%1

Illinois-based generic drugmaker Akorn Pharmaceuticals has agreed to pay $7.9 million to resolve claims that it caused Medicare to be billed for over-the-counter drugs that were not eligible for coverage, Reuters reported. The settlement, announced on Wednesday by the office of Massachusetts U.S. Attorney Rachael Rollins, stems from a 2021 whistleblower lawsuit. Whistleblower Albermarle LLC, an entity formed for the purpose of bringing the lawsuit, will receive about $946,000 of the recovery. The case centers on three drugs: anti-inflammatory cream diclofenac, antihistamine eye drop olopatadine and antihistamine nasal spray azelastine. Until recently, Akorn sold generic prescription versions of these drugs, which were eligible for Medicare reimbursement. Dicolfenac and olopatadine became became available over the counter in February 2020, and azelastine followed in June 2021, meaning the drugs were no longer eligible for Medicare. Rollins' office said that Akorn continued to sell them with obsolete prescription labeling, resulting in false claims for reimbursement being submitted to Medicare. According to Rollins' office, Akorn waited until early 2021 to seek to convert its dicolfenac and olopatadine to over-the-counter, and until January 2022 to withdraw its azelastine from the market, in order to increase profits. Akorn in 2020 filed for bankruptcy after German healthcare company Fresenius SE pulled out of a deal to buy it. The company emerged from bankruptcy following a sale to its lenders.

After more than two years, six laws and more than $5 trillion were intended to break the deadly grip of the coronavirus pandemic. The money spared the U.S. economy from ruin and put vaccines into millions of arms, but it also invited unprecedented levels of fraud, abuse and opportunism. In a year-long investigation, the Washington Post attempted to follow the COVID money trail to figure out what happened to all that cash. The federal government cannot fully track this historic distribution of federal aid. The investigation found that billions were misspent or stolen, but officials aren’t sure exactly how much. Even where wrongdoing is apparent, experts say that the cash may never be recovered. While the economy was in free-fall early in the pandemic, lawmakers and many agencies opted for haste over precision, opening the door for waste, fraud and abuse. For example, the Small Business Administration rescued hundreds of thousands of firms from collapse, but it also sent billions of dollars to firms that probably shouldn’t have obtained the money. Congress at one point sent about $500 billion directly to cities, counties and states to shore up their budgets. But the money often came with few rules. The vast sums of cash that spared some families from financial ruin also attracted sophisticated criminal networks. For example, criminals stole the identities of thousands of innocent Americans and obtained unemployment checks in their names — making the funds hard to access when people legitimately needed help.

The Securities and Exchange Commission sued insurance magnate Greg Lindberg, alleging that he and a lieutenant defrauded insurers out of more than $75 million through a series of undisclosed related-party transactions and advisory fees paid to a Malta entity, WSJ Pro Bankruptcy reported. “We allege a massive fraudulent scheme, involving unique financial structures and various complex investments,” said Osman Nawaz, chief of the SEC Division of Enforcement’s Complex Financial Instruments Unit, in a news release on Tuesday accompanying the complaint. The SEC’s civil action is the first government allegation of fraud against Mr. Lindberg, a North Carolina entrepreneur who bought several insurers and proceeded to loan at least $2 billion of their assets to entities he controlled. Four North Carolina insurers have since been placed into rehabilitation, a type of receivership akin to reorganization under federal bankruptcy law, by that state’s regulators while another in Bermuda is in liquidation. Mr. Lindberg in July was released from federal prison after an appeals court overturned his 2020 conviction on a separate, criminal matter, ruling that the district court judge erred in his jury instructions. That case, in which Mr. Lindberg was accused of attempting to bribe North Carolina’s insurance commissioner to obtain more favorable regulatory treatment, is tentatively scheduled for retrial in March 2023. Mr. Lindberg has denied wrongdoing in the criminal case. Referring to the SEC civil action, Susan Estrich, a spokeswoman for Mr. Lindberg, called it “piling on,” saying it was evidence of a “weak case,” in a statement Tuesday.

An international banker accused of bribing Puerto Rico’s then-governor to undermine an investigation into his institution turned himself in on Wednesday, almost a month after he was charged in federal court, the Associated Press reported. Julio Herrera Velutini, who is a citizen of Venezuela and Italy and who was thought to be living in the United Kingdom, pleaded not guilty hours after he was arrested in Puerto Rico and was ordered held on a $1 million secured bond. Herrera faces several charges, including bribery and honest services wire fraud — which implies a third party being harmed by the bribery or kickbacks. Federal authorities said the Puerto Rico-based Bancredito International Bank & Trust that Herrera owned came under scrutiny in 2019 when Puerto Rico’s Office of the Commissioner of Financial Institutions began probing suspicious transactions that the bank did not report. Officials alleged that Herrera and a former FBI agent who served as his consultant promised to financially support former Gov. Wanda Vázquez’s 2020 campaign for governor if she dismissed the commissioner and appointed a new one of Herrera’s choosing. Authorities said Vázquez accepted the bribe, demanded the commissioner’s resignation and appointed a former consultant for Herrera’s bank as the new commissioner in May 2020.

A U.S. judge yesterday dismissed a lawsuit by Abengoa SA shareholders accusing the Spanish engineering and energy company of conducting a massive accounting fraud between 2013 and 2015 that masked a liquidity crisis and culminated in bankruptcy, Reuters reported. U.S. District Judge Edgardo Ramos in Manhattan rejected claims, including from a whistleblower, that Abengoa routinely inflated profit margins and prematurely recognized revenue from contracts in order to boost executive bonuses. In a 56-page decision, Ramos said Abengoa did not mislead shareholders by publicly touting its "strict financial discipline," and said receipt of performance-based bonuses did not by itself establish a motive to defraud. He also said shareholders waited too long sue Bank of America, Canaccord Genuity, HSBC and Societe Generale, which helped Abengoa sell 517.5 million euros ($518 million) of American depositary shares in October 2013. The lawsuit covered investors who bought Abengoa's ADS between Oct. 17, 2013, and Aug. 2, 2015, the day before Abengoa surprised the market by seeking a capital increase. Its market value fell an estimated $8.1 billion over the next two days.

Archegos Capital Management LP made a last-ditch effort to falsely persuade banks its survival was not at stake in an unsuccessful bid to forestall the sudden collapse of the $36 billion private investment firm, U.S. prosecutors said, Reuters reported. The accusation came in a 12-page letter filed on Thursday night in Manhattan federal court, where Archegos' owner Sung Kook "Bill" Hwang has pleaded not guilty to 11 charges of fraud, market manipulation and racketeering conspiracy. Prosecutors said Archegos misled banks dozens of times in the six months before its March 2021 demise about its liquidity and how concentrated its portfolio was, in order to borrow money and make huge bets on stocks through total return swaps. The letter said that Archegos' strained finances led to a March 24, 2021 meeting where senior executives including Hwang and co-defendant Patrick Halligan, then its chief financial officer, decided to falsely tell banks that the firm's inability to meet margin calls was "a liquidity issue, not a solvency issue." Officials allegedly conveyed that assurance to Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., Morgan Stanley, Nomura Holdings Inc. and UBS Group AG that night and the next morning, and also misled counterparties about Archegos' cash.

Losses arising from cryptocurrency hacks jumped nearly 60% in the first seven months of the year to $1.9 billion, propelled by a surge in funds stolen from decentralized finance (DeFi) protocols, according to a blog post from blockchain analysis firm Chainalysis released on Tuesday, Reuters reported. In the same period last year, stolen funds from hacking amounted to $1.2 billion. DeFi applications, many of which run on the Ethereum blockchain, are financial platforms that enable crypto-denominated lending outside of traditional banks. Chainalysis noted that the trend is not likely to reverse any time soon, given the $190 million hacking of cross-chain bridge Nomad and $5 million hacking of several Solana wallets already in the first week of August. "DeFi protocols are uniquely vulnerable to hacking, as their open source code can be studied ad nauseum by cybercriminals looking for exploits and it's possible that protocols' incentives to reach the market and grow quickly lead to lapses in security best practices," Chainalysis said in the blog. Much of the funds stolen from DeFi protocols can be attributed to "bad actors" affiliated with North Korea, especially elite hacking units like Lazarus Group, the U.S. firm wrote. Chainalysis estimates that so far this year, North Korea-affiliated groups have stolen approximately $1 billion of cryptocurrency from DeFi protocols.

A former Platinum Partners fund manager was found guilty of engaging in a fraud scheme to rig a bond vote at an an oil and gas company, Bloomberg News reported. Daniel Small was accused of conspiring with Mark Nordlicht, Platinum’s co-founder, in a scheme to defraud bondholders of Black Elk Energy Offshore LLC of the proceeds of a lucrative asset sale. He was convicted on two of three counts on Friday in federal court in Brooklyn, New York. Prosecutors said while Platinum was experiencing a liquidity crisis, it had a controlling stake in Houston-based Black Elk. Small was accused of conspiring with Nordlicht and others to rig a Black Elk bondholder vote by concealing Platinum’s majority control of its bonds, diverting $70 million in asset sale proceeds to Platinum, federal prosecutors in the office of Breon Peace said.