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Serono Is Getting Ready to Settle Healthcare Fraud Investigation
Serono S.A., the large biotech company, indicated in an SEC filing that it is preparing to settle an investigation of its U.S. subsidiary, Serono Inc., related to its sales of Serostim, a drug used to treat AIDS wasting, by reserving $725 million. Serostim is a human growth hormone, and can be used — and abused…
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Atmosphere at the Philadelphia Corruption Trial Turns Poisonous
The trial of former Philadelphia Treasurer Corey Kemp and four other defendants on corruption charges has started to resemble a game at Veterans Stadium as tensions have risen with the jury still deliberating after being instructed last week. U.S. District Judge Michael Baylson interviewed each of the jurors separately on Wednesday, and apparently the subject…
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Ken Lay’s Bank Fraud Charges Will Be Heard After Larger Conspiracy Trial
U.S. District Judge Sim Lake rejected the government’s request to begin the trial of Ken Lay on the severed bank fraud charges within the next two months. Judge Lake accepted the defense argument that an earlier trial — and conviction — would have a prejudicial effect on the jury pool because of the intense publicity…
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FinCEN Seeks to Bar Two Latvian Banks from the U.S.
The Financial Crimes Enforcement Network (FinCEN) filed a notice of proposed rulemaking to prohibit two Latvian banks headquartered in Riga, VEF Banka and Multibanka, from conducting financial transactions with banks in the United States because of possible money laundering activities at the banks. Under the USA PATRIOT Act, U.S. financial institutions can be required to…
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Now, the Scrushy Defense Begins
The defense in the prosecution of Richard Scrushy began — after more rounds of legal wrangling — by focusing on the lack of any documentary evidence showing that he was aware of the fraud at HealthSouth, with the first witness being an FBI agent, who would have to be considered hostile. This is the consistent…
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Hynix Semiconductor Pleads Guilty to Price Fixing
Hynix Semiconductor Inc., a South Korean manufacturer of dynamic random access memory (DRAM), agreed to plead guilty to a single count of conspiring to violate the Sherman Act by fixing prices with other manufacturers. The plea agreement requires the company to pay a $185 million fine, which is the third largest criminal antitrust fine ever;…
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Another Hobbs Act Decision Rejects Commerce Clause Challenge
The Eleventh Circuit reiterated its position that the broad commerce element for a Hobbs Act violation only requires a minimal effect on interstate commerce and not a "substantial" effect in United States v. Verbitskaya (here). The court rejected a claim that the Supreme Court’s federalism decisions in Lopez and Morrison changed the broad interpretation of…
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Medicare Fraud Indictment for Inflated Durable Medical Equipment Billings
Abuses involving durable medical equipment (DME) have been among the most pervasive types of health care fraud prosecuted by the federal government. A grand jury in Philadelphia indicted David Mazer, who operated the Women’s Medical Group, on 12 counts of health care fraud and 18 counts of wire fraud for providing cheaper or less complex…
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Defendants Sentenced in Enron Barge Trial
Two Merrill Lynch executives, Daniel Bayly and James Brown, were sentenced for their roles in the Enron Nigerian barge trial in which Enron agreed to sell the barges to Merrill and then repurchase them later, essentially a financing deal rather than a true sale, in order to inflate Enron’s earnings for at the end of…
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Podiatrist Receives 51 Months for Medicare Fraud
The old Wall Street adage that "bulls and bears make money but pigs get slaughtered" certainly applies to doctors who abuse the medicare system. The U.S. Attorney’s Office for the Central DIstrict of California issued a press release (here) discussing the 51 month sentence given to Mark Little, a podiatrist in Orange County, who was…
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