Douglas K. Roseblum presented, “From Investigation to Immunity and Beyond: The Basics of Criminal Practice,” at the J. Willard O’Brien American Inn of Court on February 12, 2013 in Philadelphia, PA. Read More
Michael A. Morse will present, “Anatomy of a Whistleblower Case,” at HCCA’s South Atlantic Regional Annual Conference in Orlando, FL on February 8, 2013.
Related Information:
Program Information Read More
The D.C. Court of Appeals has reversed a district court’s findings that a news reporter had a common law right of access to reports by an independent consultant who was hired by AIG as part of a 2004 settlement with the SEC. SEC v. American International Group, No. 12-5141 (D.C. Cir. Feb. 1, 2013). The court’s decision was based on its findings that the records were neither judicial nor otherwise public, and therefore no right of access could be found under common law or the First Amendment of the Constitution.
In 2004, AIG and SEC entered into a consent decree to settle charges by the SEC, without any admission of wrongdoing by AIG. Among other things, the consent decree enjoined future violations, required AIG to pay disgorgement to a victim restitution fund, establish a committee to review transactions prospectively, and retain an independent consultant to review transaction policies and procedures. The consent decree further required the consultant to prepare reports documenting all findings and conclusions (IC Reports). After the entry of the consent decree, the parties filed a joint motion in order to “clarify” that the IC Reports were to be confidential. The court granted the motion and permitted disclosure to third parties only for “good cause shown.”
In 2011, Sue Reisinger, a reporter for Corporate Counsel and American Lawyer, requested access to the IC reports, citing both common law and First Amendment rights of access. As indicated above, the district court found that Reisinger had a common law right of access and ordered public disclosure of redacted copies of the reports.
In reviewing the district court’s ruling, the D.C. Circuit found that, while the public has a fundamental interest in keeping a watchful eye on the workings of public agencies, not all documents filed with courts are judicial records. It further indicated that even if a document is a record of the type subject to common law right of access, the right is not absolute. Read More
Notwithstanding the image perpetuated in our popular culture, it has never been ok to simply park taxable income or assets in offshore accounts in order to avoid taxes. A California man, Christopher B. Berg, has learned that lesson in stark terms. On January 30, 2013, Berg entered a plea of guilty in the U.S. District Court for the Northern District of California, to an information charging him with willful failure to file the required report of foreign bank account (FBAR) for an account he controlled at UBS in Switzerland in the year 2005.
According to the government, in 2000, Berg met with Beda Singenberger, a Swiss financial consultant, and a vice president of banking at UBS in San Francisco, regarding setting up a bank account at UBS in Switzerland to shelter a portion of his consulting business income from taxation. The government alleged in the information that beginning in 2001 and continuing through 2005, Berg deposited funds in the amount of $642,069, earned by Berg from consulting services, by wire transfer to UBS accounts.
While the relevance of what exactly Berg did with the money after it was deposited wasn’t clear, the government alleged that Berg used the money in these accounts at UBS in Switzerland to purchase a vehicle, to obtain cash while in Europe, and to pay the balance on a Eurocard he used while traveling in Europe.
More importantly, the government asserted that Berg did not disclose the existence of his accounts at UBS in Switzerland to his certified public accountant, and did not disclose the income earned by these accounts or the consulting income deposited to the accounts. As part of the plea, Berg acknowledged that the tax harm associated with his conduct was $270,757.
As reiterated by DOJ in its news release announcing the plea, United States citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such accounts on Schedule B, Part III, of their individual income tax returns. Read More
In a recent precedential opinion, the U.S. Court of Appeals for the Third Circuit vacated and remanded a fraud case where the sentencing court erred in its calculation of the loss amount. U.S. v. Diallo, No. 10-3771 (3d Cir. Jan. 15, 2013). The Defendant, Issa Diallo, was arrested in 2008 after using a counterfeit credit card to purchase gift cards in Wilkes-Barre, Pennsylvania. Police recovered 53 counterfeit credit cards, a laptop, flash drives, and a “skimming” device, used to code credit card account information on a credit card’s magnetic strip. Forensic analysis of the laptop and flash drives by the U.S. Secret Service revealed account information corresponding to over 200 compromised Discover, Visa, and MasterCard credit card accounts.
In 2010, Mr. Diallo pled guilty to possessing counter-access devices with intent to defraud in violation of 18 U.S.C. § 1029(a)(3). At the sentencing hearing, Diallo’s counsel argued that the Defendant’s sentence should be calculated based on the actual loss to the credit card companies, approximately $160,000. However, counsel for the United States argued the intended loss was $1.6 million, the cumulative credit limits for the 327 credit card accounts for which Diallo had either the credit card or account information. As practitioners know, Section 2B1.1 of the federal sentencing guidelines provides for incremental increases in an offense level for specific loss amounts. The guidelines also direct a sentencing court, when determining the loss amount, to use the greater of the actual loss or intended loss. In Diallo, the sentencing court used the $1.6 intended loss amount, not the $160,000 actual loss. On appeal, Diallo asserted that the sentencing court erred in concluding that the potential loss was the intended loss which greatly overstated the seriousness of the offense.
Although this was an issue of first impression regarding intended loss of credit card fraud, the Third Circuit observed its previously rulings on intended loss in bank fraud and check kiting cases. Read More
Articles In This Issue:
1. The Fundamentals of Intellectual Property
2. Circuit Split Narrowed in Favor of Employees With Disabilities Regarding Whether ADA Reassignment Requires Preferential Treatment
3. The Superior Court’s Decision in Patton v. Worthington Sounds Death Knell for Statutory Employer Defense and Elevates Construction Costs Throughout the Commonwealth
4. Pennsylvania Product Liability Law Remains Unsettled
Related Information:
Firm Newsletter, Winter 2013 Read More
This article was originally published in the February 2013 issue of New Jersey Lawyer Magazine, a publication of the New Jersey State Bar Association, and is reprinted here with permission.
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Collateral Consequences of Healthcare Prosecutions Read More
On Monday, the Second Circuit reversed the U.S. District Court for the Eastern District of New York’s denial of a government motion in limine to admit a state court a temporary restraining order as evidence of a defendant’s state of mind in a bank fraud prosecution. United States v. Dupree, No. 11-5115-CR (2nd Cir. January 28, 2013). The court found that because the government had sought to admit the state court order for a non-hearsay purpose and the District Court’s Rule 403 analysis did not account for the order’s probative value if offered to show knowledge, that the decision must be reversed and remanded.
In 2010, Courtney Dupree, the former CEO and President of GDC Acquisitions, along with GDC’s COO and outside counsel, Thomas Foley and GDC’s CFO and CIO, Rodney Watts, was arrested for bank fraud. The government alleged that Dupree and the others fraudulently secured loans from Amalgamated Bank, with which Dupree had negotiated a $21 million revolving credit line on behalf of three GDC subsidiaries, by intentionally inflating the subsidiaries’ accounts receivable. The government also alleged fraud in relation to the defendants having GDC purchase another company in violation of the credit agreement.
Following the arrests, Amalgamated filed suit in New York state court, alleging breach of the credit agreement and seeking a temporary restraining order to enjoin GDC, Dupree and the subsidiaries from receiving any assets required to be maintained at the bank other than in the ordinary course of business. The state court granted the restraining order (TRO).
While the first four counts of the superseding indictment in the underlying case stemmed from material misrepresentations made on the loan application and subsequent actions prior to Dupree’s arrest, the fifth count was directed solely at Dupree and arose from his course of conduct after the issuance of the TRO by the state court. Read More
Philadelphia, Thursday, January 24, 2013: A federal lawsuit filed by prominent Delaware Valley cardiologist Nicholas L. DePace, M.D., sparked a multi-year investigation by the United States Department of Justice and the New Jersey Attorney General’s Office that has resulted in New-Jersey based Cooper Health System, and Cooper University Hospital paying $12,600,000 to settle Medicare and Medicaid fraud allegations.
The qui tam lawsuit filed in federal district court in New Jersey in 2008 by Dr. DePace alleged that the Cooper Health System and Cooper University Hospital (collectively referred to as “Cooper”) paid millions of dollars in illegal kickbacks to physicians to induce them to refer patients to Cooper for expensive in-patient and out-patient cardiac services. A copy of Dr. DePace’s qui tam Complaint, which both the United States and the State of New Jersey joined, along with a copy of the Settlement Agreement can be found at www.falseclaimsact.com; and www.usdoj.gov/usao/nj/. The United States and State of New Jersey did not file their own Complaint.
Details of Cooper’s Alleged Kickback Scheme
According to Dr. DePace’s Complaint, since 2004, Cooper funneled illegal kickbacks to referring physicians through an advisory board known as the Cooper Heart Institute Advisory Board (“CHIAB”). Cooper established the CHIAB in 2004, with the stated purpose of utilizing prominent New Jersey physicians to advise the Cooper Heart Institute regarding innovative technologies, new management strategies, community needs, and appropriate educational and research initiatives.
In reality, the CHIAB was a sham, in which Cooper paid physicians with high-volume medical practices upwards of $18,500 each to do little more than watch four lectures per year hosted at an elegant banquet facility. These lectures consisted mostly of marketing presentation on cardiac care at Cooper. Additional lectures included generic subjects that were irrelevant to the stated mission of the CHIAB, including a 2008 lecture entitled: “The Healthcare Plans of the Two Presidential Candidates.” Read More
