On June 15, 2021, the Department of Justice (DOJ) filed a False Claims Act (FCA) suit against Paksn Inc., Prema Thekkek and one of its owners, and seven skilled nursing facilities (SNFs) owned by Thekkek and/or operated by Paksn. The government alleges that the defendants entered into medical directorship agreements with certain physicians that purported to provide compensation for administrative services, but in reality provided kickbacks to induce the physicians to refer patients to the seven SNFs. The government alleges that the arrangements violated the Anti-Kickback Statute and led to the submission of false claims for reimbursement to federal health care programs, in violation of the FCA. The matter started as a qui tam lawsuit filed by a “whistleblower” who previously worked as Paksn’s Vice President of Operations and Chief Operating Officer before the government intervened in the suit.
The DOJ press release can be found here.
On June 15, 2021, the DOJ announced that a former Texas energy broker pleaded guilty to one count of conspiracy to commit commodities fraud and wire fraud and to violate provisions of the Commodity Exchange Act, for his role in an insider trading and kickback scheme. According to the DOJ, the defendant admitted that he paid kickbacks to an energy trader and co-conspirator from commission fees paid by the co-conspirator’s employer to the defendant’s brokerage, and in exchange for these kickbacks the co-conspirator agreed to direct his employer’s business to the defendant’s brokerage. The schemed allegedly generated proceeds of approximately $5.9 million, and the defendant received $585,000 in personal profits.
On June 11, 2021, DOJ announced that a federal grand jury in the District of Columbia returned a superseding indictment charging Low Taek Jho (a/k/a Jho Low), a Malaysian businessman, and Prakazarel “Pras” Michel, a businessman and former member of the hip hop group the Fugees, with conspiring to execute an unregistered, back-channel lobbying campaign. The defendants allegedly conspired with Elliott Broidy, who previously pled guilty to conspiracy to violate the Foreign Agents Registration Act (FARA) and was later pardoned by President Trump, and others to engage in an undisclosed lobbying campaign at the direction of Low and the Vice Minister of Public Security in China, respectively, to have DOJ drop the 1Malaysia Development Berhad (1MDB) embezzlement investigation and forfeiture proceeding involving Low and others and to have a Chinese dissident sent back to China. Low is also charged with conspiring to commit money laundering, and Michel is also charged with witness tampering and conspiracy to make false statements to banks.