Former AIG chief Hank Greenberg finally goes on trial

Opening arguments began on Tuesday in the trial of former American International Group Inc chairman Maurice "Hank" Greenberg over accounting fraud at the insurance giant some 16 years ago.

Greenberg, 91, is facing civil charges from the New York Attorney General's Office of orchestrating a $500 million transaction to inflate the insurer's reserves and a $200 million transaction to hide underwriting losses. Former AIG Chief Financial Officer Howard Smith is also named as a defendant.

The two men "designed, created, negotiated and implemented every major aspect" of the two fraudulent transactions in the case, Assistant Attorney General David Ellenhorn said in his opening statement. read more »

Par Pharmaceutical Says Escobar Nixes Gov't FCA Suit

A False Claims Act suit alleging generics maker Par Pharmaceutical Companies Inc. arranged for pharmacists to dispense its own versions of drugs in more expensive forms can't survive new standards set in the U.S. Supreme Court's recent Escobar ruling, the company told an Illinois federal judge Friday.

A pharmacist's allegations — joined by the federal government and several states — that the company conspired with Walgreens and Omnicare to have pharmacists dispense a different dosage type and strength than what doctors prescribed fail under the high court's June ruling in United Health Services Inc. v. U.S. ex rel. Escobar, the company argued in a brief supplementing its motion for summary judgment. read more »

Regions Bank Agrees to Pay $52.4 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage Lending

Regions Bank (Regions) has agreed to pay $52.4 million to the United States to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Department of Justice announced today.  Regions is headquartered in Birmingham, Alabama.                                                         

“Mortgage lenders that participate in the FHA insurance program must follow the requirements intended to safeguard its integrity and to protect homeowners,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We will continue to hold responsible lenders that knowingly violate these important requirements.” read more »

Federal Court in North Carolina Orders More than $15 Million in a Monetary Penalty and Restitution for Commodity Pool Fraud

In a Related Criminal Action, Shepherd Pled Guilty to Fraud and Was Sentenced to 84 Months in Prison 

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Robert J. Conrad, Jr. of the U.S. District Court for the Western District of North Carolina entered a Final Judgment and Consent Order (Order) against Defendants James A. Shepherd and his company, James A. Shepherd Inc. (JAS Inc.), requiring them to pay, jointly and severally, a $7 million civil monetary penalty and $8,060,810.43 in restitution to defrauded commodity pool participants.  The Court’s Order also permanently prohibits Shepherd and JAS Inc. from further violations of the Commodity Exchange Act (CEA) and CFTC Regulations, as charged, and imposes permanent trading and registration bans on them.  According to the Order, Shepherd formerly resided in Vass, North Carolina, and JAS Inc. is a Delaware corporation with a principal place of business in Southern Pines, North Carolina. read more »

Five FCPA Corporate Cases One Year After Yates Memo and Zero Individual Charges

Since the Yates memo was released one year ago this week, the Department of Justice has brought five corporate Foreign Corrupt Practices Act (FCPA) enforcement actions – against PTC, VimpelCom, Olympus Latin America, BK Medical (Analogic), and LAN Airlines.

None of the enforcement actions have resulted in any Department of Justice charges against company employees.

That’s according to an analysis by Southern Illinois University Law Professor Mike Koehler. read more »