Tampa-based WellCare agrees to $137.5M settlement

Posted April 04, 2012, at 9:20 p.m.

TAMPA, Fla. — Federal prosecutors say a Tampa-based health care provider has agreed to pay $137.5 million to settle four lawsuits involving fraudulent Medicare and Medicaid claims in nine states.

The U.S. Attorney in Tampa announced the settlement Tuesday.

The suits claimed WellCare Health Plans Inc. falsely inflated the amount it claimed to be spending on medical care to avoid returning the money to Medicaid and other programs. The suits also accused the company of knowingly retaining overpayments received and falsifying data that misrepresented the medical conditions of patients and treatments they received.

WellCare will make fixed payments, plus interest, over three years to the federal government and to Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York, and Ohio.

WellCare CEO Alec Cunningham says the company is pleased matters are fully resolved.

RI to get $230M from $500M Google forfeiture

PROVIDENCE, R.I. — Rhode Island law enforcement agencies that participated in an investigation that resulted in Google Inc. forfeiting $500 million last year will receive $230 million of that money, federal officials said Monday.

Google forfeited the money last August to settle a U.S. government investigation into its distribution of online ads from Canadian pharmacies illegally selling prescription drugs to American consumers. The investigation found that Google allowed Canadian pharmacies that illegally imported drugs into the United States to advertise on its AdWords platform.

The $500 million sum represents the gross revenues Google collected in ad buys from hundreds of Canadian pharmacies, plus the earnings generated from the illegal drug sales to American consumers from 2003 to 2009, federal officials have said.

U.S. Attorney Peter F. Neronha said it may be the largest sum ever distributed among law enforcement groups under a program that allows forfeited funds to be shared with agencies that participate in federal probes.

Lawyers again to argue in NY Facebook lawsuit

BUFFALO, N.Y. — A New York man who claims he and Facebook founder Mark Zuckerberg made a deal nine years ago that entitles him to half-ownership of the social networking giant won’t be allowed to question Zuckerberg or search his computers at this point in his federal lawsuit, a judge ruled Wednesday.

Paul Ceglia’s lawyers will get the chance, though, to grill Facebook’s experts about their findings that Ceglia’s lawsuit is based on a fake document.

A federal magistrate judge issued the ruling following the latest round of legal arguments in a case with potentially billions of dollars at stake.

Palo Alto, Calif.-based Facebook last month filed a motion to dismiss the case, based largely on its experts’ findings that cast doubt on the authenticity of a two-page contract at the center of the dispute.

In his 2010 lawsuit, Ceglia claims that he and Zuckerberg signed the document in 2003, when he hired Zuckerberg, then a Harvard University freshman, to help him develop a street-mapping database. According to the Ceglia, the contract includes language showing he also gave Zuckerberg $1,000 in startup money for his Facebook idea in exchange for half-ownership of the company if it grew.

Zuckerberg has countered that he hadn’t even conceived of Facebook at the time. His lawyers have accused Ceglia of doctoring the street-mapping contract to insert Facebook references, citing evidence challenging the age of the ink and other details.

MF Global judge delays ruling on executives’ insurance

NEW YORK — Jon Corzine and other executives at MF Global Holdings find out later whether they’ll be able to access $375 million in insurance proceeds for defense costs, a judge said in a written ruling.

U.S. Bankruptcy Judge Martin Glenn in Manhattan court on Monday delayed ruling on requests that would allow executives at MF Global Holdings, facing 21 lawsuits over the former brokerage’s collapse, to access to insurance money to pay for their defense costs.

Commodity customers had objected, saying money that could go to repay funds missing from their segregated funds shouldn’t be used “to finance the defense of the culprits of the MF Global disaster.”

“Every dollar that’s paid out of the policy is one dollar less to satisfy claims against each of the debtors if the commodity customers have tort claims against the parent company,” Glenn said Monday in court. He said he would consider allowing limited access to insurance proceeds with a cap, which lawyers suggested could be about $25 million. Parties could then return to court to re-argue the issue before the cap is reached, Glenn said.

Total insurance proceeds at issue total $375 million, said Lorenzo Marinuzzi, a lawyer representing the trustee for MF Global Holdings, Louis Freeh. About 21 lawsuits filed against MF Global executives are expected to be consolidated, a representative of the class actions told Glenn on Monday.

FTC sues three California firms offering car loan modifications

LOS ANGELES — Three California companies offering auto loan modifications were sued by the Federal Trade Commission, which accused them of deceiving consumers with false promises.

Hope for Car Owners in Folsom, Kore Services in San Diego and Nafso VLM in Roseville charged clients hundreds of dollars in upfront fees to obtain car loan modifications, according to the FTC. But the firms allegedly did not fulfill their agreements to get the modifications and refused to give full refunds as advertised.

The FTC also sued Hope for Car Owners manager Patrick Freeman, Nafso VLM owner Naythem J. Nafso and Kore Services manager Michael Kamfiroozie. Kore conducted business as Auto Debt Consulting, the FTC said.

The action, split into two separate lawsuits, is the FTC’s first against auto loan modification claims, according to court documents made public Wednesday. The two complaints asked the U.S. District Court in Fresno, Calif., for temporary restraining orders to shut down the companies while the FTC pursues the cases.

On Monday, Freeman countered by asking the court to deny a temporary restraining order, saying that Hope had taken down its only active website, www.carloanmod.com, and was planning to dissolve itself. He blamed lenders who were “no longer willing” to work with the company and consumers whose expectations “had become increasingly unreasonable.”

In the filing, Freeman said that “contrary to the claims made by the plaintiffs of extreme amounts of ill-gotten gains,” both his and Hope’s bank accounts “have long since been depleted” and are likely to result in a bankruptcy filing. He denied any wrongdoing.

The FTC alleges that consumers were allegedly told by Hope and Kore counselors to stop paying their auto lenders and pay fees to the loan modification companies instead.

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