Supreme Court Trims Wire Fraud Theory of Public Corruption in Bridgegate Decision

trafficIn Kelly v. United States, 590 U.S. — (May 7, 2020), the Supreme Court recently reversed the federal fraud convictions of former public officials Bridget Kelly and William Baroni arising out of the Bridgegate scandal.  The decision limits the applicability of the federal wire fraud statute to public corruption, and it will affect how such cases are investigated and tried in the future.

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Provider Tips For Telehealth Compliance

Although the rapid shift to telehealth is a boon to providers and patients, the federal government has issued specific guidance that providers need to follow.  See tips for compliance provided by David Maria, a former federal prosecutor and member of the Department of Justice Medicare Fraud Strike Force, and Trevor Garmey, a Senior Associate with the Government Investigations and White Collar group.  The tips are here on the Triage Health Law blog.

OFSI Russian Sanctions Penalty; Foreshadows Increasing UK Enforcement?

London skylineOn March 31, 2020, the United Kingdom’s Office of Financial Sanctions Implementation (OFSI) levied its largest monetary penalty to date of GBP 20.47 million. OFSI penalized Standard Chartered for loans to Denizbank, a Turkish bank that was majority owned by Sberbank, a state-owned Russian bank.  Accordingly, those loans violated European Union restrictions on making certain new loans or credit available to sanctioned Russian financial institutions. This enforcement activity may indicate that the United Kingdom regulator is prepared to ramp up its scrutiny of sanctions compliance and to impose increasingly severe penalties in response to violations.

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Regulations for Hand Sanitizer Manufacturing

Manufacturing hand sanitizer to help meet the global demand presents a great opportunity for companies looking to find new markets.  However, successful marketing  requires compliance with regulatory oversight.  See our discussion by Marisa Darden and Marques Richeson on our Global Supply Chain Law blog

DOJ and SEC – Aggressive Measures on Coronavirus Fraud

The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have taken legal actions to combat fraud arising out of the COVID-19 health emergency.

DOJ Restraining Order

On March 23, 2020, the U.S. District Court for the Western Division of Texas issued a temporary restraining order to halt a predatory wire fraud scheme related to coronavirus treatment sales. The DOJ brought charges, pursuant to 18 U.S.C. § 1345, which permits the government to enjoin an ongoing fraud to prevent irreparable harm to the public.

In the case, United States of America v. John Doe a/k/a “,” the government alleges that persons operating the website published statements fraudulently claiming that the World Health Organization is giving free away vaccination kits to immunize people from the COVID-19 outbreak.  The website required visitors to enter credit card information and pay a $4.95 shipping fee to receive the free vaccine. The government alleged, “[t]he purpose of the website is to induce victims to pay Doe and those working in concert with him or her $4.95 for such non-existent kits, and/or to obtain credit card and other personal information from victims for purposes of engaging in fraudulent purchases and identity.”

Attorney General William Barr has signaled that coronavirus fraud is a top priority of the Justice Department.  Federal prosecutors in United States v. Doe echoed this statement, warning

the Department of Justice will not tolerate criminal exploitation of this national emergency for personal gain.  We will use every resource at the government’s disposal to act quickly to shut down these most despicable of scammers, whether they are defrauding consumers, committing identity theft, or delivering malware.

 Deputy Attorney General Jeffrey A. Rosen recently sent a memo to all U.S. Attorneys directing them to appoint a COVID-19 Fraud Coordinator to “serve as the legal counsel for the federal judicial district on matters relating to the COVID-19, direct the prosecution of COVID-19 related crimes, and to conduct outreach and awareness activities.” The national Fraud Coordinator is establishing a web portal for all U.S. Attorneys to coordinate COVID-19 fraud litigation with 16 other federal agencies.

SEC Action

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Special Appearance Denied In Sanctions Criminal Case

A New York federal judge recently held that a foreign bank could not challenge U.S. federal criminal jurisdiction prior to arraignment.

US Allegation

Halkbank is a Turkish majority state-owned bank. The United States alleged that Halkbank developed an illicit scheme comprised “of fraudulent transactions intended to deceive U.S. regulators and foreign banks” through which the bank transferred $20 billion to Iran in violation of U.S. sanctions on Iran. Specifically, the government has charged that the Bank used Iranian oil proceeds to purchase gold and masked transactions to fall within the “humanitarian exception” of the sanctions regime. The effect of the scheme was to create a pool of funds in Turkey and the United Arab Emirates, which Iran used to make international payments in U.S. dollars, and which payments passed undetected through the foreign banks and ultimately the U.S. financial system, in violation of U.S. sanctions.

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Whistleblowers Watch Stimulus Money From Inside

Whistleblowers watch from inside when a business receives stimulus money.  Whistleblowers, with their unique access to business operations, follow the money to learn whether the business abides by the strings attached to that money.  Whistleblowers look for an opportunity to cash in on what they consider fraudulent conduct.  What’s a business to do?

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DOJ, FTC Pledge 7-Day Evaluation of Competitor Collaborations

handshake business meetingInformation about an expedited procedure for obtaining guidance about the permissibility of certain collaborations between competitors, which have the effect of protecting Americans’ health and safety, was set forth in a joint statement issued March 24, 2020, by the US Department of Justice (DOJ) and the US Federal Trade Commission (FTC) (the Statement). The Statement makes clear that such procompetitive collaborations are permissible.

Barry Pupkin, a senior partner in our Competition-Antitrust Practice in Washington, takes a closer look at the guidance in a recent client alert.