Two Pharmaceutical Companies Agree to Pay a Total of Nearly $125 Million to Resolve Allegations That They Paid Kickbacks Through Copay Assistance Foundations

The Department of Justice announced today that two more pharmaceutical companies – Astellas Pharma US Inc. (Astellas) and Amgen Inc. (Amgen) – have agreed to pay a total of $124.75 million to resolve allegations that they each violated the False Claims Act by illegally paying the Medicare copays for their own products, through purportedly independent foundations that the companies used as mere conduits. When a Medicare beneficiary obtains a prescription drug covered by Medicare, the beneficiary may be required to make a partial payment, which may take the form of a copayment, coinsurance, or a deductible (collectively “copays”). Congress included copay requirements in the Medicare program, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits a pharmaceutical company from offering or paying, directly or indirectly, any remuneration — which includes money or any other thing of value — to induce Medicare patients to purchase the company’s drugs. This prohibition extends to the payment of patients’ copay obligations.

“When pharmaceutical companies use foundations to create funds that are used improperly to subsidize the copays of only their own drugs, it violates the law and undercuts a key safeguard against rising drug costs,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “These enforcement actions make clear that the government will hold accountable drug companies that directly or indirectly pay illegal kickbacks.” “According to the allegations in today’s settlements, Astellas and Amgen conspired with two copay foundations to create funds that functioned almost exclusively to benefit patients taking Astellas and Amgen drugs,” said United States Attorney Andrew E. Lelling. “As a result, the companies’ payments to the foundations were not ‘donations,’ but rather were kickbacks that undermined the structure of the Medicare program and illegally subsidized the high costs of the companies’ drugs at the expense of American taxpayers. We will keep pursuing these cases until pharmaceutical companies stop engaging in this kind of behavior.” “Kickback schemes can undermine our healthcare system, compromise medical decisions, and waste taxpayer dollars,” said Phillip Coyne, Special Agent in Charge, Office of the Inspector General of the Department of Health and Human Service’s Boston Regional Office. “We will continue to hold pharmaceutical companies accountable for subverting the charitable donation process in order to circumvent safeguards designed to protect the integrity of the Medicare program.” “As today's settlements make clear, the FBI will aggressively go after pharmaceutical companies that look to bolster their drug prices by paying illegal kickbacks — whether directly or indirectly — to undermine taxpayer funded healthcare programs, including Medicare,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.

Amgen and Astellas each entered five-year corporate integrity agreements (CIAs) with OIG as part of their respective settlements. The CIAs require the companies to implement measures, controls, and monitoring designed to promote independence from any patient assistance programs to which they donate. In addition, the companies agreed to implement risk assessment programs and to obtain compliance-related certifications from company executives and Board members.

https://www.justice.gov/opa/pr/two-pharmaceutical-companies-agree-pay-total-nearly-125-million-resolve-allegations-they-paid

Celadon Agrees to Pay $42.2 Million to Settle Accounting Fraud Claims

Trucking company admits to inflating value of fleet through false transactions, following federal probes

Freight trucking company Celadon Group Inc. has agreed to pay $42.2 million to settle fraud claims after filing false financial statements and lying to auditors in efforts to hide losses of its aging trucking fleet. Indianapolis-based Celadon admitted to inflating the value of more than 1,000 used trucks through false transactions with a third party, the Justice Department and Securities and Exchange Commission said Thursday. Under the terms of the Justice Department agreement, Celadon is required to pay restitution to shareholders. Celadon also agreed to implement internal controls and cooperate with the continuing probe, which includes investigations of individuals. The company no longer employs the executives involved in wrongdoing, the Justice Department said.

Celadon, which had disclosed the SEC investigation in 2017, said the two federal probes occurred before current leaders took the helm. In July 2017, the debt-laden trucking company replaced its chief executive with turnaround expert Paul Svindland. “We appreciate the government’s recognition of the significant changes we have made, our ongoing commitment to legal and regulatory compliance, and our significant cooperation in the investigations,” said Mr. Svindland. The company will focus on strengthening its corporate controls, pursuing a long-term capital structure and the turnaround of its core truckload transportation business, he said.

In a complaint filed Thursday in an Indianapolis federal court, the SEC charged Celadon with accounting fraud and internal control violations. The SEC alleged Celadon avoided recognizing at least $20 million in impairment charges and losses between June 2016 and April 2017. As a result, Celadon overstated earnings in financial reports for the year ended June 30, 2016, and the first two fiscal quarters of 2017. The carrier—one of the largest North American trucking firms—got into difficulty after rapidly expanding its former truck-leasing division Quality Companies LLC, which was at the center of the accounting scandal.

The expansion marked a big bet on truck-leasing in the years leading up to a 2016 slowdown in the trucking market. Quality also began to struggle because it owned a significant number of trucks with mechanical problems. The Quality fleet grew to more than 11,000 vehicles in 2016 from 750 in 2013 through a series of acquisitions. Celadon had $856 million in revenue in 2017 in truckload operations, in which companies haul full truckloads of goods, usually to distribution centers. That made the company the 13th largest operator in that sector, according to SJ Consulting Group.

Celadon’s independent auditors began investigating misconduct allegations in early 2017, and according to federal prosecutors, some of the company’s quality-management executives made false representations. Later, the auditor said it couldn’t sign off on Celadon’s prior financial statements. Celadon’s shares previously traded on the New York Stock Exchange, but the company was delisted last year and now trades over the counter. The stock was down 2.1% to $2.37 in Thursday trading. Celadon shed three businesses this month, including its logistics division and its A&S Kinard and Buckler Transport subsidiaries.

https://www.wsj.com/articles/celadon-agrees-to-pay-42-2-million-to-settle-accounting-fraud-claims-11556213014?mod=rsswn

Attorney General Appoints Regina Lombardo Acting Deputy Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives

Attorney General William P. Barr announced today that he has appointed Regina "Reggie" Lombardo to be Acting Deputy Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), effective May 1, 2019. Lombardo will replace Thomas Brandon, who will be retiring from federal service on April 30, 2019.

"Reggie Lombardo has helped run day-to-day operations at ATF for more than a year and she has proven herself to be an outstanding leader," Attorney General William Barr said. "Like her predecessor, Tom Brandon, she started as a special agent and has been entrusted with greater and greater responsibility over decades of faithful service. She is well qualified to continue ATF's successes of recent years, including helping the Department investigate and prosecute more firearms offenders than ever before. I want to thank Tom Brandon for his 30 years of service to ATF and 36 years of service to this country, and I thank Acting Deputy Director Lombardo for her willingness to accept this new role leading one of the most effective law enforcement agencies in the world."

Lombardo has served as the Associate Deputy Director and Chief Operating Officer for the agency since March 2018. In this capacity she has been responsible for the day-to-day operations of the agency charged with protecting the public from violent crime and enforcing laws and regulations related to firearms, explosives, arson, and alcohol and tobacco diversion. Lombardo has served as a special agent in the ATF since 1992 and has risen through the ranks as a career employee. She has held numerous management positions at ATF, including Assistant Director of Human Resources and Professional Development, Deputy Assistant Director of Field Operations’ Central Region, Special Agent in Charge of the Tampa Field Division, Assistant Special Agent in Charge of the New York Field Division, and Assistant Country Attaché in Toronto, Canada. She will be the first female to lead the agency in its history.

https://www.justice.gov/opa/pr/attorney-general-appoints-regina-lombardo-acting-deputy-director-bureau-alcohol-tobacco

Deputy Assistant Attorney General Adam S. Hickey of the National Security Division Delivers Remarks at the Fifth National Conference on CFIUS and Team Telecom

Good morning, and thank you for the invitation to return to this forum. This conference is one of the few devoted to national security reviews of foreign investment. It’s a unique opportunity for us in the government to talk to the private sector about the threats we see and the approaches we are taking to address them, and to hear your concerns and questions in response. The dialogue that results helps us do a better job. So thank you for being here today.

As you know, the foreign investment and telecommunications landscape is rapidly changing, because of technological advancements, legal reforms, and changes in policy. There’s a lot to discuss in the next two days, especially because of changes in the statutory authority underpinning CFIUS. But before I turn to foreign investment and telecom security work, specifically, I want to take a step back and describe the larger context for that work at the Justice Department. I want to give you a sense of how we view certain threats related to China, which, I hope, will give you a better sense of our perspective on foreign investment reviews that concern our areas of expertise and equities. Then I will turn to the Foreign Investment Risk Review Modernization Act (FIRRMA) and how I expect it to improve how the Department conducts its reviews, better tailoring our efforts to meet modern threats and allocating resources to the most complex cases.

https://www.justice.gov/opa/speech/deputy-assistant-attorney-general-adam-s-hickey-national-security-division-delivers-0

>>6323821

hmmm, the death of his wife and daughter from a car wreck, maybe