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Whistleblower News: Investment Adviser Sentenced, IPOs

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Physicians groups resolve U.S. patient referral probe for over $33 million

Two physicians groups including one operated by Envision Healthcare Corp will pay over $33 million to resolve claims they received illegal inducements to refer patients to a hospital operator’s facilities, the U.S. Justice Department said on Tuesday.

The settlements resolve allegations contained in lawsuits filed under the False Claims Act, which allows whistleblowers to sue companies on the government’s behalf to recover taxpayer money paid out based on fraudulent claims.

If successful, whistleblowers receive a percentage of the recovery. The government can intervene in the lawsuits, which is typically a major boost to such cases.

The Justice Department said two doctors whose medical practice previously supplied doctors to staff HMA hospital emergency departments, Thomas Mason and Stephen Folstad, will receive $6.2 million under the EmCare settlement. read more »

‘Master investor’ gets 24 years in prison for using $10M for strip clubs, child support, Disney trips

An Arizona investment adviser who was touted as a ‘master investor’ and entrepreneur was sentenced to more than 24 years in prison after pleading guilty to investment fraud and money laundering charges.

Jason Todd Mogler, 49, was part of an Arizona-based investment and Ponzi scheme that defrauded 225 investors, according to prosecutors.

According to the U.S. Department of Justice, Mogler and other investment executives solicited money from investors between 2006 and 2012 for purported land deals in Mexico, recycling companies in Las Vegas and Chicago and distressed real estate in Phoenix.

Prosecutors said they sought investors at seminars, via radio broadcasts and news articles. read more »

Broker Charged With Giving Special Access to IPOs for Cash Kickbacks

The Securities and Exchange Commission today charged a Wall Street stockbroker with illegally accepting more than $1 million in undisclosed kickbacks for giving certain customers preferential access to lucrative IPOs, enabling them to reap major trading profits in the secondary markets.

The SEC alleges that Brian Hirsch subverted allocation policies and procedures at two brokerage firms where he worked on the wealth syndicate desk, making long-running arrangements with certain customers to give them larger allocations of coveted public offerings being marketed by the firms.  In most instances, the customers sold their stock into the market as soon as possible to turn a substantial profit at the expense of the firms’ other brokerage customers and the issuers’ interests in raising capital from long-term investors. read more »

Why Steinhoff could be next Enron How badly has the company been wounded and what happens next?

It could wind up being South Africa’s version of the Enron accounting scandal. Furniture retailer Steinhoff International Holdings captivated investors by growing into a global force, latterly under its billionaire chairman, Christo Wiese. Now it’s drawing attention for all the wrong reasons. Shares in Steinhoff crashed 80% in two days after the company reported accounting irregularities that stretch back to 2016. Wiese has stepped down, Chief Executive Officer Markus Jooste has resigned and the company is looking for leniency from its creditors

The company has been a go-to choice for investors seeking a balance between developing and emerging markets. Its share price tripled between early 2012 and end 2016 as it expanded in the US and Europe from a base in South Africa. It owns retail chains including Conforama in France, Poundland in the UK and Mattress Firm in the US, which encompasses the stores formerly known as Sleepy’s. Reflecting the global deal-making, the company has at least 200 subsidiaries and affiliates and is Dutch-registered and listed in Frankfurt and Johannesburg. Wiese and Jooste, meantime, are among the best-known members of a close-knit group of wealthy businessmen who have owned properties in the exclusive winelands around Cape Town. read more »