Headlines that Matter for Companies and Executives in Regulated Industries
Former NBA Player Sentenced to 10 Years in Prison for Health Care Fraud
Terrence Williams, a former NBA player, was sentenced to 10 years in prison for his participation in a scheme to defraud the NBA’s Health and Welfare Benefit Plan out of more than $5 million. From 2017 through 2021, Williams and over a dozen other individuals allegedly submitted fraudulent claims for reimbursement for medical and dental services that were not actually rendered. Williams recruited other Plan participants to join the scheme by offering to provide them with false invoices to support their fraudulent claims. Williams also solicited non-medical professionals to copy invoices made by medical officers, which Williams sent to co-conspirators.
In furtherance of the scheme, Williams repeatedly impersonated employees of the Plan’s administrative manager in order to threaten doctors and obtain kickbacks, amounting to approximately $646,000. Williams was charged and arrested in April 2022 and later pled guilty to conspiracy to commit health care fraud, wire fraud, and aggravated identity theft.
In addition to the prison term, Williams has been sentenced to three years of supervised release, ordered to forfeit $653,672.55, and ordered to pay restitution of $2,500,000.
Read the US Department of Justice (DOJ) press release here.
Vitamin Company to Pay Over $1 Million in Penalties for Deceptive Marketing of Purported COVID-19 Treatments
On August 3, 2023, nutritional supplement company, Quickwork LLC, and one of its managers agreed to pay over $1 million in civil penalties for allegedly deceptively marketing vitamin supplements during the COVID-19 pandemic in violation of the Federal Trade Commission Act and COVID-19 Act. On April 15, 2021, the government filed a complaint alleging that the defendants made misleading and unsubstantiated advertising claims that their Vitamin D and Zinc supplements could be used to treat or prevent COVID-19. The government also alleged that the defendants misrepresented scientific studies in support of their claims.
Quickwork agreed to an injunction and a $1 million civil penalty, which was partially suspended due to an inability to pay. On July 19, 2023, the court granted partial summary judgment in favor of the government, finding that there was no reasonable basis to support that Zinc or Vitamin D can treat or prevent COVID-19 or provide equal or better protection against COVID-19 than available COVID-19 vaccines. The Quickwork manager also agreed to an injunction and a civil penalty of $80,000.
Read the DOJ press release here.
NYC Couple Pleads Guilty to Multi-Billion Dollar Cryptocurrency Conspiracy
A New York City couple pleaded guilty to money laundering conspiracies associated with their hack and theft of bitcoin amounting to over $4 billion. Ilya Lichtenstein and Heather Morgan were arrested in February 2022, and since that time, the government has seized approximately 120,000 bitcoin from the couple’s accounts.
According to court documents describing the scheme, Lichtenstein hacked Bitfinex, a global cryptocurrency exchange, and fraudulently authorized over 2,000 transactions in which bitcoin was transferred to Lichtenstein’s cryptocurrency wallet. Lichtenstein would then remove all evidence of the transfer, log files, and credential information. Lichtenstein created fictious identities to set up online accounts and deposited stolen funds into accounts on darknet markets and cryptocurrency exchanges. With Morgan’s assistance, he then withdrew the funds and converted bitcoin to other forms of cryptocurrency.
Lichtenstein pleaded guilty to conspiracy to commit money laundering, which carries a maximum penalty of 20 years in prison, and Morgan pleaded guilty to one count of money laundering conspiracy, as well as one count of conspiracy to defraud the United States, which carries a maximum penalty of five years in prison.
Read the DOJ press release here.