Judge Guts FTC’s $4-Billion Lawsuit Against DirecTV

The U.S. Federal Trade Commission failed to convince a federal judge in San Francisco that DirecTV should pay nearly $4 billion in restitution to customers for allegedly misleading consumers about the costs of programming packages, Bloomberg reports.

The said that “the scope of the maximum potential recovery in this case has been substantially curtailed,” according to reporter Pamela MacLean.

The FTC suit alleged that DirecTV failed to disclose to consumers in 40,000 print, mail, online and TV advertisements that its lower introductory pricing lasted just one year but tied buyers to a two-year contract.

Read the Bloomberg article.



White Paper: Update on the U.S. Department of Education’s Clery Enforcement Measures

Canopy Programs’ new white paper, “An Update on the U.S. Department of Education’s Clery Enforcement Measures,” provides an overview of the Clery review process and cases involving institutions that were fined for Clery Act violations in 2017.

Despite the change in federal administration, the U.S. Department of Education has continued to aggressively enforce the Clery Act. Specifically, the department issued fines against 10 institutions in 2017 based on program reviews that were conducted in the past several years totaling $800,000, or an average of $80,000 per institution.

The complimentary white paper offers insight into these cases, including:

  • A review of the institutional demographics by type and enrollment size
  • What caused the program reviews to take place
  • An analysis of the length of time for the program reviews
  • Which categories of violations resulted in fines

Download the white paper.



Special Receiver Appointed in Federal Lawsuit Against Wells Fargo in Texas Case

Micah Dortch, managing partner of the Dallas office of the Potts Law Firm, has been appointed a special receiver in litigation originally brought by the Securities and Exchange Commission against a group of Texas businessmen, the firm announced. That lawsuit seeks to recover funds from what was characterized as a fraudulent investment scheme directed by Thurman P. Bryant III of Frisco and Arthur E. Wammel of Pearland, along with affiliated companies and individuals.

The firm says that evidence in the case revealed that, in less than three years, the defendants were able to withdraw or transfer more than $20 million in cash from Wells Fargo Bank accounts in violation of industry standards and the bank’s own policies. Despite numerous five-figure and six-figure cash withdrawals, Wells Fargo management never verified, questioned or restricted any of the activities, according to allegations.

According to the SEC complaint, originally filed in 2017, the defendants raised more than $22 million from more than 100 investors to purportedly fund short-term mortgage loans for later sale to long-term lenders. The SEC says that no such program existed, and that Bryant and Wammel were operating a Ponzi scheme, with limited returns paid to investors from monies raised from other investors.

Dortch has been appointed by the court to investigate the role of Wells Fargo in the matter and to seek financial compensation on behalf of the defrauded investors, filing a complaint alleging that Wells Fargo failed to follow its fiduciary role.

“As stated in the complaint, Wells Fargo either knew about the scheme or willfully ignored the questionable actions being made in violation of its own internal rules,” said Dortch. “I’m honored to take on this role and gain a just resolution for these innocent victims.”

The case is Ecklund v. Wells Fargo Bank, N.A., No. 4:18-cv-00452-ALM, filed in U.S. District Court for the Eastern District of Texas in Sherman.



Department of Energy Streamlines Small-Scale LNG Export Authorizations

The Department of Energy has announced a final rule that will expedite the approval process for small-scale exports of natural gas, reports Cadwalader.

Special counsel Brett A. Snyder writes:

The DOE explained that the new rule is intended to accelerate its processing of small-scale export applications and reduce administrative burdens for the small-scale natural gas export market.

Effective August 24, 2018, the DOE will issue an export authorization, without public notice and comment, to an applicant submitting a complete application to export natural gas, including liquefied natural gas (“LNG”), to countries with which the United States has not entered into a free trade agreement (“FTA”) that requires national treatment for trade in natural gas and with which trade is not prohibited by U.S. law or policy (i.e., non-FTA countries), if the application meets two criteria.

Read the article.



The Entire W.Va. Supreme Court Faces Impeachment for Alleged Corruption

The Washington Post is reporting that a West Virginia House panel moved this week to impeach the state’s entire Supreme Court.

Fourteen articles of impeachment allege corruption, maladministration, incompetence, neglect of duty and potential criminal behavior — impeachable offenses under the state constitution, writes Isaac Stanley-Becker.

Federal investigators secured a 23-count indictment charging former chief justice Allen H. Loughry II, now suspended without pay, with fraud, witness tampering, lying to a federal agent and obstruction of justice. Another seat on the court was vacated when Menis E. Ketchum II resigned in July, days before he was accused of federal wire fraud.

The Post report says other justices are “accused of ‘unnecessary and lavish spending’ on renovation of their offices, travel budgets and ‘regular lunches from restaurants,’ among other expenses, as well as failure to carry out administrative duties and properly develop guidelines for the use of public resources.”

Read the Post article.



DOJ Says Ruling on AT&T-Time Warner Ignored ‘Economics and Common Sense’

The federal government challenged a judicial decision allowing AT&T to purchase Time Warner, arguing to a federal appeals court in Washington that the ruling suffered from “faulty logic” and ignored basic economic principles, according to The Washington Post.

The Justice Department asserted that the district court misunderstood the power dynamics at work when television distributors such as AT&T negotiate with TV programmers over content prices and terms, writes Brian Fung.

In its filing, the DOJ called the decision a “deeply flawed assessment of the government’s evidence.”

“It is fundamental to the economics of bargaining that a party derives leverage from having the ability to walk away, even if it never actually does so,” the Justice Department wrote.

Read the Washington Post article.



Hall Estill Represents OIEC in Historic Rate Reduction for OG&E Customers

Attorney Tom Schroedter with Hall Estill represented Oklahoma Industrial Energy Consumers (OIEC), an association of OG&E’s large power users, as an intervenor in Oklahoma Gas and Electric Co.’s application for Corporation Commission approval of a rate hike.

In a release, the firm said that Oklahoma Gas and Electric Company’s industrial customers will realize significant benefits from the largest single rate reduction ever awarded a state electric utility following the Oklahoma Corporation Commission’s approval of a settlement in mid-June.

The firm has offices in Tulsa, Oklahoma City, Denver, Northwest Arkansas and Oregon.

The firm’s release continues:

The commission’s order approved a settlement agreement which provides for a large rate reduction and a one-time refund to OG&E customers resulting from federal income tax law changes. Large industrial consumers will realize meaningful savings and avoid cost increases as a result of the rate case settlement. OIEC worked with the Oklahoma Attorney General’s office in advocating for and negotiating this significant decrease which results in fair and reasonable rates for OG&E customers.

“It is tremendously rewarding to work on this historic settlement which provides such substantial savings for industries and businesses across the state,” said Schroedter.

Beginning in July 2018, OG&E customers received a rate reduction of $64 million along with a one-time refund of $18.5 million that appeared as a credit on the July bill.

“We are fortunate to have outstanding attorneys like Tom who work diligently on behalf of our clients to represent the interests of Oklahoma’s industries,” said Mike Cooke, Managing Partner for Hall Estill. “Tom is a fabulous asset to our clients and brings a great depth of industry knowledge and unmatched enthusiasm to our team.”

Schroedter has practiced at Hall Estill for over 25 years and has built his legal career around Energy & Natural Resources and Utilities Law.



Health Care Fraud: How a Strike Force is Selected for a City

During the latest National Health Care Fraud Takedown, investigators targeted Houston and Dallas to identify and charge more than 40 people with a range of fraud allegations.

How is a region designated as a health care strike force area? Former federal prosecutor and Houston trial attorney Ashlee McFarlane of Gerger Khalil & Hennessy explains in a post on the website of Androvett Legal Media & Marketing.

“Dallas is a health care strike force city, meaning the Department of Justice and federal agencies have identified Dallas (like Houston) as a hot bed for health care fraud, based on data analysis and reviewing payments of claims submitted to federal health care benefit programs like Medicare,” says McFarlane.

“Kickbacks are the foundation of almost every health care fraud case. “As a former prosecutor, I can tell you—kickbacks are the first thing agents and prosecutors look for in building an investigation.

“There’s no way to know the number of kickbacks being paid in a city. You have to start investigating a case. However, when there are providers who are outliers in the billing data, federal agents often look to see if kickback payments are used to induce referrals.”

Dallas and Houston are among 10 locations nationwide with Medicare Fraud Strike Force operations. According to the Department of Justice, a Medicare Fraud Strike Force consists of a partnership between the DOJ and Department of Health and Human Services to prevent fraud and enforce anti-fraud laws.



‘Stupid, Dumb and Fat’ Comments Get Cleveland Lawyer Suspended

A Cleveland lawyer who has already paid a $300,000 settlement to his former paralegal for insulting her has now been suspended from the practice of law for six months.

WKYC reports that the Ohio Board of Professional Conduct accused Howard Evan Skolnick, a lawyer since 1993, of violating professional conduct rules by “verbally harassing” the woman for more than two years. The board recommended a a six-month suspension to be held in abeyance.

But the Ohio Supreme Court issued a one-year suspension, with six months stayed on the condition that he engage in no further misconduct.

Reporter Phil Trexler wrote” “Court records show he called her “stupid, dumb, fat and `whorey’.” He also lodged insults against the woman’s husband and her mother. Records show Skolnick also sexually harassed the woman and a female co-worker by making a request for a sexual favor while inside a car.”

Read the WKYC article.




Annual Security Report Preparation: 10 Questions to Ensure Compliance

Canopy Programs by United Educators has published “Annual Security Report: 10 Questions to Ensure Compliance,” designed to help protect educational institutions and ensure an accurate and compliant Annual Security Report (ASR) by considering 10 important questions.

“Preparing your institution’s Annual Security Report (ASR) is critical in demonstrating your school’s compliance with the Clery Act,” Canopy Programs says on its website. “Inaccuracies in the ASR—which must contain crime statistics and numerous statements of policy and procedure—and other Clery compliance deficiencies can result in review and oversight by the U.S. Department of Education (ED), fines (currently $55,907 per violation), and reputational damage.”

The publication discusses such questions as:

  1. Have we requested crime statistics from local law enforcement agencies with jurisdiction over our Clery geography?
  2. Is our Daily Crime Log up to date and available upon request?
  3. If we are a multiple campus institution, do we publish an ASR for each campus?

Continue reading “10 Questions to Ensure Compliance.”

Army of Local Lawyers Itching to Fight Trump’s Policies

Refugees - immigrationA growing number of lawyers, interpreters and other professionals across the U.S. — members of Lawyers for Good Government — have mobilized to force the Trump Administration to defend its immigration policies in court.

Bloomberg reports that the organization, which was launched as a Facebook group the day after Trump was elected president, is working on behalf of people who have been detained after they sought asylum for themselves and their children because they said they feared for their lives in their home countries.

Reporter Nick Leiber writes that “L4GG has only one employee: founder, president, and executive director Traci Feit Love, a Harvard Law School graduate and former litigator for DLA Piper, one of the biggest law firms in the world. She and her board have been figuring out how to direct L4GG’s volunteers—a significant chunk of the 1.34 million attorneys in the U.S.—to make them useful.”

Read the Bloomberg article.




Ex-Dentons Extortionist Faces Disciplinary Charges

Bloomberg Law is reporting that a former Dentons associate who stole the firm’s confidential files and then tried to extort cash and artwork from the firm now faces attorney discipline charges.

The complaint names Michael Bernard Potere, who pleaded guilty and was sentenced to federal prison for unauthorized computer access. The complaint was served July 10 but recently posted. The Illinois Attorney Registration and Disciplinary Commission’s alleged ethical violations based on the criminal conduct.

Potere, an associate in Dentons’ Los Angeles office from 2015 until June 2017, downloaded numerous confidential firm documents, such as financial reports, documents about partner meetings, client lists, billing information, and recruiting-related information, ARDC said. He then threatened to send the documents to a legal website unless the firm paid him $210,000, according to reporter Mindy L. Rattan.

Read the Bloomberg Law article.



Bitcoin Exchange Operator Faces 40 Years in Jail for Lying to SEC

Smart contracts - bitcoin - blockchainBloomberg Law is reporting that a virtual currency operator accused of running off with investor funds after a 2013 hack and lying to investigators has accepted a plea deal with federal prosecutors in New York.

Reporter Lydia Beyoud writes that Jon E. Montroll of Saginaw, Texas, faces up to 40 years in prison.

Manhattan U.S. Attorney Geoffrey S. Berman said in a July 23 statement accompanying the plea agreement that Montroll “repeatedly lied during sworn testimony and misled SEC staff to avoid taking responsibility for the loss of thousands of his customers’ bitcoins,” in 2013, Berman said.

Read the Bloomberg Law article.



Former Energy XXI CEO Agrees to Settle SEC Charges

Reuters reports that the former chief executive of Energy XXI Ltd agreed to settle civil charges that he failed to disclose to investors more than $10 million in personal loans obtained from company vendors and a candidate for the company’s board, the U.S. Securities and Exchange Commission said.

John D. Schiller Jr. didn’t admit or deny the charges, but he settled with the SEC by paying a $180,000 penalty and agreeing not to serve as an officer or director of a public company for five years, the SEC said.

The Reuters article explains: “The SEC alleged Schiller maintained an extravagant lifestyle using a leveraged margin account secured by his shares in the oil and gas producer. When oil prices tumbled in 2014 and he was faced with margin calls, Schiller accepted more than $7.5 million in personal loans from companies that did business with Energy XXI, the SEC claimed.”

Read the article.



Nashville Attorney Confirmed As General Counsel for Department of Defense

The Tennessean reports that the U.S. Senate voted 70 to 23 on Thursday to confirm Paul Ney as the general counsel for the Department of Defense.

Ney, of Nashville, has worked for the past two years in the Tennessee attorney general’s office where he currently serves as chief deputy attorney general. In that role, he coordinated and supervised legal work for all of the office’s divisions, writes reporter Michael Collins

As Defense Department general counsel, he will be involved in issues involving personnel, conduct and other matters.

Read the Tennessean article.



Has the Government ‘Waived’ Goodbye to Strict Compliance with Your Contract Specifications?

A recent Armed Services Board of Contract Appeals decision confirmed that waiver defenses can defeat government demands for strict compliance with contract requirements, reports Cohen Seglias Pallas Greenhall & Furman.

Authors Maria L. Panichelli and Alissandra D. Young explain that the Board found in Appeal of American West Construction, LLC that the U.S. Army Corps of Engineers had effectively waived the right to enforce a construction contract specification.

“This meant that the government could not recover from the contractor the difference in the price it paid for the original specification and the lower amount spent by the contractor to perform the deviation,” they write. “In a world where the government often has the right to strictly enforce contract requirements and hold contractors financially responsible for any deviation, this decision is a big win for construction contractors.”

Read the article.



ITT’s Former Top Executives Settle Fraud Charges With SEC

The Washington Post reports that tormer top executives at ITT Educational Services, the parent company of defunct ITT Technical Institute, have settled fraud cases with the Securities and Exchange Commission, avoiding a trial slated to begin Monday.

ITT chief executive Kevin Modany and former chief financial officer Daniel Fitzpatrick were chagred with civil fraud in 2015 for allegedly deceiving investors about high rates of late payments and defaults on student loans backed by the company, writes Danielle Douglas-Gabriel.

Although they didn’t admit or deny any wrongdoing, they agreed to pay penalties of $200,000 and $100,000, respectively. The agreement bars them from serving as officers and directors of public companies for five years.

Read the Washington Post article.



Halliburton Accused by Government of Harassing Muslim Workers

Energy giant Halliburton failed to act as two Muslim workers in North Texas were regularly harassed about their religion by supervisors and co-workers, the federal government alleges in a lawsuit.

Bloomberg Law reports the Equal Employment Opportunity Commission alleges Hassan Snoubar and Mir Ali were harassed and otherwise discriminated against because of their national origin. Snoubar is from Syria, and Ali is from India. Both worked for Halliburton Energy Services Inc. as operator assistants, the EEOC says.

Reporter Patrick Dorrian  writes: “The lawsuit continues the agency’s crackdown on employer practices or other workplace behaviors that target workers who are Muslim or Sikh, or of Arab, Middle Eastern, or South Asian descent. Eliminating such discrimination is one of the federal job rights watchdog’s top enforcement priorities.”

Read the article.



Former ICE General Counsel Heads to Prison for Identity Theft

Government Executive reports that a former top legal adviser to the Immigration and Customs Enforcement bureau was sentenced to 48 months in prison for wire fraud and identity theft affecting aliens, the Justice Department announced on Thursday.

Reporter Charles S. Clark writes that “Raphael Sanchez, 44, of the ICE Office of Principal Legal Advisor based in the Pacific Northwest, had pleaded guilty in February to running a scheme to defraud aliens in various stages of immigration removal by using their personally identifiable information to open lines of credit and personal loans in their names. He would then manipulate their credit bureau files, transfer funds to himself and purchase goods for himself using credit cards issued in their names, [the Department of] Justice said.”

Sanchez admitted to using the agency’s computer database as well as paper files to steal the personal information.

Read the Government Executive article.



Appellate Attorney Says Travel Ban Decision Provides Road Map for Future Litigation

The U.S. Supreme Court handed a victory to President Trump after the high court upheld the third version of his travel ban in a 5-4 vote, barring almost all travelers from five Muslim countries, North Korea and government officials from Venezuela.

“This is a big win for President Trump,” says Dallas appellate attorney David Coale in a post on the website of Androvett Legal Media & Marketing. “The decision signals that so long as the president is acting in an area of traditional executive power, in a facially neutral way with regards to religion, he has a lot of power. This signals how things may go in later immigration litigation about border policy.”

Coale adds that the latest ruling is different from another immigration hot button involving asylum.

“This dispute turned on the force of a law about visas. The current immigration dispute involves asylum requests, which is a different set of statutes. So this case does not apply directly, but it does provide a road map for future litigation by making analogies to these laws.

“Both the majority and Justice Stephen Breyer’s dissent note the system of waivers and exemptions built into the president’s order. The majority says it shows that the order was drafted carefully; the dissent says that if the waivers and exemptions are not actually used, that can justify a challenge to the statute. So that may be the next round of litigation about these matters – whether the waivers and exemptions are in fact being applied as written.

“Also,” he noted, “the majority signals that it isn’t particularly interested in presidential ‘tweets.’ It mentioned them, but basically said they were not relevant to the legal issue at hand.”