Whistleblower News: Facebook IPO Settlement, Kickback Suit
Feds' kickback complaint against Florida pharmacy snags L.A. equity firm
The Department of Justice has accused a Florida pharmacy — and the Los Angeles private equity firm that owns it — of bilking a military healthcare program out of millions of dollars by pushing unneeded vitamins and creams.
In a filing in federal court in Miami, federal prosecutors said compounding pharmacy Patient Care America billed military healthcare program Tricare for more than $68 million in prescriptions over an eight-month period in 2014 and 2015.
Those payments, prosecutors allege, were tainted because PCA paid kickbacks to marketers who pushed unnecessary prescriptions, worked with doctors who wrote prescriptions without examining patients and illegally paid patients' copays to encourage them to fill unneeded prescriptions. read more »
The Alleged $1.2 Billion Ponzi Scheme Sapping L.A.’s Trophy-Home Market
When real-estate developer Woodbridge Group of Companies bought the famous Owlwood estate in Los Angeles in September 2016, the $90 million transaction marked the pinnacle of a nearly four-year property acquisition spree. The company announced it planned to preserve the 1930s-era, Holmby Hills property—once owned by Tony Curtis and later by the pop duo Sonny & Cher—renovate it and add square footage before relisting it.
By July 2017, with none of the work completed, Woodbridge put the property back on the market for $180 million, far above the record price for a Los Angeles home. In a statement announcing the listing, Woodbridge chief executive Robert Shapiro said he’d assembled a team of well-known architects to convert and upgrade the property. He said the home had gotten significant market interest after the music mogul Jay-Z hosted a Grammy Awards party there earlier that year.
According to the Securities and Exchange Commission, Mr. Shapiro was actually operating the company as a $1.2 billion Ponzi scheme, in which storied estates like Owlwood were a lure to draw investors. The SEC lawsuit, filed in December, claims that the company, controlled by Mr. Shapiro, sold unregistered securities to an estimated 7,000 retail investors—many of them elderly—who were told their funds would provide secured, short-term real-estate loans. Instead, most of the invested money funded real-estate purchases made by Shapiro-controlled shell companies, from luxury homes in L.A. to vacant lots, court papers allege. Investors collected “interest” checks that were largely funded by money from newer investors, the SEC alleges. read more »
'Pharma bro' Shkreli to be held responsible for $10.4 million in losses: U.S. judge
Former U.S. drug company executive Martin Shkreli will be held responsible for $10.4 million in financial losses when he is sentenced for defrauding investors, a federal judge ruled on Monday, rejecting his argument that he did not cause any losses because his investors eventually came out ahead.
The ruling from U.S. District Judge Kiyo Matsumoto could mean more prison time for Shkreli, since the amount of financial loss plays a major role in federal sentencing guidelines. While Matsumoto must consider the guidelines at the sentencing, which is scheduled for March 9, she is not bound to follow them. read more »
Facebook settles lawsuit over 2012 IPO for $35 million
Facebook Inc and Chief Executive Mark Zuckerberg have reached a $35 million settlement of class-action litigation accusing them of hiding worries about the social media company’s growth prior to its May 2012 initial public offering.
The settlement was filed on Monday in the federal court in Manhattan and won preliminary approval from U.S. District Judge Robert Sweet.
It amounts to a small fraction of Facebook’s current market value of roughly $537 billion as of Monday’s market close.
Shareholders led by the Arkansas Teacher Retirement System and Fresno County Employees’ Retirement Association in California accused Facebook of concealing internal concerns about how growth in mobile devices might reduce revenue, even as it quietly warned its banks to cut their forecasts. read more »
