Florida Securities Fraud Lawyer Blog

The United States has intervened in a qui tam action filed against American Commercial College Inc. ("ACC"), a chain of for-profit colleges located in west Texas. The action was filed under the qui tam provision of the False Claims Act by whistleblowers Shawn Clark and Anthony Delgado, former ACC employees.

The whistleblowers' complaint alleges that ACC falsely certified that it was in compliance with federal law which prohibits colleges and universities from obtaining more than 90 percent of their annual tuition from federal student aid provided through the U.S. Department of Education.

The whistleblowers stand to recover between 15-25% of any settlement or judgment obtained by the federal government against ACC.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

The Securities and Exchange Commission ("SEC") has issued an alert to broker-dealers and investment advisers to be more vigilant regarding the detection and prevention of unauthorized trading in customer accounts. Unauthorized trading is not limited to unapproved trades executed in customer accounts, it can also include trades that exceed firm limits on position exposures, risk tolerances and losses; deliberate mis-marking of positions; and fabrication of records showing nonexistent transactions.

In addition to improper trades by rogue brokers, unauthorized trading can be done by traders, trading desk assistants, portfolio managers, risk managers or other firm employees, including those in administrative positions in the firm's back office.

The alert suggests that firms should:

• review changes in trading patterns;
• investigate any unusual or high volume of trade cancellations or corrections in a customer's account;
• scrutinize manual trade adjustments;
• examine any unexplained profits for a particular broker;
• analyze frequent requests for trade limit increases;
• evaluate patterns in employee remote access to trading accounts; and
• revise, if necessary, compensation and promotion policies to avoid potential incentives for unauthorized trading.

If anomalies are detected, firms should investigate further. The alert also suggests various compliance measures that firms might want to use to protect themselves and their clients from unauthorized trading, such as mandatory vacations for brokers, during which a full review of the trading in their customers' accounts can be undertaken.

The full alert can be found at http://sec.gov/about/offices/ocie/riskalert-unauthorizedtrading.pdf

Investors nationwide who have incurred recoverable investment losses due to specific failures by stockbrokers and brokerage firms, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

Authorities in Colorado have criminally charged a former stockbroker, John Brady Guyette, with 9 counts of securities fraud in connection with his sale of Medical Capital notes. Medical Capital Holdings, Inc. ("Med Cap"), an alleged Ponzi scheme, raised approximately $2.2 billion from investors between 2003 and 2008. It is believed to be the first case of criminal fraud charges against a stockbroker in connection with Med Cap. The Securities and Exchange Commission ("SEC") previously brought civil fraud claims against Med Cap and its founders, Sidney Field and Joseph Lampariello.

Guyette was affiliated with Community Bankers Securities, LLC prior to its closure in December 2009. Colorado revoked Guyette's securities licenses in April 2010. At that time, securities regulators alleged that Guyette violated Regulation D by selling the Med Cap private placements to several investors with whom he did not have a substantial prior relationship. Guyette sold $1.3 million worth of Med Cap notes to 8 investors in 2008. At the heart of the charges against Guyette are the allegations that he sold Med Cap notes to investors after Med Cap began having trouble making payments to investors; and he told at least some of the investors that the Med Cap investment was "guaranteed safe."

Investors nationwide who have been the victim of financial fraud, may contact the Florida securities arbitration attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

The 11th U.S. Circuit Court of Appeals has reinstated a qui tam action filed against Medco Health Solutions ("Medco") and its subsidiaries by whistleblowers Lucas Matheny and Deborah Loveland. The qui tam complaint had previously been dismissed by the U.S. District Court for the Southern District of Florida for failure to state a claim.

The Complaint, filed under the False Claims Act, alleged that Medco, and its subsidiaries Liberty Healthcare Group Inc. and Liberty Medical Supply Inc., failed to disclose and refund $69 million in overpayments made to Medco by the federal government. According to the Complaint, from at least 2006, Medco transferred overpayments to unrelated patient accounts, created fictitious patient accounts and then altered the records using a computer program. The Complaint also claims that Medco filed a false compliance certificate with the federal government knowingly concealing millions of dollars in overpayments.

The U.S. District Court for the Southern District of Florida had previously ruled that the Complaint did not meet the heightened pleading requirements for False Claims Act cases. The whistleblowers subsequently appealed the dismissal.

The appellate court reinstated the whistleblower Complaint after concluding that: 1) the whistleblowers had sufficiently alleged the existence of a false statement or record; 2) Medco knew the statement or record was false; 3) the false statement or record was made to avoid financial obligations to the government; and 4) that the false statement was material.

The whistleblowers stand to receive between 25-30% of any settlement or judgment against Medco by the government.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

The Securities and Exchange Commission ("SEC") recently issued an Investor Alert warning investors about fraudsters impersonating SEC employees. The SEC says it has been flooded with complaints about individuals, claiming to be SEC employees, calling or emailing unsuspecting investors with offers of large sums of money (such as $450,000), if the investor deposits a much smaller amount ($1,500, for example) into a specified account. In an attempt to add an element of legitimacy to the call, the fraudster may use the name of a legitimate company and refer the investor to an operating website.

The SEC reiterated in the Alert that it does not contact investors to:

• Obtain assistance with a fund transfer;
• Forward investment offers;
• Advise individuals that they own certain securities;
• Advise investors that they are eligible for disbursements from a class action settlement; or
• Offer financial assistance in return for payment of an upfront fee.

If you are contacted by someone claiming to be an SEC employee, use the SEC's personnel locator (202) 551-6000 to verify whether the individual is actually an SEC staff member. You may also call the SEC at (800) 732-0330 for general information. If someone has contacted you falsely claiming to be an SEC employee, you should report it to the SEC.

Investors nationwide who have been the victim of financial fraud, may contact the Florida securities arbitration attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

The Financial Industry Regulatory Authority ("FINRA") issued an Investor Alert reminding investors to carefully review their account statements and trade confirmations for potential red flags. Securities regulators take the accuracy of account documents very seriously. A careful review of these documents can alert investors to errors, or possible misconduct, by financial professionals, such as unauthorized trading or improper charges for handling transactions.

FINRA identified some of the key elements and red flags to watch for:

• Statements that look unprofessional, crooked, or altered in any manner. Fraudsters sometimes insert a logo from a legitimate brokerage firm onto their own fake statement.

• Statements that contain no or inconsistent specified end dates or statement periods. Statement end dates should follow a consistent pattern, for example, the last business day of every month.

• An account number that does not match previous statements.

• Investor's address is wrong or outdated.

• The name of the financial professional listed on the statement is unfamiliar.

• The phone number for the financial professional is out-of-service, is always busy or is never answered.

• No clearing firm listed on the statements. A clearing firm is the company that holds an investor's securities. FINRA rules require that the name and contact information for the clearing firm be listed on account statements.

• The phone number for the clearing firm is out-of-service, is always busy or is never answered.

• Account activity that was not authorized or expected.

• Account performance that seems unrealistic (the returns are always positive.)

• Unfamiliar sources of dividends and interest income.

• Income that appears on the monthly statement but has not been deposited in to the account.

• Account and transaction fees, commissions and charges that seem excessive or are unfamiliar.

• Transaction information on trade confirmations does not match the transaction information on monthly account statements.

• Unauthorized purchases of securities on margin (a loan from the firm secured by the securities purchased).

• Assets believed to have been purchased through the firm, but not listed on the account statements.

• Investment objections, such as growth, speculative, conservative, that do not match the investor's financial goals.

• Any investment that was the broker's idea but is reflected on the trade confirmation as "unsolicited."

Investors who find any inaccuracies, discrepancies or potential red flags should immediately contact their broker or brokerage firm.

The Florida attorneys at McCabe Rabin, P.A. represent investors nationwide in FINRA arbitration matters. Investors nationwide who have incurred recoverable investment losses due to specific failures by stockbrokers and brokerage firms, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

Georgia landlord, Yinka T. Omole ("Omole"), has agreed to settle a lawsuit filed by whistleblower Lowanda Strickland under the qui tam provisions of the False Claims Act for $42,900.

The whistleblower suit alleges that between July 2007 and March 2010, Omole fraudulently received federally funded housing assistance payments while requiring Lowanda Strickland to pay additional payments for property rented to her and her family. Requiring tenants to make supplemental payments is in violation of the Section 8 housing assistance program rules.

Whistleblower Lowanda Strickland will receive a share of the settlement as a reward in accordance with the qui tam provisions of the False Claims Act.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

Orthofix International, N.V. ("Orthofix") announced that it is close to resolving two pending qui tam lawsuits with the federal government.

Bone growth stimulator lawsuit
Orthofix announced that it is finalizing definitive agreements with the U.S. Attorney's Office, the U.S. Department of Justice, and the Office of the Inspector General of the U.S. Department of Health and Human Services to resolve criminal and civil charges relating to its bone growth stimulation business.

The qui tam suit against Orthofix was initially filed on March 23, 2005 by whistleblower Jeffrey Bierman under the False Claims Act and three other bio-medical companies. According to the terms of the pending agreements, Orthofix will pay a total of $42 million to resolve the allegations that Orthofix submitted reimbursement-related false claims associated with the sale versus rental of its bone growth stimulator devices.

Blackstone Medical, Inc.

Orthofix announced it has reached an agreement in principle with the U.S. Attorney's Office for the District of Massachusetts to pay $32 million related to a qui tam suit against its subsidiary, Blackstone Medical, Inc. ("Blackstone"). The settlement is subject to approval by the U.S. Attorney's Office, the U.S. Department of Justice, and the Office of the Inspector General of the U.S. Department of Health and Human Services.

The qui tam suit was filed on September 29, 2006 by whistleblower Susan Hutcheson, a regional manager for Blackstone from January 2004 until she was terminated in January 2006. The whistleblower complaint, filed under the qui tam provision of the False Claims Act, alleged that Blackstone was paying illegal kickbacks to doctors nationwide to induce them to use Blackstone's products in certain spinal surgeries. According to the Complaint, the kickbacks included such things as, monthly payments under sham consulting agreements, research grants, development projects, royalties, entertainment, travel and accommodations.

It is unknown exactly how much the Orthofix whistleblowers will receive as their reward under the False Claims Act. The False Claims Act provides financial incentives to whistleblowers by awarding them between 15% and 30% of any judgment or settlement. If the Government intervenes in the action, the whistleblower is entitled to receive between 15% and 25% of the recovery. If the Government does not intervene, the whistleblower is entitled to receive between 25% and 30% of the recovery.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

The 4th U.S. Circuit Court of Appeals issued a unanimous decision affirming an August 2010 judgment by South Carolina Judge Terry L. Wooten. Judge Wooten's judgment confirmed an arbitration award issued by a Financial Industry Regulatory Authority ("FINRA") arbitration panel ordering Wachovia Securities ("Wachovia") to pay $1.1 million in attorneys' fees to four former Wachovia brokers under the South Carolina Frivolous Civil Proceedings Act.

The FINRA Award resulted from a raiding claim brought by Wachovia against Stifel Nicolaus & Co. Inc. ("Stifel") and four brokers who left Wachovia to join Stifel. The brokers located in South Carolina, Frank Brand, Marvin Slaughter, Stephen Jones and George Stukes, joined Stifel in January 2008. Wachovia has since been renamed Wells Fargo Advisors, LLC.

The FINRA award also ordered the parties to advise a federal judge in South Carolina that sworn declarations filed by Wachovia "may contain materially false representations of fact," and that a videotape, purportedly showing the former brokers removing client documents from Wachovia, that was used as evidence by Wachovia to obtain a temporary restraining order from the court "does not support the allegations" made by the firm.

The Florida securities lawyers at McCabe Rabin, P.A. represent investors nationwide in FINRA arbitration matters. The Firm's attorneys seek to assist investors who have incurred recoverable investment losses due to specific failures by stockbrokers and brokerage firms.

Investors nationwide who have incurred investment losses, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

The Justice Department announced that Total Fina, S.A., Total Minatome Corporation, Total Exploration Production USA, Inc., Fina Oil and Chemical Company, Elf Exploration, Inc. and Total E & P USA, Inc. (collectively "Total Companies") have agreed to settle a qui tam lawsuit with payment of $15 million to the United States government.

The qui tam, or whistleblower, lawsuit initiated by Harrold Wright alleged that the Total Companies underpaid royalties owed to the United States Department of the Interior for natural gas produced from government and Indian land leases.

The Complaint, filed under the False Claims Act, alleged that the Total Companies improperly deducted from the royalty values the costs of boosting gas up to pipeline pressures, reported processed gas as unprocessed in order to reduce royalty payments, and engaged in a variety of other under-reporting activities as alleged in various administrative actions initiated against the Total Companies.

Because the whistleblower, Harrold Wright, is now deceased, his heirs will receive the $23,000, plus interest qui tam reward. This amount represents 25% of the $92,000 settlement that is allocated to the claims initially brought by Mr. Wright.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

A Ft. Lauderdale man, George Elia, who is currently under investigation by the Florida Office of Financial Regulation, is also facing a $4 million lawsuit alleging that he has been running a Ponzi scheme. In October 2011, Michael Imbesi of San Diego, along with his father, step-mother and sister, filed the Broward Circuit Court lawsuit against Elia and his company, International Consultants & Investment Group Limited Corp., after repeated requests to withdraw their money were met with delay tactics and excuses.

According to the Complaint, Elia promoted himself as an investment adviser able to generate annual profits of 20 percent on average. Court documents show that Michael Imbesi began investing with Elia in 2005 and for years, he received statements showing returns of 4 to 7 percent per quarter. Pleased with his returns, Imbesi recommended Elia to relatives, including his father and step-mother.

According to the Complaint, in the spring of 2011, Elia became inconsistent in distributing money, blaming the delays on medical issues and a hacked e-mail account. The Imbesis became nervous and asked for their principal back, but Elia only responded with excuses.

Court documents reflect that an audit of Elia's business records found significant irregularities, including the use of business funds to pay Elia's personal expenses. According to court records, the bank accounts for Elia's businesses were frozen pending the outcome of the litigation. At his deposition in November 2011, Elia answered standard questions about his background, but refused to answer additional questions, and invoked his Fifth Amendment right to remain silent.

According to a real estate broker who assisted Elia in securing a 3rd mortgage on his Ft. Lauderdale home in January 2012, within two weeks of securing the $125,000 mortgage, she discovered that Elia and his wife had moved out of the home during the night.

Investors nationwide who have been the victims of a Ponzi scheme, may contact the Florida securities arbitration lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

The United States Attorney for the Southern District of New York and the General Counsel of the U.S. Department of Housing and Urban Development ("HUD") announced that CitiMortgage, Inc. ("CitiMortgage"), a subsidiary of Citibank, N.A., has agreed to settle a qui tam lawsuit for $158.3 million. The government joined the whistleblower lawsuit filed in August 2011 by relator Sherry Hunt, CitiMortgage's vice president of quality assurance.

The Complaint, filed under the False Claims Act, alleged that for more than six years beginning in 2004, CitiMortgage failed to comply with the Federal Housing Administration ("FHA") Direct Endorsement Lender Program. According to the Justice Department, in the settlement, CitiMortgage admitted its failure to comply with HUD-FHA requirements by submitting certifications stating that certain loans were eligible for FHA mortgage insurance when they were not and, as a result, HUD incurred losses when the loans, that should never have been endorsed, defaulted.

If a Direct Endorsement Lender approves a mortgage for FHA insurance and the borrower later defaults on the mortgage, the mortgage holder may submit an insurance claim to HUD for the costs associated with the defaulted mortgage, which HUD must pay. Neither the FHA nor HUD reviews a mortgage prior to its approval for FHA insurance. As such, CitiMortgage, as a Direct Endorsement Lender, was required to follow program rules to endure it was properly underwriting and endorsing mortgages for FHA insurance.

The whistleblower alleged that since 2004, CitiMortgage has endorsed nearly 30,000 mortgages with a value of $4.8 billion for FHA insurance, but repeatedly submitted knowingly or recklessly false certifications regarding their eligibility for FHA insurance. The Complaint further alleged that CitiMortgage failed to perform basic due diligence; failed to verify information in the loan file regarding the borrower's ability to repay the mortgage; and repeatedly endorsed mortgage loans that contained serious defects, did not comply with HUD's underwriting standards, and were not eligible for FHA insurance.

The Complaint also stated that almost one-third of the mortgages originated or underwritten by CitiMortgage since 2004 have gone into default, resulting in insurance claim payments by HUD of nearly $200 million.

Of the $158.3 million settlement amount, the whistleblower will receive $31 million as a reward.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

The Department of Justice announced that Gunnison Energy Corporation ("GEC"), an affiliate of Oxbow Corporation, and SG Interests I Ltd. and SG Interests VII Ltd. (collectively "SGI") have agreed to settle antitrust and False Claims Act allegations for $550,000, with each firm to pay $275,000. The claims relate to an alleged agreement by the companies not to compete in bidding for four natural gas leases sold at auction by the U.S. Department of Interior's Bureau of Land Management ("BLM").

According to the Justice Department, the investigation resulted from a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by whistleblower Anthony Gale. The federal government partially intervened in the whistleblower's suit.

The BLM issues leases for oil and gas exploration on land owned or controlled by the federal government. In order to obtain fair and competitive prices for its leases, BLM auctions off the leases to the highest bidder. The winning bidder is required to certify that its bid was not the product of collusion with another bidder.

According to the qui tam complaint filed in the U.S. District Court for the District of Colorado, GEC and SGI were separately developing natural gas resources in Western Colorado. The Complaint alleges that in 2005, GEC and SGI agreed, in writing, that only SGI would bid at the BLM auctions and then assign an interest in all of the acquired leases to GEC. The government claims that the agreement was not part of any procompetitive or efficiency-enhancing collaboration. The government also claims it would have received more revenue for the four leases if GEC and SCI had competed at the auctions.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

The Financial Industry Regulatory Authority ("FINRA") announced it has censured and fined Citigroup $750,000 for the firm's failure to retain millions of e-mails sent by or to approximately 2,800 Citigroup brokers.

Pursuant to a Letter of Acceptance, Waiver and Consent ("AWC") submitted by Citigroup, the failure was the result of a technical glitch that occurred when Citigroup updated its e-mail system from a backup tape-based system to a new journaling-based system. After the upgrade, three of Citigroup's e-mail servers did not function as expected and, as a result, did not transmit e-mails to the archive for any of the individuals assigned to those e-mail servers.

According to FINRA, Citigroup's e-mail retention deficiencies impacted at least five FINRA investigations. The AWC also included a finding by FINRA that deficiencies in Citigroup's supervisory procedures relating to electronic communications resulted in the failure to timely detect the e-mail retention problems.

Investors nationwide who have incurred recoverable investment losses due to specific failures by stockbrokers and brokerage firms, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

Last week, a Financial Industry Regulatory Authority ("FINRA") arbitration panel awarded an elderly California couple $1.4 million for losses in two tenant-in-common ("TIC") investments. TICs are a form of real estate ownership in which two or more parties have a fractional interest in the property.

According to the investors' lawyer, LPL Financial, LLC ("LPL") knew that the TICs boosted their yield with financial "tricks." In their FINRA complaint, investors Heinrich and Araceli Hardt alleged that LPL committed securities fraud, made material misrepresentations and committed elder abuse, among other things. They had sought $8 million in damages.

According to the arbitration testimony, the TICs at issue, Heron Cove, LLC and Braintree Park, LLC, promised investors monthly income checks, purportedly generated by income-producing properties. According to the Hardts' attorney, LPL knew that the Heron Cove, LLC and Braintree Park, LLC properties were not producing any natural cash flow and, after a couple of years, the money ran out.

In addition to the FINRA arbitration matter, the Hardts filed a federal lawsuit against the sponsor of the deals, Direct Invest LLC. The pleadings filed in the pending lawsuit claim that the offering documents for the TICs contained multiple false and misleading statements regarding the property manager, projected cash flows, appreciation potential, superiority of property location, current and projected conditions for the Boston office market, strength of the leases, and use of the investment proceeds.

Investors nationwide who suffered a loss as a result of a tenant-in-common investment purchased through a FINRA member firm, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

TriWest Healthcare Alliance Corporation, a contractor for TRICARE, has agreed to resolve a qui tam, or whistleblower, lawsuit for $10 million. TRICARE is the medical benefit plan for the U.S. military, retirees, their dependents and reserve components.

The settlement resolves a qui tam lawsuit filed by former TriWest employees, Judi Jerdee, Deborah Thornton, Linda Glassgow and Paige Fiorillo under the False Claims Act. The United States partially intervened in the lawsuit on August 29, 2011.

The whistleblower complaint alleged that from 2004 to 2010, TriWest submitted claims to TRICARE for the full amount billed by service providers, even though TriWest had negotiated discounts with the service providers pursuant to contractually binding letters of agreement.

Collectively, the whistleblowers will receive $1.7 million as their share of the government's recovery.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

The Department of Justice and U.S. Postal Inspection Service announced that Boca Raton, Florida resident, James Cummings ("Cummings"), was sentenced to one year and a day in prison in connection with a fraudulent coffee machine business opportunity.

The government alleged that, from December 2003 to February 2008, in return for a minimum investment of $10,000, Cummings sold potential investors a business package that purportedly included coffee vending machines, locations in which to place the vending machines, and on-going support in the operation of the machines. The government also alleged that the buyers incurred a total loss on their investments and some never received the purchased coffee machines.

As a part of his guilty plea, Cummings admitted making false claims to potential investors regarding potential profits, that they would recoup their entire investment in 12 to 18 months, and that the locations they would be given to place their coffee machines would be high traffic, high profit locations.

In addition to one year and a day in prison, Cummings was sentenced to three years supervised release and ordered to pay $137,000 in restitution. Cummings pleaded guilty on November 29, 2011 to conspiracy to commit mail fraud for his involvement in three Florida companies: M & D Gourmet Coffee, Inc. of Boca Raton, Florida; Coffee Heaven LLC of Deerfield Beach, Florida; and Divino Trio Coffee and Vending Company of Ft. Lauderdale, Florida.

According to the Justice Department, Cummings' co-conspirator, Manuel Rodriguez, was convicted of conspiracy and wire fraud. In December 2011, he was sentenced to 120 months in prison.

Investors nationwide who have incurred losses, and who may have a FINRA arbitration claim, may contact the Florida securities arbitration lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

The Justice Department announced that Dava Pharmaceuticals ("Dava") has agreed to pay $11 million to settle a qui tam, or whistleblower, suit alleging that it violated the False Claims Act.

The whistleblower, Jim Conrad, alleged that, between October 1, 2005 and September 30, 2009, Dava knowingly underpaid its drug rebate obligations under the Medicaid Prescription Drug Rebate Program ("Rebate Program"). Under the Rebate Program, drug companies are required to make quarterly rebate payments to state Medicaid programs based on whether a drug is a name brand or generic drug, and the difference between what the Medicaid program paid and the prices paid by other purchasers.

According to the complaint, in order to decrease the rebate payments due from Dava, Dava treated its versions of the drugs cefdinir, clarithromycin and methotrexate as generic rather than name brand drugs. The complaint also alleged that Dava incorrectly calculated the average manufacturer prices for these same drugs.

The settlement resolved a qui tam action that was filed in the United States District Court for the District of Maryland. Under the terms of the settlement, the United States government will receive $5.7 million and Medicaid participating states will receive over $5 million. The whistleblower will receive 15 percent of the settlement proceeds as a reward.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

The Department of Justice announced that 14 hospitals in New York, Mississippi, North Carolina, Washington, Indiana, Missouri and Florida have agreed to settle a False Claims Act lawsuit regarding allegations that they overbilled Medicare for kyphoplasty procedures performed between 2000 and 2008. Kyphoplasty is a procedure that is used to treat some kinds of spinal fractures usually caused by osteoporosis.

The Department of Justice said the largest portions of the $12 million settlement are being paid by four hospitals associated with Adventist Health System in Florida ($3.9 million), Plainview Hospital in New York ($2.3 million), North Mississippi Medical Center in Mississippi ($1.9 million), Mission Hospital in North Carolina ($1.5 million) and Wenatchee Valley Medical Center in Washington ($1.2 million). Six other hospitals will pay the remainder of the settlement amount.

The government's investigation began in 2008 after a qui tam action was initiated by Chuck Bates and Craig Patrick, two former employees of Kyphon, a manufacturer of products used in kyphoplasty. The qui tam complaint named Kyphon (acquired by Medtronic Spine in 2007) and numerous hospitals. The whistleblowers alleged that Kyphon suggested that hospitals do kyphoplasties as inpatient procedures to bulk up their Medicare payments even though the procedures could have often been done as outpatient procedures.

According to the Justice Department, since the initial qui tam action was filed in 2008, it has settled investigations into more than 40 hospitals related to kyphoplasty overbilling for $39 million, in addition to a $75 million settlement with Medtronic Spine. The whistleblowers will get around $2.1 million from the settlements.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

The United States has filed suit against Universal Imaging, Inc. ("Universal") and its current and former owners, Phillip J. Young ("Young") and Mark Lauhoff ("Lauhoff"), under the False Claims Act seeking $150 million in damages and penalties. According to the U.S. Department of Justice, many of the facts in the case were first brought to the government's attention when whistleblowers, Dr. Richard Chesbrough, a radiologist, and his wife Kim Chesbrough, a former employee of Universal, filed a qui tam action against Universal.

The government's complaint alleges that Universal, Young and Lauhoff, violated numerous Medicare rules relating to adequate supervision of diagnostic tests and generated 90% of their business by paying illegal kickbacks to numerous physicians. The U.S. Attorney announced that fourteen physicians, who were paid by Universal for referrals, reached a settlement with the government and will return $1.56 million in kickbacks.

The government's complaint also names Dr. Gwendolyn Washington, a primary care physician, as a defendant. According to the complaint, Dr. Washington is alleged to have ordered dangerously high levels of tests involving the injection of radioactive material into patients in order to increase the amount of kickbacks she received. Dr. Washington was also named in related criminal proceeding which resulted in her sentence of 120 months in prison on charges of public corruption, health care fraud and conspiring to illegally distribute prescription drugs.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

Following the recent announcement by the Federal Reserve that interest rates are expected to remain low until at least 2014, the North American Securities Administrators Association ("NASAA") issued a warning to investors to be cautious about investments offering higher returns. The NASAA cautioned that investors should not abandon their slower growing, safe investments in favor of higher yielding alternative investments without fully understanding the risks and terms of the alternative product.

State securities regulators are concerned that individuals who depend on fixed income investments, especially seniors, may be more easily persuaded by unscrupulous salespeople to invest in inappropriate, risky investments or fraudulent schemes. The NASAA's current list of "Top Investor Traps" includes private placement offerings, promissory notes, securitized life settlement contracts, and investments in energy, distressed real estate and precious metals, which may be frauds in disguise.

Investors should remember that risk and reward are tied together. Investments with higher returns carry a higher degree of risk to investors; the lower the return, the lower the risk.

Before making any investment, investors should do their homework, especially for investments that seem to offer unusually high returns compared to other investment options. Investors can verify the legitimacy of many investments through the SEC's online database (http://investor.gov/). Investors can also review the employment and complaint history of a stockbroker through the Financial Industry Regulatory Authority (FINRA)'s BrokerCheck database
(www.finra.org/Investors/ToolsCalculators/BrokerCheck)
and investment advisors at the SEC's Investment Adviser Public Disclosure database (www.adviserinfo.sec.gov).

Investors nationwide who have incurred investment losses, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

The Securities and Exchange Commission ("SEC") charged Illinois resident Kenneth A. Dachman ("Dachman") with misappropriating more than $1.8 million in investor funds and making material misrepresentations to potential investors in connection with offerings for three companies for which he was the Chairman - Central Sleep Diagnostics, LLC, Central Sleep Diagnostics of Florida, LLC, and Advanced Sleep Devices, LLC. The broker for the three offerings, Scott A. Wolf, and his company, Stone Lion Management, Inc., were also charged by the SEC for their roles in selling unregistered securities.

According to the Complaint, between July 2008 and June 2010, Dachman raised $3.5 million from investors in 13 states and overseas on behalf of Central Sleep Diagnostics, a purported provider of outpatient diagnostic sleep studies. The Complaint states that, between December 2008 and April 2010, Dachman raised an additional $568,000 on behalf of Central Sleep Diagnostics of Florida and Advanced Sleep, a purported provider of medical devices.

The SEC alleges that Dachman made numerous misrepresentations to potential investors including, how their funds would be used and his academic and professional backgrounds. The SEC also claims Dachman misappropriated at least $1.8 million of investor funds, representing over 45% of the total funds raised, for such things as a 10,000 square foot home, lavish family vacations, a new Range Rover and other personal expenses.

Investors nationwide who have incurred investment losses, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

Jonathan Curshen of Sarasota, Florida and San Jose, Costa Rica and Nathan Montgomery of Las Vegas, Nevada were found guilty of conspiracy to commit securities fraud and wire fraud for their roles in a $7 million stock manipulation scheme that defrauded investors.

Curshen was the principal of Red Sea Management ("Red Sea") and Sentry Global Securities ("Sentry"), both located in San Jose, Costa Rica. Red Sea and Sentry provided offshore accounts and facilitated trading in penny stocks. Montgomery was a Las Vegas stock promoter.

According to the Department of Justice, the evidence at trial showed that in early 2007, Curshen and Montgomery schemed to illegally manipulate the stock price of a company called CO2 Tech.

According to the evidence at trial, Curshen, Montgomery and their co-conspirators, Robert Weidenbaum, Timothy Barham, Jr. and Ryan Reynolds, engaged in coordinated trades in conjunction with false and misleading press releases designed to artificially inflate the price of CO2 Tech stock.

According to the evidence at trial, the false press releases made it appear that the company had significant business prospects including Boeing, when it did not. According to the evidence at trial, the press releases and coordinated trades were used to create the appearance of legitimate buying interest by legitimate investors when in reality, Montgomery and his co-conspirators pumped the price of the stock then facilitated sales of the shares through Red Sea and Sentry to unsuspecting investors, including investors in South Florida. The evidence also showed that Montgomery, Weidenbaum, Reynolds and Barham were paid $1 million in cash to participate in the sham stock trades of CO2 Tech.

In addition, the evidence revealed that, from 2003 to 2008, Curshen laundered money through Red Sea and Sentry, including the proceeds from the stock fraud. Curshen was convicted of conspiracy to commit international money laundering in addition to the fraud charges.

Weidenbaum, Barham and Reynolds previously pleaded guilty to conspiracy to commit securities fraud, wire fraud and mail fraud. They are scheduled to be sentenced by Judge Richard Goldberg, United States District Court, Southern District of Florida on May 9, 2012. The sentencing for Curshen and Montgomery by Judge Goldberg is set for May 11, 2012.

Investors nationwide who have incurred investment losses, and who may have a FINRA arbitration claim, may contact the Florida securities arbitration lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

The Financial Industry Regulatory Authority has filed a complaint alleging that Charles Schwab & Company ("Schwab") violated FINRA rules by including a provision in its customer agreement requiring customers to waive their rights to participate in class actions against the firm.

According to FINRA's complaint, Schwab changed its customer account agreement in October 2011 to include the class action waiver language, as well as a separate provision requiring customers to agree that arbitrators in FINRA arbitration proceedings would not have the authority to consolidate the claims of multiple parties.

FINRA claims that both provisions violate FINRA rules governing language that its members may include in customer agreements.

Investors nationwide who have suffered an investment loss, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

The Financial Industry Regulatory Authority ("FINRA") has amended its pending complaint against David Lerner & Associates ("DLA") to add claims against David Lerner ("Lerner"), personally, and to add allegations that DLA continues to make false and misleading claims to potential investors with regard to Apple REITs, non-traded real estate investment trusts.

FINRA's initial complaint against DLA, filed in May 2011, asserted that DLA made material misrepresentations and omissions in the marketing of Apple REITs. The complaint alleged that DLA marketed the Apple REITs to elderly and unsophisticated investors without determining whether the investments were suitable for the investors.

FINRA's initial complaint further asserted that since at least 2004, shares of the Apple REITS have been unreasonably valued at $11 notwithstanding market fluctuations, declines in performance and leverage increases. FINRA claims that, despite the obvious irregularities in valuation, DLA did not sufficiently investigate the valuation of the REITs prior to marketing them to investors and provided misleading information on DLA's website regarding distributions. In addition, it is believed that DLA represented Apple REITs as safe and liquid, when in fact, they are illiquid and inappropriate for investors looking to access their money. FINRA recently issued an investor alert bulletin about the dangers of non-traded REITs such as the Apple REITs.

According to FINRA's amended complaint filed in December, between April and November 2011, DLA and Lerner made false and exaggerated claims regarding the investment returns, market values and performance of Apple REITs to over 1,000 potential investors during at least four investment seminars. According to FINRA, DLA and Lerner made misrepresentations that a past series of Apple REITs would merge and go public at a price of up to $20, well above the initial $11 offering price, and omitted to disclose that the income from the REITs was insufficient to support the promised 7%-8% returns.

According to FINRA, since January 2011, DLA has recommended and sold more than $442 million of Apple REIT Ten, resulting in sales commissions to the firm of $42 million. FINRA also claims that since 1992, DLA has sold almost $7 billion of Apple REITS which generated approximately $600 million in sales commissions to the firm.

Investors nationwide who have suffered a loss as a result of an investment in Apple REITs, and who may have a FINRA arbitration claim, may contact the Florida securities attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.