Clunker Planes Don't Save Money
UPS put profits over safety in fatal crash of 30-year-old cargo plane, lawsuits allege. Now it's paying a steep price.
Nov. 30-Dec. 6 Filings
Business Blotter is a weekly roundup of white collar complaints, lawsuits and enforcement actions – a police beat feature from Business Blunders. All defendants are presumed innocent until proven guilty.
UPS tried to save money flying an aging and inadequately maintained jets, according to wrongful death lawsuits filed Dec. 3. The result was the Sept. 30 crash in Kentucky that killed 14 people.
The fiery crash happened on takeoff when an engine detached from a wing of a dacades old MD-11 cargo jet. The National Transportation Safety Board found cracks where it was supposed to stay attached.
“This plane should have never been in the air,” said attorney Bradley Cosgrove said at a news conference.
Families of Angela Anderson, 45, who was shopping at a business near the airport, and Trinadette “Trina” Chavez, 37, who was working at nearby Grade A Auto Parts, filed the lawsuits. They were just living their lives as the exploding plane careened into local businesses.
The lawsuit filed in state court also names engine manufacturer General Electric. Both UPS and GE are not commenting, citing pending litigation.
And this could be just the beginning. UPS is also facing another lawsuit in federal court last month, accusing it of negligence and wanton conduct.
Managing New York properties for Russian oligarchs doesn’t look profitable, either
A New York property-management firm was fined $7.1 million on Dec. 4 after the Treasury Department determined it managed U.S. properties for a sanctioned Russian oligarch closely associated with Vladimir Putin. The firm earned only $32,250 for the work, according to the enforcement filing.
Texas businessman convicted in scheme to bribe Pemex officials
Ramon Alexandro Rovirosa Martinez, 46, of The Woodlands, Texas, was convicted Dec. 5 of conspiring to bribe officials at Mexico’s state oil company to secure contracts for his businesses. Evidence showed payments of cash and luxury items to multiple Pemex employees.
Breastfeeding-supply retailer settles billing allegations for $1 million
The Breastfeeding Shop in Emmaus, Penn., and its owner, Patricia Gatter, agreed Dec. 1 to pay $1 million to resolve allegations that the company submitted false claims to TRICARE for breast pumps and related equipment. The government alleged the business billed TRICARE, uniformed services health care program, hundreds of dollars more per pump than it charged Pennsylvania’s Medicaid program.
Executive assistant admits embezzling from employer
Ashley Hymel, 42, of Ama, La., pleaded guilty to wire fraud after admitting she used a company credit card to make more than $130,000 in personal purchases while working as an executive assistant. She agreed to repay the full amount under the plea agreement announced Dec. 5.
Cryptocurrency ATM operator indicted in fraud and laundering case
Trevaughn J. Yearwood, of Orlando, Fla, and Amit Kumar Jain, 46, of Vienna, Virginia, were indicted Dec. 5 on charges alleging they laundered more than $26 million in a scam targeting the elderly people with deceptive emails.
llinois brothers charged in nearly $300 million lab-testing fraud and laundering scheme
Minhaj Feroz Muhammad, 37, and Sufyan Feroze, 35, both of Naperville, Ill., were charged in a superseding indictment unsealed Dec. 5 with health care fraud and money-laundering conspiracy. Prosecutors say they hatched a plan to bill Medicare, Medicaid and private insurers for more than $293 million in COVID-19 tests that were never performed. According to court documents, the brothers controlled four laboratories in Illinois and California, used straw owners, and received at least about $65 million in reimbursements, then moved proceeds through other businesses and into real estate, overseas developments, gold bars, luxury watches and vehicles.
Porsche restoration shop operator pleads guilty to fraud
Andrea Nicole Doherty, 38, of Fallbrook, California, pleaded guilty Dec. 4 to wire-fraud charges, admitting she diverted proceeds from sales of consignment vehicles and misused restoration funds at her Porsche restoration business, CPR Classic. Prosecutors cited victim losses exceeding $8 million.
Virginia lab settles kickback allegations
Clinical laboratory NEXT Bio-Research Services, doing business as NEXT Molecular Analytics, of Chester, Virginia, on Dec. 4 agreed to pay at least $758,000 to resolve allegations involving illegal kickbacks to doctors and marketers.
Maryland man sentenced for fraud in remote-worker hiring scheme
Minh Phuong Ngoc Vong, 41, of Bowie, Maryland, was sentenced Dec. 4 to 15 months in prison for conspiracy to commit wire fraud after helping foreign IT workers pose as U.S. citizens to obtain remote positions at American companies.
Houston resident admits role in romance-fraud and email-compromise scheme
Leslie Chinedu Mba, 40, a Nigerian living in Houston, pleaded guilty Dec. 4 to conspiracy charges for participating in a network that conducted business-email compromise attacks and romance scams, causing roughly $4 million in losses, according to prosecutors.
Houston man charged in prescription-drug fraud scheme
Darrion Denard Brooks, 28, of Houston, was indicted Dec. 3 in Louisiana for allegedly using stolen DEA registration numbers and fictitious patient data to obtain controlled substances from multiple pharmacies.
Subprime auto executives hit with final judgment
The Securities and Exchange Commission announced final judgments Dec. 3 against James R. Collins and Robert F. DiMeo, former executives of Honor Finance, concluding allegations they misled investors about loan-pool performance tied to a 2016 securitization.
Chauffeur charged with posing as investment adviser
The Securities and Exchange Commission sued Shahin Ahmed on Dec. 5 with defrauding clients while working as a personal driver, alleging he posed as a licensed investment professional and caused more than $1 million in losses.
Georgia man sentenced in $24 million genetic-testing kickback scheme
Patrick C. Moore Jr., 48, of Peachtree City, Georgia, was sentenced Dec. 2 to 46 months in prison and ordered to pay more than $7.2 million in restitution for a scheme that paid and received illegal kickbacks tied to Medicare-funded genetic testing. According to court documents, Moore directed recruiters to persuade Medicare beneficiaries to undergo tests that were not medically necessary or eligible for reimbursement.
Landlord under fire for sexually harassing tenants
The Justice Department on Dec. 2 said it filed a lawsuit against William Aaron Asper, the owner and manager of rental properties located in and around Westland, Michigan, for sexually harassing tenant.
Marlborough man charged in under-the-table pay and tax case
Stephen L. Hochberg, 77, of Marlborough, Massachusetts, was charged Dec. 1 with conspiracy to defraud the United States and obstruction of justice for allegedly receiving more than $1.6 million in off-the-books compensation and benefits from an accounting and real estate firm, while evading income taxes and avoiding restitution he still owed victims of a prior fraud conviction. Prosecutors say firm owner Charles D. Katz paid Hochberg’s family members, covered rent for Hochberg’s ex-wife, paid tuition and picked up personal credit-card charges, generating at least $1,668,487 in unreported income and at least $835,105 in unpaid taxes.