Abidog v. New York Life Insurance Co. was filed in the Superior Court of the State of California on June 18, 2021, seeking damages and rescission of unregistered promissory notes sold in a Ponzi scheme that deprived elderly and other unwitting investors of their life savings.  The fifteen-count complaint alleges violations of California statutory and common law, as well as federal securities law.

Defendant Felix Chu is a former agent of Defendants New York Life Insurance Company and NYLIFE Securities LLC (collectively, “New York Life”) who used his role at New York Life to perpetrate the Ponzi scheme.  Plaintiffs are investors in the scheme.

SEC v. The Estate of Kenneth J. Casey is a case filed by the SEC in the United States District Court for the Northern District of California on June 2, 2021, claiming that Kenneth Casey (“Casey”), the founder of Professional Financial Investors, Inc. (“PFI”), a real estate investment and management company, personally misappropriated over $10 million from investors as part of a scheme where Casey falsely told investors that their money would be used to invest in multi-unit residential and commercial real estate. Specifically, the complaint alleges that Casey violated 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5, and Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].

According to the complaint, Casey’s fraudulent scheme began to unravel shortly after his death, when questions arose about the solvency of PFI and one of Casey’s other companies, PISF. The SEC had previously filed an action against the president of PFI for his role in a fraudulent scheme to misappropriate funds from investors.

CVC Capital Partners has announced it signed an agreement to acquire a majority interest in ExamWorks.

ExamWorks, based in Atlanta, is a provider of independent medical examinations, peer reviews, document management and related services.

CVC, with U.S. offices in New York and San Francisco, is a global private equity and investment advisory firm. Founded in…

Wiand v. ATC Brokers Ltd, et al. was filed in U.S. District Court for the Middle District of Florida, on May 28, 2021.  The complaint was filed by a Receiver appointed in an action brought by the Commodity Futures Trade Commission (the “CFTC”) alleging the operation of a Ponzi scheme.  The complaint alleges (1) aiding and abetting fraud, (2) aiding and abetting breach of fiduciary duties, (3) gross negligence, and (4) simple negligence.  In addition, the complaint seeks to avoid alleged fraudulent transfers received by ATC Brokers Ltd.

Plaintiff is the court appointed Receiver over Oasis International Group, Limited, Oasis Management LLC, and Satellite Holdings Company (the “Oasis Entities”) in an action filed by the CFTC, titled Commodity Futures Trade Commission v. Oasis International Group, Limited, et al., Case No. 8:19-cv-00886-VMC-SPF (M.D. Fla. Apr. 15, 2019).  Defendants include: (1) ATC Brokers Ltd., the exchange firm the Ponzi scheme operators used to carry out the scheme; (2) Spotex LLC, the entity that provided the software used to carry out the Ponzi scheme; and (3) an owner of both entity Defendants.

As vaccination rates rise, the COVID-19 pandemic continues to reverberate through 2021. These reverberations also impacted the healthcare fraud and abuse landscape that is the basis of The FCA Insider’s coverage. To-date, 2021 has seen more than three dozen posts on topics ranging from False Claims Act (FCA) court opinions, U.S. Department of Justice (DOJ) investigations, and changes to regulatory guidance under both the federal Anti-Kickback Statute (AKS) and the physician self-referral law (the Stark Law). Yet it is the fraud enforcement related to COVID-19 that we could never have planned to cover when we launched the site but led our coverage these past six months. Halfway through the year, here are six notable themes in FCA litigation and healthcare fraud and abuse covered on The FCA Insider.

Whitmore v. Horwitz was filed in the Central District of California on April 20, 2021, seeking class certification and unspecified civil damages. The complaint alleges fraud by omission, aiding and abetting fraud, breach of fiduciary duty, and aiding and abetting breach of fiduciary duty.

Plaintiffs are a group of investors seeking to represent a class of those who invested in Horwitz’s company, 1inMM Capital, LLC (“1inMM”). The defendants are Zachary Horwitz, 1inMM, and City National Bank (“City National”), the bank that Horwitz and 1inMM used.

H.I.G. Capital has announced it has completed a growth investment in Enseo.

Enseo, based in Plano, Texas, is a provider of customer experience management technology. The company is best known for delivering in guest-room entertainment in hotels. The growth investment will be used to help the company expand into healthcare and other vertical markets.

H.I.G.

This alert is a continuation from a March 3, 2021 post.

On 3rd March 2021, UK Chancellor Rishi Sunak announced a £100 million Taxpayer Protection Taskforce (Taskforce) to scrutinise claims made under Government financial business support schemes designed to help companies and individuals navigate their way through the economic impact of the COVID-19 pandemic.

In U.S. ex rel. Freedman v. Bayada Home Health Care, Inc., No. 3:19-cv-18753-FLW-ZNQ, 2021 WL 1904735 (D.N.J. May 12, 2021), a New Jersey District Court found that the relator failed to plead a cognizable theory of liability under the FCA based on defendant Bayada Home Health Care, Inc. (“Bayada”) allegedly fraudulent acquisition of a home health agency that subsequently billed Medicare for seemingly legitimate claims.

In 2011, the Ocean County Board of Health (“Ocean County”) began considering whether to sell its home healthcare agency. That fall, Bayada asked George Gilmore, an attorney and local Republican Party chair, to “lobby” on its behalf in its attempt to purchase Ocean County’s home healthcare agency. Gilmore engaged in various efforts to that end, and signed a retention agreement for legal services in March 2012. Additionally, days before Bayada submitted its proposal to Ocean County, Bayada’s then-COO offered Gilmore a “success fee” on top of his retention agreement. Bayada did not inform Ocean County of its contingency fee arrangement with Gilmore, despite the fact that the RFP and New Jersey state regulations prohibit paying lobbyists in that way. Bayada was awarded the contract, despite bidding $500,000 less than the other bidder. Bayada obtained Ocean County’s license in December 2014, enrolled as a Medicare provider in January 2015, and billed approximately $36 million in Medicare claims to the federal government through 2019.