Tyler J. Smith will be presenting at the Pennsylvania Bar Institute’s 19th Annual Health Law Institute seminar held in Philadelphia on March 12-13, 2013.
“Practice Before the Pennsylvania State Boards: Investigation of Claims, Formal Disciplinary Proceedings and Defenses”
Come to be equipped with relevant information and practical considerations surrounding the protection and preservation of a professional license. Some time will be devoted to pre-state board complaint considerations such as insurance, risk management and state board investigations. The process of analyzing the state board complaint and implementing a comprehensive litigation plan for the professional’s consideration will also be examined.
Related Information:
PBI’s 19th Annual Health Law Institute Brochure Read More
Corporate America has been rocked recently by revelations of hacking into company-wide computer systems from overseas, including concerns that the unlawful conduct is state-sponsored. The more likely and immediate threat to all corporate systems, however, is the damage that can be done by individuals within or recently departed from a company. A prime example of this problem is the hacking of the computer system of Dallas-based Exel Transportation Services by its former president Michael Musacchio and other former employees. The case culminated with the conviction of Musacchio on Friday by a federal jury in Dallas for conspiring to hack into his former employer’s computer network. United States v. Musacchio, No. 3:10-cr-00308-P (N.D. Tex.)
The Mussachio case represents a cautionary tale, both to companies concerned with cyber security and entrepreneurs looking for an edge against competition. The genesis for the wrongful conduct was the desire for a market advantage by individuals who had left Exel to form a competing venture, Total Transportation Systems, LP, in 2004. Now, with the settlement of a civil suit between the companies and three federal convictions in its wake, the Exel case stands as a stark reminder of how sensitive corporate information can be compromised by the combination of outrageous conduct by former company officials and a company computer system left susceptible to attacks by former employees.
In 2004, Musacchio left his position as President of Exel to form a competing company, Total Transportation Services, LP, where he was the original president and CEO. Two other former Exel employees, Joseph Roy Brown and John Michael Kelly, also went to work at Musacchio’s new company. According to the government, evidence submitted at trial demonstrated that between 2004 and 2006, Musacchio, Brown and Kelly engaged in a scheme to hack into Exel’s computer system for the purpose of conducting corporate espionage. Read More
Pennsylvania Legal Aid Network, Inc. is a client-centered organization that provides leadership, funding, and support to improve the availability and quality of civil legal aid and direct legal services for low income people and victims of domestic violence in Pennsylvania. The Pennsylvania Legal Aid Network consists of fourteen civil legal aid programs helping those who have nowhere else to turn when facing a critical civil legal problem by providing a full range of civil legal services.
The Pennsylvania Legal Aid Network, Inc. Excellence Awards recognize legal aid attorneys, paralegals, support staff and friends of civil legal aid who support the clients served by the civil legal programs that comprise the Pennsylvania Legal Aid Network. PLAN solicited nominations from across the Commonwealth and based its selection on a variety of criteria that demonstrated excellence and diligence in helping improve the availability and quality of civil legal services for low income people and victims of domestic violence in Pennsylvania.
Pietragallo’s Kathryn M. Kenyon was elected to receive a 2013 Excellence Award. A tribute video put together by The Pennsylvania Legal Aid Network, Inc. can be seen below. Read More
On Thursday, DOJ announced criminal charges against five individuals relating to the manufacture and distribution of salmonella-tainted peanuts and peanut products by the now defunct Peanut Corporation of America (PCA). The charges against the owner and president of the company, a food broker, and three individuals involved in the operation of the company’s Blakely, Georgia plant, include mail and wire fraud, the introduction of adulterated and misbranded food into interstate commerce, and conspiracy. Two of the individuals were also charged with obstruction of justice.
This case provides a sobering reminder to those involved in industries that don’t typically see criminal investigations that failure to implement and execute compliance programs can have dire consequences, and that deception in response to investigations will always make things worse. The team bringing the case reflects a multi-agency approach that can be used in such circumstances. Specifically, the case was investigated by the Food and Drug Administration’s Office of Criminal Investigations and the FBI. With the filing of the charges, which include a 76 count indictment against four of the individuals, the case is now being prosecuted by trial attorneys of the Consumer Protection Branch of DOJ’s Civil Division and the Office of U.S. Attorney for the Middle District of Georgia.
While there can be little doubt that the potential for injury and even death from contaminated food products had an impact on the decision to file criminal charges, the dishonesty reflected in the operations … as well as the response to the investigation, likely had a greater impact.
The charges are the culmination of an investigation that began after the Food and Drug Administration and the U.S. Centers for Disease Control and Prevention traced a national outbreak of salmonella to the PCA plant in Blakely as the likely source. According to the government, the Blakely plant was a peanut roasting facility where PCA roasted raw peanuts and produced granulated peanuts, peanut butter, and peanut paste. Read More
No we don’t bear news of a revival of the 1974 hit by Carl Douglas. Actually, that would be old news. Douglas re-recorded “Kung Fu Fighting” in 1998, and it shot to 8 in the UK, but I digress. More to the point, on Wednesday the Supreme Court, echoing its decision more than 50 years ago in Fong Foo v. United States, 369 U.S. 141 (1962), re-affirmed the concept that retrial following a court-decreed acquittal is barred, even if the acquittal is “based upon an egregiously erroneous foundation.” Evans v. Michigan, No. 11-1327 (February 20, 3013). The decision in Evans, resulted in a reversal of a decision of the Michigan Supreme Court, which had reversed the trial court’s acquittal of Lamar Evans on the charge “burning other real property.” The opinion of an 8-1 Court (Justice Alito dissenting), authored by Justice Sotomayor, concluded that the Double Jeopardy Clause barred retrial of Evans after the trial court had granted judgment of acquittal.
In the trial court, Lamar Evans was charged under Michigan law with burning “other real property.” After the close of the government’s case, Evans made a motion for judgment of acquittal, arguing that the government had failed to prove a critical element of the crime, asserting specifically that the government had failed to prove that the building was “not a dwelling house.” The trial court agreed, entering a directed verdict of acquittal, based upon its view that the State had not provided sufficient evidence to prove that particular element of the offense. It based its finding on the fact that the evidence had demonstrated that the burned property actually was a dwelling house.
In its review, the Supreme Court pointed out, as both the defense and prosecution had ultimately agreed as the case moved through appeals in Michigan, that the unproven “element” was not actually a required element at all. Read More
The United States District Court for the Eastern District of Pennsylvania recently held in Blackman v. Lincoln National that the Pennsylvania Human Relations Act (“PHRA”) does not cover employees who neither reside nor work in Pennsylvania. While that conclusion may seem obvious and logical, the decision may have a broader impact on employers.
Plaintiff, Kathy Blackman, was an Illinois resident working in the Illinois office of Lincoln National Corporation and Lincoln Financial Group, companies headquartered in Pennsylvania. Plaintiff alleged sex and age discrimination following a demotion, lodging a complaint with the Equal Employment Opportunity Commission. When she was subsequently fired and had exhausted her administrative remedies, she filed a discrimination and retaliation lawsuit under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (“ADEA”), and the PHRA against her former employers in the Eastern District of Pennsylvania.
Lincoln National moved to dismiss the PHRA claim on the basis that Blackman did not live or work in Pennsylvania. In deciding whether the PHRA applied, the court looked at the language of the PHRA. Because the pertinent section of the PHRA was silent as to whether it applied to non-residents employed outside the Commonwealth, the Court examined other sections for the legislature’s intent. In concluding the PHRA did not apply to individuals who neither lived nor worked in Pennsylvania, the Court reviewed the Act’s intent which was to protect the “inhabitants” and “the people of the commonwealth.” The Court opined that to overcome the presumption that a state statute applies only within the state, there must be explicit statutory language providing for application beyond the state’s borders.
Plaintiff argued that the PHRA should apply even though she lived and worked in Illinois, because her employer, Lincoln National was headquartered in Pennsylvania. The court determined it did not matter where the employer was headquartered, but it was the plaintiff’s place of employment which dictates application of the state anti-discrimination laws. Read More
DOJ has announced that Lender Processing Services Inc. (LPS) has agreed to pay $35 million in criminal penalties and forfeiture to address its participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents. The settlement follows the November 2012 felony guilty plea by Lorraine Brown, the former CEO of wholly owned LPS subsidiary DocX LLC. Brown admitted to her leadership role in the scheme.
The take home points from the LPS settlement ring familiar…Soon after discovering the misconduct at DocX, LPS conducted a thorough internal investigation, reported all of its findings to the government, cooperated with the government’s investigation and effectively remediated any problems it discovered.
The NPA requires the company to make the payment and meet a series of other conditions. The LPS deal demonstrates the value of companies taking a proactive approach when pursuing NPAs. The company has already taken a number of remedial actions to address the misconduct at DocX. According to DOJ, LPS has wound down all of DocX’s operations, re-executed and re-filed mortgage assignments as appropriate and terminated Brown and others. LPS has also demonstrated changes in its compliance, training and overall approach to ensuring its adherence to the law, and has retained an independent consultant to review and report on LPS’s document execution practices; assess related operational, compliance, legal and reputational risks; and establish a plan for reimbursing any financial injuries to mortgage servicers or borrowers.
According to the statement of facts accompanying the agreement, employees of DocX, at the direction of Brown and others, falsified signatures on mortgage related documents. Through this scheme and unbeknownst to the clients, Brown and subordinates at DocX directed authorized signers to allow other, unauthorized personnel to sign and to have documents notarized as if they were executed by authorized signers. Read More
The two men who played key roles in the perpetuating R. Allen Stanford’s $7 billion ponzi scheme were each sentenced to 20 years in prison on Thursday. Gilbert T. Lopez Jr. had served as chief accounting officer of Stanford Financial Group Company, and Mark J. Kuhrt had been the global controller of Stanford Financial Group Global Management. They both were convicted last year following a 5 week trial on charges of wire fraud and conspiracy to commit wire fraud. To top it all off, U.S. District Judge David Hittner, who presided over the trial, found that both defendants obstructed justice by committing perjury at trial.
Lopez and Kuhrt..kept the misuse hidden from the public and from almost all of Stanford’s other employees and worked behind the scenes to prevent the misuse from being discovered.
According to DOJ’s news release, the evidence presented at trial established that Lopez and Kuhrt were aware of and tracked Stanford’s misuse of the assets of Stanford International Bank (SIB), kept the misuse hidden from the public and from almost all of Stanford’s other employees and worked behind the scenes to prevent the misuse from being discovered. They also helped Stanford falsely represent to SIB customers during the economic crash in late 2008 that Stanford had infused hundreds of millions of dollars into SIB when he had not. As part of that effort, Lopez and Kuhrt helped design a fraudulent real estate transaction that involved falsely inflating parcels of land purchased at $63.5 million to a purported value of $3.2 billion.
While the sentences for Kuhrt and Lopez are severe, they of course pale in comparison to the 110 year sentence Stanford himself received following a separate trial last year.
James M. Davis, Stanford’s chief financial officer – who pleaded guilty and cooperated with the government soon after SIB was shut down in February 2009 and testified at both Stanford’s trial and the trial of Lopez and Kuhrt – was sentenced to 60 months in prison for his role in the scheme. Read More
In the appeal of former Pennsylvania State Senator, Vincent J. Fumo, the U.S. Court of Appeals for the Third Circuit has ordered Fumo to pay a larger share of the restitution to one of his victims. With its decision, the Court rejected the arguments raised by Fumo in his appeal and only partially granted the government’s request for relief.
This case marked Fumo’s second appeal to the Third Circuit. In 2009, Mr. Fumo was convicted of 137 counts of fraud, tax evasion, and obstruction of justice based on allegations that he defrauded the Citizens Alliance, a non-profit which he founded, as well as the Pennsylvania State Senate and Independence Seaport Museum. After successfully appealing his sentence from the district court in 2011, Fumo was re-sentenced in November 2011 to 55 months imprisonment and ordered to pay $3,340,839 in restitution to be apportioned among the three institutions defrauded by Fumo: $792,802 to the Citizens Alliance; $1,413,819 to the State Senate; and $134,217 to the Independence Seaport Museum. Both Fumo and Ruth Arnao, a former aide to Fumo and director of Citizens Alliance, were ordered to pay the Citizens Alliance restitution amount “jointly and severally.”
Although the Third Circuit refused to impose the full amount on Fumo, it agreed that Fumo and Arnao should not be saddled with equal restitution amounts due to their differing “culpability and ability to pay.”
In this appeal, the government challenged the district’s court joint and several apportionment of the Citizens Alliance restitution between Fumo and Arnao. Although the Third Circuit refused to impose the full amount on Fumo, it agreed that Fumo and Arnao should not be saddled with equal restitution amounts due to their differing “culpability and ability to pay.” The Third Circuit found that the district court lacked sufficient support to conclude that Fumo and Arnao were equally culpable. Read More
Joseph D. Mancano will present, “The False Claims Act,” at the Chester County Bar Association’s CLE in Chester County, PA on February 12, 2013. Read More
