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State Enforcement Actions

					
Each state enforces its laws and defends its interests, and states often work with the federal government in investigating and prosecuting corporate frauds. 聽Whistleblowers with knowledge of fraud or wrongful conduct that involves state or local funds or programs may be able to bring a claim under a state or local False Claims Act, and may be eligible to receive a monetary reward and protection against retaliation.


Below are summaries of recent settlements, successful prosecutions, and enforcement actions by states.聽If you believe you have information about fraud which could give rise to a claim under a State or Local False Claims Act or other whistleblower reward provision, please contact us to speak with one of our experienced whistleblower attorneys.

				

			

			
						
					
			

	
		
		

			

				
				
July 12, 2017

				 New York announced the convictions of Kulbir Singh, 53, and gas stations Dashmesh Petroleum, Inc., Gobind Petroleum, Inc. and Karam Mart Inc. on felony charges stemming from the theft of over $1 million in sales tax collected for gasoline sales. Kulbir Singh operated three BP gas stations in Nassau County, located at 2 Hempstead Avenue, West Hempstead NY (Gobind Petroleum, Inc.), 385 Merrick Road, Valley Stream, NY (Dashmesh Petroleum, Inc.), and 653 Hempstead Avenue, Elmont NY (Karam Mart, Inc.). His son, Ladpreet Singh, also operated Karam Mart. According to the prosecution, the Singhs鈥� gas stations collected but failed to remit to New York State a total of over $1,000,000 in sales taxes from September 2011 through December 2014. Each of the defendant corporations, Dashmesh Petroleum, Inc., Gobind Petroleum Inc. and Karam Mart, Inc., pleaded guilty to one count of Grand Larceny in the Second Degree, a Class C felony, and were fined $50,000 each. Defendant Kulbir Singh鈥檚 son, Ladpreet Singh, who operated Karam Mart, Inc., pleaded guilty to a misdemeanor and was sentenced to probation. 				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 30, 2017

				 New Jersey announced that a former treasurer for the South Jersey Elite Invitational Youth Football League was sentenced to jail today for stealing $56,777 from the league. Michael DiFlorio, 49, of Williamstown, N.J., was sentenced today to 330 days in the county jail as a condition of a term of five years of probation by Superior Court Judge M. Christine Allen-Jackson in Gloucester County. He pleaded guilty on April 24 to a charge of third-degree theft by unlawful taking, which was contained in a Dec. 7, 2016 indictment stemming from the theft from the football league. He also pleaded guilty that same day to an accusation charging him with third-degree theft by unlawful taking for stealing $1,147 from his former employer, an exterminating company. DiFlorio must pay full restitution to the football league and his former employer. 				 			
	
		
		
	


 			




	
		
		

			

				
				
June 26, 2017

				 New York announced the arrest and indictment of registered nurse Collins Anyanwu-Mueller, 47, for allegedly submitting over $390,000 of false claims over the course of nearly five years for private-duty nursing services that he did not provide. Anyanwu-Mueller was arraigned today in Westchester County Court in White Plains before the Honorable Larry J. Schwartz on an indictment charging him with Grand Larceny in the Second Degree, a class C felony carrying a maximum sentence of up to 15 years in state prison, and Offering a False Instrument for Filing in the First Degree, a class E felony that carries a maximum sentence of up to four years in state prison. If convicted, Anyanwu-Mueller faces up to 15 years in state prison. 				 					 

						
Tagged in:
													  Healthcare Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 22, 2017

				 New Jersey announced that a Georgia financing company will change its business practices, make a $100,000 payment, and provide an additional $60,000 to consumers, to settle the Division鈥檚 investigation into point-of-sale home improvement loans the company arranged for New Jersey consumers. GreenSky Servicing LLC (鈥淕reenSky鈥�), which arranges on-the-spot financing for home improvements through its participating contractors, agreed to the settlement terms in an Assurance of Voluntary Compliance (鈥淎VC鈥�) that resolves the investigation into whether the company鈥檚 lending program violated New Jersey鈥檚 consumer protection laws. 				 			
	
		
		
	


 			




	
		
		

			

				
				
June 16, 2017

				 New York announced a settlement with the Breast Cancer Survivors Foundation, Inc., (鈥淏CSF鈥�), and its President and Founder Dr. Yulius Poplyansky. For years, BCSF and its fundraisers painted the picture of an organization that was providing medical services to breast cancer patients and those at risk of breast cancer. Instead, as the Attorney General鈥檚 investigation found, BCSF was a shell charity created and run by its primary outside fundraiser, Mark Gelvan, in order to line the pockets of Gelvan, his companies, and his business associates 鈥� who pocketed 92 cents of every dollar donated to BCSF. As part of the settlement, BCSF will shut down its operations nationwide and pay nearly $350,000, which will be directed to legitimate breast cancer organizations. 				 			
	
		
		
	


 			




	
		
		

			

				
				
June 14, 2017

				 New York announced a lawsuit against Dean Mustaphalli and several of the entities he controls for allegedly engaging in a six-year scheme to defraud New Yorkers鈥攎any of whom were elderly and at or near retirement鈥攐ut of millions of dollars of their savings. The suit alleges that Mustaphalli caused his clients to invest in his hedge fund where he engaged in a highly speculative and risky trading strategy鈥� against their interest and without their knowledge. The complaint alleges that Mustaphalli knew that his trading strategy for the hedge fund was unsuitable for his clients, who were interested in more conservative investments, and that this caused his clients to suffer devastating losses. The Attorney General alleges that since 2011, Mustaphalli caused 58 New York investors to invest a total of more than $11 million in his hedge fund, $10 million of which was lost by engaging in a highly risky trading strategy that was not consistent with his clients鈥� investment profiles and objectives. In addition, the Attorney General alleges that Mustaphalli took an additional $100,000 from his hedge fund to pay for his own personal expenses. While the investigation of Mustaphalli was ongoing, Attorney General Schneiderman sought and obtained two orders from New York Supreme Court freezing accounts of Mustaphalli鈥檚 entities and prohibiting them and Mustaphalli from offering investment advice in New York. 				 					 

						
Tagged in:
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 9, 2017

				 Michigan has filed 13 felony charges against former Saginaw-area credit union CEO Stanley Hayes, 45 of Saginaw, for allegedly stealing over $710,000 from Valley State Credit Union where he worked. Hayes is charged with conducting a Continuing Criminal Enterprise, two counts of Embezzlement Over $20,000, seven counts of Embezzlement Over $1,000, and three counts of Using a Computer to Commit a Crime. Hayes was arraigned Friday, June 9, 2017 before the Honorary Manvel Trice in 70th District Court. His bond was set at $25,000 cash or surety. The preliminary exam conference is set for June 21, 2017 and the preliminary examination for June 26, 2017. 				 			
	
		
		
	


 			




	
		
		

			

				
				
June 7, 2017

				 New York announced that Kester Atumonyogo, of Valley Stream, NY, and his company Monack Medical Supply, Inc. were arraigned on an indictment charging Atumonyogo and Monack with billing Medicaid and Healthfirst, a Medicaid managed care organization, for an expensive nutritional formula while supplying patients with a lower-priced substitute and stealing over $1 million in the process. Atumonyogo, 49, was arraigned in New York Supreme Court, Kings County, by the Honorable Danny K. Chun. According to the indictment, Atumonyogo used a fraudulent social security number to enroll Monack as a Medicaid-participating provider of medical supplies. The company then allegedly filed false claims to Medicaid and Healthfirst that Monack had dispensed to pediatric patients a highly specialized and expensive enteral nutritional formula, which is prescribed by physicians for patients who must obtain nutrients via a feeding tube and cannot metabolize dietary nutrients from substantive food. 				 					 

						
Tagged in:
													  Drug Switching, 
													  Healthcare Fraud, 
													  Managed Care, 
													  Medicaid, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 6, 2017

				 California was awarded a $53.25 million judgment against Dish Network after it engaged in a nationwide campaign of illegal telemarketing and made unwanted calls to thousands of people registered on the Do Not Call registry, many of them California residents. The ruling was made by Judge Sue Myerscough of the United States District Court for the Central District of Illinois. The Court entered the judgment against Dish after a five-week bench trial. The Court also ordered robust injunctive relief requiring Dish Network to reform its telemarketing practices. California was joined by co-plaintiffs the federal government, Illinois, North Carolina, and Ohio in this action. 				 			
	
		
		
	


 			




	
		
		

			

				
				
June 2, 2017

				 鈥� Florida obtained a consent order to resolve a complaint filed against a Jacksonville car dealership and its president regarding the dealership鈥檚 misleading business and sales practices. The complaint alleges that Beach Blvd. Automotive used GPS tracking devices to track hundreds of purchased vehicles without consumer鈥檚 knowledge or consent to conduct unconscionable repossessions of vehicles. The defendants also allegedly created fake online profiles and, without consumer knowledge, used consumer data to post false positive comments online about the dealership.  According to the complaint, Beach Blvd. Automotive, its exclusive financing arm, Beach Blvd. Auto Financing, and John O. King, Sr., attempted to collect non-existent debt from consumers and threatened to use force to repossess purchased vehicles. The defendants allegedly increased consumers鈥� monthly car payments by adding optional items to the sales transaction without proper disclosure to customers. On several occasions, the defendants did not honor a promised warranty and, in some instances, charged a $399 pre-delivery inspection fee for an inspection never conducted. The consent order provides that within 60 days of the order鈥檚 entry, the defendants will provide equitable monetary relief, such as debt forgiveness, with a value of more than $5.1 million to certain former and current customers with covered accounts. FL				 			
	
		
		
	


 			


											

						

								

									
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