforcement and the Justice Department. Above is the joint statement from Deputy Attorney General William Hughes and U.S. Attorney for the District of New Jersey Craig Carpenito.
During COVID-19, the Paycheck Protection Program (PPP) provides forgivable loans to small businesses. Like many federal programs, it requires extensive series of certifications that could leave borrowers liable under the False Claims Act if they are not mindful.
The concerns stem from the memo circulated in May that indicated that scammers may have stolen personal information such as Social Security numbers to obtain weekly jobless benefits. Democrats are also asking for new resources for states to defend themselves against similar criminal operations.
The president of a medical technology company was charged for his alleged connection in schemes to mislead investors, manipulate company’s stock prices, and to conspire to commit health care fraud in connection with the submission of over $69 million in false and fraudulent claims for allergy and COVID-19 testing. This complaint is the first criminal securities fraud prosecution related to COVID-19 that has been brought by the Department of Justice.
ABC News: Both parties are frustrated over COVID-19 relief fraud
On Tuesday’s Senate Judiciary Committee hearing, both sides appearing unsatisfied with the Department of Justice and law enforcement officials who said that it was too soon to talk specifics about their investigations into COVID relief related fraud. The Paycheck Protection Program was one relief program that has been targeted by fraudsters, and the Federal Trade Commission reported 67,000 consumer complaints involving COVID-19 related fraud and identity theft.
JD Supra: OIG announced its plan for fighting COVID-19 Response and Recovery Oversight
The Office of Inspector General announced its “Strategic Plan: Oversight of COVID-19 Response and Recovery,” that outlines OIG’s top goals and objectives during the current pandemic. Its four goals are to protect people, protect funds, protect infrastructure, and promote effectiveness.
A Georgia Woman pleaded guilty to selling an unregistered pesticide which she claimed protected against COVID-19 and other viruses. She has violated the Federal Insecticide, Fungicide, and Rodenticide Act (FIRFA) which ensures that pesticides in the U.S. are safe for humans and work.
A Fort Davis resident was issued a temporary restraining order in order to combat alleged COVID-19 fraud. The government filed a civil suit to stop him from committing mail and wire fraud by selling fraudulent remedies for diseases and medical conditions including COVID-19.
Government Executive: Labor Department Inspector General announces that he is stepping down
Scott Dahl announced that he stepping down from Inspector General after announcing that there is a risk for fraud with the Labor Department’s $110 billion unemployment assistant program. He was leading the office’s COVID-19 relief fund investigations; however, he states that his decision was long-planned and personal.
Case Settlements & Opinions
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SEC Press Release: SEC Awards Record Payout of Nearly $50 Million to Whistleblower
The SEC announced last week that it awarded $50 million to a whistleblower under its whistleblower program. This is the largest award to an individual whistleblower and also brings the total paid out under the program to over $500 million.
Four men were charged with one count of conspiracy to defraud the United States and to pay or receive healthcare kickbacks. Additionally, one of the men received six counts of offering or paying healthcare kickbacks and one count of possession with intent to deliver the controlled substance, ketamine. These allegations stem from the defendant’s participation in a multi-million conspiracy to defraud the federal health care benefit program, TRICARE.
A government contractor agreed to enter a non-prosecution agreement (NPA) and pay over $1.25 million to resolve the Justice Department’s investigation into a kickback and fraud scheme perpetrated by a former manager on a U.S. government contract administrated by the General Services Administration (GSA). Under the NPA, they will pay $1,259,444 in victim compensation payments to the GSA and cooperate in ongoing investigations and prosecution of individuals.
The Department of Justice announced on June 2, 2020 that the Mississippi Department of Health Services agreed to pay $5 million to resolve the allegations that it violated the False Claims Act in its management of the USDA’s Supplemental Nutrition Assistance Program (SNAP), formally known as the Food Stamp Program.
Altimate Care LLC has agreed to pay $175,000 to resolve complaints of improper billing that was filed by a former employee. Altimate allegedly billed federal healthcare programs for medically unnecessary nursing visits: therefore, billing for patients that weren’t homebound, manipulating patient records, and records of nursing visits.
Williams Brothers Construction Inc. agreed to pay 1 million after allegations it violated the False Claims Act by misrepresenting the use of a small disadvantage business to gain a federally funded grant which was used in 2016 on its $65-million Ray LaHood International Terminal at Peoria Airport.
The Ross Group Construction Corporation agreed to pay $2.8 million to settle allegations that they violated the False Claims Act after improperly obtaining federally set-aside contracts that are reserved for disadvantaged small businesses.
The United States joined a lawsuit against AECOM, an agriculture and engineering firm, alleging that they violated the False Claims Act by submitting false claims for a repair or replacement of facilities damaged by Hurricane Katrina to the Federal Emergency Management Agency (FEMA).
Whistleblower Laws
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Bloomberg Tax: California Tax Fraud Whistleblower Bill Passes House Vote
A California bill to allow whistleblowers to report alleged tax fraud passed 41-17 on the Assembly floor. The bill, A.B. 2570, now moves to the Senate for debate. Attorney General Xavier Becerra supports the bill, which expands California's False Claims Act.
