Wells Fargo Says Scandal Costs Will Be Higher Than Projected

Expenses could be as high as $80 million a quarter, CFO says

CEO says he learned painfully that he doesn’t write headlines

Wells Fargo & Co.’s costs tied to a fake-account scandal are mounting faster than the bank expected as the company incurs expenses for consultants and lawyers.

The lender expects their fees to be $70 million to $80 million per quarter, Chief Financial Officer John Shrewsberry told analysts on a conference call Thursday. That compares with the range of $50 million to $60 million that he gave in February. The CFO said the costs will persist for “several quarters,” even after the bank’s board released a report this week into how the sales abuses started and were allowed to continue for more than a decade. read more »

Pfizer Says Execution Drugs Sold to Arkansas Without Knowing

Drugs sold to state by pharmaceutical distributor McKesson

State plans to execute inmates this month, New Yorker reports

Pfizer Inc. said drugs that can be used to execute inmates by lethal injection were sold to the Arkansas Department of Corrections without its knowledge by the distributor McKesson Corp., in violation of the drugmaker’s policy.

The statement followed a report in the New Yorker that the state of Arkansas was planning to execute seven people before the end of April, after which the lethal injection drugs will expire.

Pfizer and other companies have attempted to block the use of their products in lethal injections. In this case, according to Pfizer, the drugs were sold to the state by San Francisco-based McKesson, one of the U.S.’s largest distributors of pharmaceuticals. read more »

Credit Suisse execs slash their own bonuses 40% after rough year

The pay cuts cap a rough year for Credit Suisse. The bank agreed in 2016 to pay a total of $5.3 billion to the U.S. Department of Justice to settle claims that it packaged and sold toxic mortgages between 2005 and 2007. read more »

Abbott and Alere Agree to Play Nice With $5.3 Billion Deal

Abbott Laboratories agreed to consummate its troubled acquisition of Alere Inc. in a deal that values the medical test maker’s equity at $5.3 billion, shaving $500 million from the original price and ending months of legal maneuvering that appeared headed for a Delaware court.

With the legal actions dropped, Abbott must now integrate Alere’s industry-leading point-of-care technology while navigating the company’s raft of U.S. government investigations into bribery and billing practices as well as material weaknesses in its revenue recognition and accounting for income taxes. Alere is also embroiled in a battle with the U.S. Medicare program over the future of its diabetes products division. read more »

KPMG Fires 6 Over Ethics Breach on Audit Warnings

The accounting firm KPMG has fired six employees, including the head of its audit practice in the United States, after it learned they were given improper warnings ahead of planned audit inspections by its regulator, the Public Company Accounting Oversight Board.

KPMG said that an individual who had joined the firm from the Public Company Accounting Oversight Board had received confidential information from an employee of the oversight board and shared it with others at KPMG.

“That information potentially undermined the integrity of the regulatory process,” KPMG said in a news release on Tuesday. The accounting firm said it had learned of the matter from a whistle-blower in February. read more »

U.S. FDA warns Abbott Labs over heart device problems

The U.S. Food and Drug Administration issued a warning letter to Abbott Laboratories, citing manufacturing flaws with a range of cardiovascular devices acquired with its purchase of St. Jude Medical in January for $25 billion.

The letter, dated April 12 and made public on Thursday, sent Abbott's shares down 2 percent to $42.61.

The FDA, which said the company failed to disclose at least one death associated with one of the devices, said an inspection of the company's facility in Sylmar, California, raised questions about the safety of several implantable defibrillators and its Merlin@home monitor, which allows doctors to care remotely for patients with cardiac devices.

The FDA investigation showed that lithium batteries in the devices were draining prematurely and that the company had "underestimated the occurrence of the hazardous situation." read more »

 

 

Detroit Podiatrist Charged for Role in $13.9 Million Medicare Fraud Scheme

A Detroit podiatrist was charged in an indictment unsealed today for his alleged participation in a $13.9 million health care fraud scheme involving fraudulent claims for unnecessary foot surgeries and other podiatric services that were never rendered. read more »

 

 

Indian National Pleads Guilty for Role in Multi-Million Dollar India-Based Call Center Scam Targeting U.S. Victims

According to admissions made in connection with the plea, Patel and his co-conspirators perpetrated a complex scheme in which individuals from call centers located in Ahmedabad, India, impersonated officials from the IRS or U.S. Citizenship and Immigration Services in a ruse designed to defraud victims located throughout the United States. Using information obtained from data brokers and other sources, call center operators targeted U.S. victims who were threatened with arrest, imprisonment, fines or deportation if they did not pay alleged monies owed to the government. Victims who agreed to pay the scammers were instructed how to provide payment, including by purchasing stored value cards or wiring money, and upon payment, the call centers would immediately turn to a network of “runners” based in the U.S. to liquidate and launder the fraudulently-obtained funds. read more »