/>iHeadlines that Matter for Companies and Executives in Regulated Industries
DOJ Announced Results of Nationwide COVID-19 Fraud Enforcement
On Wednesday, August 23, 2023, the US Department of Justice (DOJ) announced the results of a coordinated, nationwide enforcement action to combat COVID-19 fraud. The coordinated effort included 718 enforcement actions, including federal criminal charges against 371 defendants, for offenses related to over $836 million in alleged COVID-19 fraud.
The 718 law enforcement actions included criminal and civil charges, forfeitures, guilty pleas, and sentencings. Of the 371 defendants criminally charged, 119 defendants pleaded guilty or were convicted at trial. Over $57 million in court-ordered restitution was imposed. There were also 117 civil matters that resulted in over $10.4 million in judgments. Prosecutors and law enforcement also secured forfeiture of over $231.4 million.
US Attorney General Merrick B. Garland said that this action “should send a clear message: the COVID-19 public health emergency may have ended, but the Justice Department’s work to identify and prosecute those who stole pandemic relief funds is far from over.” More than 50 US Attorneys’ Offices and more than a dozen law enforcement and Office of Inspector General (OIG) partners worked together to conduct the sweep.
Two Founders of Crypto Company Charged in Money Laundering Conspiracy
On Wednesday, August 23, 2023, Tornado Cash founders Roman Storm and Roman Semenov were charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and other charges, in an indictment unsealed in the Southern District of New York.
Storm and Semenov were two of the three founders of the Tornado Cash service, a cryptocurrency mixer that allowed its customers to engage in untraceable transfers of cryptocurrency. The indictment alleges that Storm and Semenov operated a $1 billion scheme designed to help other individuals launder and conceal funds using cryptocurrency, including by laundering hundreds of millions of dollars on behalf of Lazarus Group, a sanctioned North Korean cybercrime organization. In particular, the defendants allegedly created, paid for, operated, and profited from operating the Tornado Cash service, which advertised to customers that it provided untraceable and anonymous financial transactions. According to the indictment, Storm and Semenov failed to implement KYC and AML programs, as required by law.
If convicted, Storm and Semonov could spend years in prison.
Former LabSolutions CEO Sentenced to 27 years for Medicare Fraud
On Friday, August 18, 2023, Minal Patel, owner of LabSolutions LLC, was sentenced by a Florida federal judge to 27 years in prison for his role in a scheme to bill Medicare for millions of dollars in unnecessary genetic and other laboratory tests.
According to the DOJ, Patel conspired with patient brokers, telemedicine companies, and call centers to target Medicare beneficiaries to convince them to take expensive genetic tests. After the Medicare beneficiaries agreed to take such tests, Patel paid kickbacks to patient brokers and took steps to conceal those kickbacks. Between July 2016 and August 2019, LabSolutions submitted more than $463 million in claims to Medicare, which included claims for thousands of medically unnecessary genetic tests, of which Medicare paid over $187 million. During the same time period, Patel personally received over $21 million from Medicare in connection with the fraud scheme.
