Government Sues Sprint Over Wiretap Charges

   SAN FRANCISCO – 3/19/2014 - The United States filed a civil complaint against Sprint Communications, Inc., formerly Sprint Nextel Corporation, under the False Claims Act, 31 U.S.C. §§ 3729-3733, according to a recent announcement by United States Attorney Melinda Haag and the U.S. Department of Justice Office of Inspector General, Special Agent in Charge M. Elise Chawaga.
   The complaint seeks treble damages and civil penalties in connection with Sprint’s claims for reimbursement of the expenses it incurred in complying with court orders authorizing wiretaps, pen registers, and trap devices.
   Like other telecommunications carriers, Sprint is authorized by statute to bill law enforcement agencies for the reasonable expenses it incurs in providing facilities or assistance to accomplish a court-ordered wiretap, pen register, or trap device. In 1994, Congress passed the Communications Assistance in Law Enforcement Act (“CALEA”), which required telecommunications carriers to upgrade their equipment, facilities, or services to ensure they were capable of enabling the government, pursuant to a court order, to intercept and deliver communications and call-identifying information.
   In 2006, the Federal Communications Commission ruled that carriers were prohibited from passing on the costs of its CALEA upgrades to law enforcement agencies in its intercept bills. From 2007 to 2010, in violation of the FCC’s ruling, Sprint included in its intercept charges the hidden costs of financing its CALEA upgrades.
   The complaint alleges that Sprint unlawfully inflated its charges by approximately 58 percent, causing federal law enforcement agencies to pay over $21 million in non-allowable costs from January 1, 2007 to July 31, 2010.
   “As alleged, Sprint overbilled law enforcement agencies for carrying out court-ordered intercepts, causing a significant loss to the government’s limited resources,” U.S. Attorney Melinda Haag said. “This office will use all available tools to protect the public . . . and we will continue to hold those who present false claims to the government accountable.”
   Assistant U.S. Attorney Steven Saltiel is prosecuting the case with the assistance of Legal Assistant Kathy Terry. The prosecution is the result of an investigation by the Department of Justice Office of Inspector General.
   Source: United States Attorney's Office - Northern District of California

Mutation Linked to Form of Cushing’s Syndrome

   (NIH) - 3/12/2014 - Mutations in a gene containing part of the information needed to make an enzyme that provides energy for governing basic cell functions appear to contribute to a severe form of Cushing’s syndrome, according to researchers at the National Institutes of Health and nine European research institutions.
   Cushing’s syndrome results when the body is exposed to too much of the stress hormone cortisol. The syndrome may result when the body itself produces excess cortisol, causing symptoms that may include high blood pressure, muscle weakness or osteoporosis.
    The study was published online in the New England Journal of Medicine. In a letter to the editor of the same journal, members of the NIH research team and researchers in Italy reported that a mutation in another gene containing information needed to make yet another portion of the enzyme appears to be central to Carney Complex, a rare disease that causes multiple tumors and which is characterized by increased cortisone levels.
   For the study on Cushing’s syndrome, the researchers examined tissue from patients having a subtype of Cushing’s syndrome, in which the source of the excess cortisol is a noncancerous tumor confined to only one of the body’ two adrenal glands. The researcher examined samples from nearly 200 such adrenal gland tumors. They found that 37 percent contained a mutation in the gene known as PRKACA.
   “The mutation we identified appears to give rise to one of the most common kinds of adrenal tumors seen in Cushing’s syndrome,” said study co- first author Constantine Stratakis, M.D., D.Sc., director of the Division of Intramural Research and head of the Program on Developmental Endocrinology and Genetics at the Eunice Kennedy ShriverNational Institute of Child Health and Human Development (NICHD), the NIH institute that took part in the study. “The discovery suggests a clear path forward for investigating medications that might block the production of excess cortisol.”
   The PRKACA gene contains the information needed to make a portion, or subunit, of the PKA (protein kinase A) enzyme. The enzyme is involved in numerous chemical reactions in the cell.
   For these patients, the mutant PRKACA gene was found only in the tumor cells, and not in other cells of the body. Because the gene was not found in other cells of the body, the mutation likely arose spontaneously in the adrenal tissue.
   The researchers also examined tissue from patients who had non-cancerous growths on both adrenal glands. In samples from these patients, the researchers found an extra copy of the PRKACAgene. This extra copy, they noted, was present in all of the patients’ cells, and was not limited to the tumor tissue. Because the mutation was found in all the cells of the body, it was likely hereditary.
   However, in both the cases involving the spontaneous mutation and the inherited mutation, the activity of the PKA enzyme was increased.
   “The mutation appears to spur the activity of this enzyme, Stratakis said. “The result appears to be an increase in cell growth and division in adrenal tissue, and an overproduction of cortisol.”
   Stratakis collaborated with the other co-first authors, including Felix Beuschlein, M.D., of the Ludwig-Maximilians-University, in Munich, Germany; Martin Fassnacht, M.D., of Ludwig-Maximilians-University and the University of Wurtzburg, in Wurtzburg, Germany; Guillaume Assie, M.D., Ph.D., of the Paris Descartes University and Cochin Hospital, in Paris; Davide Calebiro, M.D., of the University of Wurtzburg; and 25 other researchers at the NICHD and institutions in France, Germany and Italy.
   In a letter to the editor of the same issue of the New England Journal of Medicine, Orsetta Zuffardi of the University of Pavia, in Pavia, Italy and  Stratakis and other colleagues in Italy and at the NIH discovered that a patient with Carney Complex, who had a tumor in the pituitary gland and elevated growth hormone, had an extra copy of the PRKACBgene. This gene codes for another subunit of Protein Kinase A. In addition to elevated growth hormone levels, people with Carney Complex often have skin spots and increased risk of tumors in the pituitary, adrenals as well as other parts of the body.
   “It’s likely that the extra copy of this gene also increases the activity of protein kinase A, essentially setting the stage for increased cell proliferation and higher production of hormones,” Stratakis said.
   Source: National Institutes of Health release of 2/26/2014

Real Estate Investor to Plead Guilty To Bid Rigging

   (DOJ) - 3/3/2014 - A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
   Felony charges were filed recently in the U.S. District Court for the Northern District of California in Oakland against Charles Gonzales, of Alamo, Calif. Including Gonzales, a total of 44 individuals have pleaded guilty or agreed to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
   According to court documents, beginning as early as April 2009 until about October 2010, Gonzales conspired with others not to bid against one another, and instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif. Gonzales was also charged with conspiring to commit mail fraud by fraudulently acquiring title to selected Alameda County properties sold at public auctions and making and receiving payoffs and diverting money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.
   “The Antitrust Division’s ongoing investigation has resulted in charges against 44 individuals for their roles in schemes that defraud distressed homeowners and lenders,” said Bill Baer, assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will continue to work with its law enforcement partners to vigorously protect competition at the local level.”
    The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda County public foreclosure auctions at non-competitive prices. When real estate properties are sold at the auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, the conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
   “The symbolism of holding illegitimate and fraudulent private auctions near a courthouse is deplorable,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The justice system will continue to prevail in this ongoing investigation pursuing bid rigging and fraud at public foreclosure auctions.”
    A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
   The charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif. Investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.
   Source: Financial Fraud Enforcement Task Force

The Arms Debate

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