FERC Asks Court To OK Pa. Trader's $42M Manipulation Fine

The Federal Energy Regulatory Commissionon Wednesday urged an Ohio federal judge to affirm $42 million in penalties and disgorgement it imposed on a shuttered Pennsylvania trading firm and its employees for alleged electricity market manipulation, allegations the firm insists are unfounded.

FERC slapped Coaltrain Energy LP, its two founders, and three traders and analysts in May with the penalties, accusing them of completing sham, money-losing, up-to-congestion transactions — a hedging mechanism against transmission system congestion charges — in the electricity market in order to collect payments known as marginal loss surplus allocations from regional grid operator PJM Interconnection. read more »

Facebook Fails to Show Up for Seventh Tax Summons From IRS

Facebook Inc. officials failed to show up after getting seven summonses from the Internal Revenue Service demanding internal corporate records on one of its offshore tax strategies, according to an IRS court filing.

U.S. authorities are examining Facebook’s federal income tax liability for the period ending Dec. 31, 2010 and are looking at whether the company understated the value of global rights for many of its intangible assets outside the U.S. and Canada that it transferred to a subsidiary in low-tax Ireland.

While Facebook has supplied some documents to the tax authority, it hasn’t provided books, records, papers and other data demanded in seven summonses, the IRS said in an amended petition filed Monday at the U.S. District Court for the Northern District of California. These include a request to show up at an IRS office in San Jose on June 29. read more »

Deion Sanders FCA Suit Draws Fight Against Default Bid

Several defendants in a False Claims Act suit against NFL Hall of Famer Deion Sanders alleging funds for feeding needy children were misused told a Texas federal court that they should not be hit with default judgments, arguing that they properly responded to the whistleblower’s suit, despite his own notice mistakes.

Defendant Charity Church and three individuals targeted in the FCA lawsuit — Damien LaMarc Wallace, Frederick R. Mays and Chazma Jones  — urged the court to deny default judgment sought by whistleblower Lawrence M. Smith, who said the defendants failed to respond to the lawsuit within the time allotted by law. read more »

Wells Fargo Withholding 'Crucial Evidence,' FCA Relators Say

A pair of whistleblowers requested sanctions against Wells Fargo in Georgia federal court Tuesday amid a bitter discovery process, accusing the bank of concealing “crucial evidence” proving their False Claims Act allegations that the bank added illegal fees to government-backed mortgages.

The whistleblowers, former mortgage brokers Victor Bibby and Brian Donnelly, said Wells Fargo Bank NA produced invoices and related documents for just 560 out of 14,000 loans being studied, material that was not handed over until a few days after “fact discovery” ran out April 29 and in violation of court discovery orders.

“WF has concealed direct evidence of WF’s fraud, and WF continues to conceal that evidence for 96 percent of the loans relators reviewed in this case over the past three years. This is particularly galling because for many of the loans relators have concluded are ‘dirty,’ relators have had to rely on indirect evidence that the fees charged were not reasonable and customary,” Bibby and Donnelly said. “All that time WF had direct evidence of the thing to be proved, but concealed it.” read more »

State Street will pay $530m to settle foreign exchange cases

State Street Corp. will pay $530 million to settle years of regulatory investigations and private lawsuits alleging that it overcharged pensions, mutual funds, and other clients on foreign currency trades.

Under an agreement with federal authorities announced Tuesday, the Boston-based financial services giant will pay $167.4 million to the Securities and Exchange Commission and $155 million to the Department of Justice, as well as $50 million to pension clients.

The payouts are aimed at concluding investigations that State Street has faced since 2009, whenWall Street whistleblower Harry Markopolos filed a lawsuit on behalf of the nation’s largest public pension funds, in California. He later filed additional lawsuits in Massachusetts and around the country. read more »

False Claims Act Penalty Spike Confirmed by DOJ

Entities that provide goods and services to the federal government, including health care providers and life sciences companies, should take note of the new civil monetary penalty amounts applicable to False Claims Act (“FCA”) violations. After much anticipation, the U.S. Department of Justice (“DOJ”) issued an interim final rule on June 30, 2016 confirming speculation that the penalty amounts will increase twofold.

The new minimum per-claim penalty amount will increase from $5,500 to $10,781, and the maximum per-claim penalty amount will increase from $11,000 to $21,563. The DOJ penalty increase mirrors the penalty spike announced by the U.S. Railroad Retirement Board (“Railroad Board”) in May of this year.

The new penalty amounts will take effect August 1, 2016 and will apply to all violations that occurred after November 2, 2015.  This November date was the date that Congress passed the Bipartisan Budget Act of 2015 (the “Act”), which is the legislation that requires federal agencies that handle FCA cases to update their penalty amounts to adjust for inflation. read more »

UPMC reaches $2.5 million settlement over Medicare claims

The U.S. Justice Department says that it has settled a complaint against the University of Pittsburgh Medical Center over false Medicare claims.

The $2.5 million settlement, announced on Wednesday, includes Pittsburgh Physicians, UPMC Community Medicine, Inc., and Tri-State Neurosurgical Associates UPMC, Inc.The settlement resolves several of the allegations in a whistleblower lawsuit filed in federal court in Pittsburgh.

The Justice Department claimed that UPMC violated the False Claims Act by submitting false claims for payment to the Medicare program. read more »