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ITMG Insider Threat Cases – September 1, 2021

Hospital to Pay More Than $3 Million to Settle Whistleblower Suit

Tarrant County’s John Peter Smith Hospital (JPS) has agreed to pay more than $3.3 million to settle allegations that it violated the False Claims Act by upcoding certain claims submitted to federal healthcare programs, Acting U.S. Attorney Prerak Shah announced today.

In her amended complaint, filed in September 2020, Ms. Lee alleged that she alerted hospital leadership that JPS had been improperly adding these modifiers to claims between 70 and 95 percent of the time, in essence routinely double billing for certain aspects of patients’ care.  Nevertheless, she claimed, JPS failed to reimburse payors for overpayment stemming from these improperly coded claims.

Lynn Man Pleads Guilty to Bank Fraud Conspiracy and Identity Theft

A Lynn man pleaded guilty yesterday in connection with his involvement in a scheme to defraud several financial institutions and obtain money from their customers using fraudulent identification documents.

As stated during the plea hearing, Iloba participated in and at times directed a scheme to defraud financial institutions. To carry out the scheme, Iloba and others used fraudulent identification documents, among other means, to withdraw money from customers’ accounts at various banks in the form of checks, cash and wire transfers. The fraudulently-obtained funds were then deposited in other bank accounts opened in the names of fictitious business entities before being withdrawn. According to the charging documents, this scheme resulted in over $1.5 million in losses between April 2017 and March 2018.

Former CEO and COO of JHL Biotech Convicted of Conspiracy to Steal Trade Secrets and Commit Wire Fraud Exceeding $101 Million

According to the plea agreement, Jordanov hired former Genentech employees to work at JHL Biotech, several of whom he learned surreptitiously brought, without authorization, confidential and proprietary documents with them from Genentech to JHL Biotech.  The company used only some of the stolen documents, but Jordanov tolerated this practice by the employees of JHL Biotech and made no effort to discourage its employees from using the documents or information they brought with them.  The employees Jordanov hired provided the Genentech documents and information to JHL Biotech, which, at times, allowed the company to cheat, cut corners, solve problems, provide examples, avoid further experimentation, eliminate costs, lend scientific assurance, and otherwise help JHL Biotech start-up, develop, and operate its business secretly using the intellectual property and scientific know-how taken from Genentech.  Jordanov admitted that he suspected that some or all the stolen information was brought to JHL Biotech in violation of relevant Genentech non-disclosure agreements and employment contracts, but he made no effort to verify whether that was true.

West Linn Man Pleads Guilty for Role in Real Estate, Agriculture, and Mining Investment Schemes

According to court documents, beginning in 2013, in Oregon and elsewhere, Shelofsky knowingly and intentionally devised several different investment fraud schemes. Shelofsky falsely told prospective investors and lenders that he had successful real estate development projects in Bend, Oregon and West Linn and a successful hemp seed cultivation and distribution venture in West Linn. During the same time period, Shelofsky and two other individuals formed a precious metals mining operation that purportedly used a proprietary mining technique to extract precious metals from the sand tailings of other mining operations. While the group made minimal efforts to operate the venture, Shelofsky misled several investors about the status of the operation to fraudulently obtain funds.

Disbarred Lawyer Found Guilty of Multiple Felonies for Stealing Client Settlement Money and Cheating on Federal Income Taxes

A disbarred personal-injury lawyer was found guilty by a federal jury today of 22 felonies for stealing the majority of a multimillion-dollar settlement that should have been paid to a car accident victim, as well as cheating on his federal income taxes.

After he had misappropriated millions of dollars from clients’ settlements, Layfield relocated to Costa Rica. Just before getting on a flight to Costa Rica, Layfield borrowed $700,000 from a business lender by providing misleading information and failing to disclose material information. Then he used substantial portions of the loan proceeds for personal expenses, including buying a horse and shipping horses to Costa Rica.

Co-Founder and Former CEO of Palo Alto-Based Start-Up Technology Company Headspin Charged With Securities Fraud and Wire Fraud

The complaint alleges that from its 2015 inception until about March 2020, Headspin raised millions of dollars from investors during four major rounds of financing.  At its inception, Headspin raised approximately $11 million through the sale of Series A preferred shares.  Later, in April 2017 to May 2018, Headspin raised approximately $24.7 million selling promissory notes convertible into future Series B preferred stock.  During September to October 2018, Headspin raised approximately $20 million dollars in the sale of Series B preferred shares.  The fourth round of fundraising occurred from November 2019 to early 2020, and Headspin raised approximately $60 million in selling Series C preferred shares.

This entry was posted on Wednesday, September 1st, 2021 at 3:30 pm. Both comments and pings are currently closed.