Biogen Inc. Agrees to Pay $900 Million to Settle False Claims Act Allegations Related to Improper Physician Payments

 

  Pharmaceutical company Biogen Inc. (Biogen), based in Cambridge, Massachusetts, has agreed to pay $900 million to resolve allegations that it violated the False Claims Act by causing the submission of false claims to Medicare and Medicaid by paying kickbacks to physicians to induce them to prescribe Biogen drugs.

The settlement announced today resolves a lawsuit filed and litigated by former Biogen employee Michael Bawduniak against Biogen under the qui tam or whistleblower provisions of the False Claims Act, which permit a private party (known as a relator) to file a lawsuit on behalf of the United States and receive a portion of any recovery. The United States may intervene in the action or, as in this case, the relator may proceed with the lawsuit. 

In his lawsuit filed in the District of Massachusetts, Bawduniak alleged that Biogen paid kickbacks to physicians to induce them to prescribe the company’s multiple sclerosis drugs. According to the relator’s complaint, from Jan. 1, 2009, through March 18, 2014, Biogen held programs through which it offered and paid remuneration, including speaker honoraria, speaker training fees, consulting fees and meals, to health care professionals who spoke at or attended Biogen’s speaker programs, speaker training meetings or consultant programs to induce them to prescribe the drugs Avonex, Tysabri and Tecfidera in violation of the Anti-Kickback Statute.

“We thank Mr. Bawduniak for uncovering this behavior and bringing it to light,” said United States Attorney Rachael S. Rollins. “This matter is an important example of the vital role that whistleblowers and their attorneys can play in protecting our nation’s public healthcare programs.”

“Bawduniak doggedly pursued this matter on behalf of the United States for over seven years,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Department of Justice’s Civil Division. “The settlement announced today underscores the critical role that whistleblowers and their attorneys play in utilizing the False Claims Act to combat fraud affecting federal healthcare programs.”

Under the terms of the settlement, Biogen will pay $843,805,187 to the United States and $56,194,813 to 15 states. The United States will pay Bawduniak a share of the federal recovery. 

The claims resolved by the settlement are allegations only and there has been no determination of liability.

Three Men Charged with International Market Manipulation Scheme

 

 An indictment unsealed today charges three men with orchestrating a large-scale market manipulation scheme related to two publicly traded companies, U.S. Attorney Philip R. Sellinger announced.

James Patten, 63, of Winston-Salem, North Carolina; Peter Coker Sr., 80, of Chapel Hill, North Carolina; and Peter Coker Jr., 53, of Hong Kong, China, are each charged in a 12-count indictment with conspiracy to commit securities fraud, securities fraud, and conspiracy to manipulate securities prices. Patten is also charged with four counts of manipulation of securities, four counts of wire fraud, and one count of money laundering.

Patten and Coker Sr. were arrested today and are scheduled to appear before U.S. Magistrate Judge L. Patrick Auld in federal court in the Middle District of North Carolina. They will appear in court in the District of New Jersey at a date to be determined. Coker Jr. remains at large.

According to documents filed in this case and statements made in court:

From 2014 through September 2022, Patten, Coker Sr., and Coker Jr. conspired to enrich themselves through a scheme to manipulate securities prices via a pattern of coordinated trading, which injected inaccurate information into the marketplace, creating false impressions of supply and demand for these securities.

 As part of the securities fraud scheme, the defendants targeted two publicly traded companies – Hometown International Inc. and E-Waste Corp. – which were both traded on the OTC Link Alternative Trading System, also known as the OTC Marketplace. The OTC Marketplace is an alternative trading system that contains three tiers of markets, which are largely based on the quality and quantity of the listed companies’ information and disclosures.

Patten, Coker Sr., and Coker Jr. took steps to gain control of both entities’ management and stock with the ultimate intention of entering reverse mergers, a transaction through which an existing public company merges with a private operating company. A successful reverse merger  would allow the defendants to sell shares of each entity at a significant profit.

In or around 2014, two New Jersey residents began the process of opening a local deli in Paulsboro, New Jersey. One of the individuals discussed his interest in opening the deli with Patten, a long-time friend, who suggested the creation of Hometown International, an umbrella corporation, under which the deli would operate as a wholly owned subsidiary. Unbeknownst to the deli owners, almost immediately after Hometown International was formed, Patten and his associates began positioning Hometown International as a vehicle for a reverse merger that would yield substantial profit to them.

Around October 2019, Hometown International began selling shares on the OTC Marketplace. Shortly thereafter, Patten, Coker Sr., And Coker Jr. undertook a calculated scheme to gain control of Hometown International’s management and its shares from the deli owners. Patten, Coker Sr., and Coker Jr. took similar actions to gain control of E-Waste Corporation’s stock and management.

Once the defendants gained control of Hometown International and E-Waste’s shares, they arranged for the transfer of millions of shares of stock to a number of nominee entities, including entities controlled by Coker Jr., in an effort to mask their control of the shares.

In addition, the defendants transferred shares to family members, friends, and associates and gained control over their trading accounts by obtaining their log-in information in order to conceal the defendants’ involvement. The defendants then used those accounts to commit a number of coordinated trading events, often referred to as match and wash trades, to trade in Hometown International and E-Waste Corp.’s stock on both sides of the transaction.

These tactics artificially inflated the price of Hometown International and E-Waste’s stock by giving the false impression that there was a genuine market interest in the stock. Their scheme had the ultimate impact of artificially inflating Hometown International’s stock by approximately 939 percent and E-Waste’s stock by approximately 19,900 percent.

The securities fraud and manipulation of securities prices counts each carry a maximum penalty of 20 years in prison and a $5 million fine. The wire fraud and money laundering counts are punishable by a maximum penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. The counts of conspiracy to commit securities fraud and conspiracy to manipulate securities prices both carry a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense whichever is greatest.

In a separate civil action, the Securities and Exchange Commission today filed a complaint in the District of New Jersey charging Patten, Coker Sr., and Coker Jr. based on the allegations underlying the market manipulation scheme.

U.S. Attorney Sellinger credited special agents of the FBI’s Philadelphia Division, under the direction of Special Agent in Charge Jacqueline Maguire, and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy Tomlins in Newark, with the investigation. He also thanked special agents from FBI Charlotte, FBI Los Angeles, FBI San Francisco, FBI Denver, and FBI Knoxville, for their assistance.

The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Attorney General James Sues Cryptocurrency Platform for Operating Illegally and Defrauding Investors

 

Nexo Failed to Register as Required by New York Law and Lied to Investors about Their Registration

New York Attorney General Letitia James today joined seven state securities regulators in suing cryptocurrency companies Nexo Inc. and Nexo Capital Inc. (Nexo), for failing to register with the state as securities and commodities brokers or dealers and for lying to investors about their registration status. Despite warnings from the Office of the Attorney General (OAG) to register as a securities and commodities broker or dealer, Nexo failed to register and misrepresented to investors that they are a licensed and registered platform. In New York, entities engaging in the offer, purchase, or sale of securities or commodities, including cryptocurrency platforms, must register with OAG if they are operating within the state or offering their products to New Yorkers. Through her lawsuit, Attorney General James seeks disgorgement of any revenues derived from Nexo’s unlawful conduct and restitution for investors.

“Cryptocurrency platforms are not exceptional; they must register to operate just like other investment platforms,” said Attorney General James. “Nexo violated the law and investors’ trust by falsely claiming that it is a licensed and registered platform. Nexo must stop its unlawful operations and take necessary action to protect its investors.”

Today’s lawsuit — filed in New York County State Supreme Court — alleges that Nexo promoted and sold securities in the form of an interest-bearing virtual currency account called the Earn Interest Product with promises of high returns for participating investors, while failing to register as a securities broker or dealer as required by state law. In addition, the lawsuit alleges that Nexo engaged in the unregistered purchase and sale of securities and commodities through its virtual currency trading platform called the Nexo Exchange, and misled investors by falsely representing that it was in compliance with applicable laws and regulations. Roughly 10,000 New Yorkers have accounts with Nexo.

Attorney General James specifically charges Nexo with violating New York’s Martin Act and New York Executive Law § 63(12). Attorney General James seeks restitution for thousands of defrauded investors, disgorgement of revenues derived from Nexo’s unlawful conduct, and permanent injunctions against the defendants’ violations of state law.  

This matter arises from an investigation conducted in coordination with a working group of state securities regulators. Today, state securities regulators of California, Kentucky, Maryland, Oklahoma, South Carolina, Washington, and Vermont all filed their own administrative actions against Nexo.

Today’s filing continues Attorney General James’ efforts to regulate the cryptocurrency industry and protect New York investors. In August, Attorney General James urged New Yorkers affected by turmoil in cryptocurrency markets — including frozen accounts and deceptive conduct — to report these issues to OAG. In June, Attorney General James warned New Yorkers of the dangerous risks of investing in cryptocurrencies after the market reached record lows. Also in June, Attorney General James reached a nearly $1 million settlement with crypto platform BlockFi Lending LLC for offering unregistered securities. Earlier this year, Attorney General James issued a taxpayer notice to virtual currency investors and their tax advisors to accurately declare and pay taxes on their virtual investments. In October 2021, Attorney General James directed unregistered crypto lending platforms (including Nexo) to cease operations for not fulfilling their legal obligations. In March 2021, Attorney General James warned New Yorkers of the risks of cryptocurrency investments and reminded investment platforms of their legal obligations.

Attorney General James continues to urge New Yorkers who have been affected by deceptive conduct in the virtual assets market to report these issues to OAG. Attorney General James also encourages workers in the cryptocurrency industry who may have witnessed misconduct or fraud to file a whistleblower complaint with her office, which can be done anonymously.

Governor Hochul Announces Crackdown on Unemployment Insurance Fraud

 New York State Department of Labor Identifies More Than $11 Million in Fraudulent Unemployment Insurance Payments in August; On Track to Find More Than $110 Million in Stolen Benefits This Year

DOL to Seek Repayment and Refer Nonpayment to Law Enforcement As Needed

New Fraud Detection Technology Part of DOL's Four-Year Modernization Effort

 Governor Kathy Hochul today announced actions to crack down on unemployment insurance fraud after a New York State Department of Labor investigation found that insurance fraud accounted for more than $11 million in benefits payments in August. These benefits were paid almost exclusively to those working while also collecting unemployment insurance payments during the pandemic. Following the Department of Labor's investigation, Governor Hochul announced that the State would seek repayment for fraudulent benefits payments and refer nonpayment to state law enforcement. Based on this investigation, the Department of Labor Office of Special Investigations is on pace to uncover $110 million in fraudulently attained benefits this year.

"At the height of the pandemic, when our state experienced an unprecedented unemployment crisis, these fraudulent unemployment insurance claims took resources away from New Yorkers who needed them most," Governor Hochul said. "My administration is taking action to step up our investigations of unemployment insurance fraud, hold those who take advantage of the system accountable, and protect this crucial benefit for New Yorkers in need."

The fraudulent payments were identified by DOL using an upgraded fraud detection system. The system allows investigators to more efficiently review cases and streamlines records requests to employers in order to confirm dates of employment. If the system detects a fraudulent payment, the claimant has an opportunity to explain the discrepancy.

Following the review, if the claimant is found to have worked while collecting benefits, DOL will take steps to ensure that ill-gotten payments are returned. This includes establishing repayment plans, garnishing state and federal tax returns and referring matters of nonpayment to state and/or federal law enforcement, as needed.

New York State Department of Labor Commissioner Roberta Reardon said, "When someone files a fraudulent unemployment insurance claim, they are stealing from New Yorkers. The Department remains vigilant and will continue to ensure that these criminals are held accountable. We thank businesses and employers for working with us to uncover fraud."

This new system is part of NYSDOL's modernization efforts which include a 4-year plan to enhance customer experience and reduce fraud. In June, Governor Hochul announced that NYSDOL is halfway through this plan.

NYSDOL is committed to ensuring fraudulent UI claims are prevented and corrected. To report UI fraud and learn more visit the Report Fraud page on the NYSDOL website.

OcasioCortez.com - We fought as a community, we won as a community

 

Have time for a story? We’d like to tell a little tale about the power of community organizing right here in our backyard…

Flashback: it’s 2021 and Texas-based energy company NRG announces they want to build a fracked-gas power plant right in NY-14, in Astoria, Queens. We knew this power plant would maintain our reliance on fossil fuels while further degrading air quality in neighborhoods already riddled with elevated levels of asthma.

In response, Team AOC, alongside the No Astoria NRG Power Plant Coalition, held weekly phone banks to educate residents about this power plant and why New York must move off dirty fossil fuels. We collected hundreds of public comments for Governor Hochul’s office and recruited supporters to attend public hearings hosted by the Department of Environmental Conservation (DEC). In total, we knocked on more than 3,000 doors, made over 160,000 calls, and sent over 50,000 texts to voters about this project.

Because of this work and the work of our community partners, last fall New York officially denied the permit for the Astoria NRG fracking plant citing inconsistency with New York’s climate laws. It was a huge victory — but the fight wasn’t over yet, because NRG appealed the decision. 

But then, just last week, NRG filed a petition seeking approval to transfer the land’s ownership to Beacon Wind to build clean, wind energy infrastructure!¹ Rather than a fossil fuel plant, Beacon Wind will bring jobs and renewable energy to NY-14. 

This is a tremendous win for the community organizers who stepped up in the fight for environmental justice and put the ideals of the Green New Deal into place. Frontline communities — especially those living in the deadly neighborhoods that form Asthma Alley — already bear the burden of fossil fuels.² This is one major step in turning the tide.

When we join together to organize, we can protect frontline communities, build renewables, create good-paying union jobs, and grow the movement for a Green New Deal nationwide.

In solidarity,

Team AOC

 

1 - Earth justice
2 - The Guardian

NYC PUBLIC ADVOCATE CONDEMNS NYCHA RESPONSE TO JACOB RIIS HOUSES WATER CRISIS AND LONGSTANDING PATTERNS OF MISMANAGEMENT AND MISTRUST AT NYCHA

 

Public Advocate Jumaane D. Williams spoke at the New York City Council Committees on Public Housing and Oversight and Investigations joint hearing examining the recent arsenic water crisis at Jacob Riis Houses, where he condemned the Authority’s response, as well as the longstanding patterns of mismanagement at NYCHA which have contributed to a deep mistrust among NYCHA tenants. The initial positive tests for arsenic, later retracted, came just hours after the Public Advocate unveiled his new report on NYCHA’s widespread dangerous conditions and systemic failures during a press conference and tour at Jacob Riis Houses.

“This is clearly another example of how NYCHA continues to fail their residents by creating an unsafe environment.” Public Advocate Jumaane D. Williams argued in today’s hearing. “In our report, we highlight the years of water damage that has ruined many apartments and the constant heat and hot water outages during the winter months. New issues like the safety of the water supply keep cropping up while recurring issues remain unabated, and it appears that NYCHA is not doing much to resolve these problems.”

The Public Advocate also decried the failure of former NYCHA CEO and current Chair, Greg Russ, to attend the hearing, saying, “I don’t know what is more disconcerting: that NYCHA’s CEO has recently stepped down during the midst of this turmoil, or that he is still serving in the capacity of Chair, making a pretty good salary, and is not here. A Chair who resides five states away with a distance of over a thousand miles. I do think it’s disrespectful that he is not here, disrespectful to the Council, disrespectful to all of NYCHA and Jacob Riis in specific, and it’s inexplicable that he’s not here to answer questions.” Russ served as CEO during the height of the crisis before stepping down after initial arsenic results were retracted.

In the wake of the crisis, Public Advocate Williams introduced legislation in the City Council to require the New York City Housing Authority to report on any outside legal expenditures it incurs. This legislation will provide the public with a sense of the financial cost of those failures and an accounting for legal actions NYCHA is involved in which extend beyond the scope of in-house counsel. With NYCHA facing a funding crisis, it is essential to have transparency about these kinds of expenses in order to identify patterns and prevent avoidable damage or unnecessary waste.

Read the Public Advocate's statement below, the bill on legal expenditures, and the report named for Jacob Riis' work, How the Other Half Lives in Public Housing. 

STATEMENT OF PUBLIC ADVOCATE JUMAANE D. WILLIAMS

TO THE NEW YORK CITY COUNCIL COMMITTEE ON PUBLIC HOUSING AND THE COMMITTEE ON OVERSIGHT AND INVESTIGATIONS

SEPTEMBER 23, 2022

My name is Jumaane D. Williams and I am the Public Advocate for the City of New York. Thank you very much Chair Avilés and Chair Brewer and members of both committees for holding this hearing and allowing me to provide a statement. 

About three weeks ago, my office and I released a report called, How the Other Half Lives in Public Housing, named after a book by Jacob Riis that was written over a hundred years ago which spotlights the inexcusable and dangerous conditions at NYCHA developments that we witnessed during our 5 Borough Tour earlier this year. We did it inside of Jacob Riis Houses. Not even twelve hours later, we learned that NYCHA discovered arsenic in the tap water at Jacob Riis Houses – even though they knew we were going to be there, and we were one of the folks that were never told of what was going on. 

According to THE CITY article, the test result that showed arsenic in the tap water was completed a week before any of the residents were notified. After being notified, many of the residents informed reporters that they do not drink from the tap water because it was either brown or smells. To this day, residents still complain about the water and let it be known that the complaints were happening well before August. However, they have not been given an explanation as to why that is. This could be as a result of aging pipes, and we all need to know what the state of NYCHA’s pipe system is through the five boroughs. It is important to note that DEP conducted tests of its water to its delivery points at Jacob Riis Houses and it came back negative for any contaminants.  

This is clearly another example of how NYCHA continues to fail their residents by creating an unsafe environment. In our report, we highlight the years of water damage that has ruined many apartments and the constant heat and hot water outages during the winter months. New issues like the safety of the water supply keep cropping up while recurring issues remain unabated, and it appears that NYCHA is not doing much to resolve these problems. 

I don’t know what is more disconcerting: that NYCHA’s CEO has recently stepped down during the midst of this turmoil, or that he is still serving in the capacity of Chair, making a pretty good salary, and is not here. A chair who resides five states away with a distance of over a thousand miles. I do think it’s disrespectful that he is not here, disrespectful to the council, disrespectful to all of NYCHA and Jacob Riis in specific, and it’s inexplicable that he’s not here to answer questions. 

NYCHA has had three chairs during my tenure in office spanning twelve years which does not help to stabilize a mismanaged agency greater in size than many cities. However, I feel strongly that NYCHA will not be able to rectify its management problems without boots on the ground. NYCHA’s employees must be made up of more New York City, in particular NYCHA, residents.

With no clear direction of what NYCHA will do next, how will they ensure that this does not happen again? NYCHA’s chronic mismanagement led to the appointment and oversight of a Federal Monitor. Our report was clear that more funding was actually needed for NYCHA, but we were also clear that the mismanagement was not necessarily attached to funding, and that mismanagement was solely the auspices of NYCHA. The Federal Monitor was not notified by NYCHA of the initial arsenic test samples. NYCHA has to have a process in place to expeditiously notify residents, the mayor, and the Federal Monitor, and other electeds, of emergency conditions irrespective of water tests that yield a positive or a false positive result.

In closing, I would like to know why a contractor who was not certified with the city to do this type of testing was hired to do the testing? That’s what we have heard, and I think that’s a question that needs to be answered. In addition to that, why did it take so long to complete the water testing and why was the first test not rushed like the later ones? Why would you wait so long to get the test completed? There was a seven-day period between when the testing company had allowed the City to release the results compared to when residents at Jacob Riis found out. It is extremely inconsiderate that NYCHA residents were the last ones to hear about this even though they are the ones directly impacted. I do have to say, NYCHA was encouraged to have meetings all throughout that process, and they refused. We need to know what is the process for informing individuals of emergency situations and whether NYCHA followed its procedures. If there is no process in place, then one has to be created and implemented immediately.  

Lastly, knowledge and information is power. NYCHA cannot render its residents powerless to determine what are the necessary steps to take for their health and the health of their family. Residents can make informed decisions, but they first need to be informed. I do have to say as well, that I know this is a systemic issue. Having been through three different people in charge, it is clear that just removing one person is not going to fix the system. It is deeply entrenched systemic problems that are happening with NYCHA. 

Thank you.

Governor Hochul Signs Legislation to Study Extreme Heat Conditions in Disadvantaged Communities

 

Legislation (S.8431-A/A.10001-B) Directs the Department of Environmental Conservation To Conduct a Study on the Impacts of Disproportionate Heat Conditions in Urban Areas 

 Governor Kathy Hochul signed legislation (S.8431-A/A.10001-B) that will direct the New York State Department of Environmental Conservation to study the impacts of disproportionate heat conditions, otherwise known as urban heat islands, in disadvantaged communities.

 

"Extreme heat threatens the lives and welfare of many New Yorkers each year, but particularly those in disadvantaged communities and communities of color," Governor Hochul said. "As we round out Climate Week, we are taking steps to address extreme heat and combat climate change. This study will put us on a path toward protecting New Yorkers and making the state a healthier, more sustainable place to live for future generations."

 

Legislation (S.8431-A/A.10001-B) directs the New York State Department of Environmental Conservation (DEC), in consultation with the environmental justice interagency coordinating council and the climate justice working group, to study the impacts of disproportionate heat conditions in urban areas, particularly in disadvantaged communities. Various cities across the state are susceptible to increased heat due to infrastructure that traps and stores heat throughout the day, which is a phenomenon known as the urban heat island effect. The study will identify urban disadvantaged communities with concentrations of heat islands, include recommendations on how to identify, prevent and address adverse health and environmental impacts from urban heat island effects and identify potential funding to address such impacts.

 

New York State Department of Environmental Conservation Commissioner and Climate Action Council Co-Chair Basil Seggos said, "Climate change is not only affecting our environment, it is already contributing to deadly public health consequences in communities historically overburdened by environmental pollution. DEC looks forward to advancing this critical study with our many local, state, and legislative partners and will continue to work under Governor Hochul's leadership to help address extreme heat and keep New Yorkers safe."

New York State is already taking steps administratively to address extreme heat in urban communities, including with the formation of the Extreme Heat Action Plan, an effort jointly lead by the New York State Energy Research and Development Authority (NYSERDA) and the Department of Environmental Conservation (DEC). Interim recommendations for the Extreme Heat Action Plan were released on July 23, 2022. The plan specifically focuses on communities disproportionately impacted by environmental pollution and climate change and identifies gaps in the State's existing approach to mitigating extreme heat impacts on areas of employment, recreation, and disadvantaged communities.

 

Former Caldwell Police Department Lieutenant Convicted of Falsifying Records, Witness Tampering, and Destruction of Records

 

 A federal jury convicted a former Caldwell Police Department Lieutenant of falsifying a record or document in a federal investigation, witness tampering by harassment, and destroying a record to impair its use in an official proceeding.  The jury found Hoadley not guilty of willful deprivation of rights under color of law.

Joseph Alan Hoadley, 42, of Caldwell, was convicted after a five-day jury trial in U.S. District Court before the Honorable Scott W. Skavdahl, U.S. District Court Judge for the District of Wyoming.  He faces up to 20 years imprisonment and a $250,000 fine on each of the three charges.  Sentencing is scheduled for December of 2022.

During the trial, the jury heard evidence that Hoadley, while employed as a Lieutenant with the Caldwell Police Department, used force against B.H. in Caldwell in 2017 while he was detained and handcuffed.  Hoadley falsified a subsequent police report detailing his actions during the incident.  In 2021, knowing that he was the target of an FBI investigation, Hoadley harassed and intimidated C.H. with the intent to dissuade him from cooperating with the FBI investigation.  In April of 2022, after being indicted by a federal grand jury, Hoadley destroyed data on his city‑issued laptop and cellphone one day before turning them over to the acting Caldwell Police Chief, who had placed Hoadley on administrative leave because of the charges.

“The safety of our communities and our ability to uphold the rule of law depend on the honesty and integrity of law enforcement officers,” said U.S. Attorney Josh Hurwit.  “And so we will never waiver in prosecuting violations of the law, even when a police officer is the offender.  I am proud of our prosecutors and staff for their work on this difficult case.  I also commend the FBI for its thorough and fair investigation.  Finally, I want to recognize the current and former Caldwell Police officers who testified under extremely difficult circumstances.”