SAN JOSE, Calif. - Theranos Inc. Founder Elizabeth A. Holmes and former company chief operating officer Ramesh "Sunny" Balwani were arraigned June 15 on federal criminal charges of conspiracy to commit wire fraud against investors, doctors and patients doing business with the medical device company (United States v. Elizabeth A. Holmes, et al., No. 18-cr-258, N.D. Calif.).
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on May 15 affirmed a lower federal court's finding that the insurer of homeowners and excess coverage policies issued to the parents of a college student convicted of killing another student has no duty to defend or indemnify against a wrongful death suit, finding that the exclusion for "any criminal act" bars coverage (Sharon D. Love v. Chartis Property Casualty Company, No. 17-1467, 4th Cir., 2018 U.S. App. LEXIS 12572).
BOSTON - The Massachusetts federal judge overseeing the New England Compounding Center (NECC) criminal case on May 7 granted a motion by six of the nine remaining defendants to exclude evidence from their Oct. 4 trial about patient deaths and injuries from contaminated methylprednisolone acetate (MPA) made by the drug compounding pharmacy (United States v. Barry J. Cadden, et al., No. 14-10363, D. Mass., 2018 U.S. Dist. LEXIS 76613).
SAN DIEGO - A California jury in a two-phased verdict issued May 3 and May 4 awarded a former insurance company field sales leader more than $18.6 million on claims that he was wrongfully fired following criminal charges that he claimed were filed falsely and were ultimately dropped (Michael A. Tilkey v. Allstate Insurance Company, No. 27-2016-00015545-CU-OE-CTL, Calif. Super., San Diego Co.).
ATLANTA - An 11th Circuit U.S. Court of Appeals panel on May 3 affirmed a man's 90-month sentence for conspiracy to commit health care fraud, holding that the judge properly applied an upward variance of 12 months based on the seriousness of the defendant's conduct, as well as his criminal history (United States v. Yosbel Marimon, No. 17-13020, 11th Cir., 2018 U.S. App. LEXIS 11756).
NEW YORK - A Second Circuit U.S. Court of Appeals panel on April 26 ruled that a federal district court did not err in convicting a man on charges of mail fraud, securities fraud, wire fraud and health care fraud because the trial court was provided with sufficient evidence to support its conviction and 300-month prison sentence against the man (United States of America v. Michael Danilovich, No. 16-2834-cr, 2nd Cir., 2018 U.S. App. LEXIS 10901).
BOSTON - A Massachusetts federal jury on April 30 convicted a gynecologist of wrongful disclosure of patient information and obstructing a criminal investigation in connection with the former Warner Chilcott's promotion of two osteoporosis drugs, the U.S. Attorney's Office announced in a press release (United States v. Rita Luthra, No. 15-30032, D. Mass.).
NEW YORK - A Second Circuit U.S. Court of Appeals panel on April 20 ruled that a defendant in a securities fraud lawsuit filed by the Securities and Exchange Commission was collaterally estopped from denying his liability in the instant action based on his guilty plea in a related criminal proceeding, affirming a federal district court's grant of summary judgment in favor of the SEC (United States Securities and Exchange Commission v. Francisco Illarremendi, et al., Nos. 17-1506, 17-1893 and 17-2551, 2nd Cir., 2018 U.S. App. LEXIS 9948).
SAN FRANCISCO - Even though an employee was tricked into transferring funds to a criminal because of fraudulent, spoofed emails, a Ninth Circuit U.S. Court of Appeals panel on April 17 found that the direct cause of a seafood company's loss was the authorized employee's action, thus precluding coverage for the loss under the computer fraud provision of a commercial crime insurance policy (Aqua Star [USA] Corp. v. Travelers Casualty and Surety Company of America, No. 16-35614, 9th Cir., 2018 U.S. App. LEXIS 9660).
NEW YORK - The Second Circuit U.S. Court of Appeals on Feb. 13 vacated and remanded a lower federal court's dismissal of an insurer's petition to assert a third-party interest in a criminal forfeiture proceeding but denied the insurer's appeal of the lower court's denial of its request for restitution for $15 million that it paid its insured under the policy's employee theft coverage (Federal Insurance Company v. United States of America, Nos. 16-2967 and 16-3402, 2nd Cir., 2018 U.S. App. LEXIS 3312).
ALBUQUERQUE, N.M. - Two expert witnesses for the U.S. government can testify about sex trafficking and the prostitution trade in a criminal case against a man and his female accomplice accused of forcing a 13-year-old girl to engage in commercial sex acts, a New Mexico federal judge ruled Feb. 8 after finding that both experts meet all requirements of Federal Rule of Evidence 702, Fed. R. Evid. 702 (United States of America v. Cordny Henry, No. 16-cr-1097, D. N.M., 2018 U.S. Dist. LEXIS 20896).
ROCHESTER, N.Y. - The Fourth Department New York Supreme Court Appellate Division on Feb. 2 determined that a trial court properly found that no coverage is owed under professional liability and environmental professional liability policies for a criminal action filed against an insured and arising out of alleged violation of the Clean Air Act because the criminal action does not constitute a suit for which coverage is provided (Certified Environmental Services Inc. v. Endurance America Insurance Co., et al., No. 1510 CA 17-01125, N.Y. Sup., App. Div., 4th Dept., 2018 N.Y. App. Div. LEXIS 704).
BOSTON - Due to attorney schedule conflicts and the need to bring two recently reinstated defendants up to speed, the judge presiding over the New England Compounding Center (NECC) criminal case on Jan. 25 rescheduled the trial of the remaining nine criminal defendants from March 16 to Oct. 4 (United States of America v. Gene Svirskiy, et al., No. 14-10363, D. Mass.).
PHOENIX - Motel 6 Operating L.P. and G6 Hospitality LLC, doing business as Motel 6, maintain a policy of disclosing guest registration information to agents of U.S. Immigration and Customs Enforcement (ICE) within the Department of Homeland Security (DHS) without requiring a warrant or reasonable suspicion of criminal acidity in violation of the U.S. Constitution, federal civil rights statutes and Arizona statutes, several unnamed Latino guests allege in a class complaint filed Jan. 23 in the U.S. District Court for the District of Arizona (Jane V., et al. v. Motel 6 Operating L.P., et al., No. 18-242, D. Ariz.).
ROCHESTER, N.Y. - In light of a Second Circuit U.S. Court of Appeals ruling and newly submitted evidence suggesting potential criminal misuse of policyholders' personally identifiable information (PII), which was stolen in a breach of their insurer's network, a New York federal judge on Jan. 19 found that sufficient allegations of injury from the risk of future identity theft merited reconsideration of her previous decision to dismiss claims brought by some of the plaintiffs in a putative class action against the insurer (Matthew Fero, et al. v. Excellus Health Plan Inc., et al., No. 6:15-cv-06569, W.D. N.Y., 2018 U.S. Dist. LEXIS 8999).
WILMINGTON, Del. - In a dispute between an insolvent insurer and the insurer's former owner who is now in prison for wire fraud, a Delaware master in chancery on Jan. 18 recommended that the court take judicial notice of certain documents and statements pertaining to the insurer's liquidation proceeding and the owner's criminal trial (Indemnity Insurance Corp., RRG v. Jeffrey Cohen, C.A. No. 8985-CB, Del. Chanc., 2018 Del. Ch. LEXIS 16).
BOSTON - The First Circuit U.S. Court of Appeals on Jan. 12 reversed the dismissal of criminal charges against three pharmacists who shipped misbranded drugs from the former New England Compounding Center (NECC), saying that whether the pharmacists knew that the drugs were going out under phony patient names is a question of fact for a jury (United States of America v. Alla V. Stepanets, et al., Nos. 16-2502, 16-2403, 16-2404, 1st Cir., 2018 U.S. App. LEXIS 871).
WASHINGTON, D.C. - Concluding "that material factual questions remain" as to whether the Federal Bureau of Investigation conducted an adequate search for records responsive to a Freedom of Information Act (FOIA) by the Associated Press (AP) related to the bureau's use of bogus news headlines to track down criminals, a District of Columbia Circuit U.S. Court of Appeals panel on Dec. 15 reversed a trial court's judgment in favor of the FBI and the U.S. Department of Justice (DOJ) (The Reporters Committee for Freedom of the Press, et al. v. Federal Bureau of Investigation, et al., No. 17-5042, D.C. Cir., 2017 U.S. App. LEXIS 25333).
SAN JOSE, Calif. - In a Dec. 15 motion, Intuit Inc. asks a California federal court to again dismiss negligence and aiding and abetting claims brought against it related to incidents of fraudulent tax return filings, arguing that the plaintiffs did not establish any liability for the criminal activities of third parties (In re Intuit Data Litigation, No. 5:15-cv-01778, N.D. Calif.).
TAMPA, Fla. - A Florida federal judge on Dec. 12 allowed a blood spatter expert and a criminal law expert to testify for a couple in their excessive-use-of-force action against several police officers, though she did place limits on both experts' opinions (Michael Bratt, et al. v. Louis Genovese, et al., No. 8:13-cv-3210, M.D. Fla., 2017 U.S. Dist. LEXIS 204003).
BROOKLYN, N.Y. - Federal prosecutors in the criminal proceedings against convicted former pharmaceutical company CEO and hedge fund manager Martin Shkreli on Nov. 30 asked a federal judge to require him to forfeit more than $7.3 million he obtained as part of his role in the securities fraud scheme to defraud investors (United States of America v. Martin Shkreli, No. 15-637, E.D. N.Y.).
SAN JOSE, Calif. - In the wake of orders partly dismissing their claims and compelling arbitration of some parties' claims, the plaintiffs in a putative class action against Intuit Inc. filed an amended complaint in California federal court Nov. 17, restating negligence and unfair competition claims related to the filing of fraudulent tax returns by criminals that exploited purported lax security in Intuit's TurboTax software (In re Intuit Data Litigation, No. 5:15-cv-01778, N.D. Calif.).
TAMPA, Fla. - The owner of several Florida pharmacies pleaded guilty on Nov. 6 to health care fraud and criminal gains for submitting $100 million in claims for compounded prescription drugs to health insurance programs (United States v. Nicholas A. Borgesano, Jr., No. 16-cr-353, M.D. Fla.).
NEW YORK - A federal judge in New York on Nov. 3 denied motions filed by two doctors seeking to sever their claims from a criminal insurance fraud indictment, finding that the defendants' antagonistic defenses and the possibility of prejudicial spillover did not warrant severance (United States of America v. Asim Hameedi, et al., No. 17 Cr. 137, S.D. N.Y., 2017 U.S. Dist. LEXIS 182790).