SEC Charges Investment Adviser and CEO With Misleading Retail Investors

The Securities and Exchange Commission today charged a Connecticut-based investment advisory firm and its chief executive officer with putting $19 million of investor money, including elderly investors’ retirement savings and pension plans, in risky investments and secretly pocketing hefty commissions from those investments.

The SEC’s complaint alleges that Temenos Advisory Inc. and George L. Taylor steered advisory clients and other investors, including senior citizens and individuals approaching retirement, into four risky, illiquid private offerings.  While Temenos and Taylor charged advisory fees for unbiased financial advice, they allegedly concealed from their clients the high commissions they were pocketing from these risky and unsuitable investment recommendations, including cash and ownership stakes in the private companies they recommended, and fraudulently misled clients about the risks and prospects of the investments.  The SEC also alleges that Temenos and Taylor grossly overbilled some of their advisory clients. read more »

Medical Device Maker AngioDynamics Agrees to Pay $12.5 Million to Resolve False Claims Act Allegations

New York-based medical device manufacturer AngioDynamics, Inc. has agreed to pay the United States a total of $12.5 million to resolve allegations that the company caused healthcare providers to submit false claims to Medicare, Medicaid, and other federal healthcare programs relating to the use of two medical devices, LC Bead and the Perforator Vein Ablation Kit (PVAK), the Justice Department announced today.  

“The Justice Department is committed to holding medical device manufacturers accountable, which includes requiring that they follow all laws designed to ensure that medical devices are safe and effective,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division.  “When manufacturers make misleading statements concerning the use of their products in ways that have not been cleared by the FDA, it undermines patient care.  Taxpayers and patients deserve better.”

The civil settlement relating to LC Bead resolves a lawsuit filed under the whistleblower provision of the False Claims Act by Mr. Ryan Bliss, who formerly worked in the marketing departments of both AngioDynamics and Biocompatibles.  The Act permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. read more »

Two Consulting Companies and Nine Affiliated Skilled Nursing Facilities to Pay $10 Million to Resolve False Claims Act Allegations Relating to Medically Unnecessary Rehabilitation Therapy Services

Southern SNF Management, Inc., Rehab Services in Motion d/b/a Dynamic Rehab and nine affiliated skilled nursing facilities in Florida and Alabama have agreed to resolve allegations that they violated the False Claims Act by submitting or causing the submission of false claims to Medicare for medically unnecessary rehabilitation therapy services, the Department of Justice announced today.  Under the agreement, Southern SNF, Dynamic Rehab and the nine skilled nursing facilities will pay the United States a total of $10 million. 

Medicare reimburses skilled nursing facilities based on a patient’s Resource Utilization Group (RUG) level, which is supposed to be determined by the amount of skilled rehabilitation therapy required by the patient.  The United States alleged that between October 2009 and December 2013, Southern SNF, Dynamic Rehab and the nine skilled nursing facilities’ corporate policies and practices encouraged the provision of medically unreasonable and unnecessary therapy without regard for patients’ individual clinical needs. The companies’ actions resulted in the submission of false claims based on inflated RUG levels. 

The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by La-Wanda Davis, Tramecier Donald, and Megan Dinkins, former employees of one of the skilled nursing facilities.  Under the False Claims Act, private citizens can sue on behalf of the government for false claims and share in any recovery.  The whistleblowers will receive $2 million of the recovered funds. read more »

Two Connecticut Men Charged for Deceptive Trading Practices Executed on U.S. Commodities Markets

Two former employees of a global financial institution were charged in an indictment filed today for their alleged participation in fraudulent and deceptive trading in previous metals futures contracts, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge William Sweeney of the FBI’s New York Field Office.

Edward Bases, 56, of New Canaan, Connecticut, and John Pacilio, 54, of Southport, Connecticut, were each charged with one count of conspiracy to commit wire fraud affecting a financial institution and commodities fraud.  Bases and Pacilio were also charged with one count of commodities fraud each.  Pacilio was further charged with five counts of spoofing. read more »