Sacramento Bee: “Patricia Davis, former Assistant Director, USDOJ Civil Division, joins GeyerGorey LLP”
Category Archives: Grant Fraud
MainJustice.Com: “Former Civil Division Fraud Leader Joins White Collar Firm”
Patricia Davis, former Assistant Director, Fraud Section, Civil Division, joins GeyerGorey LLP
Patricia Davis, a twenty-year veteran of the Department of Justice, has joined GeyerGorey LLP as of counsel. She previously served as Assistant Director, Fraud Section, Civil Division, U.S. Department of Justice, where she was responsible for investigating and prosecuting hundreds of cases involving fraud on government healthcare, procurement and grant/loan programs. Prior to joining the Department, Ms. Davis was Deputy Counsel to the Inspector General at the General Services Administration. She is the eleventh former DOJ prosecutor to join the boutique law firm in less than a year.
“The scope and breadth of Pat’s experience is unparalleled. Much of the Civil Division’s enforcement program focusing on Defense Department contracts and pharmaceuticals rested squarely on her shoulders,” said Brad Geyer, one of the firm’s founding partners. “We are delighted that Pat has decided to join us.”
Robert Zastrow, who was Verizon’s Assistant General Counsel for 15 years before co-founding the firm in October 2012, added,“ Pat Davis is an excellent addition to our corporate compliance and white collar practice.”
“I believe that Pat brings our firm to a new level in terms of our ability to get cases placed appropriately and to enhance the chances that our qui tam (False Claims Act) cases will be adopted by the government,” said Hays Gorey, a firm co-founder. “With Pat’s terrific background and deep legal knowledge, we are uniquely positioned to develop cases so that they are ready, when filed, to be transitioned immediately to the appropriate U.S. Attorney’s Office or the Civil Division of the Department of Justice.”
Headquartered in Washington, D.C., with offices in New York, Boston, Philadelphia and Dallas, GeyerGorey LLP specializes in white collar criminal defense, particularly investigations and cases involving allegations of economic crimes, including violations of the federal antitrust laws (price fixing, bid rigging, territorial and customer allocation agreements), the procurement and grant fraud statutes, the securities laws, the Foreign Corrupt Practices Act, the False Claims Act and other whistleblower actions. The firm also conducts internal investigations of possible criminal conduct and provides advice regarding compliance with antitrust, anti-bribery and other laws and regulations, in addition to advising on voluntary and mandatory disclosure issues. For further information, please call Patricia Davis at (202) 559-1456 or email [email protected].
Texas-Based School Chain to Pay Government $3.7 Million for Submitting False Claims for Federal Student Financial Aid Schools Located in Texas, Florida, New Mexico and Oklahoma
ATI Enterprises Inc. will pay the government $3.7 million to resolve False Claims Act allegations that it falsely certified compliance with federal student aid programs’ eligibility requirements and submitted claims for ineligible students, the Justice Department announced today.
“Federal financial aid is meant to help students obtain a quality education from an eligible institution, and the Department of Justice is committed to ensuring colleges comply with the rules to make certain that happens,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.
Allegedly, ATI Enterprises knowingly misrepresented to the Texas Workforce Commission and to the Accrediting Commission of Career Schools and Colleges its job placement statistics to maintain its state licensure and accreditation. To participate in federal student aid programs, as authorized by Title IV of the Higher Education Act of 1965, as amended (Title IV), schools must enter into a contract with the Secretary of Education called a Program Participation Agreement, in which they agree to a number of terms. For example, if an institution advertises its job placement rates as a means of attracting students to enroll, it must make available to prospective students its most recent and accurate employment statistics to substantiate the truthfulness of its advertisements. The government alleged that, by misrepresenting its job placement statistics, ATI Enterprises fraudulently maintained its eligibility for federal financial aid under Title IV.
The government further alleged that ATI employees engaged in fraudulent practices to induce students to enroll and maintain their enrollment in the schools. This falsely increased the schools’ enrollment numbers, and consequently, the amount of federal dollars they received at the expense of taxpayers and students, who incurred long-term debt.
“Misuses of the federal student aid system must not be tolerated, for the sake of the taxpayers and of the innocent individuals who are seeking a quality education,” said Sarah R. Saldaña, U.S. Attorney for the Northern District of Texas, where some of the ATI campuses involved in the lawsuit are located.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida said: “Federal financial aid is there to help students attain their dreams and goals, and misuse of these funds to increase corporate profits is unacceptable. We are committed to ensuring that federal student aid is used for the benefit of students.”
The settlement amount will be paid from funds supporting three letters of credit that ATI provided to the Department of Education. In addition to the False Claims Act settlement, the Department of Education will disburse from the letter of credit funds $2 million for student loan refunds in relation to cases students filed against ATI in Texas state courts and other related arbitrations.
“Federal student aid exists so that students can make the dream of a higher education a reality. That’s why misuse in any way of these vital funds cannot be tolerated,” said Kathleen Tighe, Inspector General of the U.S. Department of Education. “I’m proud of the work of OIG special agents for holding ATI Enterprises accountable and for protecting the integrity of federal education dollars.”
The settlement resolves allegations made in two separate complaints against ATI Enterprises Inc., and related entities filed under the False Claims Act’s qui tam, or whistleblower, provisions, which permit a private individual to file suit for false claims to the government and to share in any recovery. The first complaint, U.S. ex rel. Aldridge, et al. v. ATI Enterprises Inc., et al., was filed in July 2009 in the U.S. District Court for the Northern District of Texas. The second complaint, U.S. ex rel. Ramirez-Damon v. ATI Enterprises Inc., was filed in July 2011 in the U.S. District Court for the Southern District of Florida.
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Texas, the U.S. Attorney’s Office for the Southern District of Florida, and the Department of Education’s Office of Inspector General and Office of General Counsel. The claims settled by this agreement are allegations only, and there has been no determination of liability.
GeyerGorey LLP Issues Updated Representative Matters List; Experience is Wide and Deep
Representative Matters
Our attorneys have led and participated in some of the highest profile matters in the past decade, both while in the government and in private practice. We have been involved in the most significant criminal cartel cases, the most important mergers, the most notable civil antitrust investigations, the largest procurement fraud cases, and game-changing antitrust cases that reached the United States Supreme Court. Our collective experience stands as a testament to our work ethic, our drive for excellence, and the trust and responsibility we have been given by our clients and the government.
International Cartels:
- Led investigation and prosecution of marine contractors engaged in conspiracy to suppress and eliminate competition to install deep sea oil platforms
- Led investigation and prosecution of international freight forwarders engaged in conspiracy to fix prices on international air cargo shipments
- Led investigation and prosecution of household-goods moving contractors engaged in conspiracy to fix prices for international moving services provided to Department of Defense
- Investigation and prosecution of graphite electrodes manufacturers
- Investigation and prosecution of ocean shipping companies
- Investigation and prosecution of a FTSE 250 engineering company that resulted in the indictment, extradition and conviction of its former chief executive
- Defended foreign construction company in investigation and prosecution of alleged billion-dollar bid rigging scheme, in related qui tam litigation, and in other related matters
- Defended foreign vitamin manufacturers in investigations and prosecutions of alleged international price-fixing agreements
- Defended foreign specialty chemical manufacturers in investigations and prosecutions of alleged international price-fixing agreements
- Defended U.S.-based executive of foreign company in criminal and civil litigation related to his alleged role in an international cartel to fix prices in the marine supply industry
- Defended foreign executive of foreign company in criminal and civil litigation related to his alleged role in the conspiracy to fix air cargo rates around the world
- Defended international freight forwarder in criminal litigation related to its alleged role in an international conspiracy to rig bids on U.S. military shipping contracts
- Investigation and subsequent prosecution of foreign vitamin manufacturers for price fixing conspiracy
Domestic Price Fixing and Bid Rigging:
- Defended electrical products manufacturer in first felony prosecution under the Sherman Act and in civil treble damage litigation
- Represented a class of nurses in litigation against a hospital association and a number of Arizona hospitals
- Represented the State of Ohio against a number of dairies for allegedly rigging bids of school milk
- Investigation and prosecution of highway paving contractors in multiple districts for bid rigging
- Investigation and prosecution of military insignia providers supplying the Army Air Force Exchange System with over 4,000 items of insignia
- Represented metal drum manufacturer in prosecution for price fixing
- Investigation of polypropylene bag manufacturers and that resulted in the prosecution of a manufacturer for Buy American Act violations and conspiracy to defraud
- Investigation and prosecution of nearly 40 cases against paving contractors for conspiring to rig bids in connection with federal and state highway and airport contracts
- Investigation and prosecution of an auction rigging conspiracy involving auto parts to by the Department of Defense at Defense Reutilization Marketing Offices (DRMO)
- Investigation and prosecution of multiple electrical construction contractors for conspiring to rig bids for major power wiring contracts associated with steel mills and waste water treatment plants
- Investigation and prosecution of multiple wholesale grocery companies and bid managers for rigging bids to school districts, hospitals and jails in southern Texas
- Investigation and prosecution of multiple dairies for rigging bids for school milk sold to districts in Louisiana
- Investigation and prosecution of crawfish processors for fixing prices paid to crawfish farmers and fishermen
- Investigation and prosecution of bribery conspiracy involving the reconstruction of the New Orleans levee system after Hurricane Katrina
- Investigation and prosecution of fire protective services company and its president
- Investigation and prosecution of an Iraq-based general construction bid rigging scheme
- Investigation and prosecution of conspiracy to solicit kickback scheme involving security services on a US Agency for International Development contract
- Investigation and prosecution of fuel theft from an overseas United States military facility
- Investigation and prosecution of a Europe-based scheme to defraud the Iraqi government by facilitating the fraudulent claim for payment of armored vehicles that were never delivered
- Represented individual accused of defrauding government defense agency out of hundreds of thousands of dollars of grant money
- Represented company accused of defrauding government by failing to supply vitamin-enriched food products with the proper level of enrichment
- Represented large computer software company in internal investigation of improper influence on government contracting process
General Criminal:
- Defended CEO and three closely-held companies in a multi-state racketeering and tax fraud prosecution
- Investigation and prosecution of multiple labor racketeering cases ranging from prosecutions of United Mine Worker Union officials for theft of union funds used to pay for the murder of a political opponent of the union president to the prosecution of two Boston-based racketeers for actions associated with their travel to California in connection with a union organizing effort at a San Rafael newspaper
- Investigation and prosecution of the mayor of a New Jersey town for taking bribes in connection with the permitting of a tank farm at the terminus point of a major Gulf Coast to East Coast pipeline
- Investigation and prosecution of the most prolific serial bank robber in United States history
- Investigation and prosecution of the murder for hire of a government witness and one of the largest cocaine importation conspiracies East of the Mississippi River
- Investigation and prosecution of numerous gun, drug and false identity cases
- Investigation and prosecution of multiple obstructions of justice, contempt, false statement, witness tampering and perjury cases arising out of grand jury investigations
- Investigation and prosecution of bank fraud cases
- Represented individuals before the District of Columbia Court of Appeals in appeals from criminal convictions (more than a dozen cases)
- Defended individual in intelligence community in investigation by DCIS for alleged violations of public corruption statutes (18 U.S.C §§ 207 & 208)
- Defended individual in criminal investigation by Inspector General of NASA
- Defended individual in federal bribery investigation
- Defended government contractor in investigation by the Inspector General of the Department of Agriculture
- Defended several regional hospitals in various unrelated federal investigations of allegedly fraudulent billing practices, Stark violations
- Represented hospital CEO in investigation of alleged Stark violations
- Represented pathology laboratory in healthcare fraud investigation
- Represented national healthcare company in investigation of allegedly criminal off-label marketing
- Represented various individuals in applications for presidential pardons
Mergers and Acquisitions:
- Represented Warner Music in connection with the proposed acquisition of EMI by Universal Music
- Represented DISH Network in opposition to the proposed acquisition of T-Mobile by AT&T
- Represented Merck in connection with its acquisition of Schering Plough
- Represented Simon Properties in connection with its acquisition of Prime Outlets
- Obtained antitrust clearance in the acquisition of Liquid Container by Graham Packaging
- Obtained consent decree against nuclear engineering firm which had acquired another firm with the same engineering specialty
- Represented major home healthcare provider in acquisition valued in excess of $500 million
- Represented pathology laboratory in merger valued in excess of $100 million
- Represented foreign mining company in acquisition of US coal mines valued over $1 billion
- Represented hospital management company in acquisition valued in excess of $500 million
- Represented individual in several acquisitions of stock each valued in excess of $100 million
- Represented major over-the-counter pharmaceutical company in four different acquisitions over several years whose values ranged from over $100 million to over $500 million
- Represented national restaurant chain in acquisition valued at about $1 billion
- Represented regional hospital chain in acquisition of a hospital valued above $50 million
- Represented hospital valued in excess of $100 million in sale to state hospital system
Civil Antitrust Matters:.
- Defended large telecommunications provider in three week trial for alleged exclusionary conduct directed towards telecom services resellers.
- Represented large telecommunications provider as plaintiff in case alleging monopolization of market for telecom switch software.
- Represented leading music copyright licensing organization in a decade-long investigation by the Department of Justice
- Led the investigation of Ticketmaster at the Department of Justice
- Led major, successful prosecution by United States Department of Justice of conspiracy among twenty-four leading market-makers in NASDAQ stocks, including Goldman, Sachs & Co. and J. P. Morgan Securities, Inc. who had conspired to maintain spreads between buying and selling prices of NASDAQ stocks
- Defended large telecommunications provider in multi-year litigation brought by competitive telecom carrier alleging monopolization of market for high speed data services
- Led successful investigation and prosecution of Salomon Bros Inc. and two hedge funds, Caxton Corporation and Steinhardt Partners, LP, to limit the supply of two-year Treasury notes to the “repo,” or “repurchase agreement,” market
- Successfully brought the Reagan Administrations ‘s first challenge to a merger (brewing industry)
- Successfully represented the United States in a litigated matter challenging field of use restrictions in patent licensing agreement in specialty chemicals
- Successfully represented the United States in challenge to professional rules of conduct limiting competition among accountants in Texas
- Successfully represented the United States in challenge to acquisition by Texaco, Inc. of an independent oil refining company
- Represented high-tech electronic service provider with respect to antitrust issues in a bet-the-company patent infringement case
- Represented sporting goods manufacturer in vacating a consent decree
- Represented leading music copyright pool in civil antitrust investigation leading to vacating of an earlier consent decree and modification of another consent decree
- Represented hospital CEO in litigation arising from denial of physician staff privileges
Antitrust Compliance Counseling:
- Advised large telecommunications provider on its price and product bundling
- Advised large telecom provider in connection with a joint venture of three carriers to entire the mobile payments market with mobile phones
- Advised major manufacturer of household appliances on antitrust compliance
- Advised major manufacturer of high-end kitchen appliances on antitrust compliance
- Advised major manufacturer of over-the-counter pharmaceutical on antitrust compliance
- Advised regional airport on state action doctrine and compliance with antitrust laws
- Advised national trade association on antitrust compliance and Noerr-Pennington doctrine
- Advised international shipping company on compliance regarding competition, fraud, and foreign corrupt practices
- Advised African government on contracting and anti-fraud and anti-corruption best practices
Other Civil Litigation:
- Represented Haiti in multinational investigation and litigation leading to the recovery of money stolen by its former president Jean-Claude Duvalier
- Represented developers in multiple appeals involving alleged illegal cooperative conversion terms
- Defended law firm in $10 million professional malpractice action
- Defended various healthcare providers in numerous different federal investigations of alleged fraud, related qui tam cases, and related whistleblower termination actions
- Defended CMS contractor in qui tam case
- Represented regional Medicare Advantage organization in suit against the U.S. Government
- Defended book distributor and publisher in defamation case
- Defended author in defamation case
- Represented gaming company in civil rights action relating to state gaming regulations
- Defended copyright and trademark owner in intellectual property litigation
- Defended local retailer of gray market goods in trademark infringement litigation
- Represented major multinational corporation in suit seeking refund of local corporate franchise tax
- Represented government contractor in appeal of denial of security clearance
- Defended employers in cases alleging violation of wage-and-hour statute
- Represented developers in multiple appeals involving alleged illegal cooperative conversion terms
- Defended employer in case alleging employment discrimination
- Defended employer in case alleging sexual harassment
- Defended employers in cases alleging unlawful discharge
Experience by Industry:
- Air Cargo
- Aircraft Parts (Domestic)
- Airlines
- Airport Contracts
- Automobile Dealers (Domestic)
- Airlines
- Asset Forfeiture
- Auction Rigging (Multiple Industries)
- Banking (International)
- Baked Goods (Domestic)
- Baking Soda
- Book Publishing
- Bridge Construction
- Carbon Products
- Caustic Soda
- Cell Towers (Domestic)
- Chemicals (Multiple Products, Domestic and International)
- Clothing and Textiles (Multiple Products, Domestic and International)
- Computer Software
- Construction (Domestic and International)
- Copyright and Trademark
- Dairy Products
- Deep sea Oil Platforms
- Democratization Programs
- Electrical Products
- Embassy Construction
- Engineering
- Export-Import Bank Clients (Multiple Industries, International)
- Food Service Contracts (Multiple Industries, Domestic and International)
- Financial Institutions (Domestic and International)
- Fire Protection Services
- Freight Forwarding (Domestic and International)
- Fuel Supply (Domestic and International)
- General Construction (Multiple Industries, Domestic and International)
- Government Contracts (Multiple Industries, Domestic and International)
- Graphite Electrodes
- Highway Construction
- Hospitals
- Housing Foreclosure Auctions (Domestic)
- Information Technology (Multiple Industries, Domestic and International)
- Industrial Gases (Domestic and Multiple Products)
- LIBOR
- Marine Contractors
- Medical Products (Multiple Products, Domestic and International)
- Metal Drums
- Military Insignia (International)
- Military Moving and Storage
- Mining and Related Products (Multiple Industries, Domestic)
- Motor Vehicles (Domestic)
- Municipal Bonds (Multiple Industries, Domestic and International)
- Nursing
- Ocean Shipping (International)
- Oilfield Supplies
- Pharmaceuticals (Multiple Products, Domestic and International)
- Polypropylene bags
- Rock Salt
- Seafood
- Security Contracts
- School District Contracts (Multiple Industries)
- Soda Ash
- Shipping (Multiple Industries, Domestic and International)
- Slag Removal
- Telecommunications
- Tobacco
- Translation Services
- Trucking
- US Agency for International Development Contractors and Grant Recipients
- Vitamins
- Warzone
- Waste Hauling
- Wholesale Groceries
- Wireless
- World Bank Contractors and Grant Recipients (International)
- Vitamins
Experience by Subject Matter:
- Antitrust (Civil and Criminal)
- Auction Rigging
- Bank Robberies (Domestic)
- Bank Fraud
- Bid-Rigging
- Bribery
- Buy American Act Violations
- Capital Crimes
- Cartels (Multiple Products, Domestic and International)
- Cash Smuggling (International, multiple procurements by multiple governments)
- Civil Merger and Non-Merger Cases (Multiple Products, Multiple Industries Domestic and International)
- Civil Rights Actions
- Competition Advocacy
- Contempt
- Contracting Fraud
- Corporate Defense (Multiple Industries, Domestic and International)
- Criminal Conspiracies
- Defamation
- Disaster Fraud
- Drug Cartels and Trafficking
- Embezzlement
- Employment Law
- False Claims
- False Statements
- Federal Trade Commission Matters
- Firearms and Weapons Offenses (Domestic and International)
- Foreign Corrupt Practices Act (FCPA) (Multiple Industries)
- Forgery
- Fuel Theft
- Grant Fraud (Multiple Industries, Multiple Agencies, Domestic and International)
- Hart-Scott-Rodino Pre-Merger Notification
- Health Care Fraud (Compliance, Organizational Defense, Whistleblowers)
- Kickbacks
- Identity Theft
- Intellectual Property
- Mail Fraud
- Market Allocation
- Mergers and Acquisitions
- Money Laundering (Multiple Industries, Domestic and International)
- Monopolies (Multiple Industries, Domestic and International)
- Murder for Hire
- Non-governmental Organizations (International)
- Obstruction of Justice
- Overseas Contingency Operations
- Perjury
- Presidential Pardons
- Price Fixing
- Procurement Fraud (Multiple Industries, Domestic and International)
- Professional Malpractice Defense
- Public Corruption
- Qui Tam Matters
- Racketeering
- Securities Fraud
- Stark Violations
- Tax Fraud (International, Domestic and State)
- Territorial Allocation
- Webb-Pomerene Organizations (International)
- Weapons Offenses (Domestic and International)
- Whistleblowers (Multiple Industries, Domestic and International)
- Wire Fraud
- Witness Tampering
Texas Businessman Agrees to Settle False Claims Allegations Involving the E-Rate Program
Larry Lehmann of Giddings, Texas has agreed to pay $400,000 to settle allegations that he violated the False Claims Act in connection with the Federal Communications Commission’s E-rate Program, the Department of Justice announced today. The E-rate Program, created by Congress in the Telecommunications Act of 1996, subsidizes eligible equipment and services to make Internet access and internal networking more affordable for public schools and libraries. The Houston Independent School District (HISD) was one of the applicants that successfully sought and received E-rate subsidies from 2004 through 2006.
“The E-rate Program provides vital support for our nation’s students and schools,” said Stuart F. Delery, Assistant Attorney General for the Civil Division of the Department of Justice. “We are committed to protecting the integrity of this important program, which helps our children connect to the digital world.”
“Our office is committed to protecting the integrity of government initiatives,” said U.S. Attorney Kenneth Magidson. “We will continue to work closely with the Department in cases such as this one to ensure the E-rate and other federal programs are free from fraudulent and deceitful claims.”
Lehmann functioned as the CEO and managing partner of Acclaim Professional Services (Acclaim), which partnered with other companies to provide E-rate funded equipment and services to HISD during this period. The United States contended that, in violation of E-rate competitive bidding requirements and HISD procurement rules, Lehmann provided gifts and loans to HISD employees, including tickets to sporting events and two loans totaling $66,750 to an HISD employee who was involved in the procurement and administration of HISD’s E-rate projects.
The United States also alleged that Lehmann helped devise a scheme in which HISD outsourced some of its employees to Acclaim, which allowed them to continue to work for HISD while passing the cost on to the E-rate Program. The United States further alleged that, with Lehmann’s approval, Acclaim hid the cost of these employees in its E-rate Program invoices by rolling them into the cost of eligible goods and services.
The settlement with Lehmann is part of a broader investigation by the United States of E-rate funding requests submitted by HISD and the Dallas Independent School District (DISD). The government previously recovered $16.25 million from Hewlett-Packard, $850,000 from HISD, and $750,000 from DISD. The government’s investigation was initiated, in part, by a qui tam or whistleblower lawsuit filed under the False Claims Act by Dave Richardson and Dave Gillis, who investigated allegations of improprieties based on Richardson’s experience bidding for contracts at HISD and DISD. The False Claims Act authorizes private parties to file suit for false claims on behalf of the United States and share in the government’s recovery. The United States intervened in Richardson and Gillis’ lawsuit, and added Lehmann as a defendant.
“E-rate is one of the FCC’s biggest success stories, helping connect nearly every U.S. library and school to the Internet,” said Julie Veach, Chief of the FCC Wireline Competition Bureau. “We take any abuse of our rules seriously and thank the Department of Justice for their assistance in protecting the integrity of the E-rate Program for students, teachers, and libraries across the country. Today’s action is a signal to those interested in profiting at the expense of our nation’s schools and libraries: fraud doesn’t pay.”
This case was handled by the U.S. Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Southern District of Texas, and the FCC’s Office of the Inspector General and Office of the General Counsel.
The claims resolved by this settlement are allegations only, and there has been no determination of liability. The lawsuit against Lehmann is captioned United States ex rel. Dave Richardson and Dave Gillis v. Larry Lehmann, Civil Action No. 4:05-cv-3836 (S.D. Tex.).
Two Mayors and Two Lobbyists Charged in Separate Corruption Investigations Mayor of Sweetwater Received More Than $40,000 in Bribes; Mayor of Miami Lakes Received $6,750 in Bribes
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that four individuals have been charged in two separate complaints involving public corruption allegations. The first complaint charges Manuel L. Maroño, 41, the mayor of Sweetwater, and two lobbyists, Jorge L. Forte, 41, and Richard F. Candia, 49, all of Miami, for their alleged participation in a kickback and bribery scheme (the Maroño complaint) in connection with purported federal grants for the city of Sweetwater. The second complaint charges Michael A. Pizzi, 51, the mayor of Miami Lakes and town attorney for the town of Medley, and Richard F. Candia, in a separate kickback and bribery scheme in connection with purported federal grants for both Miami Lakes and Medley (the Pizzi complaint). Both complaints charge the defendants with conspiracy to commit extortion under color of official right, in violation of Title 18, United States Code, Section 1951(a).
U.S. Attorney Wifredo A. Ferrer stated, “Our democracy suffers when, as in these cases, elected officials use their power and political influence for personal gain instead of for the public good. Public corruption, at any level of government, corrodes and undermines the public’s confidence in our system of government. We are committed to stopping this corrosion and to help restore transparency to local government.”
“For the public to have confidence in their government, they must be certain that their elected officials will not use their position for personal gain,” said Michael B. Steinbach, Special Agent in Charge, FBI Miami. “We encourage anyone who may have information about corruption to come forward and report it. This information is critical to our work. The South Florida community can be assured that public corruption will remain a top priority for the FBI.”
The defendants made their initial appearances in federal court today at 1:30 p.m. before U.S. Magistrate Judge Andrea Simonton. If convicted, the defendants face a maximum statutory penalty of up to 20 years in prison.
Investigation Background
The investigation began in approximately June 2011, when Candia began dealing with an FBI confidential source and two undercover FBI agents posing as the owners of a Chicago-based grant administration business. During meetings, the undercover agents represented to Candia that, with the aid of corrupt local public officials, they could obtain federal grant moneys, which they would then keep and distribute among themselves. After listening to the undercover agents’ proposal, Candia identified Maroño and Pizzi as potential participants in the scheme.
The Sweetwater Deal—Manuel Maroño
According to the Maroño complaint affidavit, after identifying Maroño as a potential participant in the proposed scheme, Candia introduced Maroño to the undercover agents. Maroño caused the passage of a resolution in Sweetwater that authorized the undercover agents’ company to apply for federal grant moneys on behalf of the city of Sweetwater. After the resolution was passed, Maroño and Forte personally met and negotiated with the undercover agents and accepted a series of cash payments in exchange for Maroño’s official action in support of the grant scheme. During these negotiations and meetings, Forte acted as the front man for Maroño.
To further the scheme and avoid detection, Maroño also participated in what he believed to be audit telephone calls from a federal grant auditor to confirm the grantee’s performance on the grant. During two separate audit calls, both of which were recorded, Maroño lied to and misled the auditor, who was in fact an undercover FBI agent, about the actual use of the grant money and the grantee’s performance. For their actions, Maroño and Forte received $40,000 and Candia received at least $5,000 in kickbacks in connection with the Sweetwater deal.
Lastly, Maroño, Forte, and Candia received additional payments for their assistance in identifying other public officials whom they claimed might also be interested in participating in similar grant schemes in their cities. To this end, Maroño, Forte, and Candia used Maroño’s position as President of the Florida League of Cities to introduce the scheme to other officials. Maroño and Forte received an additional $20,000 in cash for these introductions, but no other public officials ultimately participated in the scheme.
The Miami Lakes/Medley Deals—Michael Pizzi
The second complaint charges Michael Pizzi and Candia with engaging in a similar grant scheme in Miami Lakes and Medley. As more fully explained in the affidavit filed in support of the Pizzi complaint, Candia introduced Pizzi to the undercover FBI agents to help implement the grant scheme in Medley, where Pizzi was the town attorney. After a series of meetings with Candia and the undercover agents, Pizzi initially agreed to participate in the scheme in exchange for $750 in campaign contributions, which he received in three separate checks delivered to his office by the FBI confidential source.
Thereafter, to aid in the grant scheme’s success, Pizzi backdated a document that endorsed the undercover agents’ company. Pizzi also handled what he believed to be an audit telephone call from a federal grant auditor to confirm the grantee’s performance on the grant. During that call, which was recorded, Pizzi lied to and misled the auditor, who was in fact an undercover FBI agent, about the actual use of the grant money and the grantee’s performance. In return for Pizzi’s help in Medley, Pizzi received a $1,000 cash kickback and other things of value.
Later, with the intent of expanding the grant scheme to Miami Lakes, Pizzi worked to get a resolution passed in Miami Lakes that would authorize the undercover FBI agents’ company to seek additional grant funds for the city of Miami Lakes. In exchange for his work in Miami Lakes, Pizzi received additional $2,000 and $3,000 cash pay-offs.
These cases were investigated by the FBI Miami Area Public Corruption Task Force with assistance from the City of Miami Police Department, Hialeah Police Department, Miami Beach Police Department, Miami Dade Police Department, and Customs and Border Protection-Internal Affairs. The cases are being prosecuted by Assistant U.S. Attorney Jared E. Dwyer.
A complaint is only an accusation and a defendant is presumed innocent until and unless proven
Noted Antitrust and Disaster Fraud Prosecutor Joan E. Marshall Joins GeyerGorey LLP
Joan Marshall who prosecuted the worldwide vitamins cartel and brought a series of fraud cases in the aftermath of Hurricane Katrina, has joined the firm as a partner. Previously, Ms. Marshall was with the US DOJ Antitrust Division in the Dallas Field Office. She is the tenth former DOJ prosecutor to join the new boutique law firm in less than a year.
FOR IMMEDIATE RELEASE
PRLog (Press Release) – Aug. 6, 2013 – WASHINGTON, D.C. — GeyerGorey LLP is pleased to announce that Joan E. Marshall, a former Department of Justice prosecutor, has joined the firm as partner. Ms. Marshall will open a new office for the firm, in Dallas, where she will be resident.
Ms. Marshall comes to GeyerGorey from the Antitrust Division of the Department of Justice, where she also served as a prosecutor on the Department’s Disaster Fraud Task Force and its predecessor, the Hurricane Katrina Fraud Task Force. While with the Department of Justice, Ms. Marshall supervised numerous multi-agency investigations of bid rigging, price fixing, mail fraud, wire fraud, bank fraud, bribery, perjury and obstruction of justice.
Ms. Marshall had the distinction of breaking the Dallas Field Office’s acclaimed vitamins cartel case and helped to devise, structure and carry out what became one of the most comprehensive international investigations and prosecutions of all time, resulting in more than $1 billion in collected criminal fines. She led the Antitrust Division’s bribery prosecutions involving construction of the levees surrounding New Orleans after the devastation of Hurricane Katrina. Her experience spans investigations and prosecutions involving numerous industries including wholesale groceries, milk, seafood, medical equipment, oilfield supplies, military moving and storage, road and building construction, and municipal finance.
“We are thrilled that Joan has decided to join us,” said Hays Gorey. “She adds deep experience with numerous enforcement agencies and compliments our experience in key industries like oil and gas exploration, not to mention the fraud piece. Our corporate compliance and competition expertise is a perfect fit in the Dallas-Ft. Worth market, which has the largest concentration of corporate headquarters in the United States.”
Ms. Marshall is a frequent speaker on antitrust enforcement and fraud prevention and detection and has developed numerous training programs. She is a recipient of the United States Department of Justice, Assistant Attorney General’s Award and certificates of appreciation from the United States Department of Homeland Security, Office of Inspector General, and the United States Army Criminal Investigation Command, Major Procurement Fraud Unit.
Robert Zastrow, who was Verizon’s Assistant General Counsel for 15 years before co-founding the firm in October 2012, added, “Joan’s extensive background and expertise nicely complements our firm’s unique philosophy and enriches our solid bench in the White Collar world.” Co-founder, Brad Geyer added: “We are very involved in servicing the government contractor and the non-profit and non-governmental organization community and we are excited to roll in Joan’s disaster fraud experience into our overall product offerings. It is also unusual to have career prosecutors in one firm that worked on the highest profile matters on both the criminal and civil worlds. Joan will give us a strategic presence in the Dallas market, which is home to companies in the airline, technology, energy, banking, medical and defense contracting sectors.”
Headquartered in Washington, D.C., GeyerGorey LLP specializes in white collar criminal defense, particularly investigations and cases involving allegations of economic crimes, such as violations of the federal antitrust laws (price fixing, bid rigging, territorial and customer allocation agreements), procurement fraud, securities fraud, foreign bribery (Foreign Corrupt Practices Act) and qui tam (False Claims Act) and other whistleblower actions. The firm also conducts internal investigations of possible criminal conduct and provides advice regarding compliance with U.S. antitrust, anti-bribery and other laws.
Phillip Zane’s Game Theory: Ten Years On
Phillip Zane be the only attorney whose colleagues and clients might expect to see an open book on games and strategy on his desk.
Ten years ago this spring, Zane published The Price Fixer’s Dilemma: Applying Game Theory to the Decision of Whether to Plead Guilty to Antitrust Crimes, 48 Antitrust Bull. 1 (2003), which changed the way law-and-economics scholars and sophisticated prosecutors and defense counsel analyze whether, and when, to settle high-stakes antitrust cases.
Zane’s article strongly suggested that in a number of common situations, pleading guilty (or even seeking the protections of the corporate leniency program) is not always justified. Zane’s article used a repeated, or iterative, version of the prisoner’s dilemma to demonstrate that pleading guilty was not always the best strategy for antitrust defendants facing criminal prosecution and civil liability in multiple proceedings or jurisdictions.
At the time, a few of the brainier Antitrust Division prosecutors breathed a sigh of relief when the defense bar did not seem to notice and they failed to incorporate Zane’s research into their negotiating strategies.
In 2007, Zane published “An Introduction to Game Theory for Antitrust Lawyers,” which he used in a unit of an antitrust class he taught at George Mason University School of Law. That paper was another milestone on the way to making game theory concepts accessible and useful to the antitrust defense bar.
Zane’s work, which now used game theory to criticize the settlement of the second Microsoft case and the Government’s approach to conscious parallelism, as well as the leniency program, was met with official grumblings within the Antitrust Division.
GeyerGorey LLP was founded on the principle that the chances for achieving the best possible outcome are maximized by having access to multiple, top-notch, cross-disciplinary legal minds that are synced together by an organizational and compensation structure that encourages sharing of ideas and information in client relationships.
As international enforcement agencies sprouted and developed criminal capabilities and as more hybrid matters included prosecutors from US enforcement agency components with sometimes overlapping jurisdictions, such as the Antitrust, Criminal, Civil and Tax Divisions of the Department of Justice, and the alphabet soup of regulatory agencies, particularly the Securities and Exchange Commission, it became apparent that Zane’s game-theoretic approach has application in almost every significant decision we could be called upon to make. Since Zane has joined us we have been working to factor in the increased risks associated with what we call hybrid conduct (conduct that violates more than a single statute). Our tools of analysis for identifying risks for violations of competition laws, anti-corruption laws, anti-money-laundering laws, and other prohibitions, include sophisticated game-theoretic techniques, as well as, of course, the noses of former seasoned prosecutors, taking into account, each particular client’s tolerance for risk.
To take one example, an internal investigation might show both possible price fixing and bribery of foreign government officials. How, given the potential for multiple prosecutions, should decisions to defend or cooperate be assessed? And how might such decisions trigger interest by the Tax Division, the SEC, the Commodities Futures Trading Commission, the Federal Energy Regulatory Commission or other regulators. When should a corporation launch an internal investigation? When should it make a mandatory disclosure? What should it disclose and to which agency, in what order? When should it seek leniency and when should it instead stand silent? These tools are valuable in the civil context as well: When should it abandon a proposed merger or instead oppose an enforcement agency’s challenge to a proposed deal?
These are truly the most difficult questions a lawyer advising large corporations is required to address. We are well positioned to help answer these questions.
GGLLP Alert: Changes to the False Claims Act Under the Patient Protection and Affordable Care Act
Changes to the False Claims Act Under the Patient Protection and Affordable Care Act
The 2010 Patient Protection and Affordable Care Act (PPACA) made a number of significant changes to the False Claims Act, including the following:
Original Source Requirement. A plaintiff may now overcome the public disclosure if he or she qualifies as an “original source.” The PPACA revised the definition of this term. Previously, an original source had to have “direct and independent knowledge of the information on which the allegations [were] based.” Now, an original source may be a person who merely has “knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions.” See 31 U.S.C. 3730(e)(4)(B).
Changes to the Public Disclosure Bar. Previously, relators were precluded from proceeding if there had been a public disclosure of information. This disclosure could have occurred in news reports, a Freedom of Information Act response, court proceedings or in any number of ways. Thus, the public disclosure bar often served as a basis for dismissal. The PPACA amended the False Claims Act to allow the government to have the final say on whether a court could properly dismiss a case based on a public disclosure. The statute now provides that “the court shall dismiss an action unless opposed by the Government, if substantially the same allegations or transaction alleged in the action or claim were publicly disclosed.” See 31 U.S.C. 3730(e)(4)(A).
Overpayments. In the prior law, there was confusion as to the “obligation” under the False Claims Act not to retain overpayments and when such overpayments had to be returned after their discovery. Now, under the PPACA, overpayments under Medicare and Medicaid must be reported and returned within 60 days of discovery, or the date a corresponding hospital report is due. The failure timely to report and return an overpayment exposes a provider to False Claims Act liability.
Statutory Anti-Kickback Liability. The federal Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b) (AKS), makes it a crime for any person to solicit, receive, offer or pay remuneration (monetary or otherwise) in exchange for referring patients to receive certain services that are paid for by the government. Previously, many courts had interpreted the False Claims Act to mean that claims submitted as a result of AKS violations were false claims and therefore gave rise to liability under the False Claims Act (in addition to AKS penalties). Even though this was the majority rule, some courts held otherwise and the issue was always present in every case. The PPACA changed the language of the AKS to provide that claims submitted in violation of the AKS automatically constitute false claims for purposes of the False Claims Act. Further, the new language provides that “a person need not have actual knowledge … or specific intent to commit a violation” of the AKS.