JPMorgan cuts ties with OxyContin maker Purdue Pharma

JPMorgan Chase & Co has cut ties with Purdue Pharma LP over the OxyContin maker’s alleged role in the U.S. opioid crisis, forcing it to find a new bank to manage cash and bill payments.

The move makes JPMorgan, the largest U.S. bank by assets, the most high-profile corporation known to have distanced itself from Purdue and its wealthy owners, the Sackler family, amid thousands of lawsuits alleging the company pushed addictive painkillers while downplaying their abuse and overdose risks. read more »

RICO Offers a Powerful Tool to Punish Executives for the Opioid Crisis

The conviction of John Kapoor, the Insys Therapeutics founder, and four other executives at the pharmaceutical firm on racketeering charges this month was a significant step toward imposing substantial penalties on corporate officials for contributing to the nation’s opioid epidemic.

Prosecutors rarely use the Racketeer Influenced and Corrupt Organizations Act, or RICO, in corporate criminal prosecutions because it can be a difficult offense to prove, but the law allows them to pull together disparate defendants into a single case. read more »

United States Files False Claims Act Complaint Against Home Health Agency and Two of Its Owners

The United States has filed a complaint in intervention against Doctor’s Choice Home Care Inc (Doctor’s Choice), Timothy Beach, and Stuart Christensen alleging False Claims Act violations arising from the alleged payment of kickbacks in the form of sham medical director agreements and payments to the spouses of referring physicians, the Department of Justice today announced. Doctor’s Choice is a home health agency based in Sarasota, Florida. Timothy Beach and Stuart Christensen are partial owners of Doctor’s Choice.

The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act, which allow private parties to file suit on behalf of the United States for false claims and receive a share of any recovery. The act permits the United States to intervene and take over responsibility for litigating the case, as it has done here. A defendant who violates the act is subject to three times the government’s losses, plus applicable penalties. read more »

SEC Sues Alleged Perpetrator of Fraudulent Pyramid Scheme Promising Investors Cryptocurrency Riches

The Securities and Exchange Commission filed a civil injunctive action against Daniel Pacheco, a resident of San Clemente, California, and the alleged perpetrator of a multimillion-dollar pyramid scheme.

The SEC’s complaint, filed Wednesday, alleges that from January 2017 through March 2018, Pacheco conducted a fraudulent, unregistered offering of securities through two California-based companies he controls, IPro Solutions LLC and IPro Network LLC (collectively, “IPro”). IPro raised more than $26 million from investors by selling instructional packages that provided lessons on e-commerce. Investors also received “points” that could be converted into a digital asset known as PRO Currency. Investors who contributed additional funds could earn a mixture of cash commissions and additional convertible points by recruiting new investors into the IPro network. As alleged in the complaint, however, IPro was a fraudulent pyramid scheme. IPro’s inevitable collapse was hastened by Pacheco’s fraudulent use of investor funds, which included, among other things, the all-cash purchase of a $2.5 million home and a Rolls Royce. Pacheco’s misappropriation accelerated the rate at which IPro became unable to pay the commissions and bonuses due its investors. read more »