Ten Former NFL Players Charged with Defrauding League's Health Care Benefits Plan

Ten Former NFL Players Charged with Defrauding League’s Health Care Benefits Plan

On December 12, the DOJ unsealed two indictments charging ten retired NFL players with defrauding the league’s retiree health care benefits plan of over $3.4 million.

According to the indictments, the former players submitted claims for medical equipment valued at between $40,000 and $50,000 using falsified letters from health care providers describing how the players would use the devices as well as fabricated prescriptions and invoices related to the devices.

The scheme was revealed when an insurer identified discrepancies in claims and referred the matter to law enforcement. The players face maximum sentences which range from 10 to 20 years imprisonment as well as fines of $250,000 for each charge. The cases are USA v. Buckhalter, et al., case number 5:19-cr-00205, and USA v. McCune, et al., case number 5:19-cr-00206, in the US District Court for the Eastern District of Kentucky.

Ericsson Agrees to $1 Billion FCPA Settlement

On December 6, Swedish telecommunications company Telefonaktiebolaget LM Ericsson entered into a deferred prosecution agreement to settle criminal and civil investigations by the DOJ and SEC into potential violations of the Foreign Corrupt Practices Act. Per the DPA, Ericsson must pay a $520 million criminal penalty and an additional $540 million civil penalty to the SEC in a related investigation. The $1 billion settlement is one of the largest in the history of the FCPA’s enforcement.

According to the DPA, between 2000 and 2016, Ericsson used third-party agents and consultants to pay bribes to government officials in various countries, including Djibouti, China, Vietnam, Indonesia, and Kuwait. These payments were then knowingly mischaracterized in Ericsson’s books and records.

Under the agreement, Ericsson has agreed to the imposition of a three-year independent compliance monitor, enhancing its compliance program, and cooperating with the DOJ with any ongoing investigations, including of individual actors. The large monetary penalty was the result of several factors, including Ericsson’s failure to disclose allegations of corruption with respect to two relevant matters, making untimely productions of documents, and failing to adequately discipline employees involved in the misconduct.

The DOJ press release is here.

HSBC Switzerland Enters into DPA and Agrees to Pay $192 Million

HSBC Private Bank (Suisse) SA (HSBC Switzerland), a private bank headquartered in Geneva, entered into a DPA in the United States District Court for the Southern District of Florida and will pay over $192 million in penalties.

According to the DPA and other court documents, from 2000 to 2010, HSBC Switzerland conspired with its employees, third-party fiduciaries, and US clients to commit various tax violations, including filing false tax returns and tax evasion. As an example of misconduct, in 2007, the bank held about $1.2 billion in undeclared assets for its US clients. HSBC Switzerland also assisted US clients with concealing their offshore assets and income using a variety of methods, including relying on Swiss bank secrecy laws to avoid disclosure to US authorities, using code-named and numbered accounts, and maintaining accounts in the names of nominee entities established in tax haven jurisdictions.

Under the three-year DPA, HSBC Switzerland is required to fully cooperate with the DOJ’s Tax Division and the IRS and affirmatively disclose information it may uncover pertaining to US-associated accounts.

The DOJ press release is here.

Stock Promoter Sentenced to 84 Months for Stock Manipulation Scheme

Stock promoter Dino Paolucci, an Ontario resident, was sentenced to seven years imprisonment and ordered to forfeit $2 million in relation to a stock manipulation scheme by a Pennsylvania federal court.

Paolucci and his co-schemers engaged in a “pump and dump” scheme in 2012 and 2013 by gaining control over five public companies, distributing stocks to themselves through fraudulent means, inflating the price of the stocks, and then selling their manipulated shares. The group was able to inflate the price of the stocks by issuing false and misleading press releases and promotions. Paolucci played a central role in the scheme by issuing e-mail newsletters boasting about the stocks. Paolucci and his co-schemers used offshore corporations, brokerage accounts, and fake corporations and names to conceal their activities from the SEC.

The DOJ press release is here.

San Francisco Acupuncturist Agrees to Pay $800,000 in Restitution for Health Care Fraud

On December 6, Haichao Huang, a San Francisco acupuncturist, pleaded guilty to health care fraud and making false statements relating to health care matters in California federal court. Although the final amount will be set by the court at sentencing, Huang agreed to pay no less than $800,000 in restitution.

According to the plea agreement, Huang executed a scheme to defraud health care benefit programs by, among other things, submitting claims which included false or inaccurate billing codes. For example, Huang submitted claims for services he allegedly provided on days on which he was not physically in California.

Huang is scheduled to be sentenced on March 13, 2020. He faces a maximum statutory penalty of 10 years imprisonment and a fine of $250,000 for each health care fraud violation.

The DOJ press release is here.