Kobe Steel Scandal Is Now Subject of Justice Department Inquiry

Kobe Steel, the Japanese metals producer at the focus of a worldwide quality scandal, has now come under the scrutiny of the United States Department of Justice.

The company said Tuesday that its American unit, Kobe Steel USA, had received a request from the Justice Department for documents and records related to any substandard metals sold to customers in the United States.

The revelation is the latest to shake Kobe Steel and corporate Japan as companies across a range of industries — including railroads, automakers and aircraft manufacturers — attempt to determine the repercussions of using metals that may not have been produced to proper specifications.

Kobe Steel acknowledged earlier this month that it had falsified quality data for years and sold substandard or potentially substandard aluminum, copper and powdered steel — used to make molded parts, like gears — to companies around the world. The affected customers include Boeing, Ford, General Motors and other major American manufacturers. read more »

Samsung Is Under Scrutiny Again as South Korean Police Raid Offices

Barely two months after its crown prince was sent to prison on corruption charges, the family that controls Samsung’s vast business empire is again facing allegations of white-collar crime.

The South Korean police raided the head office of Samsung’s construction arm on Wednesday as they investigated whether Lee Kun-hee, the group’s patriarch, had misappropriated company funds to renovate his family’s home. Investigators will soon begin questioning others, including company officials, an officer involved with the investigation said. read more »

Here's Why McKinsey Is Freezing a Big Chunk of Its Work in South Africa

The consulting giant McKinsey has suspended all its work for state-owned companies in South Africa, due to a corruption scandal involving state power company Eskom.

The New York-based firm is one of several global outfits to get caught up in the sprawling intrigue surrounding the Guptas, an Indian family that has extremely close ties to president Jacob Zuma. The Gupta brothers are seen by many as being at the nexus of South Africa’s “state capture” problem, as investigations in recent years have accused them of siphoning off state funds and enjoying extraordinary influence in the selection of senior ministers. The Guptas and Zuma deny any wrongdoing.

McKinsey’s role in this drama centered on arrangements it had with Eskom alongside the Gupta-linked financial services firm Trillian Capital Partners. In 2016 the creaky utility paid McKinsey and Trillian around 1.6 billion rand ($120 million), reports the investigative journalism group amaBhungane, of which 564 million rand went to Trillian for a so-called “turnaround program.”

A Trillian whistleblower claimed that international consultancies had to take on Trillian as a local partner in order to gain lucrative contracts, from which Trillian would get up to half the proceeds. read more »

Suburban couple defrauded millions from Medicare

The federal government has filed a lawsuit accusing a south suburban couple of defrauding Medicare out of millions of dollars through false claims by their medical companies.

The suit, filed Tuesday in U.S. District Court, accuses Gateway Health Systems Inc. and its owners – 58-year-old Ajibola Ayeni and his wife, Joy H. Turner-Ayeni – of violating the federal False Claims Act by seeking and accepting Medicare payments for fraudulent services, according to a statement from the U.S. attorney’s office.

Ayeni also owned Docs at the Door P.C., a home-visiting physician company, prosecutors said. The suit claims the company falsely certified non-homebound patients as needing home-health services and fraudulently “upcoded” home doctor visits to the second-highest billing level in order to increase payments from Medicare.

Both Gateway and Docs at the Door were paid millions of dollars for services they claimed to provide for Medicare beneficiaries, prosecutors said. Ayeni and Turner-Ayeni directed the companies to create false documentation to cover up services that were not rendered or that were not medically necessary. read more ».

Dallas Man Admits To Committing $50M TRICARE Fraud

Andrew Joseph Baumiller, 38, of Dallas, Texas, pleaded guilty today before U.S. Magistrate Judge David L. Horan to one count of conspiracy to commit health care fraud stemming from a scheme to defraud TRICARE, the health insurance program for members of the military and their families. The announcement was made today by U.S. Attorney John Parker of the Northern District of Texas.

Baumiller faces a maximum statutory penalty of 10 years in federal prison, a $250,000 fine, and will be ordered to pay restitution. Baumiller will remain in custody pending sentencing, which is scheduled before Chief U.S. District Judge Barbara M.G. Lynn in February, 2018.