SEC files suit against California hybrid adviser for fraud

The Securities and Exchange Commission has filed a suit charging that a hybrid advisory firm in California and its senior managers engaged in fraud and lied to investors in a real estate-related, securities offering fraud.

According to the SEC's complaint, Hoplon Financial Group and its CEO, Daniel B. Vazquez, Sr., sold membership units in the New Economic Opportunities Fund I they created to purchase and flip residential real estate properties. The complaint alleges that between 2011 and 2014, Hoplon and Mr. Vazquez raised $2.18 million from 27 investors, primarily from those investors' individual retirement accounts, based on misrepresentations about how much compensation they would take. Read more »

U.S. SEC says Rio Tinto, ex-CEO, ex-CFO must face fraud case

The top U.S. securities regulator on Tuesday rejected arguments by Rio Tinto Plc and two former top executives that its civil lawsuit claiming they concealed the plunging value of coal assets owned by the big Anglo-Australian mining company should be dismissed.

In letters filed with the U.S. District Court in Manhattan, the Securities and Exchange Commission said its complaint adequately alleged that fraud occurred, and that Rio Tinto, former Chief Executive Thomas Albanese and former Chief Financial Officer Guy Elliott intended to deceive investors. Read more »

Protests rumble in China after fraudulent investment scheme fails

Following the collapse of Qianbao.com, a major Chinese investment scheme, authorities are working to quell protests in the eastern city of Nanjing. China's lax regulations on internet investment have allowed several fraudulent companies to grow in recent years.

Chinese authorities are struggling to quell protests following the collapse of an investment scheme police say took as much as $4.7 billion from millions of depositors.

The implosion of Qianbao.com adds to a string of failures of Chinese financial ventures blamed on fraud or mismanagement that have prompted protests and complaints of official indifference to the suffering of small investors. In a separate case, the founder of an online lender was sentenced in September to life in prison on charges he defrauded investors of $7.7 billion. Read more »

Whistleblower: FBI, NSA Conspire to Delete Data to Cover Up Their Crimes

Both the National Security Agency (NSA) and the FBI have recently failed to comply with orders to preserve specific data, with one body claiming it didn't have enough storage to follow through, the other saying a trove was accidentally erased.

The NSA was under court order to hold on to information that was linked to warrantless wiretapping during the George W Bush administration, while the FBI was told to by the Homeland Security and Governmental Affairs Committee to preserve text messages between two agents who had been accused of anti-Trump bias, The Hill reports. Agencies were expected to preserve the data in long-term storage.

Could it be a coincidence that two of the US' most prominent security agencies somehow both managed to jettison intelligence they were told to keep? Read more »

Former Department of Veterans Affairs Employee Pleads Guilty to Wire Fraud and Bribery

A former Department of Veterans Affairs (VA) official pleaded guilty today to charges of wire fraud and bribery for orchestrating a scheme to steal more than $66,000 in benefit money from the VA for veterans in need.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division made the announcement.

Russel M. Ware, 39, of Upper Marlboro, Maryland, pleaded guilty to one count of wire fraud and one count of bribery before U.S. District Judge Amit P. Mehta in the District of Columbia.  Sentencing has been scheduled for May 8, before Judge Mehta. Read more »

California Medical Device Company to Pay $7.62 Million to Resolve Allegations that Its Subsidiary Billed TRICARE for Excessive, Unnecessary Supplies

The Department of Justice announced today that DJO Global Inc. (DJO), a medical device company headquartered in Vista, California, has agreed to pay $7.62 million to resolve allegations that its subsidiary, Empi Inc. (Empi), a now-defunct medical device company based in Shoreview, Minnesota, submitted false claims to TRICARE for excessive, unnecessary transcutaneous electrical nerve stimulation (TENS) electrodes that TRICARE beneficiaries did not need or use.  TENS is a therapy that uses low-voltage electrical current for pain relief.

The settlement resolves allegations that Empi used inappropriate techniques such as “assumptive selling” to persuade some TRICARE beneficiaries to seek and accept unjustifiably large quantities of TENS electrodes from 2010 through 2015, with a particularly steep increase in the number of beneficiaries receiving unnecessary quantities in 2014-2015.  Assumptive selling consisted of Empi sales representatives contacting some TRICARE beneficiaries and inducing them to order excessive TENS electrodes by acting as though the beneficiaries had indicated a need for them, when that may not have been the case. Read more »

Two California Urologists Agree to Pay More than $1 Million to Settle False Claims Act Allegations Related to Radiation Therapy Referrals

Drs. Aytac Apaydin and Stephen Worsham, urologists based in Northern California, will pay $1.085 million to resolve allegations that they submitted and caused the submission of false claims to Medicare for image guided radiation therapy (IGRT) that was referred and billed in violation of the physician self-referral law (commonly known as the “Stark Law”) and the Anti-Kickback Statute, the Department of Justice announced.  Drs. Apaydin and Worsham own and operate Salinas Valley Urology Associates (SVUA) in Salinas, California.  They also owned Advance Radiation Oncology Center (AROC), located in Salinas, California, which dissolved in 2016.  IGRT is used to treat patients who are diagnosed with cancer, including prostate cancer patients. Read more »