Technology Company’s Former CEO and Founder Sentenced to 49 Months in Prison for Defrauding Investors

On September 29, 2017, the Honorable Denise L. Cote of the Southern District of New York sentenced former technology company CEO and founder Maryse Liburdi to 49 months in prison for a scheme to defraud investors in her company.  Liburdi was also sentenced to three years of supervised release, and ordered to pay $7.07 million in forfeiture, and an additional $7.07 million in restitution to victims of the scheme.  From at least 2010 to 2015, ... Continue Reading

Former Broker-Dealer Managing Director Sentenced for Public Pension Fund Bribery Scheme

On September 29, 2017, the Honorable J. Paul Oetken of the Southern District of New York sentenced a New York broker-dealer’s former managing director of institutional fixed income sales Deborah Kelley to three years’ probation, including six months of home confinement. Kelley was also ordered to pay a $50,000 fine, $187,900 in forfeiture, and complete 1000 hours of community service; restitution will be determined within 90 days.  Kelley pled guilty to conspiracy to commit securities ... Continue Reading

Nine Indicted for Insider Trading Allegations

On September 28, 2017, nine defendants were indicted on fraud charges based on allegations they traded on nonpublic information regarding an impending corporate acquisition, resulting in illegal profits of $866,629.  According to the indictment, in 2015 Shane Fleming, a vice president of corporate sales at Life Time Fitness, Inc. of Minnesota, obtained inside information about the sale of Life Time Fitness to two private equity firms.  This information was shared with his friend and business ... Continue Reading

Residential Home Funding Corp. Settles Civil Mortgage Fraud Suit

On September 28, 2017, acting Manhattan U.S. Attorney settled a mortgage fraud lawsuit against Residential Home Funding Corp. (“Residential Home”) based on their participation in the Federal Housing Administration’s Direct Endorsement Lender Program (“DEL Program”).  Residential Home agreed to pay $1.67 million, based on an ability to pay analysis, and admitted and accepted responsibility for failure to maintain a compliant quality control program and for approving FHA insurance loans that did not meet HUD-established standards.  ... Continue Reading

Federal Grand Jury Indicts Former Head of SoCal Software Company and IT Executive of Australian Bank for Bribery Scheme Relating to Purchase of Company

On September 27, 2017, a Los Angeles grand jury returned a 15-count indictment for Eric Pulier, the founder, CEO and largest shareholder of software company ServiceMesh, Inc., and Jon Waldron, a former IT manager at the Commonwealth Bank of Australia (“CBA”), relating to charges that ServiceMesh paid bribes to CBA executives to approve contracts that inflated the company’s revenues, which in turn caused Computer Sciences Corporation (“CSC”) to pay a $98 million incentive bonus as ... Continue Reading

Former Executive of a Tenet Hospital and Health Clinic Owner and Operator Charged for $400 Million Fraud and Bribery Scheme

On September 26, 2017, a former Tenet Healthcare Corporation Hospital CEO, Bill Moore, along with an owner and operator of an Atlanta-based chain of pre-natal clinics, Edmundo Cota, were charged for orchestrating a fraud and bribery scheme that caused Tenet to bill Georgia and South Carolina Medicaid Programs for over $400 million.  Moore was charged with one count of conspiracy to defraud the United States and pay and receive health care bribes, two counts of ... Continue Reading

Israeli Citizen Gets 3 Years’ Imprisonment for Foreign Exchange Fraud

On September 25, 2017, the Honorable Deborah A. Batts of the Southern District of New York sentenced Fadi Ewiess to three years in prison after pleading guilty to wire fraud in connection with his role in a scheme to defraud investors through Golden Bridge FX, a purported foreign exchange (“forex”) trading platform through which customers could place bets on the direction that currencies would move as against other currencies.  Through Golden Bridge, Ewiess and others ... Continue Reading

SolarCity Agrees to Pay $29.5 Million to Resolve Alleged False Claims Act Violations

On September 22, 2017, DOJ announced that SolarCity Corporation has agreed to pay $29.5 million to resolve allegations that it violated the False Claims Act.  DOJ alleged that, beginning in 2009, SolarCity submitted inflated claims on behalf of itself and affiliated investment funds to the U.S. Department of the Treasury pursuant to Section 1603 of the American Recovery Reinvestment Act of 2009.  Through the Section 1603 Program, the Treasury paid a cash grant equal to ... Continue Reading

Sweden-Based Telia Company AB Enters Global Resolution of Over $965 Million for Foreign Bribery Allegations

On September 21, 2017, Telia Company AB entered into a global settlement under which is agreed to pay a combined total penalty of $965 million for a scheme to bribe a government official in Uzbekistan.  According to court documents, Telia and its Uzbek subsidiary, Coscom, paid approximately $331 million in bribes to an Uzbek government official, who was closely related to another high-ranking official, in exchange for access to the Uzbek telecom market.  Payments were ... Continue Reading

Former CEO Charged with Insider Trading

On September 20, 2017, Peter C. Chang, the former President, CEO and Chair of the Board of Directors of Alliance Fiber Optic Products, Inc. (“AFOP”), was arrested and charged with securities fraud and fraud in connection with a tender offer.  AFOP, which is publicly traded on the NASDAQ, is a manufacturer of fiber optic components based in Sunnyvale, California.  According to the government, Chang acquired confidential information about AFOP based on his position in the ... Continue Reading

Investment Fund Manager Sentenced to 12 Years’ Imprisonment for Ponzi Scheme

On September 15, 2017, Brian R. Callahan was sentenced to 12 years’ imprisonment and three years’ supervised release after pleading guilty to securities fraud and wire fraud.  Callahan was also ordered to pay approximately $67.6 million in restitution.  Between 2006 and 2012, Callahan, who managed four different investment funds, raised more than $118 million from at least 40 investors.  Instead of investing the money in mutual funds, hedge funds and other securities, as he told ... Continue Reading

Judge Ordered Allied Home Mortgage Entities to Pay $296 Million for Civil Mortgage Fraud

On September 14, 2017, United States District Court Judge George C. Hanks Jr. of the Southern District of Texas ordered the Allied Home Mortgage Entities (“Allied”) to pay $296 million for FCA violations for which it had previously been held liable.  In November 30, 2016, a unanimous jury found Allied and Allied’s CEO Jim C. Hodge, liable for violating the False Claims Act (“FCA”) and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ... Continue Reading

New York-Based Hospital Operator Pays $4 Million for False Claims Act Violations Relating to Improper Payments to Doctors

On September 13, 2017, MediSys Health Network Inc., which operates two hospitals in Queens, New York, settled charges it violated the False Claims Act, agreeing to pay $4 million for submitting claims to the Medicare program for services provided to patients that had been referred by doctors who had improper financial relationships with the company.  MediSys provided compensation and advantageous office lease arrangements to physicians in violation of the Stark Law, which places limitations on ... Continue Reading

Civil Fraud Complaint Filed Against Former Head of Subprime Mortgage Trading at Deutsche Bank

On September 11, 2017, the United States filed a civil complaint pursuant in the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) in the Eastern District of New York against Paul Mangione, the former head of subprime trading at Deutsche Bank.  The government alleges that he engaged in a scheme to sell two residential mortgage-backed securities (“RMBS”) by misrepresenting the quality of the underlying loans to investors, resulting in losses of hundreds of ... Continue Reading

Russian Cyber-Criminal Pled Guilty for Participation in Cybercrime Ring That Caused Losses of $50 Million in Online Identity Theft

On September 8, 2017, Roman Valeryevich Seleznev pled guilty in separate criminal actions in the District of Nevada and the Northern District of Georgia to one count of participation in a racketeering enterprise and one count of conspiracy to commit bank fraud for his role in an identity theft and credit card fraud ring known as “Carder.su.”  Seleznev admitted that, as part of the crime ring, he sold stolen credit card account data and other ... Continue Reading

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