State AG Monitor

State AGs in the News

By Bernard Nash , Divonne Smoyer , and Ann-Marie Luciano on Posted in Consumer Protection, Employment, Medicaid Fraud, Mortgages/Foreclosures, Pharmaceuticals

Consumer Protection

Colorado Attorney General Announces Settlement with Company Over Alleged Fraudulent Internet Marketing Scheme

  • Colorado Attorney General John Suthers announced that the Denver District Court has approved a consent judgment with Consolidated Medical Services, LLC and its owner over allegations that the company defrauded consumers through an Internet-based affiliate marketing program.
  • The lawsuit alleges that the company recruited primarily elderly individuals and charged them a variety of fees to allow them to sell health benefits plans online to other customers.  Most of the plans did not pay patients’ claims as originally represented, and the recruits were not able to recoup their investments.
  • As part of the settlement, the owner agreed to shut down the affiliate marketing program and return $100,000 to affiliates. In addition, the owner is required to pay a $250,000 judgment.

Employment

Massachusetts Attorney General Reaches Settlement with Staffing Company and Client for $649,000 in Restitution and Penalties

  • Massachusetts Attorney General Martha Coakley recently announced that her office has reached a settlement with temporary staffing agency EDA Staffing, Inc., and its client, CSM Bakery Products NA, Inc. over allegations that the companies did not fully pay the wages of approximately 1,200 workers at a Woburn facility.
  • Under the terms of the settlement, the companies will together pay more than $649,000 in restitution as well as civil penalties. In addition, the staffing agency is required to provide training for supervisors and managers on wage and hour laws and information about work assignments and rights on the job in its distribution of employment notices.

Medicaid Fraud

New York Attorney General Obtains $13.4 Million Medicaid Fraud Settlement with Hospital

  • New York Attorney General Eric Schneiderman announced last week that his office has reached a $13.4 million settlement with New York Downtown Hospital to resolve allegations that the hospital conspired with an out-of-state vendor to commit Medicaid fraud.
  • The settlement resolves allegations that the hospital engaged in a patient referral scheme with SpecialCare Hospital Management Corp. whereby the hospital paid a monthly fee in exchange for the referral of Medicaid patients to its unlicensed inpatient detoxification unit, in violation of federal and state anti-kickback laws and Medicaid regulations.

Mortgages/Foreclosures

Arizona Attorney General Reaches Settlement with Law Firm Over Alleged Improper Collection of Advance Fees

  • Arizona Attorney General Tom Horne announced last week that his office has reached a settlement with a Chicago-based law firm, The Mortgage Law Group a/k/a Macey Aleman & Searns, over allegations that the firm illegally collected advance fees from consumers seeking assistance in obtaining mortgage loan modifications.
  • The settlement resolves a consumer fraud lawsuit the Attorney General had filed alleging that the law firm, through the assistance of Underwater Property Solutions, deceived consumers about their ability to stop foreclosures and obtain loan modifications, and improperly collected advance fees.
  • As part of the settlement, the law firm must pay $39,280 in restitution and $60,000 in attorneys’ fees. In addition, the firm is permanently prohibited from engaging in any consumer debt or loan modification services in Arizona or on behalf of Arizona consumers.

Pharmaceuticals

California Attorney General Sues Pharmacy Over Allegedly Improper Perks

  • California Attorney General Kamala Harris recently filed suit against Allion Healthcare Inc. and its subsidiary pharmacies over allegations that it provided illegal kickbacks to consumers by handing out a variety of free items and incentives to California Medicaid beneficiaries who transferred their prescriptions to its retailers.
  • The lawsuit alleges that Allion engaged in unfair competition in violation of state law by providing free items, such as cellphones, airtime minutes, and bus passes for consumers who transferred their prescriptions. The Attorney General is seeking restitution and civil penalties.