Category:Fraud & Abuse
The FTC’s Civil Action Against Powerful Pharmacy Business Managers Could Reduce the Cost of Insulin for Millions of Diabetic Patients
Insulin is a life-sustaining medication for numerous individuals with diabetes. For an extended period, many have been forced to pay inflated prices for a product that is inexpensive to manufacture. However, individuals with diabetes may now have cause for cautious optimism regarding more cost-effective treatment options. This development arises as the Federal Trade Commission (FTC) has decided to address one aspect of the system responsible for the high cost of insulin. The FTC initiated legal proceedings against the three largest pharmacy benefits managers (PBM) on September 20, 2024. The action was taken in response to alleged unfair and anticompetitive rebating practices that were purported to have artificially elevated the list prices of insulin medications.
The Snyder Decision: What is to Come Regarding Federal and State Gratuities Regulations?
The Supreme Court of the United States released its 6-3 opinion on Snyder v. United States on June 26, 2024. This decision overturned the conviction of Indiana mayor, James Snyder, who was convicted of accepting an illegal gratuity in violation of Title 18, §666(a)(1)(B) of the United States Code. The Supreme Court held that §666 does not criminalize gratuities for several reasons: the statute’s text, statutory history, statutory structure, statutory punishments, federalism, and fair notice. The scope of §666 is severely narrowed, bringing the question: What is the potential impact of Snyder on other federal and state bribery laws as they apply to state and local officials?
No Post Hoc Justification for Submitting False Claims
On June 1, 2023, in a unanimous opinion, the United States Supreme Court ruled in United States et al. ex rel. Schutte et al. v. Supervalu Inc. et al. and United States et al. ex rel. Proctor v. Safe-way, Inc. that the scienter element of the False Claims Act (FCA) refers to a defendant’s knowledge and subjective beliefs. Supervalu and Safeway knew they were charging government health insurance programs more for prescription drugs than what they usually and customarily charging regular customers, in violation of the FCA.
It’s About to Get Much Harder to Launder Money
In January 2021, Congress passed the Corporate Transparency Act (CTA) as part of the Anti-Money Laundering Act of 2020. The CTA requires entities to list names and addresses connected to both the company and beneficial owners. Ultimately, the goal is to reduce the ease at which shell companies can be formed and used to launder money.
Updated ABA Resolution Imposes Higher Due Diligence Standards for Lawyers
The American Bar Association (“ABA”) recently passed Resolution 100 (“The Resolution”) to strengthen rules regarding due diligence toward clients. This resolution amends ABA Model Rule 1.16 to explicitly recognize an attorney’s duty to “assess the facts and circumstances of their representation”. The updated Rule reflects the goal of preventing attorneys from using their expertise to commit or further a scheme, with money laundering and terrorist financing being of particular concern.
Capitol Attack Aftermath: The 65 Project files Complaint Against Trump-Aligned Attorney
Monday, March 6, 2023, marks two-and-one-quarter years since the notorious attack on the U.S. Capitol. Since then, the unprecedented insurrection’s aftermath has thrust Trump-aligned supporters and politicians into the political limelight. As the House of Representatives continues its comprehensive investigation, Cassidy Hutchinson, former White House aide and standout witness of the House’s Jan. 6th committee investigation, recently accused President Trump’s former White House attorney Stefan Passantino of unethical legal maneuvering. On Wednesday February 15, 2023, nearly three months after her allegations were brought, bipartisan U.S. legal advocacy group ‘The 65 Project’ filed an informal ethics complaint against Passantino.
The Southwest Airline Debacle: What Role Should Regulators Play?
To anyone who travelled by plane this last holiday season or tuned into the news, you’re well versed in the Southwest Airlines (Southwest) issues that plagued December 2022. Southwest ended up cancelling over 15,000 flights over the Christmas season, forcing thousands of stranded passengers to sleep at the airport and miss time with loved ones. With the disruptions leading to an estimated $825 million loss for the company, federal regulators have scrutinized Southwest to ensure compliance with its customer service plan and to take mitigating steps to prevent another catastrophe. This failure presents an opportunity beyond mere investigation for the Department of Transportation (DOT) to take important regulatory steps to ensure infrastructure and technology is aligned with the modern expectations of travel.
Nowhere to Hide: The Corporate Transparency Act Seeks to Unmask the Beneficial Owners of Shell Companies
In January of 2021, Congress adopted substantial changes to the nation’s anti-money-laundering laws, including enacting a new federal statute, the Corporate Transparency Act (CTA or Act), that will establish a centralized database of corporate beneficial ownership. The CTA mandates that by 2025 (or, in some cases, by 2024) all domestic and foreign companies doing business in the U.S. must provide information about the true beneficiaries of their operations by complying with new reporting requirements. The legislation is designed to capture information on an estimated 32 million companies that operate in unregulated areas or are too small to trigger disclosure obligations under other federal laws yet can be used by criminals, terrorists, and other bad actors to hide money laundering and other illicit financial activities. The Treasury Department’s Financial Crimes Enforcement Network bureau (FinCEN) explained the need for a beneficial ownership database, stating, “Illicit actors frequently use corporate structures such as shell and front companies to obfuscate their identities and launder their ill-gotten gains through the U.S. financial system. Not only do such acts undermine U.S. national security, but they also threaten U.S. economic prosperity: shell and front companies can shield beneficial owners’ identities and allow criminals to illegally access and transact in the U.S. economy, while creating an uneven playing field for small U.S. businesses engaged in legitimate activity.” FinCEN issued its final rule on the CTA’s reporting requirements on September 29, 2022. Although the regulations resolve many of the issues that arose after the Act’s passage, a number of compliance challenges and questions still remain.
The Sicker, The Better: Cigna Orchestrates Fraudulent Scheme to Defraud Government
Cigna Corporation (Cigna)–a global juggernaut in the insurance arena–faces a health care fraud lawsuit brought by the government under the federal False Claims Act (the FCA). By allegedly exaggerating patients’ illnesses to boost its own risk scores, Cigna secured inflated payments from the Medicare Advantage reimbursement system.
The SEC’s Regulation Best Interest: Purposes, Components, and Criticisms
In 2019, the U.S. Securities and Exchange Commission (SEC) adopted Regulation Best Interest (“Reg BI”). Reg BI is a standard of conduct that applies to broker-dealers (a firm in the business of selling securities) and persons associated with broker-dealers when making a recommendation of a certain investment strategy or securities transaction to a retail customer. The SEC gave broker-dealers a time window to implement this new law into firm policies and procedures, and while no regulatory action happened in the first few years of its enactment, the SEC brought its first action in June of this year and FINRA brought its first in October of this year. This makes it especially important for broker-dealer firms to ensure they are presently in compliance with the standards set forth in Reg BI.