Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Monday, March 1, 2021:

Immigration

  • Illinois Attorney General Raoul joined District of Columbia Attorney General Racine in leading a coalition of 20 attorneys general in urging the U.S. Department of Homeland Security and U.S. Citizenship and Immigration Services (USCIS) to withdraw the decision to terminate the Haitian Family Reunification Parole Program and the Filipino World War II Veteran Parole Program.

Federal Matters

  • Michigan Attorney General Nessel joined a coalition of attorneys general in sending a letter to Congressional leadership urging support for H.R. 1/S. 1, the For the People Act of 2021. The bill is an omnibus package of democracy reforms designed to expand access to the ballot, protect elections from foreign interference, force disclosure of dark money in federal elections, and raise ethical standards for federal officials. Joining Nessel are the attorneys general of Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington.

Financial Services | Consumer Financial Protection Bureau

  • New York Attorney General James urged investors “extreme caution when investing in virtual currencies” and added, “we’re sending a clear message to the entire industry that you either play by the rules or we will shut you down.” The alert to industry members serves as a reminder to brokers, dealers, salespersons, and investment advisors that the State of New York will not tolerate unregistered cryptocurrency operations. They could potentially face “both civil and criminal liability.”

Healthcare

  • Massachusetts Attorney General Healey’s Office filed a lawsuit against an orthodontist for fraudulently submitting millions of dollars in false claims to the state’s Medicaid program, MassHealth, including by keeping children in braces for longer than medically necessary and deceptively billing for mouth guards. The AG’s Office alleges that this conduct violates the state False Claims Act and the state Medicaid False Claims Act; constitutes a breach of contract by the two companies; and resulted in the unjust enrichment of the defendants. The lawsuit seeks treble damages and civil penalties. The complaint can be found here.

State AG Office News

  • Former South Dakota Attorney General Jackley announced that he will seek the 2022 Republican nomination for the position held by incumbent Jason Ravnsborg, who is facing impeachment and calls to resign after he killed a man with his car.
  • In recognition of National Consumer Protection Week, a number of Attorneys General announced their office’s list of Top 10 consumer complaints for 2020. Top spots were held by (1) COVID-19 related scams, (2) robocalls, and (3) internet-related issues. Here are the lists for Illinois, Michigan, and New York.

Tuesday, March 2, 2021

Immigration

  • Virginia Attorney General Herring has joined 21 attorneys general in filing an amicus brief with the U.S. Supreme Court in support of the right of foreign nationals living in the United States under a Temporary Protected Status designation to become permanent residents when they meet statutory requirements.

Financial Services | Consumer Financial Protection Bureau

  • New York Attorney General James announced a $500,000 settlement with Champion, the reverse mortgage servicing division of Nationstar Mortgage LLC, over allegations that Champion failed to provide homeowners with the clear, accurate information they needed to help protect their homes. As part of the agreement, Champion is required to pay $500,000 to the Attorney General’s Equitable Reverse Mortgage Assistance (ERMA) program, a $3 million pilot program launched in 2020 using settlement funds obtained by the Office of the Attorney General (OAG). The ERMA program will help customers, specifically senior citizens, from Champion and other reverse mortgage servicers in New York avoid default and foreclosure due to missed property payment, and the additional $500,000 in ERMA funds will be earmarked to assist Champion customers.

Law Enforcement

  • Washington state senators passed, by an overwhelmingly bipartisan 46-2 vote, a bill Attorney General Ferguson requested to create. The bill includes a database of police use-of-force incidents so the public, policymakers, researchers and law enforcement can access the data. Currently in Washington state, there is no central repository for use-of-force data. The bill requires agencies to collect and report key data regarding the incident, including the demographic characteristics of the officers and the members of the public. A centralized, online and publicly accessible database will assist law enforcement, academics and policymakers.

Privacy/Data Security

  • Virginia is poised to become the second state in the nation to pass a broad consumer privacy bill. Virginia’s Consumer Data Protection Act has passed through the General Assembly and the governor is expected to sign it any day. The law’s chief innovation is requiring consent before companies collect some limited types of sensitive information. Like laws in California, it also includes some individual rights to access and delete information, and it gives people the right to opt out of some types of data sales and targeted ads. There are some concerns that the law will be passed too quickly, leaving a slew of exceptions that make it unclear whether many big-name companies were purposely exempted.

Wednesday, March 3, 2021

Consumer Protection

  • Virginia Attorney General Herring announced that he has secured debt relief and restitution for 700 Virginia student loan borrowers through a settlement with Equitable Acceptance Corporation. Under the terms of the agreement, Equitable is required to cancel over $50,000 in debt and provide $40,000 in restitution for nearly 700 Virginians. The settlement resolves allegations that Equitable violated the Virginia Consumer Protection Act by making loans with illegal interest rates that were used by Virginians to purchase fake student debt relief services from companies that partnered with Equitable.

Federal Matters

  • Twenty Republican state attorneys general signed a letter denouncing the House Democrats’ controversial election reform bill as unconstitutional for a slew of reasons just hours before the measure was expected to be voted on. The letter — led by Indiana Attorney General Todd Rokita — tore into H.R. 1, the “For the People Act,” a massive election reform bill and a leading priority for House Democrats this Congress.

Healthcare

  • North Carolina Attorney General Stein announced that Lakeisha Shameika Jones pleaded guilty to fraud by a medical assistance provider and obtaining property by false pretenses. Jones was sentenced to eight to 19 months in prison and suspended for 36 months of supervised probation by Judge William Bland in Wayne County Superior Court. According to AG Stein, “[t]his individual defrauded the Medicaid program and wasted taxpayer money,” said Attorney General Josh Stein. “My office will hold accountable businesses and people that break the law and commit fraud.” From July 28, 2018 to October 26, 2018, Jones submitted false time sheets to her employer, Xeon Home Health Care Services, indicating that she had provided medical services to a Medicaid recipient in Wayne County, when in fact she had not.

Thursday, March 4, 2021

Federal Trade Commission

  • Georgia Attorney General Carr, along with the Federal Trade Commission and 46 agencies from 38 states and the District of Columbia, has stopped a massive telefunding operation that bombarded 67 million consumers with 1.3 billion deceptive charitable fundraising calls (mostly illegal robocalls) claiming to support veterans, children and firefighters. The defendants collected more than $110 million using their deceptive solicitations. Associated Community Services and a number of related defendants have agreed to settle charges by the FTC and state agencies that they duped Americans into donating to charities that failed to provide the services they promised. The complaint names ACS and its sister companies Central Processing Services and Community Services Appeal; their owners, Dick Cole, Bill Burland, Barbara Cole, and Amy Burland; and ACS senior managers Nikole Gilstorf, Tony Lia, John Lucidi, and Scot Stepek. In addition, the complaint names two fundraising companies allegedly operated by Gilstorf and Lia as spin-offs of ACS, Directele, and The Dale Corporation. Defendants will be required to cease operations and pay monetary judgements.

Financial Services | Consumer Financial Protection Bureau

  • Virginia Attorney General Herring announced that he has reached a settlement with Allied Title Lending, LLC d/b/a Allied Cash Advance (Allied), an open-end credit plan lender, concerning violations of Virginia’s consumer finance statutes. In addition to providing for a permanent injunction preventing Allied from further violations of Virginia’s consumer finance statutes, the settlement requires the company to pay $850,000 that the Commonwealth can use to provide restitution to customers who opened accounts with Allied during the period from September 28, 2013 through July 23, 2017, and to pay the Commonwealth $150,000 for reimbursement of its attorneys’ fees and settlement administration costs. The settlement resolves allegations that Allied violated Virginia’s consumer finance statutes, including laws applicable to open-end credit lenders, by: (1) charging a $100 origination fee during the statutorily mandated finance charge-free grace period on all loans; and (2) engaging in a pattern of repeat transactions and “rollover” loans with thousands of consumers who were required to close accounts that they paid down to a $0 balance, but permitted to open new accounts on which new fees were charged, on a monthly basis.

Law Enforcement

  • Together with law enforcement agencies and the Colorado Department of Labor and Employment (CDLE), Colorado Attorney General Weiser announced the creation of the Colorado Unemployment Fraud Task Force. The joint task force will investigate and prosecute those who have committed identity theft, and used that information to commit fraud against the state of Colorado and the unemployment insurance system.

Friday, March 5, 2021

Consumer Protection

  • Washington D.C. Attorney General Racine released a 2020 “Consumer Complaint Report,” which highlighted that the Attorney General’s Office received 50% more consumer complaints than in 2019. The issues most complained of were billing and refund problems, and price gouging accounted for 8% of the complaints, though complaints decreased after the Attorney General’s Office initiated enforcement actions.
  • Indiana Attorney General Rokita announced agreements with six motorcycle dealerships which allegedly charged excessive document preparation fees over two years. Under the agreements, the dealerships must pay $174,000 in restitution.

 Federal Trade Commission

  • The Federal Trade Commission, along with attorneys general from 38 states and the District of Columbia, halted Associated Community Services’ (“ACS”) and related defendants’ telemarketing operation, which used fraudulent and deceptive solicitations to collect over $110 million from 1.3 billion calls. The settlement includes both suspended monetary relief and injunctive relief.

 Financial Services | Consumer Financial Protection Bureau

  • Washington Attorney General Ferguson announced that a King County Superior Court judge ruled that student loan servicer Navient violated the Washington Consumer Protection Act through its conduct related to student loans. According to the press release, “This is the first time a judge has ruled that Navient broke a consumer protection law in a student loan servicing lawsuit filed by a state’s Attorney General or federal consumer protection agency.” A full trial is scheduled for April of 2022.
  • New York Attorney General James announced that her office reached an agreement with KeyBank to help low- to moderate-income New Yorkers buy homes. The agreement resolves Attorney General James’ investigation into KeyBank’s alleged deceptive advertising of its “KeyBank Plus” program. The bank has agreed to pay $5 million to the State of New York Mortgage Agency for down payment assistance as well as to lend $145 million to low- to moderate-income homebuyers over the next five years.
  • The Consumer Financial Protection Bureau (“CFPB”) filed a petition in Minnesota district court to enforce a Civil Investigative Demand against Educational Credit Management Corporation (“ECMC”). The CFPB is alleging that ECMC withheld at least 70 emails that may show it delayed loan rehabilitations in order to maximize collections costs.
  • U.S. District Judge Kenneth Marra for the Southern District of Florida ruled that a large part of the Consumer Financial Protection Bureau’s (“CFPB”) mortgage servicing misconduct lawsuit against Ocwen Financial Group is precluded by a settlement Ocwen previously reached with the CFPB and state regulators. Judge Marra granted partial summary judgment to Ocwen on nine of the 10 counts in the lawsuit.

Workers/Labor

  • New Jersey Attorney General Grewal announced that the Division on Civil Rights proposed amendments to the New Jersey Family Leave Act, which, among other things, expand protections for family leave related to the pandemic and broaden the definitions of “family leave,” “family member,” “parent,” “child,” and “covered employer.”