Texas AG Took $100,000 Gift From Someone His Office Was Investigating

Texas Attorney General Ken Paxton took $100,000 from a "family friend" as a gift from the CEO of a company his office helped investigate for Medicaid fraud to defend himself from criminal charges.

Paxton, not surprisingly, says the money he took from Preferred Imaging LLC head James Webb to defend himself against felony securities charges didn't violate any internal agency policy or state law, according to the Associated Press. Webb agreed last Friday to a $3.51 million settlement with the Department of Justice over a whistleblower's False Claims Act and Texas Medicaid Fraud Prevention Act lawsuit that alleged the company improperly billed Medicaid between 2009 and 2015 for services performed without proper medical supervision. 

According to documents obtained by the AP, Paxton did in fact violate an internal rule that says employees of the agency cannot knowingly accept gifts from people under investigation by the AG's office. While Paxton's office denied involvement in the case against Webb's company, a Justice Department spokeswoman told the AP his office did assist with the case against Webb. read more »

Fifty-Five Hospitals to Pay U.S. More Than $34 Million to Resolve False Claims Act Allegations Related to Kyphoplasty

Fifty-five hospitals located throughout twenty-one states have agreed to pay the United States a total of more than $34 million to settle allegations that the health care facilities submitted false claims to Medicare for kyphoplasty procedures, the Justice Department announced today.  Kyphoplasty is a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. `

In many cases, kyphoplasty can be performed safely and effectively as an outpatient procedure without any need for a more costly hospital admission.  The settlements announced today resolve allegations that the settling hospitals frequently billed Medicare for kyphoplasty procedures on a more costly inpatient basis, rather than an outpatient basis, in order to increase their Medicare billings.   

“Hospitals that participate in the Medicare program must bill for their services accurately and honestly,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice.  “The Department of Justice is committed to ensuring that Medicare funds are expended appropriately, based on the medical needs of patients rather than the desire of medical providers to maximize profits.” read more »

UnitedHealthcare Sues Dialysis Chain Over Billing

Private health insurers can pay more than $4,000 for each dialysis treatment. Government health plans like Medicaid pay around $200.

That gaping price difference was the motivation for a scheme, orchestrated by a for-profit dialysis chain, that illegally pushed poor people in Florida and Ohio out of inexpensive government programs and into expensive private plans sold by UnitedHealthcare, according to a lawsuit the giant insurer filed in federal court on Friday. UnitedHealthcare says the arrangement needlessly exposed the patients to medical bills.

The suit accuses American Renal Associates, a public company that operates nearly 200 dialysis clinics across the country, of fraudulently billing millions of dollars since the beginning of the year. UnitedHealthcare is trying to recoup that money.

The insurer argues that the effort was aided by the American Kidney Fund, a nonprofit patient advocacy group, which paid the patients’ premiums for private insurance. The insurer said American Renal Associates “earmarked donations” to the kidney fund to pay for the coverage, violating anti-kickback laws in the process. The lawsuit also says that the company’s patients were not told that the kidney fund would stop paying their premiums if they received a kidney transplant. read more »

Plaintiffs In 2 States Drop EB-5 Scam Suits Over Jay Peak

Two proposed class action suits claiming Raymond James & Associates was involved in a fraudulent scheme targeting EB-5 investors in Vermont's Jay Peak ski resort were voluntarily dismissed without prejudice by the plaintiffs in the Green Mountain State and Florida in the last week.

On Wednesday, Carlos Enrique Hiller Sanchez dropped his attempt in Florida federal court to recover funds from the brokerage firm and fund manager Joel Burstein for alleged violations of the Securities Exchange Act of 1934, fraud and a fiduciary breach through their roles in the alleged scheme, which involved collecting money from foreigners who sought to obtain green cards by investing in the U.S. through the EB-5 visa program

On Friday, three EB-5 investors asked a Vermont federal court to dismiss their claims Jay Peak ski resort owner Ariel Quiros and CEO William Stenger conspired with Raymond James to misuse the bulk of $350 million raised through the immigrant investor plan. The EB-5 program allows foreigners who invest at least $500,000 in the U.S. and create or maintain a minimum of 10 U.S. jobs to obtain green cards.

The U.S. Securities and Exchange Commission and the state of Vermont have also taken actionagainst Jay Peak and its owners, filing suits last month in Florida and Vermont, respectively. The SEC has won an asset freeze and the appointment of a receiver for the resort’s entities.

The SEC alleges Quiros and Stenger, through various companies including Jay Peak and Q Resorts Inc., used $200 million of the EB-5 money in “Ponzi-like fashion” to cover losses in unrelated projects and to pay for Quiros’ personal expenses, including the purchase of a luxury condo and the payment of income taxes. The SEC said the fraud included false statements, deceptive financial transactions and outright theft.

Raymond James is also named in another Florida suit over the same alleged scheme. read more »

SEC Case Freezes Assets of Ski Resort Steeped in Fraudulent EB-5 Offerings

The Securities and Exchange Commission today announced fraud charges and an asset freeze against a Vermont-based ski resort and related businesses allegedly misusing millions of dollars raised through investments solicited under the EB-5 Immigrant Investor Program.  

The SEC’s case was unsealed today in federal court in Miami, and the court has appointed a receiver over the companies to prevent any further spending of investor assets.

The SEC alleges that Ariel Quiros of Miami, William Stenger of Newport, Vt., and their companies made false statements and omitted key information while raising more than $350 million from investors to construct ski resort facilities and a biomedical research facility in Vermont.  Investors were told they were investing in one of several projects connected to Jay Peak Inc., a ski resort operated by Quiros and Stenger, and their money would only be used to finance that specific project.  Instead, in Ponzi-like fashion, money from investors in later projects was misappropriated to fund deficits in earlier projects.  More than $200 million was allegedly used for other-than-stated purposes, including $50 million spent on Quiros’s personal expenses and in other ways never disclosed to investors.

According to the SEC’s complaint, Quiros improperly tapped investor funds for such things as the purchase of a luxury condominium, payment of his income taxes and other taxes unrelated to the investments, and acquisition of an unrelated ski resort. read more » read the SEC complaint here »