Investigation Information Bulletin: Pharmacy Retail Company Cleared of $ 121 Million Charges in Fraud Class Action | Arent Renard

CVS Pharmacy Paid $ 121 Million Classroom Fee
Fraud action

On June 23, 2021, CVS Pharmacy Inc. was cleared of claims regarding overcharging drug purchasers of more than $ 121 million for general drugs. The verdict comes after a week-long trial in the Northern District of California starting June 7, 2021. The jury deliberated for less than a day and unanimously cleared CVS of alleged violations of six state laws on consumer protection.

A group of 11 categories of single-state insured patients filed this consumer class action suit alleging nineteen causes of action for fraud, constructive fraud, negligent misrepresentation, unjust enrichment and violation of privacy laws. consumers in twelve states and the District of Columbia. The complainants alleged that CVS distorted the “usual and customary” prices of certain generic drugs by failing to report the lower prices charged by CVS to members of its “Health Pass” program to third-party insurance providers and benefit managers. pharmaceuticals. Executives of the pharmacy benefit managers testified that their contracts with CVS did not require CVS to report discounts under the Health Savings Pass program.

The case is Corcoran et al v CVS Health Corporation, File Number 4: 15-cv-03504, in the Northern District of California.

Cayman Islands-based fund accused of $ 106 million fraud

On June 21, 2021, the United States Securities and Exchange Commission filed a lawsuit in the Southern District of New York against a Cayman Islands-based mutual fund and its founders, alleging that they transferred $ 102 million to front companies for personal use. The lawsuit also alleges that the fund’s founders refused to honor investor redemption requests of around $ 106 million and instead embezzled those assets into an inaccessible brokerage account.

According to the complaint, the individual defendants and the fund embezzled funds from investors through fraudulent behavior, including setting up shell companies, diverting assets to shell companies as part of non-lending transactions. guarantees that violate the requirements of the fund’s prospectus and submit false statements of material fact to investors. to cover their alleged fault.

The individual defendants and the fund were charged with four counts of wire fraud and violations of the Securities and Exchange Act for the alleged conduct. As an individual exercising control over the fund, a defendant was also charged with an action for liability of the supervisors.

The case is Securities and Exchange Commission v. Abarbanel et al. and the complaint can be found here.

Televangelist’s COVID Cure claims cost $ 156,000 in restitution

On June 23, 2021, Missouri Attorney General Eric Schmitt announced a consent judgment against a televangelist and his company Morningside Church Productions Inc. demanding up to $ 156,000 in damages. The consent judgment resolves allegations that the defendant marketed the “Silver Solution” as a remedy for Covid-19 in violation of the Missouri Merchandising Practices Act, which prohibits false or misleading claims in connection with the offer or the sale of goods.

In March 2020, the Missouri attorney general’s office filed a lawsuit against Bakker and Morningside Church Productions, after seeing an advertisement on the Bakker show claiming that the product “Silver Solution” was able to cure Covid-19. Under the Consent Judgment, Bakker cannot sell or advertise the “Silver Solution” as a means of diagnosing, treating, or curing any disease or illness. Bakker will pay up to $ 115,766 to residents of Missouri who purchased the product, and if less than that amount is paid, the difference between the refunds and $ 90,000 must go to the Merchandising Practices Revolving Fund. Between all required payments, the total will be $ 156,000.

The Attorney General’s press release can be viewed here, and the consent judgment can be viewed here.


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Anne G. Cash

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