A Brazilian Bribery Machine

Record fine for illegal payments by Odebrecht raises hopes of end to the country’s culture of impunity.

It revamped the Maracanã stadium, Brazil’s home of football in Rio de Janeiro, for the 2014 World Cup, developed one of the largest hydroelectric dams in Africa and built a $1bn port in Cuba. But now Odebrecht, Latin America’s largest construction group, is in danger of being better known for creating one of the biggest bribery machines in corporate history.

The US Department of Justice last week described the operation, which channelled almost $788m to politicians and officials across a dozencountries, as an “unparalleled bribery and bid rigging scheme” as it together with Brazilian and Swiss authorities slapped a record fine of at least $3.5bn on Odebrecht.

The scandal that has torn through Odebrecht and threatens to unseat senior politicians in Brazil and across the region had discreet beginnings in the company’s mundane sounding “structured operations” division.

It was there — a secret operation in full public view — that Maria Tavares, a secretary at the company, began her work day, she told prosecutors, by “downloading a spreadsheet that contained the [bribery] payments to be made for that week” — essentially a payroll for politicians and public officials stretching from Brasília to Maputo in Mozambique. read more »

Wells Fargo whistleblower from Sonoma Sues the Bank for 'Retaliatory' Firing

A former employee of Wells Fargo from Sonoma has filed a lawsuit against the bank, alleging that it retaliated against her after she became a whistleblower about illegal and aggressive sales tactics.

Diana Duenas-Brown reported more than two dozen instances of “fraudulent, illegal, and deceptive practices against Wells Fargo customers,” her lawsuit reads, which she says lead to harassment by her supervisor. Duenas-Brown was a branch manager for the Sonoma town of Windsor for 11 years and was with the bank for 14.

“Because Duenas-Brown’s complaints jeopardized these profits and growth, her supervisors began to retaliate against her for reporting this illegal conduct, discriminated against her, and subjected her to a hostile work environment,” the lawsuit, which was filed Dec. 9, claims. read more »

China to Launch New Anti-Corruption System

The Communist Party of China, the center of political power within the Asian Republic, today announced plans for a new anti-corruption system within the capital city of Beijing and provinces of Shanxi and Zhejiang.

The announcement empowers a more independent office that can supervise both those within the executive and judicial branches of the local state.

The ambition is to create an independent watchdog role, similar to the highly successful Corrupt Practices Investigation Bureau in Singapore or a Scandinavian ombudsman.

Crucially, the new scheme will be independent of the Communist Party, which has a stranglehold of key state positions. This all-powerful status is, many argue, itself a source of discretionary action and corruption within China. read more »

Does Regulatory Compliance Matter In False Claims Act Cases?

Courts are making government agency actions, or lack thereof, in deciding whether to pay health-care claims a centerpiece of their analysis in determining if whistle-blower allegations of Medicare and Medicaid fraud rise to the level to support False Claims Act violations under the Supreme Court’s Universal Health ruling. This focus on whether regulatory compliance was “material” to an agency’s payment decision will create new hurdles for litigators, complicate discovery, and possibly precipitate more settlements, health-care fraud attorneys told me.

The Universal Health opinion noted that one indication of whether the government, in the form of an agency such as the Department of Health and Human Services, believes a particular Medicare or Medicaid regulation or requirement is material is whether it continues to pay allegedly deficient claims after it learns of the deficiency. 

Rivington House Buyer Ripped Us Off Big Time, Must Pay Big Fine

State Senator Daniel Squadron has asked the state attorney general to investigate if the Allure Group — the current owner of the Rivington House building — can be sued for defrauding the city government under the state False Claims Act. A successful suit could see the real estate company pay huge fines for its role in the sale of the former AIDS hospice to a luxury housing developer.

The False Claims Act statute allows for penalties against companies that knowingly lie to the city or state in such a way that affects payment to the government.

The Allure Group bought the former Lower East Side AIDS facility, at the corner of Rivington and Forsyth Sts., from its longtime operator, VillageCare, in 2014 for $28 million with the understanding it would become a for-profit nursing home. Rivington House had a deed restriction on the property that stipulated it must be used as a nonprofit healthcare facility. In order to lift that restriction, the Allure Group had to pay the city a percentage of the property’s value.

The Allure Group allegedly planned to flip the property to a luxury developer for $116 million, but concealed this knowledge, so that the property value was underestimated at $64 million, therefore lowering its payment to the city. The Allure Group paid the city 25 percent of that figure, or $16 million, to lift the restriction, then went ahead and sold the building to Slate Property Group for the aforementioned sum, turning a $72 million profit and robbing the neighborhood of a longtime community care facility. read more »

Indian-origin Man Found Guilty of Bribery in US

An Indian-origin man was found guilty of bribing Mexican officials to secure contracts, Assistant Attorney General Leslie Caldwell has said.

Kamta Ramnarine, 69, the co-owner of an aircraft maintenance company was found guilty in the $2 million-bribery case involving Mexican officials, Caldwell said on Tuesday.

The conviction of Ramnarine of Brownsville, Texas, followed his admission before Federal Judge Ricardo H Hinojosa in McAllen, Texas, that he had conspired to violate the Foreign Corrupt Practices Act that makes bribing foreign officials a crime prosecutable in the US.

He and three others, who either co-owned or were associated with the aircraft maintenance companies, and two Mexican state government officials were all found guilty in the $2 million-bribery scheme, officials said. read more »

Saratoga: Bay Sleep Clinic Owners to Pay $2.6M to Settle Medicare Fraud Allegations

The owners and operators of a sleep clinic chain have agreed to pay $2.6 million to settle allegations that they fraudulently billed Medicare, according to the U.S. Attorney’s Office.

As early as April 2002, Anooshiravan Mostowfipour and Tara Nader, both 58 and of Saratoga, billed Medicare for sleep tests performed by Bay Sleep Clinic technicians who lacked the proper licenses and certificates, according to a False Claims Act complaint filed in August. read more »

Whistleblower’s off-label marketing suit against Celgene can proceed to trial, judge rules

A federal judge in California has ruled that a multi-billion dollar whistleblower case against biotech giant Celgene Corp. can proceed to a jury trial. The case alleges that Celgene marketed two drugs for unapproved uses, causing the government to pay for hundreds of thousands of “off-label” prescriptions.

In an opinion issued Wednesday night, Judge George H. King, of the Central District of California, wrote that former employee Beverly Brown had provided solid evidence to support her claim that Celgene promoted Thalomid and Revlimid for use in cancer patients. The FDA had approved the drugs only for other purposes, and the company was not permitted to pitch it to doctors for unapproved, or off-label, uses. read more »