Facebook data: the whistleblowers' tale

The FT's Aliya Ram interviews Christopher Wylie and Shahmir Sanni, the two whistleblowers at the centre of the Facebook data breach outcry, about how the scandal broke and what it means for Facebook read more »

SEC Charges Fintech Company Founder With Scheme to Defraud Investors and Misappropriate Funds

The Securities and Exchange Commission has charged Michael Liberty, the founder of the fintech startup now known as Mozido Inc., with a scheme to trick hundreds of investors into investing in his shell companies instead of Mozido.  Liberty and his accomplices then allegedly stole most of the more than $48 million raised to fund a lavish lifestyle that included private jet flights, multi-million dollar residences, expensive cars, and movie production ventures.

The SEC’s complaint, filed March 30, 2018, alleges that Liberty, his wife Brittany Liberty, his attorney George Marcus, his cousin Richard Liberty, and his cousin’s friend Paul Hess induced investors to purchase unregistered interests in shell companies controlled by Michael Liberty that supposedly owned transferrable interests in Mozido.  In reality, the shell companies either did not own or were not permitted to transfer interests in the company.  The SEC also alleges that Michael Liberty and his accomplices lied to investors about Mozido’s valuation and finances, the amount Michael Liberty had personally invested in Mozido, and the use of their funds.  According to the complaint, Michael Liberty and his accomplices later orchestrated a series of transactions in which they used investors’ own money to heavily dilute their interests and duped investors into trading securities for those worth more than 90 percent less. 

“As alleged in our complaint, these investments were sold as a chance to get in early with a seemingly promising fintech company,” said Paul Levenson, Director of the SEC’s Boston Regional Office.  “The prospect of investing in a non-public start-up company may hold considerable allure, but buyers need to understand what they are buying.  Unscrupulous operators make it difficult for ordinary investors to assess such ‘investment opportunities.’”  read more »

160 Months in Prison for $4.3 Million Kickback Scheme Against Military Insurance Program

The owner of an Orlando, Florida-area pharmacy, who was also a licensed pharmacist, was sentenced for his role in a kickback scheme involving pain and scar creams that resulted in the payment of approximately $4.3 million in false and fraudulent claims to TRICARE.  TRICARE provides coverage for active duty military members and their families, as well as retired veterans.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Maria Chapa Lopez of the Middle District of Florida, Special Agent in Charge Eric Sporre of the FBI’s Tampa Field Office and Resident Agent in Charge Brooke M. Harris of the U.S. Department of Defense Office of Inspector General (DOD-OIG) Defense Criminal Investigative Service made the announcement.

Larry B. Howard, 53, of Oviedo, Florida, was sentenced by U.S. District Judge Paul G. Byron for the Middle District of Florida to serve 160 months in prison and ordered to forfeit over $4.3 million as proceeds of the crime.  Howard was also ordered to forfeit two properties, worth approximately $340,000, that he purchased with the proceeds of the crime, and two cashier’s checks worth $25,000 each.  The judge also ordered Howard to pay $4.3 million in restitution to the federal military health insurance program. read more »

Radiation Therapy Company Agrees to Pay Up to $11.5 Million to Settle Allegations of False Claims and Kickbacks

Texas-based SightLine Health LLC (SightLine), which operates radiation therapy centers throughout the United States, has agreed to settle a False Claims Act lawsuit alleging that it knowingly submitted claims to the Medicare program that violated the Anti Kickback Statute, the Justice Department announced today.  Together with Integrated Oncology Network Holdings LLC (ION), which acquired SightLine in 2011, SightLine has agreed to pay the government up to $11.5 million.

The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and instead is based on the best interests of the patient.  It prohibits anyone from offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  Claims submitted in violation of the Anti-Kickback Statute may subject the claimant to liability under the False Claims Act.    

The settlement announced today resolves allegations that SightLine violated the Anti-Kickback Statute and the False Claims Act by targeting physicians that were able to refer patients to its cancer treatment centers, and paid those physicians a share of its profits pursuant to investment arrangements that were set up to allow physicians to profit from their referrals.  Specifically, the United States alleged that SightLine formed a series of leasing companies in which referring physicians were permitted to invest, and through which SightLine allegedly distributed the profits that its physician-investors generated by referring cancer patients for radiation therapy. read more »