Posts Tagged ‘settlement’

Jerry Brown Throws Down: UCLA Prof’s Phony Bologna L.B. Research and Education Foundation

Friday, December 4th, 2009

California Attorney General Jerry Brown can’t abide charity-related monkeyshines. So if use your charity as a personal bank account to finance your research and business ventures, maybe like UCLA Professor Gerald D. Buckberg, M.D. and others, well look out, Jack.

Deets below.

El Protector De La Gente, Mr. Brown:

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Here’s the beef and here’s the settlement.

Brown Halts UCLA Professor’s Use of Charitable Funds for Personal Business Ventures

Los Angeles -Attorney General Edmund G. Brown Jr. today reached a settlement with UCLA Professor Gerald D. Buckberg, M.D., and five officers of the nonprofit L.B. Research and Education Foundation (“L.B.”) that forces them to stop using the charity as a “personal bank account” to finance their business ventures.

“Professor Buckberg and his associates used the charity as a personal bank account to finance their research and business ventures,” Brown said. “This self-dealing is a clear breach of their fiduciary duties and under today’s settlement, Buckberg must return $140,000 in diverted funds to the charity.”

Buckberg founded L.B. in 1997 and has served as the charity’s director, chief executive officer, and manager. The purpose of the charity, as stated in the articles of incorporation, is to “provide help to persons with physical and psychological problems, provide funding for research activities related to physical or psychological problems and to provide funding for scholarships and other programs that improve education.”

Under California law, “no part of a charitable organization’s income or assets may inure to the benefit of any director, officer, member or private person.” However, an investigation launched by Brown’s office in 2007 revealed that Buckberg and L.B.’s officers used the charity’s assets to finance their own medical research, the research activities of companies in which they had a financial interest and the development of medical devices that they sold.

On September 9, 2009, Brown sued the charity and its officers to stop these illegal practices. Today’s settlement agreement forces Buckberg to return $140,000 in diverted funds to L.B., and:

- Prohibits L.B. from using grants or other funding to directly or indirectly support research by L.B.’s officers and directors or any entity in which they have a financial interest;
- Requires L.B. to report future grant awards to Brown’s office;
- Prohibits Buckberg from serving as an officer of L.B.;
- Requires the transfer of control of L.B.’s corporate checkbook and bank accounts from Buckberg to the Chief Financial Officer;
- Requires L.B. to hire experts to educate officers and board members about charitable trust law and their fiduciary duties, to develop a conflict of interest policy and to develop a grant-making review process to ensure that future grants comply with state and federal law;
- Mandates that new board members be elected by a majority of the board and that two independent board members be added; and
- Requires L.B. to keep financial books and records that clearly set forth expenditures.

Under the settlement, Brown’s office will also be reimbursed for its legal fees.

L.B. has been primarily funded by Buckberg, although it has received some funding from several other individuals and businesses.

To report charity fraud, contact the Attorney General’s Office at 1-800-952-5225 or file a complaint online at: http://ag.ca.gov/charities/forms/charitable/ct9.pdf.

Jerry Brown Throws Down – Massive $1.4 Billion Settlement with Wells Fargo Announced

Wednesday, November 18th, 2009

California State Attorney General Jerry Brown is announcing a huge, “b”-as-in-boy, $1.4 billion settlement with affiliates of Well Fargo today. That means that if you bought certain auction-rate securities based on “misleading advice” from any of three Wells affiliates, well, you’re going to get your money back. Hurray!

All the deets are below.

El Protector De La Gente, Jerry Brown:

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Here they are:

“Attorney General Edmund G. Brown Jr. today announced a landmark $1.4 billion settlement with three Wells Fargo affiliates to pay back investors, charities and small businesses that purchased auction-rate securities based on “misleading advice.”

“Wells Fargo convinced thousands of investors to purchase auction-rate securities with promises of robust returns and liquidity, but when the market collapsed, investors were left out in the cold,” Brown said. “Based on misleading advice, investors bought these risky securities. Now, retail investors and small businesses are finally getting their money back.”

Under today’s settlement, Wells Fargo will buy back $1.4 billion in non-liquid auction-rate securities from thousands of retail customers, charities, and small businesses nationwide, including about $700 million to California investors. Wells Fargo will also pay legal costs and future monitoring expenses incurred by Brown’s office. In February 2008, nationwide auction markets froze, and investors have been unable to sell their securities.

Earlier this year, Brown filed the suit against three Wells Fargo affiliates-Wells Fargo Investments, LLC; Wells Fargo Brokerage Services, LLC; and Wells Fargo Institutional Securities, LLC-for violating California’s Securities Law. Brown’s suit contended that Wells Fargo routinely misrepresented, marketed and sold auction-rate securities as safe, liquid and cash-like investments, omitting material facts.

The company was also charged with failing to supervise and train its sales agents and selling unsuitable investments. The lawsuit contended that Wells Fargo ignored clear industry and internal warnings about risk and previous auction failure.

In March 2005, the Securities and Exchange Commission (SEC), the “Big 4″ accounting firms, and the Financial Accounting Standards Board all determined that auction-rate securities should not be considered “cash equivalents.” Despite these warnings, Wells Fargo continued to aggressively sell and falsely market auction-rate securities as safe, liquid, cash-like investments until the nationwide auction markets froze in early 2008.

In marketing and selling these investments, Wells Fargo failed to inform investors about how auction-rate securities or the auction process worked, as well as the risks and consequences of auction failure.”

Ever more deets, after the jump.

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Million Dollar Payday for San Mateo County Hospital Whistleblower

Thursday, March 12th, 2009

The Stop Snitching movement took a blow with news today of a million dollar payday to Ronald M. Davis, a former employee of San Mateo County. Seems there might have been some irregularities with the way San Mateo Medical Center, the county’s troubled “public safety net” hospital, got dinero from the federales’  Medicare and Medicaid programs:

“The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private individuals called “relators” to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. The relator in this action will receive $1,020,000 as his statutory share of the proceeds of this settlement.”

The million clams is the 15% statutory minimum of what the Feds are going to get back. Ka ching!

via solidstate

For shame SMMC, for shame.

Let’s get the Feds’ side of the story and then see them pat themselves on the back:

San Mateo County, California, to Pay U.S. $6.8 Million to Resolve False Claims Allegations

Settlement Resolves Allegations Against San Mateo County Medical Center

WASHINGTON, March 12 /PRNewswire-USNewswire/ — San Mateo County, Calif., has agreed to pay the United States $6.8 million to resolve allegations that the San Mateo Medical Center (SMMC) submitted false claims to the United States in connection with payments from the Medicare and Medicaid programs, the Justice Department announced today.

The government alleges that SMMC falsely inflated its bed count to Medicare in order to receive higher payments under Medicare’s Disproportionate Share Hospital (DSH) adjustment. The DSH adjustment is an extra Medicare payment available to hospitals that meet certain requirements, including having 100 or more acute care beds.

In addition, the government alleges that San Mateo County improperly obtained federal payments under the Medicaid program for services provided to patients at Institutes of Mental Disease (IMDs) who were between the ages of 22 and 64. Such services are ineligible for federal funding, and San Mateo County was required to separately report them to the California Department of Mental Health so that the state could ensure that no federal funds were used to pay for them. Medicaid (known as Medi-Cal in California) is a program funded jointly by federal and state funds. The settlement covers conduct from 1997 to 2007.

More deets after the jump.

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Jerry Brown Prohibits H&R Block From Marketing “Early Tax Refunds”

Friday, January 2nd, 2009

Oh snap! Just in time for tax season, California Attorney General Jerry Brown’s 2006 lawsuit against H&R Block has borne some fruit. He just reached agreement prohibiting deceptive marketing of tax refund loans:

“The settlement provides for up to $2.45 million in restitution for consumers who purchased a “Refund Anticipation Loan” or a “Refund Anticipation Check” through H&R Block between January 1, 2001 and December 31, 2008. In addition, H&R Block will pay $500,000 in penalties and $1.9 million in fees and costs.”

Will the “settlement administrator” be contacting you about getting some money from H&R? Read on for details.

California’s dogged AG:

via “Thomas Hawk’s” Photostream

Attorney General Brown Reaches Agreement with H&R Block Prohibiting Deceptive Marketing of Tax Refund Loans

Sacramento—Attorney General Edmund G. Brown Jr. today reached a $4.85 million settlement with H&R Block, which prohibits the company from marketing refund anticipation loans as early tax refunds.

This settlement prevents H&R Block from marketing high-cost loans as early tax refunds,” Attorney General Brown said. “This is especially important because often these loans go to those who can least afford them.”

Attorney General Brown filed suit against H&R Block in early 2006 regarding its marketing and sale of income tax refund anticipation loans and a related product called refund anticipation checks.

H&R Block continues to deny any wrongdoing. During the course of the investigation, Block has worked with the Attorney General to improve its practices.

A refund anticipation loan is a short-term loan secured by a taxpayer’s anticipated income tax refund. The complaint alleged a variety of deceptive practices by H&R Block including:

Deceptive advertising designed to disguise refund anticipation loans, which carry fees and other costs, as tax refunds, which the IRS provides without charge; and

Unfair debt collection practices by which customers’ refund proceeds were garnished to pay off debts they supposedly owed.

The settlement provides for up to $2.45 million in restitution for consumers who purchased a
“Refund Anticipation Loan” or a “Refund Anticipation Check” through H&R Block between
January 1, 2001 and December 31, 2008. In addition, H&R Block will pay $500,000 in penalties and $1.9 million in fees and costs.

In addition. H&R Block will be prohibited from marketing these loans and related products in a deceptive or misleading manner and will be required to make clear and conspicuous disclosures to consumers prior to their purchase of these products. Terms of the settlement are limited to three years.

A settlement administrator will be contacting eligible consumers directly. Eligible consumers may also write to the Attorney General’s Public Inquiry Unit at P.O. Box 944255, Sacramento, CA 94244-2550, or may send an e-mail at http://ag.ca.gov/contact/.

Attorney General Brown previously settled claims against Jackson Hewitt and recently concluded a trial against Liberty Tax Service, the second and third largest tax preparation companies in the country, respectively. All three lawsuits involved refund anticipation loans and related products.

Attorney General Jerry Brown Takes Down That Airborne Company

Tuesday, December 16th, 2008

Of course during this season of the common cold, you’ve already heard all about those Airborne Effervescent Health Formula (also known as a “dietary supplement“) tablets. To say the least, San Franciscans are divided on the efficacy of this product

But check out today’s tidings:

“Attorney General Brown Joins Agreement Forcing Airborne to Stop Marketing its Products as a Cure for the Common Cold.”

Snap! But of course, all your school teacher friends won’t care. They’ll go, “Well, I don’t know about that, but it works for me.” Fair enough, but it certainly seems like the Airborne folks feel that they might have gone too far with their claims.

This guy never gets sick. He’s Unbreakable: 

via “Thomas Hawk’s” Photostream

The full skivvy:

SACRAMENTO – California Attorney General Edmund G. Brown Jr. today joined with 32 other state attorneys general in announcing a landmark $7 million settlement with Airborne, Inc. that forces the company to stop advertisements that “dramatically misrepresented” its dietary supplements as cold remedies.

“Airborne dramatically misrepresented its products as cold remedies without any scientific evidence to back up its claims,” Attorney General Brown said. “Under this agreement, the company will stop advertisements that suggest that its products are a cure for the common cold.”

Airborne began selling its products as a cold remedy on the Internet around July 2000 and on television in 2004. In its advertisements, Airborne featured people suffering from cold and flu symptoms and made unsupported statements suggesting its products were a cure for the common cold. This included:

• “Airborne Cold Remedy”
• “A Miracle Cold Buster!”
• “Sick of Catching Colds?”
• “Take at the first sign of a cold symptom.”

The company also requested that retailers sell Airborne products in the cold/cough aisle.

To substantiate their claims, Airborne relied upon studies that claimed the major ingredients in their products — Vitamin C, Vitamin E, Selenium, and Zinc — prevent colds. However, subsequent definitive studies found that these ingredients do not have any discernable effect to prevent colds. Despite the information, Airborne continued to market its products as cold remedies.

Investigators also raised concerns about the levels of Vitamin A in Airborne products. In older formulations, Airborne contained 5,000 International Units of Vitamin A. If the product was taken as instructed, consumers would ingest up to 15,000 International Units of Vitamin A daily.

This amount of Vitamin A poses potential health risks to vulnerable populations, including children and pregnant women. During the negotiation process, Airborne reformulated its product to contain only 2,000 International Units of Vitamin A.

More after the jump.

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