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 14, 2021
- Colorado Attorney General Weiser announced a settlement with mobile home park management company Impact MHC requiring it to pay $25,000 and implement security measures after information was exposed in a data breach from October 2018 to July 2019. Attorney General Weiser also stated that the company took 10 months to provide notice of the breach when notice is required no more than 30 days later.
- California Attorney General Bonta led a coalition of 12 attorneys general in a comment letter to the Securities and Exchange Commission (“SEC”) asking it to require United States companies to provide information about their financial risk due to climate change. Specifically, the coalition is asking the SEC to require companies to annually disclose their greenhouse gas emissions and any plans to address these emissions, the potential impacts of climate change and climate change regulation, and corporate governance and risk management surrounding climate change.
Criminal Fraud Schemes
- California Attorney General Bonta announced the sentencing of two defendants for defrauding U.S. Navy sailors in a tax and insurance scheme through company Go Navy Tax Services, which sold unnecessary and expensive insurance products to service members for a large commission. The sentences include restitution payments of $500,000.
Labor & Employment
- Massachusetts Attorney General Healey announced a settlement with home health agency Compassionate Healthcare Systems LLC, requiring it to pay over $85,000 to settle allegations that it failed to properly compensate employees for overtime work and travel time between job sites.
Tuesday, June 15, 2021
- On June 15, 2021, Lina Khan was confirmed as the chair of the Federal Trade Commission, a decision that may signal an increase in antitrust enforcement. Acting Chairwoman Slaughter will again become a commissioner.
- New Jersey Attorney General Grewal announced the issuance of warning letters to companies offering free “gifts” of cannabis items with purchases, when these items were actually central to the purchases in question. The letters state that New Jersey will continue to enforce the regulation of the adult-use cannabis market.
- Delaware Attorney General Jennings applauded the Delaware Senate’s passage of unfair business practices legislation, which explicitly adds unfair practices to the prohibited practices under Delaware’s Consumer Fraud Act, meaning the Act could cover such practices as price gouging and high-pressure sales strategies. The legislation will now go to Governor Carney for his signature.
Elder Fraud & Abuse
- Several attorneys general made announcements about World Elder Abuse Awareness Day, including Washington D.C. Attorney General Racine, who also announced the settlement of allegations that car dealership Ourisman Chevrolet financially exploited a senior citizen by selling a car under unfavorable terms. The settlement includes restitution.
- Several attorneys general announced the U.S. District Court for the Western District of Louisiana’s grant of a preliminary injunction against President Biden’s Executive Order, which imposed a moratorium on oil and gas leasing and drilling permits on federal land.
- A coalition of 16 attorneys general filed comments before the U.S. Securities and Exchange Commission (“SEC”) against an initiative by the Biden administration that would require climate change disclosures in SEC filings. The attorneys general are arguing that the initiative threatens the First Amendment.
Criminal Medicaid Fraud
- Pennsylvania Attorney General Shapiro announced that four individuals have been charged for allegedly participating in a $10 million Medicaid fraud scheme that involved overcharging for non-medical transportation plans, many of which were unreliable or were never used.
Wednesday, June 16, 2021
- The Consumer Financial Protection Bureau (“CFPB”) issued an interpretive rule explaining the basis of its authority to examine financial institutions for risks to military borrowers from conduct that violates the Military Lending Act. The CFPB had previously discontinued examination of activities related to the Act based on a belief that Congress did not specifically give the CFPB this authority. However, the current CFPB leadership announced its disagreement with this belief.
- Iowa Attorney General Miller announced a settlement with door-to-door sales organization Inner City Solutions, resolving allegations that it solicited funds for charities with which it was not affiliated and kept the money for itself, as well as failed to comply with state regulations covering charities. As part of the settlement, the company agreed to stop doing business in Iowa.
- Nevada Attorney General Ford warned consumers in Nevada about deceptive discounted insurance plans and credit repair scams.
- Massachusetts Attorney General Healey announced that limited liability company Bedrock Group LLC agreed to pay $3.5 million to resolve allegations that it made false statements in connection with its obligation to refund the state for face masks it did not deliver during the pandemic.
Criminal Medicaid Fraud
- Idaho Attorney General Wasden announced that two individuals were sentenced for Medicaid provider fraud. The sentences include probation, community service, fines and court costs, and restitution.
Thursday, June 17, 2021
- The Consumer Financial Protection Bureau (“CFPB”) reported that the Federal Financial Institutions Examination Council announced the availability of 2020 data on mortgage lending transactions at banks, savings associations, credit unions, and mortgage companies, reported under the Home Mortgage Disclosure Act. Among other things, this data is used to evaluate potential fair lending risks.
- Arkansas Attorney General Rutledge filed a lawsuit in partnership with the Federal Trade Commission (“FTC”) against BINT Operations LLC and its officers for allegedly promoting and operating an illegal pyramid scheme by specifically targeting Black communities and promising consumers an 800% return on investment. The complaint, which alleges that the defendants violated the FTC Act, the Consumer Review Fairness Act of 2016, and the Arkansas Deceptive Trade Practices Act, seeks monetary relief, fines, civil penalties, and injunctive relief.
Investment Fraud Schemes
- New York Attorney General James announced a lawsuit against Lear Capital and its founder for allegedly cheating New Yorkers out of about $10 million by persuading them to invest in precious metals, while charging undisclosed commissions that reduced investments by up to a third. The company also did not register as a commodity broker-dealer, investment advisor, or telemarketer. The lawsuit is seeking an order permanently barring the company and its founder from operating in New York, restitution, disgorgement, damages, penalties, and costs.
- New York Attorney General James announced a settlement with health care company Albany Med Health System resolving allegations that it unlawfully included a “repayment fee” in employment contracts for nurses who were recruited from foreign countries. The settlement requires Albany Med to pay $90,229 to former nurses as well as remove the repayment provision from employment contracts, notify current and former nurses of its removal, and submit written compliance reports.
Labor & Employment
- California Attorney General Bonta announced that he filed an amicus brief in Ninth Circuit case Raines v. U.S. Healthworks Medical Group, which revolves around a challenge to pre-employment screening practices, explaining the California Fair Employment and Housing Act and how it supports holding third-party agents liable.
Friday, June 18, 2021
- The National Association of Attorneys General is asking Congress to pass the State Antitrust Enforcement Venue Act of 2021, which would give states the same venue selection abilities as federal enforcers by barring the transfer of state antitrust actions into multidistrict litigations. The attorneys general believe this law would allow state actions to stay in the states’ preferred venues without the inefficiencies of multidistrict litigation.
- A coalition of 26 attorneys general led by Michigan Attorney General Nessel and Ohio Attorney General Yost sent a letter to Attorney General Garland asking the Department of Justice to adopt the First Circuit’s reading of the Wire Act, limiting it to sports betting. The attorneys general are arguing that the broader interpretation leaves those outside the First Circuit vulnerable to criminal prosecutions for lotteries, when government-operated lotteries raise money for essential state activities such as public education.
- New York Attorney General James announced a settlement with Orange County and the Town of Chester to end alleged discriminatory housing practices intended to prevent members of the Jewish community from moving to Chester. Under the settlements, the county and town must comply with the Fair Housing Act and take preventative measures for future equitable housing practices.