Swiss Bank Program: Fourteen more Swiss banks reached resolution with the DOJ under its Swiss Bank Program (first reported on in our April newsletter under "First Swiss Bank Reaches Resolution with the DOJ Under Its Swiss Bank Program"). (7/30/15, 7/23/15, 7/16/15, 7/9/15, 7/2/15, 6/26/15 and 6/19/15)
FCPA highlights: The SEC announced that Mead Johnson Nutrition Company agreed to pay $12 million in disgorgement and penalties to settle charges that its Chinese subsidiary paid bribes to medical professionals at government-owned hospitals to recommend Mead's infant formula to new mother patients (7/28/15). The DOJ announced that Louis Berger International, Inc., entered into a DPA and agreed to pay a $17.1 million criminal penalty to resolve charges that it bribed foreign officials in India, Indonesia, Vietnam and Kuwait to secure government construction management contracts in violation of the FCPA. Two of the company's former executives also pleaded guilty to conspiracy and FCPA charges in connection with the scheme (7/17/15). In what is being billed as the first completed FCPA investigation of 2015, the DOJ announced that Florida-based defense and government contracting company IAP Worldwide Services Inc. entered into an NPA with the government and agreed to pay a $7.1 million penalty to resolve the DOJ's investigation into bribes paid to Kuwaiti officials to secure government contracts in violation of the FCPA. A vice president of the company also pleaded guilty to one count of conspiracy to violate the FCPA (6/16/15). In connection with its announcement of the guilty plea by former PetroTiger co-CEO Joseph Sigelman for conspiring to pay bribes to foreign officials in violation of the FCPA, the DOJ announced that it was declining to prosecute PetroTiger based on its "voluntary disclosure, cooperation, and remediation." (6/15/15).
DOJ seeks forfeiture: In connection with a multicountry telecom corruption probe, the DOJ filed a complaint in Manhattan federal district court seeking forfeiture of $300 million being held by Bank of New York Mellon in Ireland, Luxembourg and Belgium which it claims are the proceeds of an international bribery conspiracy involving two Russian phone companies and a close relative of Uzbekistan's president (7/3/15). The DOJ announced that it filed a complaint in federal district court in Washington, D.C., seeking forfeiture of $34 million in bribe payments to the Republic of Chad's former ambassador to the United States and Canada. The forfeiture amount represents the cash value of shares in a Canadian energy company that the company used to bribe Chad's former ambassador to the United States and Canada in order to influence the award of oil development rights (6/30/15).
Whistleblower news roundup: The SEC announced that medical device manufacturer NuVasive Inc. agreed to pay $13.5 million to settle FCA violations relating to the marketing of medical devices to doctors for use in spine surgeries in a manner not approved by the FDA, thereby causing the doctors to submit false claims to Medicare. Qui tam whistleblower to receive award of $2.2 million (7/30/15). The SEC announced that it was paying $3 million to a whistleblower in a complex fraud case, constituting the third-biggest award under the SEC's whistleblower program that launched in 2011 (7/17/15). A qui tam whistleblower (and former sales rep) in the Endo Pharmaceuticals, Inc., FCA case was awarded $33.6 million, or 24% of the $137 million paid by Endo Pharmaceuticals in 2014, when it entered into a DPA with the DOJ in connection with alleged off-label marketing of Lidoderm pain patch (7/17/15). Colorado-based dialysis services provider DaVita Healthcare Partners, Inc., agreed to pay $450 million to resolve FCA violations relating to the creation of and billing for unnecessary waste in connection with the administration of two dialysis drugs. Two qui tam whistleblowers to split an award of up to $135 million (6/25/15). Florida-based skilled nursing facility Hebrew Homes Health Network, Inc., and its former president/executive director agreed to pay $17 million to resolve FCA violations relating to improper payments to doctors for referrals of Medicare patients requiring skilled nursing care. This is the largest settlement involving alleged violations of the Anti-Kickback Statute by a U.S. skilled nursing facility. Qui tam whistleblower to receive $4.25 million (6/16/15).
Challenges to SEC administrative proceedings: In Tilton v. SEC (first reported on in our April newsletter under "Wherefore Art Thou Due Process? SEC Administrative Hearings Under Attack"), S.D.N.Y. District Court Judge Ronnie Abrams denied plaintiff Tilton's motion for preliminary injunction and dismissed her complaint for lack of subject matter jurisdiction, stating that Tilton's "exclusive avenue of review" is through the SEC administrative process, which must be exhausted before bringing her challenge in federal court. Judge Abrams acknowledged that the district courts in New York and other states have split on this issue, but cited to cases finding lack of subject matter jurisdiction to be "more persuasive." Tilton has filed an appeal to the Second Circuit (6/30/15). The SEC's Enforcement Division filed a rare petition for review with the SEC of Administrative Law Judge James E. Grimes's 6/4/15 decision ruling against it in In the Matter of Robare Group, et al. ALJ Grimes had dismissed all charges in a conflicts of interest case involving failure to disclose custodians' payments to advisers (6/25/15).
Other items of interest: The SEC announced that it had fined Deloitte & Touche approximately $1 million for violating auditor independence rules with respect to the appearance of independence and impartiality. The SEC found that Deloitte & Touche's consulting affiliate maintained a business relationship with a trustee serving on the boards and audit committees of three funds audited by the accounting firm. The trustee and the funds' administrator ALPS Fund Services were also charged with related reporting and compliance violations and agreed to settle the charges (7/1/15). The SEC announced that Goldman Sachs agreed to pay $7 million in penalties to resolve allegations that it violated the market access rule by not having adequate safeguards in place while using new software to prevent the "glitch" that resulted in the firm erroneously sending out approximately 16,000 mispriced option orders in less than an hour on 8/20/13 (6/30/15). The DOJ announced a national Medicare fraud sweep resulting in charges against 243 individuals for approximately $712 million in false billing (6/18/15).
Talks about town: Attorney General Loretta E. Lynch spoke at the DOJ Cybersecurity Symposium (7/21/15). Associate Director of Enforcement for FinCen Stephanie Booker spoke at the 2015 Bank Secrecy Act Conference (6/18/15). Assistant Attorney General Leslie R. Caldwell spoke at the 26th Annual Association of Certified Fraud Examiners Global Fraud Conference (6/15/15).