Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
Monday, June 21, 2021
A coalition of 21 attorneys general and two cities, led by Pennsylvania Attorney General Shapiro, is asking the Postal Regulatory Commission to oppose the Postmaster General’s attempt to increase delivery times for First-Class Mail and other essential services. The coalition is arguing that the proposed changes would harm consumers, particularly those in rural areas and senior citizens, as well as the government.
Michigan Attorney General Nessel issued a consumer alert over cryptocurrency, warning consumers that they should research before they invest, understand the terms and conditions of digital payment apps, and be wary of celebrity endorsements.
Criminal Fraud Schemes
Arizona Attorney General Brnovich announced that the former CEO of Hacienda, Inc. pleaded guilty to two counts of Fraudulent Schemes and Artifices, related to an August 2020 indictment for an alleged white collar fraud scheme that took millions of dollars from taxpayers. Under the plea agreement the former CEO has agreed to pay $500,000 in restitution to the Arizona Health Care Cost Containment System and $274,500 to the Attorney General’s anti-racketeering revolving fund.
Tuesday, June 22, 2021
Criminal Medicaid Fraud
North Carolina Attorney General Stein and Acting United States Attorney for the Middle District of North Carolina Hairston announced a $330,000 settlement resolving allegations that Palladium Primary Care, P.A. and Premiere Health Care Plus, P.A., and an associated doctor, submitted false Medicaid and Medicare claims for nerve conduction and arterial studies that were not medically necessary or reasonable.
Illinois Attorney General Raoul and Vermilion County State’s Attorney Lacy filed a lawsuit against Dynegy Midwest Generation, LLC over the alleged illegal disposal of coal ash at the location of the former Vermilion Power Station, leading to groundwater pollution. Raoul and Lacy have also filed a motion for an interim order requiring Dynegy to create a safety emergency response plan for the location.
Wednesday, June 23, 2021
Charities / Nonprofits
California Attorney General Bonta announced his sponsorship of AB 488, which would allow the California Department of Justice to supervise charitable fundraising on internet platforms in order to protect consumers and charities from misleading or deceptive solicitations. Currently, California law does not specifically cover charitable solicitations over online platforms.
A coalition of 25 attorneys general sent a letter to the U.S. Senate urging it to pass H.R. 5, titled the Equality Act, which is intended to protect Americans from discrimination on the basis of gender identity and sexual orientation. The Act would address gaps in federal civil rights law to clarify that protections include these types of discrimination. It would also clarify that civil rights law prohibits discrimination on the basis of sex, including gender identity and sexual orientation, in those areas of the Civil Rights Act of 1964 that bar discrimination in federal funding and public accommodations.
Three proposed class action lawsuits were filed in Pennsylvania state court on June 23, 2021, accusing online lender Best Egg and collection companies Alliant Capital Management LLC and Capital Link Management LLC of violating Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (the lender) and the Fair Debt Collection Practices Act (the collection companies) by attempting to collect on illegal debts that charged more than 6% aggregate interest. The lawsuits seek declaratory relief and damages.
Missouri Attorney General Schmitt announced that his office entered a consent judgment against Jim Bakker and Morningside Church Productions, which it sued in March of 2020 for advertising “silver solution” as a potential COVID-19 cure. The settlement includes about $156,000 in restitution as well as injunctive relief.
A coalition of 23 attorneys general led by Arizona Attorney General Brnovich submitted a merits brief to the U.S. Supreme Court asking it to reverse a Sixth Circuit decision that allows individuals to strategically surrender in lawsuits challenging state laws with which they do not agree. The coalition argues that the Sixth Circuit decision will allow individuals to go against the democratic process and that attorneys general have an interest in intervening to protect their states’ laws.
Thursday, June 24, 2021
Unlawful Sweepstakes Schemes
Arkansas Attorney General Rutledge announced a settlement against an individual who facilitated an international sweepstakes scheme, under which victims were told they won a prize but must first pay taxes or fees, which were actually paid to the individual. Under the settlement, the individual must pay restitution and civil penalties totaling $100,000 as well as adhere to injunctive relief provisions.
Ohio Attorney General Yost announced a settlement with Frontier Communications resolving allegations that Frontier charged consumers for internet speeds that could not be reached. The settlement requires Frontier to fund upgrades to its internet system, cease deceptive advertising, and allow consumers to either continue with their current plan, move to a lower cost plan, or cancel service for no fee.
Federal Trade Commission
The House Judiciary Committee allowed antitrust legislation to proceed that would limit big tech companies’ market power, for example by restricting conduct that advantages the companies’ own services and products and by giving the Federal Trade Commission broad standard-setting powers. The bills would still need to pass the full House to move forward.
The U.S. House of Representatives passed a bill to repeal the Comptroller of the Currency’s “true lender” rule, which will now go to President Biden for his signature. The “true lender” rule allows consumers to take out loans with interest rates that are above the state-set maximum by stating that the “true lender” is the party listed as the true lender of a loan or the one that funds the loan.
A coalition of 11 attorneys general led by South Carolina Attorney General Wilson opposed the use of the Congressional Review Act to strike down the “true lender” rule, arguing that it will restrict the Comptroller of the Currency’s ability to address “true lender” concerns in the future.
Michigan Attorney General Nessel announced that a BP gas station owner who was previously told to cease and desist from price gouging agreed to pay a $2,000 fine, which will go to consumers as reimbursement. The owner sold gas for about $1 higher than nearby stations.
Friday, June 25, 2021
Criminal Medicaid Fraud
Missouri Attorney General Schmitt announced a $150,000 settlement against a former Medicaid provider for billing for services that she could not demonstrate were provided. The provider owned and operated Shady Oaks Retirement Home, which is no longer operational, and allegedly filed 148 false claims. Florida Attorney General Moody also announced the arrest of a Medicaid home and community-based services provider for allegedly defrauding the Medicaid program out of over $5,000 by submitting overlapping claims and claims for services not provided.
Oregon Attorney General Rosenblum applauded the Oregon legislature’s passage of SB 485, which will create a “Student Loan Borrowers Bill of Rights,” including both regulations for student loan servicers and borrower protections. The legislation also creates an ombudsperson at the Oregon Department of Consumer and Business Services who will respond to complaints against servicers as well as educate borrowers.
Connecticut Attorney General Tong announced a $1,002,481 settlement with Connecticut Addiction Medicine and its principals resolving allegations that the medical practice excessively billed for urine drug tests.