Posts Tagged With Cases of Interest

Blood Testing Laboratory to Pay $6 Million to Settle Allegations of Kickbacks and Unnecessary Testing

On April 28, 2017, Quest Diagnostics Inc. agreed to pay $6 million to resolve an alleged False Claims Act violation for paying kickbacks to physicians and patients to induce the use of Berkeley HeartLab Inc., a Quest subsidiary, for blood testing services and unnecessary medical tests.  According to the complaint, Berkeley allegedly paid kickbacks to referring physicians disguised as “processing and handling” fees and allegedly paid kickbacks to patients by waiving copayments that certain patients ... Continue Reading

Former RMBS Trader Sentenced to 2 Years in Prison, Fined $2 Million After Re-Trial

On April 26, 2017, Jesse Litvak, a former trader of residential mortgage-backed securities (RMBS), was sentenced to two years in prison followed by three years of supervised release for engaging in fraudulent RMBS trades.  Litvak was also ordered to pay a $2 million fine.  Litvak’s sentenced follows a guilty verdict on one count of securities fraud after a jury trial that concluded in January 2017.  The jury also acquitted Litvak on nine counts.  Litvak’s conviction ... Continue Reading

Pacific Pulmonary Services Agrees to Pay $11.4 Million to Resolve False Claims Act Allegations

On April 25, 2017, Branden Partners, L.P., doing business as Pacific Pulmonary Services, agreed to pay $11.4 million to resolve allegations that it and its general partner, Teijin Pharma USA LLC, violated the False Claims Act.  Pacific Pulmonary Services provides oxygen tanks and related supplies, and sleep therapy equipment, to patients’ homes.  The allegations were that, starting in 2004, Pacific Pulmonary Services began submitting claims for reimbursement to Medicare and other federal healthcare programs for ... Continue Reading

Vice President and Risk Management Specialist at Investment Bank Charged with Insider Trading

On April 24, 2017, Avaneesh Krishnamoorthy, a vice president and risk management specialist at a Manhattan-based investment bank, was arrested and charged with insider trading, in connection with making $48,000 in profits from stock and options trading based on material nonpublic information about a private equity fund’s potential acquisition of a publicly traded company.  According to the complaint, through his position at the investment bank, Krishnamoorthy had access to material nonpublic information about mergers and ... Continue Reading

Four Individuals Arrested for Multi-Million Dollar Securities Fraud and Money Laundering Schemes

On April 14, 2017, four individuals were arrested for their involvement in a stock manipulation scheme involve BioCube, Inc. and their efforts to launder approximately $2 million in illegal proceeds.  The four individuals are Chris Messalas, Boris Rubizhevky, Michael Garnick and Dimitrios Argyros.  Messalas, a former securities brokers, Rubizhevky, the former Chief Executive Officer of BioCube, and Garnick, an attorney, were charged with securities fraud conspiracy.  In particular, they are charged with defrauding potential BioCube ... Continue Reading

Software Engineer Charged with Attempting to Steal Proprietary Trading Code from His Employer

On April 13, 2017, Dmitry Sazonov was charged with attempted theft of trade secrets for his alleged attempted theft of proprietary computer code for a trading platform from his employer, a financial services firm with an office in New York.  According to the complaint, Sazonov allegedly took various steps to attempt to steal proprietary code in advance of a February 3, 2017 meeting with a supervisor about the future of his role at the firm.  ... Continue Reading

Computer Engineer Arrested for Theft of Proprietary Trading Code from His Employer

On April 7, 2017, Zhengquan Zhang was charged with theft of trade secrets for his alleged theft of trading code associated with proprietary algorithmic trading models from his employer, a global financial services company in New York, and was arrested in Santa Clara, California.  According to the complaint, Zhang took steps to steal the code between December 2016 and March 2017, including installing code to identify encryption keys to gain access to the proprietary code, ... Continue Reading

William T. “Billy” Walters Convicted of Insider Trading

On April 7, 2017, after a four-week trial before U.S. District Court Judge P. Kevin Castel in the Southern District of New York, William T. Walters was convicted of ten counts of conspiracy, securities fraud and wire fraud charges.  The charges related to his scheme to commit insider trading.  From 2008 through 2014, Walters received material non-public information about Dean Foods Company from Thomas C. Davis, a member of the Board of Directors of Dean ... Continue Reading

Peruvian National Pleads Guilty in Manhattan Federal Court to Commodities and Wire Fraud for Running Million-Dollar Ponzi Scheme

On April 7, 2017, Pedro Jaramillo pled guilty in the Southern District of New York to one count of commodities fraud and one count of wire fraud in connection with a scheme to defraud more than two dozen investors, mostly from Latin American countries including Peru, of more than $1.2 million dollars.  According to court documents, between January 2014 and December 2016, Jaramillo solicited investments from investors, representing that investor monies would be invested in ... Continue Reading

Owners of Drug Wholesale Companies Charged in Connection with Federal ‘Structuring’ Conspiracy

On April 6, 2017, Richard Kayseryan, Derou Biglari, Jivani Markarian and Rafik Mesropyan were charged in a 20-count indictment in connection with a federal ‘structuring’ conspiracy, in which they made millions of dollars in cash deposits designed to circumvent federal reporting requirements.  Kayseryan owns the Burbank-based drug wholesale company TriMed Medical Wholesalers, Inc.—which is charged in the indictment along with the four individual defendants—and Biglari and Markarian own the Glendale-based drug wholesale business JD Pharmaceutical ... Continue Reading

Man Pleads Guilty in Connection with $5 Million Investment Fraud Scheme

On April 4, 2017, James Trolice, the president and chief marketing owner of eAgency, a California-based company that developed mobile security products, pled guilty to wire fraud and transacting in criminal proceeds in connection with a scheme to defraud investors out of more than $5 million.  Trolice was also the president and owner of Trolice Consulting Services LLC.  Along with Lee Vaccaro, Trolice sold investors interests in Trolice Consulting Services and companies that Vaccaro controlled, ... Continue Reading

Turkish Banker Arrested for Conspiring to Violate U.S. Sanctions against Iran

On March 27, 2017, Mehmet Hakan Atilla, a citizen and resident of Turkey, was arrested for conspiring to use the U.S. financial system to conduct transactions on behalf of the Government of Iran and other Iranian entities and to defraud U.S. financial institutions by concealing the nature of these transactions.  According to the Complaint unsealed on March 28, Atilla, a Deputy General Manager of International Banking at a Turkish Bank, helped Reza Zarrab, a gold ... Continue Reading

Investment Advisor and Broker Convicted at Trial in Connection with Securities Fraud Scheme

On March 23, 2017, Christopher Cervino, a registered broker, and Sheik F. Khan, an investment advisor, were convicted after a three-week jury trial in connection with a securities fraud scheme involving VGTel, Inc., a publicly traded over-the-counter company.  According to the indictment, other court filings, and the evidence at trial, the defendants—led by co-conspirator Edward Durante, who pled guilty in August 2016 in connection with this matter—artificially inflated the market for VGTel, which increased their ... Continue Reading

Philadelphia District Attorney Charged with Bribery and Extortion

On March 21, 2017, Philadelphia District Attorney Rufus Seth Williams was charged in a 23-count indictment with bribery, extortion and honest services wire fraud in connection with receiving bribes from two business owners and with defrauding a nursing home and family friends of money intended for a family member’s nursing home care.  According to the indictment, from July 2010 to July 2015, Williams solicited and received tens of thousands of dollars’ worth of bribes from ... Continue Reading

Man Indicted for Theft of Over $100 Million in Fraudulent Email Scheme Against Multinational Internet Companies

On March 21, 2017, criminal charges were announced against Evaldas Rimasauskas of Lithuania in connection with a fraudulent business email compromise scheme that induced two U.S.-based internet companies—a multinational technology company and a multinational online social media company (the “Victim Companies”)—to wire over $100 million to bank accounts that he controlled.  Rimasauskas was arrested by authorities in Lithuania.  According to the indictment, from at least 2013 through 2015, Rimasauskas orchestrated a scheme in which he ... Continue Reading

Former Chief Executive Officer and Chief Financial Officer of China Medical Technologies Indicted in Connection with Securities Fraud Scheme

On March 20, 2017, an indictment charging Xiaodong Wu, the founder, CEO and Board Chairman of China Medical Technologies, Inc. (China Medical), and Tak Yung Samson Tsang, the CFO and a member of the Board of Directors of China Medical, with securities fraud and conspiracy to commit securities fraud and wire fraud was unsealed in the Eastern District of New York.  According to the indictment, Wu and Tsang allegedly defrauded China Medical’s noteholders and investors ... Continue Reading

Former Chairman and CEO of Credit Union and Operator of Unlawful Bitcoin Exchange Convicted at Trial in Connection with Bribery and Fraud Scheme

On March 17, 2017, Trevon Gross, the former Chairman and CEO of HOPE FCU, a federal credit union in New Jersey with primarily low-income members, and Yuri Lebedev, a former employee of Coin.mx, an unlawful internet-based Bitcoin exchange, were found guilty after a four-week jury trial, in connection with a bribery scheme to gain control of HOPE FCU and a fraud scheme to evade detection of Coin.mx.  Between 2013 and July 2015, Lebedev and his ... Continue Reading

Chicago Trader Indicted on Fraud Charges for Allegedly Misappropriating at Least $1.5 Million in Client Funds

On March 16, 2017, Randall Rye, the owner of Faster Than Light Trading LLC, was indicted on six counts of wire fraud in connection with a scheme to misappropriate investors’ funds for personal use.  According to the indictment, Rye told investors that he would invest their money in options and futures contracts using an algorithm.  Instead, Rye allegedly misappropriated the money for his own personal use, including vacations to St. Lucia and Bali, tickets to ... Continue Reading

U.S. Charges Russian FSB Officers and Their Criminal Conspirators for Hacking Yahoo and Millions of Email Accounts

On March 15, 2017, four defendants, including two officers of the Russian Federal Security Service (FSB), were indicted in the Northern District of California for computer fraud, economic espionage, and other criminal offenses in connection with a conspiracy to access Yahoo’s network and the contents of Yahoo webmail accounts.  The defendants are Russian nationals Dmitry Aleksandrovich Dokuchaev, Igor Anatolyevich Sushchin and Alexsey Alexseyevich Belan, and Canadian national Karim Baratov.  According to the indictment, Dokuchaev and ... Continue Reading

Former Investment Advisor Sentenced to Six Months’ Imprisonment for Insider Trading

On March 15, 2017, former investment advisor David Hobson was sentenced to six months in prison for participating in a scheme to commit insider trading in connection with deals involving the pharmaceutical company (the “Pharma Company”) at which Michael Maciocio, Hobson’s co-conspirator, worked.  Hobson had pled guilty in this case to one count of conspiracy to commit securities fraud and one count of securities fraud in October 2016.  According to the indictment and statements made ... Continue Reading

California Businessman Sentenced to Prison for Concealing over $23.5 Million in Israeli Bank Accounts

On March 13, 2017, Masud Sarshar, the owner and operator of Apparel Limited, Inc. and a resident of Los Angeles, California, was sentenced to 24 months in prison for maintaining undeclared bank accounts at Israeli banks.  Sarshar was also sentenced to three years of supervised release and ordered to pay more than $8.3 million in restitution to the IRS, plus interest and penalties.  Sarshar pled guilty to the charges in August 2016. DOJ Press Release ... Continue Reading

CA Inc. to Pay $45 Million for Alleged False Claims on Information Technology Contract

On March 10, 2017, CA Inc., an information technology management software and service company,  agreed to pay $45 million to resolve allegations that it made false statements and claims in the negotiation and administration of a General Services Administration (“GSA”) contract.  The agreement resolves claims that CA provided false information about commercial customer discounts for its software licenses and maintenance services to GSA contracting officers.  The allegations stemmed from a whistleblower lawsuit filed by a ... Continue Reading

ZTE Corporation Agrees to Plead Guilty and Pay over $430.4 Million for Violating U.S. Sanctions by Sending U.S.-Origin Items to Iran

On March 7, 2017, Attorney General Jeff Sessions announced that ZTE Corporation agreed to plead guilty for conspiring to violate the International Emergency Economic Powers Act (“IEEPA”), obstructing justice and making a material false statement.  ZTE’s agreement to plead guilty is the DOJ component of a series of settlements that ZTE reached with U.S. agencies, which totals to an agreement to pay the U.S. Government $892,360,064.  On the criminal side, ZTE will enter a guilty ... Continue Reading

Kiekert AG Agrees to Plead Guilty to Bid Rigging Involving Auto Parts

On March 7, 2017, Kiekert AG, an automotive parts manufacturer based in Heiligenhaus, Germany, agreed to plead guilty in the Eastern District of Michigan and to pay a $6.1 million criminal fine for its role in a conspiracy to rig bids of side-door latches and latch minimodules installed in cars in violation of the Sherman Act.  According to court documents, from September 2008 through May 2013, Kiekert participated in a conspiracy with another major auto ... Continue Reading

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