Monthly Archives: September 2016

Ten California Real Estate Investors Exposed for Their Roles in Foreclosure Auction Racket

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Washington, D.C.-  Multiple real estate investors from Eastern California face sentencing for their roles in a multi-faceted bid-rigging racket.  All ten of the named men face monetary fees upwards of $1 million for their actions while seven will be imprisoned for 6-12 months.

The DOJ post:

Ten Eastern California Real Estate Investors Sentenced for Roles in Bid-Rigging and Mail-Fraud Conspiracies Involving Real Estate Purchased at Public Foreclosure Auctions

More than $6 Million in Fines and Restitution Imposed

Ten Eastern California real estate investors were sentenced yesterday for their participation in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Eastern California, the Department of Justice announced.

The primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Joaquin County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties.

“These defendants rigged foreclosure auctions to profit at the expense of mortgage holders and homeowners,” said Acting Assistant Attorney General Renata Hesse of the Department of Justice’s Antitrust Division.  “Yesterday’s sentences send a strong message that conspiracies to eliminate competition in any area of our economy will not be tolerated.”

“My office will continue to fight real estate fraud in all its forms, including bringing to justice those who would subvert public foreclosure auctions for their own personal gain,” said Acting United States Attorney Phillip A. Talbert of the Eastern District of California.

The following individuals were sentenced in the U.S. District Court for the Eastern District of California in Sacramento:

  • Anthony B. Ghio of Stockton, California, was sentenced to serve five months in prison and ordered to pay a $1 million criminal fine and $214,544 in restitution to the victims of the crime.
  • John R. Vanzetti of Stockton, California, was sentenced to serve five months in prison and ordered to pay a $1 million criminal fine and $271,454 in restitution to the victims of the crime.
  • Theodore B. Hutz of Stockton, California, was sentenced to serve five months in prison and ordered to pay a $250,000 criminal fine and $76,670 in restitution to the victims of the crime.
  • Richard Northcutt of Stockton, California, was sentenced to serve seven months in prison and ordered to pay a $1 million criminal fine and $614,982 in restitution to the victims of the crime.
  • Kennen A. Swanger of Alta, California, was sentenced to serve five months in prison and ordered to pay a $5,000 criminal fine.
  • Wiley C. Chandler of Stockton, California, was sentenced to serve seven months in prison and ordered to pay a $500,000 criminal fine and $614,982 in restitution to the victims of the crime.
  • Walter Daniel Olmstead of San Francisco, California, was sentenced to serve eight months in prison and ordered to pay a $29,687 in restitution to the victims of the crime.
  • Gregory L. Jackson of Lodi, California, was sentenced to pay a $150,000 criminal fine and $20,900 in restitution to the victims of the crime.
  • Robert Rose of Danville, California, was sentenced to pay a $100,000 criminal fine and $24,128 in restitution to the victims of the crime.
  • Anthony B. Joachim of Stockton, California, was sentenced to pay a $175,000 criminal fine and $94,154 in restitution to the victims of the crime.

Two other real estate investors, Andrew B. Katakis and Donald M. Parker, were convicted at trial of bid rigging in March 2014.

A total of thirteen individuals pleaded guilty or were convicted in the U.S. District Court for the Eastern District of California in connection with this investigation.  The sentences announced yesterday resulted from an ongoing investigation being conducted by the Antitrust Division’s San Francisco office, the U.S. Attorney’s Office for the Eastern District of California, the FBI’s Sacramento Division and the San Joaquin County District Attorney’s Office.

GeyerGorey LLP

GeyerGorey LLP is experienced in working with clients to successfully resolve the toughest, most complicated white collar criminal investigations, including FCPA, frauds including grant fraud and procurement fraud, and competition matters including antitrust and anti-dumping cases. Our partners all have over 20 years of senior level experience with the US Department of Justice and deep expertise in the field of federal white collar crimes. We know how the government’s enforcement agencies think and what they look for in these types of investigations. We use these insights to help our clients mount an effective and efficient defense that specifically addresses any red flags that federal agents look for when conducting an investigation. If your organization is under investigation, or you are concerned that an investigation may be launched, GeyerGorey LLP may be the right firm for you. Call Now +1 (888) 293-0644

DOJ Announces Plan to Improve Forensic Practitioners’ “Professional Responsibility”

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Washington, D.C.-  The Department of Justie announces new steps to improve “professional responsibility” among forensics practitioners.

 The DOJ announcement:

Justice Department Announces New Steps to Advance and Strengthen Forensic Science

Changes Include New Code of Professional Responsibility for Practice of Forensic Science

The Department of Justice announced new steps today as part of its ongoing commitment to strengthening and advancing forensic science.  The department will implement a number of steps that will promote professional responsibility among forensics practitioners, institute best practices and advance the relationship between the academic research of forensic science and implementation in the field.

“Today’s announcement marks yet another step forward in the department’s efforts to strengthen the practice of forensic science in our nation’s laboratories and courtrooms,” said Deputy Attorney General Sally Q. Yates.  “We are continually looking at ways to ensure that forensic evidence is collected, analyzed and presented in a responsible and scientifically rigorous manner.”

The new policies include adopting a new code of professional responsibility that builds upon existing policies and accreditation requirements for departmental forensic examiners and laboratories. The department believes the code will improve education and guidance on professional responsibility while establishing a process for identifying and addressing violations of professional conduct.

Department forensic laboratories will also review their policies and procedures to ensure that forensic examiners are not using the expressions “reasonable scientific certainty” or “reasonable (forensic discipline) certainty” in their reports or testimony.  Department prosecutors will also abstain from using these expressions when presenting forensic reports or questioning forensic experts in court unless required by a judge or applicable law.  This decision complements the department’s efforts, announced earlier this year, to provide better guidance to forensic examiners and federal prosecutors on how to properly characterize the strength of forensic evidence in the courtroom.

The department also announced policies to implement greater transparency and access to forensic laboratory quality assurance documents and a plan to explore a grant funding of multiyear post-doctoral fellowships at federal, state and local forensic science service providers and forensic medicine service providers.

The new policies arose out of recommendations made by the National Commission of Forensic Science, which was established to advance the field of forensic science and make suggestions to the Attorney General on how to ensure that reliable and scientifically valid evidence is used when solving crimes.  The Attorney General’s decision to implement several of the commission’s recommendations was announced at a meeting of the commission today.  A memo was also sent to all department component heads directing the implementation of the recommendations.  Additional information on the department’s ongoing work to strengthen forensic science can be found at www.justice.gov/forensics.

 

GeyerGorey LLP 

GeyerGorey LLP is experienced in working with clients to successfully resolve the toughest, most complicated white collar criminal investigations, including FCPA, frauds including grant fraud and procurement fraud, and competition matters including antitrust and anti-dumping cases. Our partners all have over 20 years of senior level experience with the US Department of Justice and deep expertise in the field of federal white collar crimes. We know how the government’s enforcement agencies think and what they look for in these types of investigations. We use these insights to help our clients mount an effective and efficient defense that specifically addresses any red flags that federal agents look for when conducting an investigation. If your organization is under investigation, or you are concerned that an investigation may be launched, GeyerGorey LLP may be the right firm for you. Call Now +1 (888) 293-0644

Two Medicare Companies to Forfeit Total of $12 Million to Settle False Claim Allegations

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Cinnaminson, NJ- Two medical equipment companies and their brother-CEOs will forfeit a grand total of $12 million to settle False Claims allegations. Both companies, U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc., made unrequested phone calls to Medicare beneficiaries , seeking to sell them unnecessary medical equipment.

The DOJ post on the matter:

Diabetic Medical Equipment Companies to Pay More Than $12 Million to Resolve False Claims Act Allegations

U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc. and the two owners and presidents of those companies have agreed to pay the United States more than $12.2 million to resolve allegations that they violated the federal False Claims Act by using a fictitious entity to make unsolicited telephone calls to Medicare beneficiaries in order to sell them durable medical equipment, the U.S. Department of Justice announced.  U.S. Healthcare Supply LLC, based in Milford, New Jersey, has agreed to pay more than $5 million, and Jon P. Letko, its owner and president, has agreed to pay more than $1 million.  His brother, Edward J. Letko, the owner and president of Oxford Diabetic Supply Inc., a medical equipment supplier that allegedly also participated in the scheme, has agreed to pay $6 million plus interest.

“We will continue to hold health care providers accountable for attempting to circumvent Medicare statutes and regulations that help prevent the submission of claims for medically unnecessary services and supplies,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Arrangements which clearly disregard program requirements in order to enhance the financial interests of health care providers will not be tolerated.”

“Cold-calling people to sell them expensive medical equipment is prohibited for a reason: unsuspecting patients shouldn’t be coerced into making medical decisions about devices and equipment – which they may not even need – on the basis of a sales pitch,” said U.S. Attorney Paul J. Fishman for the District of New Jersey.

The settlement announced today resolves allegations that U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc. set up and controlled an entity called Diabetic Experts Inc., which they used to make unsolicited telephone calls to Medicare beneficiaries in order to sell them durable medical equipment.  The companies submitted claims to Medicare for the equipment that they sold based on these unsolicited calls.  This conduct violated the Medicare Anti-Solicitation Statute.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $30.5 billion through False Claims Act cases, with more than $18.4 billion of that amount recovered in cases involving fraud against federal health care programs.

 

 

GeyerGorey LLP is experienced in working with clients to successfully resolve the toughest, most complicated white collar criminal investigations, including FCPA, frauds including grant fraud and procurement fraud, and competition matters including antitrust and anti-dumping cases. Our partners all have over 20 years of senior level experience with the US Department of Justice and deep expertise in the field of federal white collar crimes. We know how the government’s enforcement agencies think and what they look for in these types of investigations. We use these insights to help our clients mount an effective and efficient defense that specifically addresses any red flags that federal agents look for when conducting an investigation. If your organization is under investigation, or you are concerned that an investigation may be launched, GeyerGorey LLP may be the right firm for you. Call Now +1 (888) 293-0644