Two elderly San Fernando Valley residents have been convicted for running a Ponzi scheme for 13 years, which netted them $100 million, and now potentially 80 years in prison.

Joel Barry Gillis, 74, and Edward Wishner, 76, face up to 80 years in prison each for the Ponzi scheme charges. Both men pleaded guilty in federal court to two counts of mail fraud, one count of wire fraud, and conspiracy charges related to their long-running and very successful Ponzi scheme.

Investors in the Ponzi scheme were told that their money would go to new ATM machines through their fraudulent business, Nationwide Automated Systems Inc. The two defendants convinced many buyers that the machines were worth between $12,000 and $19,800 a pop. The men claimed that investors would receive $0.50 per ATM transaction, with an annual return of 20%, by placing the ATMs in high-traffic locations such as hotels, casinos, and convenience stores. The men claimed that NASI operated 30,000 ATMs nationally, and received $1 billion in ATM transactions each month.

The Ponzi scheme netted 2,000 investors over its 13 years of operation, and even at a low point in the scheme last year, when the defendants bounced $3 million in fraudulent checks, they received $4 million in new investors.

In response to hundreds of calls from investors, Gillis and Wishner “falsely sought to reassure the victim-investors that NASI was only suffering from accounting problems and technical delays relating to system upgrades, and that timely payment of investor returns would likely resume by the beginning of October 2014,” according to court papers.

The defendants will be sentenced for the federal charges related to their Ponzi scheme on March 30th.

The Strom Law Firm Can Help With South Carolina Federal Criminal Charges, Including Indictments for Ponzi Schemes

The South Carolina federal criminal defense attorneys at the Strom Law Firm, LLC will fight to protect your rights and your personal and professional future.

Whether you are charged with:

• a computer crime
• mail fraud, wire fraud, or bank fraud,
• a RICO violation
• a drug crime,
• tax fraud
• making a false statement to a federal agent,

or any other South Carolina Federal criminal charges, you are likely facing a personal, family, social, business, and/or financial crisis unlike any you have ever faced before.

It is also important that you speak with a competent federal criminal defense attorney before discussing anything with a Federal agent, as you may be prosecuted for any false statements made to a Federal agent. Remember, Martha Stewart did not go to prison for insider trading; she was convicted of making a false statement to a Federal agent. This is known as a 1001 violation.

For experienced Columbia, South Carolina criminal defense attorneys who will fight for your rights and work to have your charges reduced or even dismissed, contact the  South Carolina federal charges attorneys at the Strom Law Firm, today. We offer a no-cost, confidential consultation to discuss our experience and knowledge of the system can help you. 803.252.4800

On December 30th, a former professor at Georgia Tech was indicted on racketeering charges for using the college’s funds to funnel $1 million in equipment into his personal business.

Joy Laskar faces two counts of racketeering for allegedly stealing $1 million from Georgia Tech. He was indicted by a Fulton County Grand Jury.

Laskar worked as the director of the Georgia Electronic Design Center (GEDC) at Georgia Tech, and began spending the university’s money on computer chips from CMP, a French microchip manufacturer, then used the chips to benefit Sayana Wireless, a private company that he founded in 2006. He also allegedly used Georgia Tech’s resources, such as phones and email, to conduct the company’s day-to-day operations, which is a violation of the college’s policy and procedures.

The alleged racketeering occurred between 2006 and 2011. In 2010, Georgia Bureau of Investigation agents raided his home and office, as well as those of several of Laskar’s colleagues. Reportedly, GEDC found cost overruns after a larger Georgia Tech audit, and contacted the authorities about potential fraud.

Although Laskar was arrested in 2010 after the raids, along with three other colleagues, the racketeering indictment took over four years, coming in within days of the statute of limitations expiration. Laskar has been suspended without pay from Georgia Tech since the original racketeering investigation.

If convicted on the racketeering charges, Laskar faces up to 40 years in prison, and a fine of $100,000 for each charge.

The Strom Law Firm Can Help with Racketeering Charges and Other RICO Charges

RICO charges involve the operation of an illegal business or enterprise, including a fraudulent scams, for an individual or entity’s personal profit. RICO cases are complex criminal cases.  They involve serious criminal charges and life altering potential consequences. The federal Racketeer Influenced and Corrupt Organizations Act (RICO) and similar state racketeering laws give the government a tremendous amount of power to go after those accused of racketeering.

The Federal Racketeer Influenced and Corrupt Organizations Act (RICO) and similar state racketeering laws give the government a tremendous amount of power to go after those accused of racketeering.

The RICO act is broad and covers a variety of white collar crimes including:

• murder,
• the transportation and distribution of drugs,
• gambling,
• embezzlement,
• extortion,
• theft/armed robbery,
• money laundering, and
• bribery
• racketeering

Being arrested or investigated for federal criminal charges can be very stressful. However, just because you are under a great deal of pressure does not mean that you are automatically guilty, or that you have no rights in court. For experienced RICO and federal criminal charges defense attorneys who will fight for your rights and work to have your charges reduced or even dismissed, contact the attorneys at the Strom Law Firm, today. We offer free, confidential consultations so that you can discuss the facts of your case with impunity, in a safe environment. Do not hesitate to contact us. 803.252.4800.

Over one year after 35 educators, test administrators, and principals in the Atlanta Public School System were linked to a massive cheating scam to change students’ test scores, 12 of those accused are now standing trial on federal racketeering charges.

Prosecutors allege that the Atlanta Public Schools testing scam dates back as far as 2005, when school administrators began to put pressure on teachers and test administrators to change students’ test scores to meet federal guidelines and get more grant money from the US government. Some teachers said they were offered bribes in the form of bonuses, and that if they did not comply, they would be fired.

So far, 21 defendants have been offered plea deals and will likely testify during the  federal racketeering charges case.

For at least four years – 2005 to 2009 – educators across Atlanta altered test scores and answers on standardized tests to make the school district appear to rapidly improve. At the center of the Atlanta cheating scandal was school superintendent Beverly Hall, who was named National Superintendent of the Year in 2009 for the incredible improvements in her urban school district.

In 2011, the Atlanta Journal-Constitution reported suspicions of cheating in a series of articles, which made the urban school district appear to make rapid and impressive improvements on national test scores. The reports launched a state investigation into Hall’s school district, which uncovered an incredible ring of cheating that occurred at 44 Atlanta schools, perpetrated by 178 educators, including 38 principals.

The indictment against Hall and others alleges that she “created a culture of fear, intimidation and retaliation.” However, Hall’s federal racketeering charges trial specifically was delayed indefinitely because advanced breast cancer has left her too ill to attend court proceedings.

“We’ve had cheating all up and down the line. It was absolutely amazing,” said Michael Bowers, a former Georgia attorney general who investigated the cheating scandal. Bowers said his investigation found “erasure parties,” in which educators – both in school and outside of school – erased and changed test answers to make their students appear smarter. Teachers were even told to make changes to tests. “Anything that you can imagine that could involve cheating, it was done,” he said.

“Not only were the children deprived, a lot of teachers were forced into cheating, forced into criminal acts,” Bowers said. “Now, granted, they did wrong, but a lot of them did this to protect jobs.”

The Strom Law Firm Can Help with Federal Racketeering Charges and Other RICO Charges

RICO charges involve the operation of an illegal business or enterprise, including a fraudulent scams, for an individual or entity’s personal profit. RICO cases are complex criminal cases.  They involve serious criminal charges and life altering potential consequences. The federal Racketeer Influenced and Corrupt Organizations Act (RICO) and similar state racketeering laws give the government a tremendous amount of power to go after those accused of racketeering.

For experienced RICO and federal criminal charges defense attorneys who will fight for your rights and work to have your racketeering and corruption charges reduced or even dismissed, contact the attorneys at the Strom Law Firm, today. We offer free, confidential consultations so that you can discuss the facts of your case with impunity, in a safe environment. Do not hesitate to contact us. 803.252.4800.

The adoptive father of missing North Carolina teenager Erica Parsons stated on Tuesday, October 7th, that he will go to court to face his federal fraud charges, despite the fact that, for the same charges, his wife has accepted a plea deal for federal charges.

Sandy and Casey Parsons each faced 76 federal charges involving defrauding the federal government by accepting adoption program money although Erica Parsons had run away from home.

In the first week of October, Casey Parsons pleaded guilty to 15 counts of fraud as part of a plea deal, and will be sentenced for the federal charges in February. Her husband Sandy, however, has not accepted a plea deal for federal charges and will go to court for his 76 federal charges.

Casey Parsons’s federal charges included one count of conspiracy to defraud the government, five counts of mail fraud, four counts of aiding in the preparation of a false tax return, four counts of wire fraud and one count of aggravated identity theft. Despite her plea deal for federal charges, she faces 199 years in prison, and $3.75 million in fines.

They allegedly collected benefits for Erica between February 2010 and August 2013, despite Erica Parson’s disappearance. The federal government offers assistance to families who adopt children, including adoption assistance, Medicaid, Social Security, and Food and Nutrition benefits. Misuse or redirection of those funds constitutes a federal crime. Erica was last seen in November 2011, when she was 13 years old, but her disappearance was not reported until July 2013.

The Parsons reportedly have a history of problems with custody of Erica. When Erica was 6 years old, Casey Parsons took her to live with another family member. The family member told investigators that “they took custody of Erica for about 8 months after Casey Parsons called them and said she could not stand to look at Erica.” However, “after about 8 months Casey Stone Parsons resumed custody of Erica and said that she was afraid that the Department of Social Services would find out that she did not have her and she was still getting money for her.”

“I feel like (the plea is) another step toward justice for Erica,” said Carolyn Parsons, Erica’s biological mother. “It’s not Erica by no means, but it’s a start toward getting some kind of justice.”

Although the Parsons face numerous federal charges for defrauding a government program, the couple so far does not face criminal charges connected with Erica’s disappearance. There is a $50,000 reward for information about Erica’s disappearance.

Prosecuting Federal Charges in South Carolina

If you or a loved one are the victims of a serious crime, including identity theft, kidnapping, or fraud, it is important that you take the person who hurt you to court – whether it is a federal criminal trial, or personal injury lawsuit. The attorneys at the Strom Law Firm have been based in Columbia, SC for 16 years, and are also licensed to practice in Georgia and New York. We offer free, confidential consultations to discuss the facts of your case, so do not hesitate to contact us for help. 803.252.4800.

Michael Sorrentino, famous under the moniker “The Situation” on MTV’s popular reality show “Jersey Shore,” and his brother Marc Sorretino, pleaded not guilty to tax fraud charges and conspiracy – serious federal charges – on Wednesday, September 24th.

The brothers were indicted on federal charges for allegedly failing to pay income taxes on $8.9 million earned through The Situation’s promotional activities.

“Jersey Shore” ran from 2009 to 2012, and showcased the antics of five 20-somethings at a beach house on the Jersey Shore. Michael Sorrentino insisted on being referred to as “The Situation” while cast on the show.

The Wednesday federal charges hearing lasted only 7 ½ minutes, and the two brothers both pleaded not guilty to tax fraud and conspiracy charges. Prosecutors stated that they believed the Sorrentinos had fraudulently claimed millions of dollars in personal expenses as business expenses, such as purchases of luxury cars and designer clothes.

Their nearly $9 million was primarily received by two companies that the brothers own, MPS Entertainment and Situation Nation.

“Rather than living in reality and reporting their true income, Michael Sorrentino and his brother Marc created the illusion that they earned less income by filing false and fraudulent tax returns,” said Jonathan D. Larsen, acting special agent in charge, IRS-Criminal Investigation, Newark Field Office.

The federal indictment alleges that the pair accepted income not only for television and personal appearances, but also from a vodka company, an online clothing business that the two reportedly owned, publication of an autobiography, plus a comic book featuring The Situation as a superhero. Michael Sorrentino also reportedly had income from promoting vitamins, jewelry, clothing, DVDs, and high-end sunglasses. He was also hired to make personal appearances at night clubs, bars, and liquor stores.

The brothers were released on a $250,000 bond each, and their next court appearance for an arraignment on the conspiracy and tax fraud charges will be October 6th.

Federal Fraud Charges and Defense, From Tax Fraud to Wire Fraud

Our federal criminal defense lawyers handle wire fraud cases involving:

• Fraudulent insurance claims
• Bond issuances and investment schemes
• Falsifying loan applications
• Check fraud schemes
• Bribes or kickbacks
• False advertising or misrepresentation in sales transactions

Transferring money to an offshore or international bank may be legitimate and legal transactions; however, transferring money to an offshore or international bank account to hide a crime can lead to serious federal criminal charges.

The Strom Law Firm Defends Tax Fraud, Conspiracy, and Other Federal Charges

The Strom Law Firm, LLC has the experience that you need to defend your tax fraud, securities fraud, conspiracy, or bank fraud charges. Founded by former U.S. Attorney and assistant solicitor, Pete Strom, our experienced criminal defense attorneys include a former public defender, and a former Assistant Attorney General and Richland County Assistant Solicitor, as well as a tax lawyer familiar with IRS investigations.  Our experience and familiarity with prosecutorial techniques provide the basis for experienced and effective legal representation. We will fight hard to have your charges reduced, or even dismissed. Contact us today for a free consultation to discuss the facts of your case as well the most effective way to proceed with your case. 803.252.4800

Warner Bros and New Line Cinema, two major Hollywood production companies, face a racketeering lawsuit filed by a film producer over “The Conjuring” and its sequels.

Producer Tony DeRosa-Grund has been battling Warner Bros for the past year over a rights dispute in “The Conjuring,” and has now added racketeering charges to the lawsuit against the Hollywood giant, filed in Texas.

The racketeering charges claim that New Line Cinema LLC, a subsidiary of Warner Bros, and Craig Alexander, the production company’s senior VP and head of business and legal affairs, misrepresented the company’s intentions to a bankruptcy court when it purchased the rights to the life stories of paranormal investigators Ed and Lorraine Warren, who were the inspiration for “The Conjuring” and its sequels. Instead of retaining the rights, New Line Cinema transferred them to Warner Bros, which “assumed no obligations” to the financial agreements New Line Cinema made with the Warrens and DeRosa-Grund.

DeRosa-Grund claims that New Line and Alexander never stated that producers’ fees would be limited to one initial movie, and in fact the company included the term “sequels” in court-approved documentation, representing DeRosa-Grund as being attached to and paid for producing services in anything involving the Warrens’ story.

“At no point in time during negotiations did [New Line and Alexander] request that any other rights, besides theatrical motion picture rights, be granted to New Line Productions and, by automatic assignment, Warner Bros.,” the racketeering lawsuit states.

DeRosa-Grund cited “a pattern of racketeering activity” on the part of New Line Cinema, pointing to an ongoing legal dispute between Harvey Weinstein and the company over “The Hobbit” sequels.

“As a result of Defendants’ overt racketeering acts of mail and wire fraud, obstruction of justice and money laundering, Plaintiffs suffered and are continuing to suffer injury to their business and property including but not limited to, substantial loss of income, loss of benefits and loss of reputation,” reads the complaint.

The Strom Law Firm Can Help with Racketeering and Other RICO Charges

RICO charges involve the operation of an illegal business or enterprise, including a fraudulent scams, for an individual or entity’s personal profit. RICO cases are complex criminal cases.  They involve serious criminal charges and life altering potential consequences. The federal Racketeer Influenced and Corrupt Organizations Act (RICO) and similar state racketeering laws give the government a tremendous amount of power to go after those accused of racketeering.

The Federal Racketeer Influenced and Corrupt Organizations Act (RICO) and similar state racketeering laws give the government a tremendous amount of power to go after those accused of racketeering.

Being arrested or investigated for federal criminal charges can be very stressful. However, just because you are under a great deal of pressure does not mean that you are automatically guilty, or that you have no rights in court. For experienced RICO and federal criminal charges defense attorneys who will fight for your rights and work to have your charges reduced or even dismissed, contact the attorneys at the Strom Law Firm, today. We offer free, confidential consultations so that you can discuss the facts of your case with impunity, in a safe environment. Do not hesitate to contact us. 803.252.4800.

In June, former Charlotte, NC mayor Patrick Cannon pleaded guilty to one charge of wire fraud, which stemmed from numerous bribery, extortion, and other federal charges that cropped up during his tenure as mayor. On Tuesday, October 14th, Cannon was sentenced to 44 months in federal prison.

Cannon was also sentenced to 2 years of supervised release, and a $10,000 fine. Federal prosecutors wanted Cannon in jail for 37 months, or just over 3 years, for the one charge of wire fraud plea; his defense requested only 18 months, because his jail time would impact his children’s lives.

“Much has been given to me in the way of the public’s trust. I regret having acted in ways that broke that trust. For that, I am deeply sorry. I love Charlotte,” Cannon said at his sentencing hearing on Tuesday.

“[Charlotte] is the city of my birth. I regret having hurt the city that I love,” Cannon said. He added, “Today, I have acknowledged being guilty of accepting moneys for constituent services. Something that should have never been done while serving in elected office … I understand the anger and the frustration that my actions have caused. I can only hope that the life that I live from now on will reflect both my remorse and my desire to still make a positive impact upon the city.”

“We are looking forward to closure. We are looking forward to continuing to do the work of the city. The new mayor has jumped right in and is keeping us on task,” said City Councilman Kenny Smith, a Republican from District 6.

Cannon’s meteoric political career began when he was elected to city council in 1993, at the age of 26, just two years out of college. He served on the City Council until 2005, spent four years out of office in private business, then returned to City Council in 2009. He served on both the city council and as mayor pro tem from 2010 to 2013, when he was officially elected mayor.

The FBI began investigating allegations of bribery and extortion in 2010. Reportedly, undercover agents offered bribes to Cannon so they would not “have issues or concerns with city and county officials” over zoning, construction permitting and alcohol regulation. Over the course of the investigation, FBI agents documented five separate occasions in which Cannon allegedly took cash, plane tickets, hotel rooms, and a luxury apartment as bribes from the agents, including a trip to Las Vegas in July 2013, with all expenses paid and $6,000 in cash to spend. The gifts and cash totaled more than $48,000.

In February, Cannon allegedly accepted a leather briefcase with $20,000 cash as a bribe in the mayor’s office, and reportedly angled for a 1% kickback on the alleged $125 million in investments in the city. In exchange for the bribery and extortion, Cannon promised the undercover agents he would develop streetcar lines near their property to aid their business. He was arrested in March during an undercover operation. Although he faced numerous federal charges, however, Cannon only pleaded guilty to one charge of wire fraud.

The Strom Law Firm Defends Wire Fraud and Other Federal Charges

The law broadly defines wire fraud as devising or intending to devise a scheme to defraud others of money or property under false or fraudulent pretenses, representations or promises by means of electronic communications, or “wires.” Because they typically involve interstate matters, most wire fraud cases are considered federal crimes with convictions carrying heavy fines, prison sentences of up to 20 years, or both.

The Strom Law Firm, LLC has the experience that you need to defend your wire fraud charges, or other federal charges. Our experience and familiarity with prosecutorial techniques provide the basis for experienced and effective legal representation. We will fight hard to have your charges reduced, or even dismissed. Contact us today for a free consultation to discuss the facts of your case as well the most effective way to proceed with your case. 803.252.4800

The wife and brother of a convicted Ponzi scheme ringleader have been indicted on federal charges related to the scam.

Cassandra Kendall Wilson, 66, and Timothy L. Wilson, 60, have both been indicted on indicted on federal charges including conspiracy to defraud the US government, for assisting Ron “Ronnie” Wilson hide gold and other assets after he was convicted for creating a Ponzi scheme.

Ronnie Wilson is currently serving a 19-year sentence for mail fraud.

Authorities said in the indictment that Cassandra and Timothy Wilson helped Ronnie stash hundreds of thousands of dollars before the court-appointed receiver could collect the money and disburse it to the Ponzi scheme victims. The assets – in the form of cash, and gold and silver coins – were hidden in ammunition canisters and “secreted from the receiver’s office.”

The maximum penalty for the conspiracy charge is 5 years in prison and a fine of $250,000. However, Ronnie Wilson could have an additional 10 years placed on his sentence for the federal charge of making false statements regarding the assets.

“We are aggressively and actively pursuing all available assets, and we will do whatever we can within the law to get as much money back to the victims that have been defrauded,” US Attorney Bill Nettles said.

So far, no reimbursements have made it to the Ponzi scheme victims, according to Beattie Ashmore, a Greenville attorney acting as receiver for Ronnie Wilson and his fraudulent company, Atlantic Bullion. However, Ashmore has recovered around $400,000 in gold, silver, and cash from the Wilsons.

“Ron Wilson’s money has been spent, it’s been squandered, it’s been secreted,” Ashmore said.

Wilson’s plan reportedly defrauded investors of almost $90 million.

Wilson gathered investors in his business, saying that he had silver stored in a facility in Delaware.

“I began operating what is generally known as a Ponzi scheme,” Wilson’s confession says. It says Wilson told clients he would buy silver at low prices and sell at high prices, but “most of the time I did not buy silver.”

He kept fictitious books, according to his own account, and issued fraudulent quarterly statements to his investors.

“He lied to us with a straight face,” said Gloria Davis, a Travelers Rest investor who once had $95,000 on Wilson’s books. “We got statements quarterly. I was just stunned that I heard he had done this. He should be ashamed of himself. I wish they’d walked him out in handcuffs.”

The Strom Law Firm Can Help With Federal Charges, Including Indictments for Ponzi Schemes

The federal criminal defense attorneys at the Strom Law Firm, LLC will fight to protect your rights and your personal and professional future.

Whether you are charged with:

• a computer crime
• mail fraud, wire fraud, or bank fraud,
• a RICO violation
• a drug crime,
• tax fraud
• making a false statement to a federal agent,

or any other Federal charge, you are likely facing a personal, family, social, business, and/or financial crisis unlike any you have ever faced before.

For experienced criminal defense attorneys who will fight for your rights and work to have your charges reduced or even dismissed, contact the federal charges attorneys at the Strom Law Firm, today. We offer a no-cost, confidential consultation to discuss our experience and knowledge of the system can help you. 803.252.4800

The notorious Deep Web trafficking website, the Silk Road, was seized by federal investigators in October 2013, after the 29-year-old founder was arrested on serious federal criminal charges for murder-for-hire, drug trafficking, and others. After more than a year of waiting, the Silk Road founder’s trial began on January 13th.

Ross William Ulbricht, 30, stands accused of operating the “Deep Web” site, the Silk Road, an online bazaar that sold everything from illegal drugs to prostitutes to assassination services and money laundering schemes. Ulbricht used the pseudonym “Dread Pirate Roberts” and federal authorities spent years attempting to track him down. Finally, despite ingenious attempts to keep himself and his users anonymous, Ulbricht was caught in his own criminal trap: On March 29th, the operator contacted a hit-man through the site, requesting the murder of a user who had hacked the site and was threatening to release the names of thousands of Silk Road users. The user reportedly demanded $500,000 to pay off his drug dealers. There is no evidence that the murder-for-hire ever occurred.

“He was willing to stop at nothing to protect his criminal enterprise,” said Assistant U.S. Attorney Timothy Howard, who alleged that Ulbricht paid hundreds of thousands of dollars in murder contracts on several people he felt posed a threat to Silk Road.

The Silk Road is also the primary reason for the existence and popularity of BitCoins, a currency that many retailers are beginning to pick up, and whose value is determined entirely by online transactions. BitCoins are also notoriously used as an anonymous method of purchasing illegal goods and services.

Ulbricht claims that the Silk Road was primarily a “libertarian experiment” in market economics, but Howard called Ulbricht the “Kingpin” of an intention criminal operation that was founded in 2009, when Ulbricht wanted to sell illegal hallucinogenic mushrooms he grew outside of a cabin in Texas.

Frustrating the federal criminal trial is the fact that, a mere six weeks after the Silk Road was shut down by federal authorities, The Silk Road 2.0 was created, and is nearly identical to the original Deep Website. It is even run by an anonymous user calling him or herself the Dread Pirate Roberts, leading some to speculate that Ulbricht was merely a pawn, taking the fall for a larger criminal operation.

“Ross was the perfect fall guy, because, after all, Silk Road was his idea,” said Ulbricht’s defense attorney.

The Strom Law Firm Helps Defend Against Charges in Federal Criminal Trials

The Strom Law Firm, LLC represents individuals charged with Federal Charges including:

• Importing controlled substances
• Manufacturing methamphetamine “Meth”, marijuana, or cocaine
• Conspiracy to possess with the intent to distribute
• Possession with Intent to Distribute large quantities of drugs

Federal drug charges are serious and can lead to severe consequences.  Many federal drug charges carry severe mandatory sentences with limited opportunities for probation or parole.

Federal drug investigations and indictments are often combined with other charges including:

• 1001 False Statement Violations,
• money laundering,
• conspiracy, and
• asset forfeiture.

If you, your loved one, or your corporation has been contacted by a law enforcement officer about South Caorlina federal charges and face a criminal trial, you should contact the Strom Law Firm, LLC immediately. The Strom Law Firm offers free, confidential consultations so you can discuss the facts of your case with impunity. Contact us today.803.252.4800

In a separate filing stemming from the whistleblower lawsuit against Tenet Healthcare and its federal kickback scheme with Clinica de la Mama in Hilton Head, SC, a former executive from Hilton Head Hospital now faces federal kickback charges for his role in the financial fraud.

Gary W. Lang, the vice president of business development at Hilton Head Hospital from 2004 to 2006, was indicted on federal kickback charges on July 23rd.

The original whistleblower lawsuit contended that Hilton Head Hospital, parent company Tenet Healthcare, and four clinics in Georgia called Clinica de la Mama worked together in a federal kickback scheme to receive more Medicaid money for births to undocumented immigrant women. Medicaid will reimburse hospitals for deliveries to undocumented immigrant mothers, because childbirth qualifies as a medical emergency. Otherwise, federal programs will not reimburse hospitals.

However, hospitals are not allowed to pay for patient referrals if a government program will pay for the medical procedure. In this case, Tenet Healthcare still paid Clinical de la Mama for referrals, a practice that began at Hilton Head Hospital under Elizabeth Lamkin, who was the CEO of Hilton Head Hospital from 2002 to 2009. The scheme was designed to get Tenet Healthcare more revenue from Medicaid.

Lamkin has not yet been arrested on  federal kickback charges.

Tracey Cota, the former chief operation officer of Clinica de la Mama from 2000 to 2010, also faces federal charges related to the whistleblower case.

The federal charges against Lang allege that he intentionally entered the referral agreement with Clinica de la Mama, knowing that Hilton Head Hospital could illegally receive more money from Medicaid. The lawsuit also alleges that, when he left Hilton Head Hospital to become CEO at Clearview Regional Medical Center in Monroe, GA, he duplicated the kickback scheme.

Cota, who faced similar federal kickback charges, waived indictment and pleaded guilty to conspiracy to violate the anti-kickback statute on Wednesday, August 5th.  Cota will enter a plea agreement with the Attorney General’s office.

Lang has also reportedly waived indictment and will enter a plea agreement.

Federal Kickback Defense in South Carolina

Kickbacks refer to a form of negotiated bribery in which one returns part of the purchase price of an item to a buyer or buyer’s representative with the intent of inducing a purchase or improperly influencing purchases in the future.

Under federal law, kickbacks involving government officials or public funds provided by the government are illegal.

Not all kickbacks are considered illegal, however. If a kickback does not specifically violate the federal or state law, the kickback may be considered normal, legal and tax deductible. Tax deductibility is prohibited by an official, employee of the federal government or an official or employee of a foreign government.

If you or your company has been accused of kickbacks, or violation of federal kickback law, a South Carolina federal criminal defense attorney at the Strom Law Firm, LLC can help. With long standing experience with both state and federal cases, we know what it takes to aggressively defend you. Call a South Carolina Federal Criminal Defense Attorney at the Strom Law Firm today for a free consultation. 803.252.4800.