How the S.E.C. May Pursue a Case Against Elon Musk and Tesla

“Funding secured” does not sound particularly ominous. But when Elon Musk, Tesla’s chief executive, tweeted those words on Aug. 7, he set off a firestorm.

The Securities and Exchange Commission is ramping up an investigation about whether he misled investors and violated federal securities laws. It served a subpoena on Tesla to determine if there was funding to take the company private at $420 a share, as Mr. Musk seemed to claim in his tweet.

Tesla was already under investigation about its disclosure of production issues with its Model 3 vehicle, including a subpoena from the S.E.C. to a parts supplier, according to The Wall Street Journal. The fact that there was already a subpoena most likely means the investigation of Mr. Musk’s tweet was folded into the earlier inquiry. There were also whistle-blower complaints filed with the S.E.C. about undisclosed thefts and drug dealing in a factory.

Add it all together, and it appears that an investigation has the potential to move down a number of paths. The question is how this might play out for Tesla and Mr. Musk.

A formal investigation does not mean a case will be filed. It does indicate that the S.E.C. is committing resources, and investigations tend to take on lives of their own. Where they end is not always where they started heading, especially when there is a thorough review of corporate records. read more »

Microsoft faces U.S. bribery probe over sales in Hungary

Microsoft Corp (MSFT.O) is being investigated by U.S. authorities over potential bribery and corruption related to software sales in Hungary, the Wall Street Journal reported on Thursday, citing people familiar with the matter.

The U.S. Justice Department and the Securities and Exchange Commission are probing how Microsoft sold its software such as Word and Excel to middleman firms in Hungary at steep discounts, the report said.

The intermediaries then sold those software to government agencies there in 2013 and 2014 at close to full price, the report said.

Investigators are looking into whether the middleman companies used the difference to pay bribes and kickbacks to government officials. read more »

Ex-Argentina president Cristina Fernández de Kirchner's homes raided

Police in Argentina have begun searching properties belonging to the former president, Cristina Fernández de Kirchner, as part of a major corruption investigation.

Forensic scientists, dogs and firefighters helped carry out the raids on two houses in Patagonia and one apartment in Buenos Aires.

It comes after Judge Claudio Bonadio asked to partially lift Ms Fernández's immunity as he investigates bribery allegations during her presidency.

Ms Fernández denies any wrongdoing.

In a defiant speech on Wednesday, the senator - who has immunity from imprisonment, but not prosecution - described the investigation as "shameless". read more »

California Doctor Convicted of $4.1m Medicare Kickback Conspiracy

A federal jury in Los Angeles, California found a Lancaster, California doctor guilty today of conspiracy for his role in a Medicare kickback conspiracy involving a Los Angeles-area home health agency.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Nicola T. Hanna of the Central District of California, Special Agent in Charge Christian J. Schrank of the U.S. Department of Health and Human Services

Office of Inspector General’s (HHS-OIG) Los Angeles Regional Office and Assistant Director in Charge Paul D. Delacourt of the FBI’s Los Angeles Division made the announcement.

Kanagasabai Kanakeswaran, M.D., 65, was convicted of one count of conspiracy to pay and/or receive kickbacks for Medicare referrals and four counts of receiving kickbacks for Medicare referrals after a six-day trial.  Sentencing has been scheduled for Jan. 7, 2019 before U.S. District Judge Philip S. Gutierrez of the Central District of California, who presided over the trial.

According to evidence presented at trial, from 2008 to 2016, Kanakeswaran and others engaged in a conspiracy to refer Medicare patients to Star Home Health Resources (Star), a home health agency located in La Verne, California in exchange for illegal kickback payments.  Kanakeswaran received cash kickback payments, as well as kickback payments by check through a company Kanakeswaran owned called Digital Perfection Corporation, the evidence showed.

As a result of the conspiracy, the owners and operators of Star submitted claims to Medicare based on the Medicare beneficiaries that Kanakeswaran referred to Star, and Medicare paid approximately $4.1 million based on those claims, the evidence showed. read more »