NY case alleges Ernst & Young fraud as Lehman auditor
Dec 21, 2010
Reuters
New York prosecutors accused accounting firm Ernst & Young of helping to conceal Lehman Brothers Holdings Inc's financial problems before it collapsed in 2008.
The following are highlights from the civil fraud complaint filed by the office of New York Attorney General Andrew Cuomo in New York State Supreme Court:
- Ernst & Young approved Lehman's policy on Repo 105 transactions created in 2001 that allowed Lehman to park tens of billions of dollars of highly liquid fixed income securities with European banks for the sole purpose of reducing Lehman's balance sheet leverage.
- Senior Lehman personnel, including Kristine Smith, discussed the proposal with Kevin Reilly, the E&Y "engagement partner" in charge of E&Y's relationship with Lehman, and with E&Y partners William Schlich and Matthew Kurzweil.
- E&Y knew Lehman was treating the transfer of tens of billions of dollars of securities in Repo 105 transactions as "sales," not "loans" according to the complaint.
- Rather than expose this fraud E&Y year after year gave clean opinions on Lehman's financial statements even though they concealed massive Repo 105 transactions.
- In 2006, one of E&Y's auditors, Bharat Jain, became concerned about the heavy use of the Repo 105 transactions.
In a September 7, 2006, email to his senior manager, Jennifer Jackson, Jain noted that he would "like to know what is our thought process behind how much of these Lehman should do from reputational risk, etc. perspective. Are we comparing to other competitors, are we referring to any industry publications, any regulatory guidance, etc.?"
- In May 2008, E&Y was given a copy of a letter to senior financial executives at Lehman from Matthew Lee, an executive responsible for Lehman's global balance sheet, which raised serious questions about Lehman's financial statements.
- In June 2008, Lee told Schlich and another E&Y partner, Hillary Hansen, that Lehman was removing $50 billion in fixed income securities from its balance sheet each quarter by purporting to "sell them" to European counterparties.
-- Hansen raised concerns about Repo 105 with Schlich "who casually dismissed the concerns" by telling Hansen that they were being properly recorded as sales.
- In subsequent meetings about Lee's allegations, Repo 105 was not even mentioned even though E&Y had been instructed to tell Lehman's audit committee about Lee's concerns.
- E&Y misrepresented Lehman's compliance with applicable accounting standards, the complaint said.
- It said E&Y failed to challenge public statements by Lehman's management concerning the reductions in leverage that E&Y knew had been accomplished largely by the use of Repo 105 transactions.
(Compiled by Grant McCool; Editing by Gary Hill)
Tuesday, December 21, 2010
Tuesday, December 14, 2010
A Secretive Banking Elite Rules Trading in Derivatives
Daniel Singer runs a heating oil company in Elmsford, N.Y., and is a derivatives customer. In order to offer homeowners fixed-rate oil plans, he buys derivatives contracts. But since the trading system is not transparent, he can’t tell whether the prices he gets are fair or not.
A Secretive Banking Elite Rules Trading in Derivatives
By LOUISE STORY
New York Times
December 11, 2010
On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan.
The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.
Drawn from giants like JPMorgan Chase, Goldman Sachs and Morgan Stanley, the bankers form a powerful committee that helps oversee trading in derivatives, instruments which, like insurance, are used to hedge risk.
In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks.
The banks in this group, which is affiliated with a new derivatives clearinghouse, have fought to block other banks from entering the market, and they are also trying to thwart efforts to make full information on prices and fees freely available.
Banks’ influence over this market, and over clearinghouses like the one this select group advises, has costly implications for businesses large and small, like Dan Singer’s home heating-oil company in Westchester County, north of New York City.
This fall, many of Mr. Singer’s customers purchased fixed-rate plans to lock in winter heating oil at around $3 a gallon. While that price was above the prevailing $2.80 a gallon then, the contracts will protect homeowners if bitterly cold weather pushes the price higher.
But Mr. Singer wonders if his company, Robison Oil, should be getting a better deal. He uses derivatives like swaps and options to create his fixed plans. But he has no idea how much lower his prices — and his customers’ prices — could be, he says, because banks don’t disclose fees associated with the derivatives...
A Secretive Banking Elite Rules Trading in Derivatives
By LOUISE STORY
New York Times
December 11, 2010
On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan.
The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.
Drawn from giants like JPMorgan Chase, Goldman Sachs and Morgan Stanley, the bankers form a powerful committee that helps oversee trading in derivatives, instruments which, like insurance, are used to hedge risk.
In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks.
The banks in this group, which is affiliated with a new derivatives clearinghouse, have fought to block other banks from entering the market, and they are also trying to thwart efforts to make full information on prices and fees freely available.
Banks’ influence over this market, and over clearinghouses like the one this select group advises, has costly implications for businesses large and small, like Dan Singer’s home heating-oil company in Westchester County, north of New York City.
This fall, many of Mr. Singer’s customers purchased fixed-rate plans to lock in winter heating oil at around $3 a gallon. While that price was above the prevailing $2.80 a gallon then, the contracts will protect homeowners if bitterly cold weather pushes the price higher.
But Mr. Singer wonders if his company, Robison Oil, should be getting a better deal. He uses derivatives like swaps and options to create his fixed plans. But he has no idea how much lower his prices — and his customers’ prices — could be, he says, because banks don’t disclose fees associated with the derivatives...
Wednesday, December 8, 2010
U.S. Lays Out AIG Exit Plan
DECEMBER 8, 2010
U.S. Lays Out AIG Exit Plan
Treasury Looking to Unload $15 Billion of Its Shares in First Quarter of 2011
By SERENA NG And ERIK HOLM
Wall Street Journal
American International Group Inc. on Wednesday entered into an agreement with the U.S. government that details, among other things, the rights the Treasury Department will have as it begins to sell its controlling stake in an accelerated exit plan.
The Treasury is aiming to sell at least $15 billion of its shares in the giant insurer in the first of a series of stock offerings starting in the first quarter of 2011, people familiar with the matter said.
Executing the share sales, which are expected to total over $60 billion over two years, will involve a careful balancing act that aims to disentangle the government from the company without destabilizing it. While Treasury wants to exit its ownership as quickly as possible, it doesn't want to get in the way if AIG needs to buttress its capital position or that of its insurance subsidiaries by selling shares.
Under the agreement released on Wednesday, the government will essentially be able to dictate the terms and frequency of AIG share sales until U.S. ownership drops below 33%...
U.S. Lays Out AIG Exit Plan
Treasury Looking to Unload $15 Billion of Its Shares in First Quarter of 2011
By SERENA NG And ERIK HOLM
Wall Street Journal
American International Group Inc. on Wednesday entered into an agreement with the U.S. government that details, among other things, the rights the Treasury Department will have as it begins to sell its controlling stake in an accelerated exit plan.
The Treasury is aiming to sell at least $15 billion of its shares in the giant insurer in the first of a series of stock offerings starting in the first quarter of 2011, people familiar with the matter said.
Executing the share sales, which are expected to total over $60 billion over two years, will involve a careful balancing act that aims to disentangle the government from the company without destabilizing it. While Treasury wants to exit its ownership as quickly as possible, it doesn't want to get in the way if AIG needs to buttress its capital position or that of its insurance subsidiaries by selling shares.
Under the agreement released on Wednesday, the government will essentially be able to dictate the terms and frequency of AIG share sales until U.S. ownership drops below 33%...
Thursday, December 2, 2010
Madoff trustee files lawsuit against US banking giant JPMorgan Chase
Madoff Trustee Picard Sues JPMorgan
Fox Business
Dec. 2, 2010
The trustee for the victims of the multi-billion dollar Bernie Madoff Ponzi scheme filed a lawsuit against US banking giant JPMorgan Chase on Thursday, saying the bank enabled Madoff to conduct “massive fraud” against his victims.
Fox Business
Dec. 2, 2010
The trustee for the victims of the multi-billion dollar Bernie Madoff Ponzi scheme filed a lawsuit against US banking giant JPMorgan Chase on Thursday, saying the bank enabled Madoff to conduct “massive fraud” against his victims.
Thursday, November 18, 2010
School insurance company prevents parents from testing syringe that poked their son
"[The principal] invited the Kuertens to pick up the needle for possible testing, but George Hills [insurance] Co. claimed the needle first."
I have long thought that insurance companies and their lawyers do a great deal of harm to schools, but in this case, I must admit that there was really nothing to be gained by testing the syringe eight days after the needle stuck the students. Viruses are unlikely to survive that long.
But why didn't the school turn over the needle right away? Who spread the bogus story of the syringe being used to water plants?
Needle poke turns into big problem at L.A. charter school
April 19, 2010
Howard Blume
Los Angeles Times
When 6-year-old Kristopher Kuerten pricked himself with a syringe found at his school, his Redondo Beach parents had no idea they would end up locked in a complicated dispute over the needle.
The school's insurance company seized the needle and won't release it, saying no lab is willing to test it. The family is worried about their son's health and wants the syringe tested.
The incident, which happened at Goethe International Charter School, underscores the unusual problems that can be especially challenging for a school with no support from school district bureaucracy. Charters are independently managed, a freedom considered crucial to their success. But it also means they function outside of long-developed procedures.
Goethe, which shares a Marina del Rey campus with a Los Angeles Unified School District middle school, offers German-language immersion.
Kristopher hasn't experienced any medical problems, and experts say his risk for infection from HIV, hepatitis or other pathogens is low. But his parents are unhappy about how matters were handled.
During a school day in February, a classmate apparently found a syringe in an electrical box and gave it to Kristopher. The prick probably happened when he played with the syringe during the after-school program. A staff member attended to the minor wound.
Jean and Thomas Kuerten said they learned what happened from Kristopher.
School Principal Luci Fowers declined to discuss the matter, but in an earlier e-mail to the Kuertens, she wrote that after-school program workers, who aren't employees of the school, "had been [given] misinformation about the use of the syringe to nourish plants apparently from one of our interns."
Fowers added: "No one from our [permanent] staff was on our campus at that time nor were we informed about the incident until we returned from the weekend."
At a Los Angeles Unified School District school, the nurse or a designated staff member would have provided first aid and notified the parents and the needle would have been placed in a "sharps container," said Connie Moore, the district's director of nursing.
At Goethe, the principal was out ill for a time, and it was not until eight days after the incident that she alerted the parents that the syringe was not for plants, according to e-mails from the school provided by the family.
She invited the Kuertens to pick up the needle for possible testing, but George Hills Co. claimed the needle first.
I have long thought that insurance companies and their lawyers do a great deal of harm to schools, but in this case, I must admit that there was really nothing to be gained by testing the syringe eight days after the needle stuck the students. Viruses are unlikely to survive that long.
But why didn't the school turn over the needle right away? Who spread the bogus story of the syringe being used to water plants?
Needle poke turns into big problem at L.A. charter school
April 19, 2010
Howard Blume
Los Angeles Times
When 6-year-old Kristopher Kuerten pricked himself with a syringe found at his school, his Redondo Beach parents had no idea they would end up locked in a complicated dispute over the needle.
The school's insurance company seized the needle and won't release it, saying no lab is willing to test it. The family is worried about their son's health and wants the syringe tested.
The incident, which happened at Goethe International Charter School, underscores the unusual problems that can be especially challenging for a school with no support from school district bureaucracy. Charters are independently managed, a freedom considered crucial to their success. But it also means they function outside of long-developed procedures.
Goethe, which shares a Marina del Rey campus with a Los Angeles Unified School District middle school, offers German-language immersion.
Kristopher hasn't experienced any medical problems, and experts say his risk for infection from HIV, hepatitis or other pathogens is low. But his parents are unhappy about how matters were handled.
During a school day in February, a classmate apparently found a syringe in an electrical box and gave it to Kristopher. The prick probably happened when he played with the syringe during the after-school program. A staff member attended to the minor wound.
Jean and Thomas Kuerten said they learned what happened from Kristopher.
School Principal Luci Fowers declined to discuss the matter, but in an earlier e-mail to the Kuertens, she wrote that after-school program workers, who aren't employees of the school, "had been [given] misinformation about the use of the syringe to nourish plants apparently from one of our interns."
Fowers added: "No one from our [permanent] staff was on our campus at that time nor were we informed about the incident until we returned from the weekend."
At a Los Angeles Unified School District school, the nurse or a designated staff member would have provided first aid and notified the parents and the needle would have been placed in a "sharps container," said Connie Moore, the district's director of nursing.
At Goethe, the principal was out ill for a time, and it was not until eight days after the incident that she alerted the parents that the syringe was not for plants, according to e-mails from the school provided by the family.
She invited the Kuertens to pick up the needle for possible testing, but George Hills Co. claimed the needle first.
Tuesday, November 9, 2010
Former Glaxo Lawyer Indicted
I don't think our Judge Judith Hayes of San Diego is going to be happy about this. The Justice Department has indicted a lawyer, Lauren C. Stevens of Durham, N.C.. Hayes doesn't even want lawyers to be criticized on the Internet, much less indicted for concealing evidence and obstructing justice.
Here's what our Judge Hayes had to say on the subject to a woman who criticized a law firm on the Internet:
"Take this law firm off the website...save yourself some trouble. A lawyer does what a lawyer does in every case, and if we had people putting up websites for every lawyer they didn't like we'd have so many websites the Internet would be boggled, if that is something that can happen electronically."
--Court Reporter's transcript April 6, 2009 Dept. 68 San Diego Superior Court
Note to Judge Hayes: The Internet seems to be doing just fine despite the burden of the millions of people who express their views online. What would happen if every victim decided to expose wrongdoing by lawyers? I think the result would be a more reliable justice system in which lawyers turn over evidence instead of hiding it.
November 9, 2010
Former Glaxo Lawyer Indicted
By DUFF WILSON
New York Times
A former vice president and associate general counsel for the British pharmaceutical company GlaxoSmithKline has been indicted on charges of making false statements and obstructing a federal investigation into illegal drug marketing, the Justice Department announced on Tuesday.
The criminal charges are part of the government’s long-promised crackdown on individual executives for their roles in pharmaceutical company cases, which have resulted in billions of dollars in fines and payments by the companies.
Lauren C. Stevens of Durham, N.C., is accused of lying to the Food and Drug Administration in a series of letters in 2003 denying the company had promoted a drug for off-label uses, according to federal prosecutors. She had claimed the company did not have promotional slides the F.D.A. had sought during its investigation, the indictment said...
Here's what our Judge Hayes had to say on the subject to a woman who criticized a law firm on the Internet:
"Take this law firm off the website...save yourself some trouble. A lawyer does what a lawyer does in every case, and if we had people putting up websites for every lawyer they didn't like we'd have so many websites the Internet would be boggled, if that is something that can happen electronically."
--Court Reporter's transcript April 6, 2009 Dept. 68 San Diego Superior Court
Note to Judge Hayes: The Internet seems to be doing just fine despite the burden of the millions of people who express their views online. What would happen if every victim decided to expose wrongdoing by lawyers? I think the result would be a more reliable justice system in which lawyers turn over evidence instead of hiding it.
November 9, 2010
Former Glaxo Lawyer Indicted
By DUFF WILSON
New York Times
A former vice president and associate general counsel for the British pharmaceutical company GlaxoSmithKline has been indicted on charges of making false statements and obstructing a federal investigation into illegal drug marketing, the Justice Department announced on Tuesday.
The criminal charges are part of the government’s long-promised crackdown on individual executives for their roles in pharmaceutical company cases, which have resulted in billions of dollars in fines and payments by the companies.
Lauren C. Stevens of Durham, N.C., is accused of lying to the Food and Drug Administration in a series of letters in 2003 denying the company had promoted a drug for off-label uses, according to federal prosecutors. She had claimed the company did not have promotional slides the F.D.A. had sought during its investigation, the indictment said...
U.S. doctors still too cozy with drug industry: report
U.S. doctors still too cozy with drug industry: report
By Julie Steenhuysen
Nov 9, 2010
Reuters
Doctors in the United States are still too cozy with drug companies, although they have managed to break some of those ties, U.S. researchers said on Monday.
The team at Harvard University and Massachusetts General Hospital did a national survey of 1,900 primary care doctors in 2009 about their contacts with drug companies.
They found 84 percent reported some type of relationship with drug companies, compared with 94 percent in 2004.
About two thirds accepted drug samples, 70 percent accepted food or beverages from drug companies and 14 percent accepted payment in exchange for their professional services, they reported in the Archives of Internal Medicine.
"We found a significant decline overall in the percentage of physicians who have relationships with industry," Eric Campbell of Massachusetts General, who led the study, said in a telephone interview.
In the team's first study of industry ties in 2004, getting drug samples or accepting lunches or other food from drug company salespeople were most common, followed by payments from drug companies for attending medical meetings or continuing education seminars.
Since then, several government and academic groups have pressured doctors to sever their ties to drug companies.
Members of Congress, including Senator Charles Grassley, an Iowa Republican, have been pushing to limit the influence of drugmakers over the practice of medicine after a probe showed a noted Harvard neuroscientist had failed to disclose payments from drug companies...
By Julie Steenhuysen
Nov 9, 2010
Reuters
Doctors in the United States are still too cozy with drug companies, although they have managed to break some of those ties, U.S. researchers said on Monday.
The team at Harvard University and Massachusetts General Hospital did a national survey of 1,900 primary care doctors in 2009 about their contacts with drug companies.
They found 84 percent reported some type of relationship with drug companies, compared with 94 percent in 2004.
About two thirds accepted drug samples, 70 percent accepted food or beverages from drug companies and 14 percent accepted payment in exchange for their professional services, they reported in the Archives of Internal Medicine.
"We found a significant decline overall in the percentage of physicians who have relationships with industry," Eric Campbell of Massachusetts General, who led the study, said in a telephone interview.
In the team's first study of industry ties in 2004, getting drug samples or accepting lunches or other food from drug company salespeople were most common, followed by payments from drug companies for attending medical meetings or continuing education seminars.
Since then, several government and academic groups have pressured doctors to sever their ties to drug companies.
Members of Congress, including Senator Charles Grassley, an Iowa Republican, have been pushing to limit the influence of drugmakers over the practice of medicine after a probe showed a noted Harvard neuroscientist had failed to disclose payments from drug companies...
Thursday, November 4, 2010
"Client 9": The Eliot Spitzer case: How we were bamboozled
Did AIG, the insurance company that got over $100 billion in bailouts, play a role in bringing down Eliot Spitzer?
Nov 3, 2010
"Client 9": The Eliot Spitzer case: How we were bamboozled
An intriguing new movie dissects the thicket of money, lies and rumors around the governor's downfall
By Andrew O'Hehir
Perhaps you've noticed this lately: It's remarkably easy to distract people from substantive issues by telling them entertaining stories, whether or not they bear any relationship to the truth. (E.g.: "The Muslim socialist raised your taxes!" may be a lie from beginning to end, but it has a lot more narrative appeal than "We're the people who let the bankers steal your grandkids' money, and we'd like to do it some more.")
Unfortunately for former New York Gov. Eliot Spitzer, the stories his enemies got to tell about him were true, at least in part. But the fact that Spitzer must take the blame for his own misdeeds -- and for his hypocrisy -- should not obscure the more important fact that the media and the public got fatefully bamboozled by the Spitzer story. "Politician caught with pants down" and "White knight has feet of clay" are stories we're all drawn to, almost by primal instinct. They satisfyingly confirm all our worst suspicions about human nature. But that primal satisfaction was used, in this case, to distract our attention from the takedown of one of the few American politicians devoted to fighting corporate power and ruling-class privilege, an act that in retrospect looks an awful lot like a political assassination...
As irresistible as the Ashley and Angelina material may be, that stuff is really the icing on Gibney's cake, which is an elegantly told New York fable about a smart, arrogant guy who made a whole lot of the wrong kinds of enemies. "Client 9" builds a forceful, if circumstantial, case around the disclosures that led to Spitzer's downfall. Avowed Spitzer haters like investment banker Ken Langone, former AIG CEO Hank Greenberg and ex-New York Stock Exchange head Dick Grasso were clearly seeking any opportunity to take the governor down, and Langone has made murky comments to the effect that he knew about the prostitution scandal before the news broke. (See, a friend of his was in line behind Spitzer at the post office ... No, really.)
Notorious right-wing political trickster Roger Stone has claimed to be the initial source who told the FBI about Spitzer's dalliances with hookers (and he's definitely the source of the scurrilous knee-socks allegation). Although Stone was an aide and confidante to state Sen. Joe Bruno, one of Spitzer's biggest Albany foes, Stone says he heard about the whole thing on his own, at random, from a hooker in a Miami nightclub. (Given Stone's background and reputation, that part of the story is strangely believable.) Add up all these billionaires, rogues and past and future indictees -- along with a scandal-plagued Justice Department at the tail end of the George W. Bush era, eager to claim the scalp of a leading Democrat -- and the whole thing looks overdetermined, as the Marxists say.
Nov 3, 2010
"Client 9": The Eliot Spitzer case: How we were bamboozled
An intriguing new movie dissects the thicket of money, lies and rumors around the governor's downfall
By Andrew O'Hehir
Perhaps you've noticed this lately: It's remarkably easy to distract people from substantive issues by telling them entertaining stories, whether or not they bear any relationship to the truth. (E.g.: "The Muslim socialist raised your taxes!" may be a lie from beginning to end, but it has a lot more narrative appeal than "We're the people who let the bankers steal your grandkids' money, and we'd like to do it some more.")
Unfortunately for former New York Gov. Eliot Spitzer, the stories his enemies got to tell about him were true, at least in part. But the fact that Spitzer must take the blame for his own misdeeds -- and for his hypocrisy -- should not obscure the more important fact that the media and the public got fatefully bamboozled by the Spitzer story. "Politician caught with pants down" and "White knight has feet of clay" are stories we're all drawn to, almost by primal instinct. They satisfyingly confirm all our worst suspicions about human nature. But that primal satisfaction was used, in this case, to distract our attention from the takedown of one of the few American politicians devoted to fighting corporate power and ruling-class privilege, an act that in retrospect looks an awful lot like a political assassination...
As irresistible as the Ashley and Angelina material may be, that stuff is really the icing on Gibney's cake, which is an elegantly told New York fable about a smart, arrogant guy who made a whole lot of the wrong kinds of enemies. "Client 9" builds a forceful, if circumstantial, case around the disclosures that led to Spitzer's downfall. Avowed Spitzer haters like investment banker Ken Langone, former AIG CEO Hank Greenberg and ex-New York Stock Exchange head Dick Grasso were clearly seeking any opportunity to take the governor down, and Langone has made murky comments to the effect that he knew about the prostitution scandal before the news broke. (See, a friend of his was in line behind Spitzer at the post office ... No, really.)
Notorious right-wing political trickster Roger Stone has claimed to be the initial source who told the FBI about Spitzer's dalliances with hookers (and he's definitely the source of the scurrilous knee-socks allegation). Although Stone was an aide and confidante to state Sen. Joe Bruno, one of Spitzer's biggest Albany foes, Stone says he heard about the whole thing on his own, at random, from a hooker in a Miami nightclub. (Given Stone's background and reputation, that part of the story is strangely believable.) Add up all these billionaires, rogues and past and future indictees -- along with a scandal-plagued Justice Department at the tail end of the George W. Bush era, eager to claim the scalp of a leading Democrat -- and the whole thing looks overdetermined, as the Marxists say.
Wednesday, October 27, 2010
Glaxo Case May Not Be Over
October 27, 2010
Glaxo Case May Not Be Over
By DUFF WILSON
New York Times
The government is still following up on GlaxoSmithKline’s manufacturing problems in Puerto Rico after Tuesday’s news that the company would pay $750 million to settle criminal and civil complaints about adulterated products.
For months, federal investigators have talked about a renewed determination to hold company officials, not just corporate entities, accountable for false claims filed with government health programs that buy such products. The federal False Claims Act has recovered billions of dollars for health care fraud, but companies, not executives, are signing the plea deals.
The GlaxoSmithKline case started with a whistle-blower complaint filed six years ago by the plant’s former quality control manager. Her case ended yesterday with a $96 million share of the recovery.
The United States attorney for Massachusetts, Carmen M. Ortiz, was asked in an interview Tuesday whether there could still be any individual accountability in the case. “I really shouldn’t comment specifically in relation to this case,” she replied, “because the investigation is ongoing.”
Does that mean company officials might still be under scrutiny? “The corporate aspect is finally settled,” Ms. Ortiz replied. “I would rather not say anything else.”
One former Glaxo official was singled out in the indictment of the company in the Puerto Rico case – an unnamed person who was hired in April 2003 as the site director of the giant manufacturing facility, and accused of interfering with quality complaints. The person was removed from that job in October 2004.
In most circumstances, however, 2004 would fall outside of the five-year statute of limitations for federal misdemeanor prosecutions.
But the government can pursue individuals under a strict liability standard known as the Park doctrine — a line of prosecution that has many pharmaceutical executives worried.
Named after a 1975 Supreme Court case, that doctrine allows misdemeanor prosecution of company officials for violating the federal Food, Drug and Cosmetic Act whether or not there is evidence the official knew of the violations. The individual needs to be in a position of authority.
Glaxo Case May Not Be Over
By DUFF WILSON
New York Times
The government is still following up on GlaxoSmithKline’s manufacturing problems in Puerto Rico after Tuesday’s news that the company would pay $750 million to settle criminal and civil complaints about adulterated products.
For months, federal investigators have talked about a renewed determination to hold company officials, not just corporate entities, accountable for false claims filed with government health programs that buy such products. The federal False Claims Act has recovered billions of dollars for health care fraud, but companies, not executives, are signing the plea deals.
The GlaxoSmithKline case started with a whistle-blower complaint filed six years ago by the plant’s former quality control manager. Her case ended yesterday with a $96 million share of the recovery.
The United States attorney for Massachusetts, Carmen M. Ortiz, was asked in an interview Tuesday whether there could still be any individual accountability in the case. “I really shouldn’t comment specifically in relation to this case,” she replied, “because the investigation is ongoing.”
Does that mean company officials might still be under scrutiny? “The corporate aspect is finally settled,” Ms. Ortiz replied. “I would rather not say anything else.”
One former Glaxo official was singled out in the indictment of the company in the Puerto Rico case – an unnamed person who was hired in April 2003 as the site director of the giant manufacturing facility, and accused of interfering with quality complaints. The person was removed from that job in October 2004.
In most circumstances, however, 2004 would fall outside of the five-year statute of limitations for federal misdemeanor prosecutions.
But the government can pursue individuals under a strict liability standard known as the Park doctrine — a line of prosecution that has many pharmaceutical executives worried.
Named after a 1975 Supreme Court case, that doctrine allows misdemeanor prosecution of company officials for violating the federal Food, Drug and Cosmetic Act whether or not there is evidence the official knew of the violations. The individual needs to be in a position of authority.
Wednesday, October 20, 2010
Kan doctor, wife sentenced in 'pill mill' case
Kan. doctor, wife sentenced in 'pill mill' case
By ROXANA HEGEMAN
The Associated Press
Oct. 20, 2010
WICHITA, Kan. — A Kansas doctor who ran a clinic linked to dozens of overdose deaths was sentenced Wednesday to 30 years in prison while his wife got 33 years in a case the judge said was an "avoidable tragedy motivated by greed."
Dr. Stephen Schneider looked grim and his wife blinked back tears as their sentences were pronounced in U.S. District Court in Wichita.
The Haysville couple were convicted in June of unlawfully writing prescriptions, health care fraud and money laundering. Jurors convicted them of a moneymaking conspiracy that prosecutors linked to 68 overdose deaths.
U.S. District Judge Monti Belot told the 57-year-old physician that the evidence showed that he earned and deserved the nickname "Schneider the Writer" because in many cases writing scripts was his only form of medical care.
"For whatever reason, Steven Schneider utterly failed to live up to his oath to 'do no harm,'" Belot said.
The judge said the doctor was put on every possible notice that the controlled substances he was prescribing — particularly the potent painkiller Actiq — was addicting, harming and killing his patients but did nothing to stop it.
Belot reserved some of his most scathing comments for Linda Schneider, 52, who he characterized as more culpable for creating and perpetuating the clinic as a generator of income rather than a place for competent medical care. He blamed the doctor for knowing that the clinic was mismanaged and doing nothing to stop the practice.
"Had she not been involved in the operation of the clinic, or had she approached her role there in a professional and responsible way, none of us would be here today," Belot said. "That doesn't excuse Stephen Schneider's wrongful acts, but it may somewhat explain them."
Besides conspiracy, the Schneiders were found guilty on five counts of unlawfully writing prescriptions and 11 health care fraud counts. Linda Schneider was found guilty of 15 money laundering charges while Stephen Schneider was convicted of two.
Although the doctor has no criminal record, his wife has a previous felony conviction for fraud.
"I believe the evidence has shown Linda Schneider is a scheming, manipulative, uncaring criminal who believed, erroneously, that she was smart enough to 'get away with it,'" Belot said. "A big mistake on her part."...
By ROXANA HEGEMAN
The Associated Press
Oct. 20, 2010
WICHITA, Kan. — A Kansas doctor who ran a clinic linked to dozens of overdose deaths was sentenced Wednesday to 30 years in prison while his wife got 33 years in a case the judge said was an "avoidable tragedy motivated by greed."
Dr. Stephen Schneider looked grim and his wife blinked back tears as their sentences were pronounced in U.S. District Court in Wichita.
The Haysville couple were convicted in June of unlawfully writing prescriptions, health care fraud and money laundering. Jurors convicted them of a moneymaking conspiracy that prosecutors linked to 68 overdose deaths.
U.S. District Judge Monti Belot told the 57-year-old physician that the evidence showed that he earned and deserved the nickname "Schneider the Writer" because in many cases writing scripts was his only form of medical care.
"For whatever reason, Steven Schneider utterly failed to live up to his oath to 'do no harm,'" Belot said.
The judge said the doctor was put on every possible notice that the controlled substances he was prescribing — particularly the potent painkiller Actiq — was addicting, harming and killing his patients but did nothing to stop it.
Belot reserved some of his most scathing comments for Linda Schneider, 52, who he characterized as more culpable for creating and perpetuating the clinic as a generator of income rather than a place for competent medical care. He blamed the doctor for knowing that the clinic was mismanaged and doing nothing to stop the practice.
"Had she not been involved in the operation of the clinic, or had she approached her role there in a professional and responsible way, none of us would be here today," Belot said. "That doesn't excuse Stephen Schneider's wrongful acts, but it may somewhat explain them."
Besides conspiracy, the Schneiders were found guilty on five counts of unlawfully writing prescriptions and 11 health care fraud counts. Linda Schneider was found guilty of 15 money laundering charges while Stephen Schneider was convicted of two.
Although the doctor has no criminal record, his wife has a previous felony conviction for fraud.
"I believe the evidence has shown Linda Schneider is a scheming, manipulative, uncaring criminal who believed, erroneously, that she was smart enough to 'get away with it,'" Belot said. "A big mistake on her part."...
Tuesday, October 19, 2010
Drug Companies Hire Troubled Doctors As Experts
October 19, 2010
Drug Companies Hire Troubled Doctors As Experts
NPR Staff and ProPublica
Drug companies say they hire the most-respected doctors in their fields for the critical task of teaching about the benefits and risks of the companies' drugs.
But an investigation by ProPublica has uncovered hundreds of doctors receiving company payments who had been accused of professional misconduct, were disciplined by state boards or lacked credentials as researchers or specialists.
To vet the industry's handpicked speakers, ProPublica created a comprehensive database that represents the most accessible accounting yet of payments to doctors. Compiled from disclosures by seven companies, the database covers $257.8 million in payouts since 2009 for speaking, consulting and other duties. The companies include Lilly, Cephalon, AstraZeneca, GlaxoSmithKline, Johnson & Johnson, Merck and Pfizer.
Although these companies have posted payments on their websites — some as a result of legal settlements — they make it difficult to spot trends or even learn who has earned the most. ProPublica combined the data and identified the highest-paid doctors, then checked their credentials and disciplinary records.
That is something not all companies do.
"Without question, the public should care," said Dr. Joseph Ross, an assistant professor of medicine at Yale School of Medicine who has written about the industry’s influence on physicians. "You would never want your kid learning from a bad teacher. Why would you want your doctor learning from a bad doctor, someone who hasn't displayed good judgment in the past?"...
Drug Companies Hire Troubled Doctors As Experts
NPR Staff and ProPublica
Drug companies say they hire the most-respected doctors in their fields for the critical task of teaching about the benefits and risks of the companies' drugs.
But an investigation by ProPublica has uncovered hundreds of doctors receiving company payments who had been accused of professional misconduct, were disciplined by state boards or lacked credentials as researchers or specialists.
To vet the industry's handpicked speakers, ProPublica created a comprehensive database that represents the most accessible accounting yet of payments to doctors. Compiled from disclosures by seven companies, the database covers $257.8 million in payouts since 2009 for speaking, consulting and other duties. The companies include Lilly, Cephalon, AstraZeneca, GlaxoSmithKline, Johnson & Johnson, Merck and Pfizer.
Although these companies have posted payments on their websites — some as a result of legal settlements — they make it difficult to spot trends or even learn who has earned the most. ProPublica combined the data and identified the highest-paid doctors, then checked their credentials and disciplinary records.
That is something not all companies do.
"Without question, the public should care," said Dr. Joseph Ross, an assistant professor of medicine at Yale School of Medicine who has written about the industry’s influence on physicians. "You would never want your kid learning from a bad teacher. Why would you want your doctor learning from a bad doctor, someone who hasn't displayed good judgment in the past?"...
Monday, October 4, 2010
U.S. pays as Prudential invests troop death benefits
U.S. pays as Prudential invests troop death benefits
By David Evans
Bloomberg News
Sunday, October 3, 2010
washingtonpost.com
When Prudential Financial invests the death benefits owed to survivors of U.S. troops killed in battle, the money comes from a source with deep pockets: the federal government.
After a service member dies in combat - including the more than 4,000 who have been killed in Iraq and Afghanistan - the Department of Veterans Affairs sends Prudential the full amount of each family's life insurance coverage, usually $400,000.
The government has paid Prudential $1.7 billion for these benefits since 2003, when the war in Iraq began, according to information provided by the VA.
Prudential holds that taxpayer money, invests it and reaps the gains.
Here's how it works: If survivors request a lump-sum payment of the death benefit, Prudential opens a retained-asset account, a quasi-checking account that allows families to draw money when they are ready to spend it.
(READ: Washington Post special report on soldier's traumatic brain injuries and coming home a different person)
Until the money is used, it stays in Prudential's corporate account. There, the insurer invests it, mostly in bonds, making returns as much as eight times what it is paying out to holders of the retained-asset account.
What this means is that Prudential is investing - and profiting from - death benefits owed to service members' families, using money provided by the government.
"They have what appears to be a nice sweetheart deal with the federal government," says Michael Powers, a professor of risk management and insurance at Temple University in Philadelphia. "This strikes me as the same sort of thing as those classic stories of the government paying hundreds of dollars for a wrench or a toilet seat."
Ninety-five percent of survivors paid by Prudential ask for lump-sum payments, the VA says. Since 1999, the company has sent out more than 60,000 Alliance Account checkbooks, instead of checks, covering more than $7 billion in death benefits when families asked for full payouts...
By David Evans
Bloomberg News
Sunday, October 3, 2010
washingtonpost.com
When Prudential Financial invests the death benefits owed to survivors of U.S. troops killed in battle, the money comes from a source with deep pockets: the federal government.
After a service member dies in combat - including the more than 4,000 who have been killed in Iraq and Afghanistan - the Department of Veterans Affairs sends Prudential the full amount of each family's life insurance coverage, usually $400,000.
The government has paid Prudential $1.7 billion for these benefits since 2003, when the war in Iraq began, according to information provided by the VA.
Prudential holds that taxpayer money, invests it and reaps the gains.
Here's how it works: If survivors request a lump-sum payment of the death benefit, Prudential opens a retained-asset account, a quasi-checking account that allows families to draw money when they are ready to spend it.
(READ: Washington Post special report on soldier's traumatic brain injuries and coming home a different person)
Until the money is used, it stays in Prudential's corporate account. There, the insurer invests it, mostly in bonds, making returns as much as eight times what it is paying out to holders of the retained-asset account.
What this means is that Prudential is investing - and profiting from - death benefits owed to service members' families, using money provided by the government.
"They have what appears to be a nice sweetheart deal with the federal government," says Michael Powers, a professor of risk management and insurance at Temple University in Philadelphia. "This strikes me as the same sort of thing as those classic stories of the government paying hundreds of dollars for a wrench or a toilet seat."
Ninety-five percent of survivors paid by Prudential ask for lump-sum payments, the VA says. Since 1999, the company has sent out more than 60,000 Alliance Account checkbooks, instead of checks, covering more than $7 billion in death benefits when families asked for full payouts...
Wednesday, July 28, 2010
Sandy Osgood comes out ahead in competition with Marsh
Sandy works well with lawyers--now that's something to be proud of.
Sandy Osgood, CPCU
Senior Vice President
Wells Fargo Insurance Services, Redwood City, Calif.
sandyo@abdi.com
Competing With the Big Boys
In December 2007, the insurance firm that Sandy Osgood built from the ground up 20 years ago, Technology Insurance Services, was acquired by ABD/Wells Fargo Insurance Services. It seems the change has done her good. Not only has she retained long-term clients, but in 2008 she's nabbed some major new accounts too.
One client of Osgood's, a risk manager for a public transit company, has been impressed with her specialization in the public transportation sector for a couple decades and has been even more pleased with his broker since she joined Wells Fargo.
"She always has been able to compete," he said. "Marsh made a big run with us recently and they couldn't compete with her in terms of pricing and coverages, and there's no way we'd get the level of service if we went with the bigger firm. If she left, I think I'd just quit."
[Maura Larkins comment: It seems that Marsh & McLennan is now just "Marsh."]
...Recently, the risk manager said Osgood has helped his company's legal department develop an insurance handbook that the company's contracts and procurement employees use...
February 20, 2009
About Marsh
Marsh, the world's leading insurance broker and risk adviser, has over 23,000 employees and provides advice and transactional capabilities to clients in over 100 countries
Sandy Osgood, CPCU
Senior Vice President
Wells Fargo Insurance Services, Redwood City, Calif.
sandyo@abdi.com
Competing With the Big Boys
In December 2007, the insurance firm that Sandy Osgood built from the ground up 20 years ago, Technology Insurance Services, was acquired by ABD/Wells Fargo Insurance Services. It seems the change has done her good. Not only has she retained long-term clients, but in 2008 she's nabbed some major new accounts too.
One client of Osgood's, a risk manager for a public transit company, has been impressed with her specialization in the public transportation sector for a couple decades and has been even more pleased with his broker since she joined Wells Fargo.
"She always has been able to compete," he said. "Marsh made a big run with us recently and they couldn't compete with her in terms of pricing and coverages, and there's no way we'd get the level of service if we went with the bigger firm. If she left, I think I'd just quit."
[Maura Larkins comment: It seems that Marsh & McLennan is now just "Marsh."]
...Recently, the risk manager said Osgood has helped his company's legal department develop an insurance handbook that the company's contracts and procurement employees use...
February 20, 2009
About Marsh
Marsh, the world's leading insurance broker and risk adviser, has over 23,000 employees and provides advice and transactional capabilities to clients in over 100 countries
Tuesday, June 22, 2010
Regulators Rein In Murky Life Policies
JUNE 21, 2010
Wall Street Journal
Regulators Rein In Murky Life Policies
By LESLIE SCISM
The life-insurance business was good to Steven M. Brasner for much of the past decade, so good that he and his wife named their motor yachts after it. Their first, a 34-footer, they christened "Preferred Risk." Its 50-foot replacement: "STOLI on the Docks."
While it rings of vodka, STOLI also stands for "Stranger-Originated Life Insurance"—controversial policies that older people take out and then sell to investors. The investors pay the premiums and collect proceeds when the original owner dies. Mr. Brasner was a sales agent who specialized in such policies. In the years before the financial crisis, he connected aging retirees in need of money with cash-flush hedge funds eager for offbeat investments.
Times are different now. In April, Florida authorities arrested Mr. Brasner on 22 counts of alleged grand theft, fraud and other offenses tied to $78 million of policies that earned him nearly $2 million in commissions. The state accuses him of lying to insurers about applicants' financial status and their reasons for buying the coverage. If convicted, the 44-year-old could land in jail for decades...
Wall Street Journal
Regulators Rein In Murky Life Policies
By LESLIE SCISM
The life-insurance business was good to Steven M. Brasner for much of the past decade, so good that he and his wife named their motor yachts after it. Their first, a 34-footer, they christened "Preferred Risk." Its 50-foot replacement: "STOLI on the Docks."
While it rings of vodka, STOLI also stands for "Stranger-Originated Life Insurance"—controversial policies that older people take out and then sell to investors. The investors pay the premiums and collect proceeds when the original owner dies. Mr. Brasner was a sales agent who specialized in such policies. In the years before the financial crisis, he connected aging retirees in need of money with cash-flush hedge funds eager for offbeat investments.
Times are different now. In April, Florida authorities arrested Mr. Brasner on 22 counts of alleged grand theft, fraud and other offenses tied to $78 million of policies that earned him nearly $2 million in commissions. The state accuses him of lying to insurers about applicants' financial status and their reasons for buying the coverage. If convicted, the 44-year-old could land in jail for decades...
Wednesday, May 26, 2010
Study: Health care reform a good deal for California, other states
Study: Health care reform a good deal for California, other states
MercuryNews.com
By Mike Zapler
05/26/2010
WASHINGTON — A new report estimates that the national heath care reform law will allow California and other states to significantly pare the ranks of the uninsured at a relatively small cost, as the federal government picks up the lion's share of additional costs of expanding coverage.
In a joint study released Wednesday, the Kaiser Family Foundation and Urban Institute examined the cost to states of expanding Medicaid, one of the main vehicles in the reform law to cover the uninsured. The law will expand the federal health care program for the poor (known as Medi-Cal in California), to those earning up to 133 percent of the federal poverty line, or $14,400 for an individual. Medi-Cal rules vary, but generally it covers families who make up to 106 percent of the poverty level...
MercuryNews.com
By Mike Zapler
05/26/2010
WASHINGTON — A new report estimates that the national heath care reform law will allow California and other states to significantly pare the ranks of the uninsured at a relatively small cost, as the federal government picks up the lion's share of additional costs of expanding coverage.
In a joint study released Wednesday, the Kaiser Family Foundation and Urban Institute examined the cost to states of expanding Medicaid, one of the main vehicles in the reform law to cover the uninsured. The law will expand the federal health care program for the poor (known as Medi-Cal in California), to those earning up to 133 percent of the federal poverty line, or $14,400 for an individual. Medi-Cal rules vary, but generally it covers families who make up to 106 percent of the poverty level...
Monday, February 8, 2010
Illinois medical malpractice caps unconstitutional
Chicago attorney Martin Dolan of Dolan Legal sent this article:
Illinois medical malpractice caps unconstitutional
By CARLA K. JOHNSON AP Medical Writer
February 4, 2010
CHICAGO - A divided Illinois Supreme Court ruled Thursday that caps on some awards in medical malpractice cases violate the state's Constitution. Trial lawyers and consumer groups applauded the decision to strike down the caps, which limited awards for noneconomic damages, such as pain and suffering.
Doctors and hospitals expressed disappointment and said the decision highlights the need for President Barack Obama and Congress to embrace medical liability reform as part of health care overhaul legislation.
It was the third time the court rejected caps enacted by state lawmakers.
This time, the justices struck down in its entirety a medical malpractice reform law enacted by the Legislature in 2005. The court said lawmakers could re-enact some of the measure's provisions, just not the caps on what malpractice victims could win in court. The law had limited awards to $500,000 when defendants were doctors and $1 million against hospitals.
It also gave state regulators more power to review and change malpractice insurance rates, investigate complaints and punish bad doctors.
The court said the Legislature's caps violate the separation of powers by infringing on the judiciary. Chief Justice Thomas Fitzgerald's majority opinion said the court wasn't persuaded by caps in other states...
At a news conference Thursday in Chicago, the family's attorney, Jeffrey Goldberg, distributed a photo of Abigaile Lebron sitting in a wheelchair. He urged lawmakers to remember the victims of medical malpractice...
Illinois medical malpractice caps unconstitutional
By CARLA K. JOHNSON AP Medical Writer
February 4, 2010
CHICAGO - A divided Illinois Supreme Court ruled Thursday that caps on some awards in medical malpractice cases violate the state's Constitution. Trial lawyers and consumer groups applauded the decision to strike down the caps, which limited awards for noneconomic damages, such as pain and suffering.
Doctors and hospitals expressed disappointment and said the decision highlights the need for President Barack Obama and Congress to embrace medical liability reform as part of health care overhaul legislation.
It was the third time the court rejected caps enacted by state lawmakers.
This time, the justices struck down in its entirety a medical malpractice reform law enacted by the Legislature in 2005. The court said lawmakers could re-enact some of the measure's provisions, just not the caps on what malpractice victims could win in court. The law had limited awards to $500,000 when defendants were doctors and $1 million against hospitals.
It also gave state regulators more power to review and change malpractice insurance rates, investigate complaints and punish bad doctors.
The court said the Legislature's caps violate the separation of powers by infringing on the judiciary. Chief Justice Thomas Fitzgerald's majority opinion said the court wasn't persuaded by caps in other states...
At a news conference Thursday in Chicago, the family's attorney, Jeffrey Goldberg, distributed a photo of Abigaile Lebron sitting in a wheelchair. He urged lawmakers to remember the victims of medical malpractice...
Obama says he won't give up on Melanie Shouse's dream of health care reform
Obama says he won't give up on Melanie Shouse's dream of health care reform
By Michael Sorkin
ST. LOUIS POST-DISPATCH
02/06/2010
Melanie Shouse believed Barack Obama could reform health care, and the St. Louis activist worked hard to help get him to the White House.
She died last Saturday from breast cancer while battling her insurance company to pay for her chemotherapy treatment.
On Thursday night, President Obama cited her case in promising to continue working for health care legislation.
In a speech, Obama spoke of Shouse's death and her obituary in the Post-Dispatch.
"How can I say to her ... 'We're giving up'?" Obama said....
Shouse, 41, of Overland, died after a 41/2-year battle with breast cancer.
Her obituary reported that she waited months to go to a doctor after she began to feel sick in 2005. She explained that she could only afford so-called "catastrophic" health insurance — a policy that required her to pay out $5,000 in deductibles before the insurance kicked in.
Shouse spent the last years of her life advocating that consumers "take on the Big Insurance Monopoly and liberate American families from the slavery of skyrocketing insurance premiums and canceled coverage, which leave millions of us in a state of perpetual fear and insecurity."...
By Michael Sorkin
ST. LOUIS POST-DISPATCH
02/06/2010
Melanie Shouse believed Barack Obama could reform health care, and the St. Louis activist worked hard to help get him to the White House.
She died last Saturday from breast cancer while battling her insurance company to pay for her chemotherapy treatment.
On Thursday night, President Obama cited her case in promising to continue working for health care legislation.
In a speech, Obama spoke of Shouse's death and her obituary in the Post-Dispatch.
"How can I say to her ... 'We're giving up'?" Obama said....
Shouse, 41, of Overland, died after a 41/2-year battle with breast cancer.
Her obituary reported that she waited months to go to a doctor after she began to feel sick in 2005. She explained that she could only afford so-called "catastrophic" health insurance — a policy that required her to pay out $5,000 in deductibles before the insurance kicked in.
Shouse spent the last years of her life advocating that consumers "take on the Big Insurance Monopoly and liberate American families from the slavery of skyrocketing insurance premiums and canceled coverage, which leave millions of us in a state of perpetual fear and insecurity."...
Obama official 'very disturbed' by Anthem Blue Cross rate hikes
UPDATE: DEMOCRATS ACHIEVE A SMALL STEP TOWARD HEALTH CARE REFORM
Anthem Blue Cross backpedals on raising rates
Anthem to delay insurance rate hike amid criticism
By LINDA A. JOHNSON (AP)
Feb. 13, 2010
Health insurer Anthem Blue Cross will postpone its much-criticized plan to raise rates for some California residents who buy insurance on their own, after reaching a deal Saturday with state regulators.
Anthem's planned rate hike, which the state estimates would affect about 700,000 customers, averaged 25 percent and would have been as high as 39 percent for some.
Anthem Blue Cross of California, based in Thousand Oaks, agreed to postpone the increase from March 1 until May 1 so California could have outside experts review the company's complex and detailed plan filing, including data on the medical costs it expects to incur...
In this Feb. 4, 2010 file photo, Health and Human Services Secretary Kathleen Sebelius testifies on Capitol Hill in Washington. washingtonpost.com
Blue Cross is obviously feeling very powerful. I imagine it will spend the new revenues on campaign ads to defeat universal health care. Hmmm. I'm trying to think of a more arrogant and smug act of contempt for the people who pour their hard-earned money into Blue Cross.
Obama official 'very disturbed' by Anthem Blue Cross rate hikes
By Duke Helfand
LA Times
February 9, 2010
California insurance regulators asked Anthem Blue Cross to delay controversial rate increases of as much as 39% for individual policies, hikes that have triggered widespread criticism from subscribers and brokers -- and now from the federal government.
In a rare step, the Obama administration called on California's largest for-profit insurer to justify its rate hikes, saying the increases were alarming at a time when subscribers face skyrocketing healthcare costs...
HHS secretary asks insurer to justify rate hike
By SHAYA TAYEFE MOHAJER
The Associated Press
February 8, 2010
LOS ANGELES -- The Obama administration on Monday asked California's largest for-profit health insurer to justify plans to hike customers' premiums by as much as 39 percent, a move that could affect some 800,000 people.
In a letter to the president of Anthem Blue Cross, Health and Human Services Secretary Kathleen Sebelius said she was disturbed to learn of the planned increases, calling them "extraordinary."...
WellPoint sees profit grow eightfold in fourth quarter
The Los Angeles Times, January 28, 2010
CA Health Insurance Companies Pay Fine for Rescinding Health ...
21 Jan 2010 by admin
The recent legal ruling is a result of a lawsuit against health giant Anthem Blue Cross of California. Prosecutors argued that Anthem violated state law by selling health plan members the promise of health insurance, but then later ... “ This puts new cops on the beat,” said Bryan Liang, director of the Institute of Health Law Studies at California Western School of Law in San Diego. “Lots of stuff in the standard operating practices of health plans is going to be affected ...
chocobaby.luv.ph/
Patient Sues Anthem Blue Cross Over Liver Transplant - Consumer ...
7 Oct 2009
Ephram Nehme was gravely ill when Anthem Blue Cross of California agreed to pay for a liver transplant his physician said he needed to survive. Then, his condition went downhill fast. The news from his doctor was bad. ... tremendously important issue because most people aren't savvy enough about how to work this system, and it is totally stacked against them," said Bryan Liang, director of the Institute of Health Law Studies at California Western Law School in San Diego. ...
Consumer Watchdog Updates
Anthem Blue Cross backpedals on raising rates
Anthem to delay insurance rate hike amid criticism
By LINDA A. JOHNSON (AP)
Feb. 13, 2010
Health insurer Anthem Blue Cross will postpone its much-criticized plan to raise rates for some California residents who buy insurance on their own, after reaching a deal Saturday with state regulators.
Anthem's planned rate hike, which the state estimates would affect about 700,000 customers, averaged 25 percent and would have been as high as 39 percent for some.
Anthem Blue Cross of California, based in Thousand Oaks, agreed to postpone the increase from March 1 until May 1 so California could have outside experts review the company's complex and detailed plan filing, including data on the medical costs it expects to incur...
In this Feb. 4, 2010 file photo, Health and Human Services Secretary Kathleen Sebelius testifies on Capitol Hill in Washington. washingtonpost.com Blue Cross is obviously feeling very powerful. I imagine it will spend the new revenues on campaign ads to defeat universal health care. Hmmm. I'm trying to think of a more arrogant and smug act of contempt for the people who pour their hard-earned money into Blue Cross.
Obama official 'very disturbed' by Anthem Blue Cross rate hikes
By Duke Helfand
LA Times
February 9, 2010
California insurance regulators asked Anthem Blue Cross to delay controversial rate increases of as much as 39% for individual policies, hikes that have triggered widespread criticism from subscribers and brokers -- and now from the federal government.
In a rare step, the Obama administration called on California's largest for-profit insurer to justify its rate hikes, saying the increases were alarming at a time when subscribers face skyrocketing healthcare costs...
HHS secretary asks insurer to justify rate hike
By SHAYA TAYEFE MOHAJER
The Associated Press
February 8, 2010
LOS ANGELES -- The Obama administration on Monday asked California's largest for-profit health insurer to justify plans to hike customers' premiums by as much as 39 percent, a move that could affect some 800,000 people.
In a letter to the president of Anthem Blue Cross, Health and Human Services Secretary Kathleen Sebelius said she was disturbed to learn of the planned increases, calling them "extraordinary."...
WellPoint sees profit grow eightfold in fourth quarter
The Los Angeles Times, January 28, 2010
CA Health Insurance Companies Pay Fine for Rescinding Health ...
21 Jan 2010 by admin
The recent legal ruling is a result of a lawsuit against health giant Anthem Blue Cross of California. Prosecutors argued that Anthem violated state law by selling health plan members the promise of health insurance, but then later ... “ This puts new cops on the beat,” said Bryan Liang, director of the Institute of Health Law Studies at California Western School of Law in San Diego. “Lots of stuff in the standard operating practices of health plans is going to be affected ...
chocobaby.luv.ph/
Patient Sues Anthem Blue Cross Over Liver Transplant - Consumer ...
7 Oct 2009
Ephram Nehme was gravely ill when Anthem Blue Cross of California agreed to pay for a liver transplant his physician said he needed to survive. Then, his condition went downhill fast. The news from his doctor was bad. ... tremendously important issue because most people aren't savvy enough about how to work this system, and it is totally stacked against them," said Bryan Liang, director of the Institute of Health Law Studies at California Western Law School in San Diego. ...
Consumer Watchdog Updates
Bankers give money to Republicans because they don't want to be "kicked around" anymore since bailout
Bankers don't seem to be feeling any remorse for triggering the biggest financial crisis since the Depression and then getting bailed out by the government. They're not going to take it anymore! Well, they might take more money, but they're not going to put up with regulations and limits on their bonuses.
Wall Street Throwing More Money at Republicans
gothamist
Feb. 8, 2010
Fed up with name-calling and increased restrictions from the Obama administration, bankers are shifting financial support to Democratic opponents in the Republican party.
Bank officials say Wall Street is sending a message: “The expectation in Washington is that ‘We can kick you around, and you are still going to give us money,’ ” one top official at a major Wall Street firm tells the Times.
“We are not going to play that game anymore.”...
In a Message to Democrats, Wall St. Sends Cash to G.O.P.
New York Times
By DAVID D. KIRKPATRICK
Published: February 7, 2010
...this year Chase’s political action committee is sending the Democrats a pointed message. While it has contributed to some individual Democrats and state organizations, it has rebuffed solicitations from the national Democratic House and Senate campaign committees. Instead, it gave $30,000 to their Republican counterparts...
She's "tired of hearin' the talk talk talk" but Palin wowed Tea Party Nation Inc. with nastiness for fun and profit
AP/Ed Reinke
Sarah Palin addresses attendees at the National Tea Party Convention in Nashville, Tenn., Saturday, Feb. 6, 2010.
Feb 6, 2010 21:07 EST
The pitbull in lipstick is back!
By Joan Walsh
Salon.com
Eric Hoffer didn't live to see Tea Party Nation, but I always think of his most famous quote when I'm forced to deal with it: ""Every great cause begins as a movement, becomes a business, and eventually degenerates into a racket."
I'm not sure the Tea Party cause is a great one, but it's an influential one, and it degenerated into a racket lickety split, in less than a year. This weekend's gathering in Nashville splintered both the Tennessee and the national Tea Party movement, as local go-getter Judson Phillips set up the once-anticipated "convention" as his own for-profit business. We'll have a first-hand report from the racket that paid Sarah Palin more than $100,000 to speak Saturday night. But I can't help weighing in.
Wow. This was the Palin we saw at the 2008 Republican convention, the snarling pitbull in shimmery lipstick. I know journalists aren't supposed to use words like mean and dumb, but I can't help it. Palin is one of the meanest people on the public stage today. She wallows in it. She loves it! Also? Possibly one of the dumbest. But mean works, and so does dumb. And so do lies, and there were many mean, dumb lies in her speech.
How rich that she read her talk in a sing-song voice as she ripped Barack Obama for using a Teleprompter. Once she left the speech for the Q&A, she really went off-message, as well as nearly off-English. (Even though it looked like, at one point, she was reading answers off of her hand.)
"They're not knowin what are we gonna do if we don't have Tea Party support" was one of my favorite head-scratchers, a great echo of "when Putin rears his head."
...She told the crowd her husband Todd -- according to recently released emails, the non-elected former governor of Alaska -- is "much too independent" to be a Republican, because he's even "more conservative" than she is. What a great way to revisit the controversy over Todd's membership in the secessionist Alaska Independent Party! Remember how Palin dogged poor McCain campaign manager Steve Schmidt, trying to get him to denounce Salon's reporting on the Palins and AIP?
She tried to get Schmidt to lie and say her husband checked the AIP box on voter forms mistakenly, and he refused. Now she's bragging her husband isn't a Republican because he's so "independent."
She lied about rejecting stimulus money for Alaska (apparently she rejected a small home-weatherization project, which as it is sounds kind of mean for the governor of Alaska.)...
Monsanto: The evil corporation in your refrigerator
Monsanto: The evil corporation in your refrigerator
Bob Cesca
Wallet Pop
Feb 4th 2010
When we consider the rogue's gallery of devilish, over-sized, greedy and disproportionately powerful corporations, we generally come up with outfits like Microsoft, Bechtel, AIG, Halliburton, Goldman-Sachs, Exxon-Mobil and the United States Senate.
Yet somehow, Monsanto, arguably the most devilish, over-sized, greedy and disproportionately powerful corporation in the world has been able to more or less skulk between the raindrops -- only a household name in households where documentaries like Food Inc. are regarded as light Friday evening entertainment.
...But for the most part, if you were to ask an average American for their list of sinister corporations, Monsanto probably wouldn't make the cut.
It should.
Founded by Missouri pharmacist John Francis Queeny in 1901, Monsanto is literally everywhere. Just about every non-organic food product available to consumers has some sort of connection with Monsanto.
Anyone who can read a label knows that corn, soy and cotton can be found in just about every American food product. Upwards of 90% of all corn, soybeans and cotton are grown from genetically engineered seeds, also known as genetically modified organisms (GMOs). These genetically enhanced products appear in around 70% of all American processed food products. And Monsanto controls 90% of all genetically engineered seeds. In other words, Monsanto controls -- and owns patents on -- most of the American food supply.
When you consider, as Walletpop originally reported, that one-in-four food labels is inaccurate, that the F.D.A.'s testing is weak at best, then how can we trust one corporation to have so much control over our produce? The answer is, we can't.
Recently, a study by the International Journal of Biological Sciences revealed that Monsanto's Mon 863, Mon 810, and Roundup herbicide-absorbing NK 603 in corn caused kidney and liver damage in laboratory rats.
Scientists also discovered damage to the heart, spleen, adrenal glands and even the blood of rats that consumed the mutant corn...
MORE ON FOOD CORRUPTION:
Tomato bribery probe just the beginning, prosecutors say
By P.J. Huffstutter
LA Times
February 8, 2010
Amid concerns about corrupt practices in the food industry, nine people have pleaded guilty to charges including racketeering, money laundering and bid-rigging in a federal probe of SK Foods.
To his friends, Randall Lee Rahal was just a food salesman, someone who routinely left his home on Shadyside Road in Ramsey, N.J., to crisscross the country hawking California tomatoes.
The 61-year-old sold them pureed. He sold them crushed. He sold them roasted and mashed into paste. His clients were food manufacturers, supermarket chains and other commercial buyers who turned his products into soup, ketchup and salsa.
But in the eyes of the Justice Department, Rahal was Tomato Enemy No. 1 -- a produce scofflaw who allegedly peeled off $100 bills and carried cash-stuffed envelopes to bribe buyers from leading food companies in a decade-long racketeering scheme that may have led to higher prices for consumers at the grocery store.
In a series of court filings starting in 2008, federal prosecutors in Sacramento allege that Rahal, nine others and SK Foods of Monterey, Calif., used more than $330,000 in bribes from 1998 to 2008 to subvert competition and nail down deals to sell the company's tomato paste, peppers and other products to Kraft Foods Inc., Safeway Inc., Frito-Lay North America and B&G Foods, among others...
Bob Cesca
Wallet Pop
Feb 4th 2010
When we consider the rogue's gallery of devilish, over-sized, greedy and disproportionately powerful corporations, we generally come up with outfits like Microsoft, Bechtel, AIG, Halliburton, Goldman-Sachs, Exxon-Mobil and the United States Senate.
Yet somehow, Monsanto, arguably the most devilish, over-sized, greedy and disproportionately powerful corporation in the world has been able to more or less skulk between the raindrops -- only a household name in households where documentaries like Food Inc. are regarded as light Friday evening entertainment.
...But for the most part, if you were to ask an average American for their list of sinister corporations, Monsanto probably wouldn't make the cut.
It should.
Founded by Missouri pharmacist John Francis Queeny in 1901, Monsanto is literally everywhere. Just about every non-organic food product available to consumers has some sort of connection with Monsanto.
Anyone who can read a label knows that corn, soy and cotton can be found in just about every American food product. Upwards of 90% of all corn, soybeans and cotton are grown from genetically engineered seeds, also known as genetically modified organisms (GMOs). These genetically enhanced products appear in around 70% of all American processed food products. And Monsanto controls 90% of all genetically engineered seeds. In other words, Monsanto controls -- and owns patents on -- most of the American food supply.
When you consider, as Walletpop originally reported, that one-in-four food labels is inaccurate, that the F.D.A.'s testing is weak at best, then how can we trust one corporation to have so much control over our produce? The answer is, we can't.
Recently, a study by the International Journal of Biological Sciences revealed that Monsanto's Mon 863, Mon 810, and Roundup herbicide-absorbing NK 603 in corn caused kidney and liver damage in laboratory rats.
Scientists also discovered damage to the heart, spleen, adrenal glands and even the blood of rats that consumed the mutant corn...
MORE ON FOOD CORRUPTION:
Tomato bribery probe just the beginning, prosecutors say
By P.J. Huffstutter
LA Times
February 8, 2010
Amid concerns about corrupt practices in the food industry, nine people have pleaded guilty to charges including racketeering, money laundering and bid-rigging in a federal probe of SK Foods.
To his friends, Randall Lee Rahal was just a food salesman, someone who routinely left his home on Shadyside Road in Ramsey, N.J., to crisscross the country hawking California tomatoes.
The 61-year-old sold them pureed. He sold them crushed. He sold them roasted and mashed into paste. His clients were food manufacturers, supermarket chains and other commercial buyers who turned his products into soup, ketchup and salsa.
But in the eyes of the Justice Department, Rahal was Tomato Enemy No. 1 -- a produce scofflaw who allegedly peeled off $100 bills and carried cash-stuffed envelopes to bribe buyers from leading food companies in a decade-long racketeering scheme that may have led to higher prices for consumers at the grocery store.
In a series of court filings starting in 2008, federal prosecutors in Sacramento allege that Rahal, nine others and SK Foods of Monterey, Calif., used more than $330,000 in bribes from 1998 to 2008 to subvert competition and nail down deals to sell the company's tomato paste, peppers and other products to Kraft Foods Inc., Safeway Inc., Frito-Lay North America and B&G Foods, among others...
Thursday, February 4, 2010
Ken Lewis, Bank of America Sued by Cuomo for Fraud
Ken Lewis, Bank of America Sued by Cuomo for Fraud
February 04, 2010
By Karen Freifeld and David Scheer
Bloomberg
Former Bank of America Corp. Chief Executive Officer Kenneth Lewis was sued by New York Attorney General Andrew Cuomo for defrauding investors and the government when buying Merrill Lynch & Co. The bank agreed to pay $150 million to settle a related lawsuit by U.S. regulators.
Cuomo also sued the bank’s former chief financial officer Joe Price and the bank itself for not disclosing about $16 billion in losses Merrill had incurred before it was bought by Bank of America in an effort to get the merger approved. Afterwards, Lewis demanded government bailout funds, Cuomo said.
“We believe the bank management understated the Merrill Lynch losses to shareholders, then they overstated their ability to terminate their agreement to secure $20 billion of TARP money, and that is just a fraud,” Cuomo said today at a press conference. “Bank of America and its officials defrauded the government and the taxpayers at a very difficult time.”
Cuomo is pursuing individuals at the bank while the U.S. Securities and Exchange Commission has declined to do so. The suit is being filed under the Martin Act, a New York securities law that permits both civil and criminal penalties...
February 04, 2010
By Karen Freifeld and David Scheer
Bloomberg
Former Bank of America Corp. Chief Executive Officer Kenneth Lewis was sued by New York Attorney General Andrew Cuomo for defrauding investors and the government when buying Merrill Lynch & Co. The bank agreed to pay $150 million to settle a related lawsuit by U.S. regulators.
Cuomo also sued the bank’s former chief financial officer Joe Price and the bank itself for not disclosing about $16 billion in losses Merrill had incurred before it was bought by Bank of America in an effort to get the merger approved. Afterwards, Lewis demanded government bailout funds, Cuomo said.
“We believe the bank management understated the Merrill Lynch losses to shareholders, then they overstated their ability to terminate their agreement to secure $20 billion of TARP money, and that is just a fraud,” Cuomo said today at a press conference. “Bank of America and its officials defrauded the government and the taxpayers at a very difficult time.”
Cuomo is pursuing individuals at the bank while the U.S. Securities and Exchange Commission has declined to do so. The suit is being filed under the Martin Act, a New York securities law that permits both civil and criminal penalties...
Thursday, January 7, 2010
NY Fed Told AIG to Limit Details of Bank Payments
Apparently AIG's creditors, apart from banks, were small enough to let them fail, and keep the deals secret.
JANUARY 7, 2010
NY Fed Told AIG to Limit Details of Bank Payments
By ALISTAIR BARR
The Federal Reserve Bank of New York told American International Group to withhold details from the public about more than $62 billion the insurer paid to banks at the height of the 2008 financial crisis, according to emails disclosed on Thursday by congressman Darrell Issa (R., Calif.).
AIG said in a draft of a regulatory filing that it paid banks including Goldman Sachs Group and Société Genéralé 100 cents on the dollar for credit-default swaps they bought from the insurer's derivatives unit AIG Financial Products.
The swaps were sold as protection against defaults on complex mortgage-related vehicles known as collateralized debt obligations, or CDOs. As the housing meltdown grew into a full-blown financial crisis, AIG was forced to post billions of dollars in collateral on these contracts, pushing it to the brink of collapse.
The insurer was saved by the federal government, which committed more than $100 billion in taxpayer money to the bailout. A lot of that money was quickly transferred to major banks that were counterparties on the CDO-linked derivatives.
The bailout has been among the most controversial of the financial crisis because the banks were paid 100 cents on the dollar during a period when many similar obligations were being settled at large discounts...
JANUARY 7, 2010
NY Fed Told AIG to Limit Details of Bank Payments
By ALISTAIR BARR
The Federal Reserve Bank of New York told American International Group to withhold details from the public about more than $62 billion the insurer paid to banks at the height of the 2008 financial crisis, according to emails disclosed on Thursday by congressman Darrell Issa (R., Calif.).
AIG said in a draft of a regulatory filing that it paid banks including Goldman Sachs Group and Société Genéralé 100 cents on the dollar for credit-default swaps they bought from the insurer's derivatives unit AIG Financial Products.
The swaps were sold as protection against defaults on complex mortgage-related vehicles known as collateralized debt obligations, or CDOs. As the housing meltdown grew into a full-blown financial crisis, AIG was forced to post billions of dollars in collateral on these contracts, pushing it to the brink of collapse.
The insurer was saved by the federal government, which committed more than $100 billion in taxpayer money to the bailout. A lot of that money was quickly transferred to major banks that were counterparties on the CDO-linked derivatives.
The bailout has been among the most controversial of the financial crisis because the banks were paid 100 cents on the dollar during a period when many similar obligations were being settled at large discounts...
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