Digest 3.7.2019 The State AG Report Weekly Update

2019 AG Elections

Republican Andy Taggart Announces Bid for Mississippi Attorney General

Consumer Protection

Florida Attorney General Announces Creation of Senior Protection Team

  • Florida AG Ashley Moody announced the creation of a Senior Protection Team to fight fraud against and abuse of state residents 60 years of age and older.
  • According to the AG’s office, the Senior Protection Team will be an intra-agency team comprised of members from the AG’s Consumer Protection Division, Office of Statewide Prosecution, and Medicaid Fraud Control Unit and the Florida Department of Law Enforcement who will work to identify emerging scams, spot trends, and stay ahead of changes in technology used to prey on senior citizens.

Illinois Attorney General Sues Tax Preparation Business Over Alleged False Advertising and Failure to Disclose Fees for Services

  • Illinois AG Kwame Raoul filed a complaint and a motion for a temporary restraining order (“TRO”) against tax preparation business Nu Republic over allegations that it falsely advertised its tax preparation services and charged consumers undisclosed fees in violation of the state’s Tax Refund Anticipation Loan Reform Act.
  • According to the AG’s office, Nu Republic and its sister company Refund Republic allegedly falsely advertised that consumers could double their tax refunds or obtain free cash advances by filing their taxes with Nu Republic, extracted additional undisclosed fees from consumers’ tax refunds, charged consumers for unnecessary tax-related financial products, provided erroneous tax filings and refund estimates, failed to meet filing deadlines, and made unauthorized submissions to the Internal Revenue Service.
  • According to the AG’s office, the TRO would require Nu Republic to cease operations while the lawsuit is ongoing.

Missouri Attorney General Sues Telemarketing Companies Over Alleged Robocalls to Individuals on No-Call List

  • Missouri AG Eric Schmitt filed a lawsuit against Health Advisors of America, Inc., Duff Insurance Brokerage Inc., America’s Best Insurance Group Inc., and Michael T Smith Insurance Inc., and their presidents over allegations that the companies made automated telephone calls—commonly known as “robocalls”—to state residents who were on the state’s no-call list in violation of Missouri’s No-Call law.
  • According to the AG’s office, the defendants called state residents who were on the state’s no-call list with a recorded message stating that they were offering pre-approved low-cost health insurance plans and encouraged the call recipients to press a number to receive an assessment and utilized several telephone numbers during their robocalling campaigns to attempt to circumvent call blocking features and to conceal their identities.
  • According to the AG’s office, the complaint seeks injunctive relief, penalties, and costs.


Massachusetts Attorney General Issues Cease and Desist Letter to E-Cigarette Retailer Over Alleged Sales of E-Cigarettes to Minors

  • Massachusetts AG Maura Healey issued a cease and desist letter (“Letter”) to Kilo E-Liquids, Inc. (“Kilo”) over allegations that it failed to prevent underage individuals from purchasing its e-cigarette products in violation of the state’s unfair business practices law and the AG’s regulations on e-cigarettes.
  • According to the Letter, Kilo allegedly failed to comply with state requirements to verify the ages of its online consumers and to require an adult to sign for deliveries mailed to its online consumers and advertised one of its vaping devices on websites designed for underage individuals, among other things.
  • The Letter demands that Kilo cease accepting all orders from addresses in the state and advertising any of its vaping products on websites designed for minors until it demonstrates compliance with the state’s tobacco and e-cigarette regulations.
  • As previously reported, AG Healey issued cease and desist letters to e-cigarette retailers Eonsmoke, LLC and Direct Eliquid LLC in July 2018 demanding that they cease accepting or fulfilling orders from Massachusetts consumers until they demonstrate compliance with the state’s tobacco and e-cigarette regulations.


New Mexico Attorney General Files Suit Against U.S. Air Force Over Alleged Soil and Groundwater Contamination

  • New Mexico AG Hector Balderas and the New Mexico Environment Department filed a lawsuit against the U.S. Department of the Air Force (“USAF”) over allegations that it contaminated soil and groundwater around two USAF bases in violation of the state’s Hazardous Waste Act.
  • According to the complaint, the USAF allegedly failed to safely dispose of chemicals released by its firefighting foams—known as per- and polyflouroaklyl substances (“PFAS”)—and failed to stop the spread of PFAS into the soil and groundwater near two Air Force bases in the state, causing contamination levels far exceeding federal health advisory standards.
  • The complaint seeks injunctive relief, penalties, and reimbursement for the state’s past and future work related to addressing the alleged contamination.

Financial Industry

Federal Trade Commission Requests Public Comment on Proposed Amendments to Safeguards and Privacy Rules

  • The Federal Trade Commission (“FTC”) is seeking public comment on proposed amendments to the Safeguards Rule and Privacy Rule of the Gramm-Leach-Bliley Act, which impose privacy and security obligations on financial institutions.
  • The proposed amendments to the Safeguards Rule—which establishes security program requirements for financial institutions—would add more detailed requirements for its mandated security programs, including encryption of consumer data, implementation of access controls, and multifactor authentication, and require companies to submit periodic security reports to their corporate governing bodies, among other things.
  • The proposed amendments to the Privacy Rule—which requires financial institutions to inform consumers about and allow consumers to opt out of information-sharing with third parties—would narrow the Rule to no longer apply to motor vehicle dealers that directly extend credit to consumers and do not routinely assign the extensions of credit to unaffiliated third parties, among other things.
  • The proposed amendments to both Rules would also expand the definition of “financial institution” to make “finders”—companies that connect consumers with lenders for a fee—subject to the Rules.
  • According to the FTC, the Federal Register Notice will be published “soon”. The deadline for submitting comments will be 60 days after the Notice is published.

Health Care

West Virginia Attorney General Supports Bill Transferring State Medicaid Fraud Control Unit to Attorney General’s Office

  • West Virginia AG Patrick Morrisey testified before the West Virginia House of Delegates Health and Human Resources Committee in support of a bill that would transfer the state’s Medicaid Fraud Control Unit (“Unit”) to the AG’s office.
  • The bill, H.B. 2867, would transfer the Unit–including all investigative powers–from the state Department of Health and Human Resources (“Department”) to the AG’s office by October 1, 2019, require the state’s legislative auditor to study the performance of the Unit under the AG’s office’s control, require the Department to assist with the transfer of the Unit to the AG’s office, and authorize local prosecutors or Department attorneys to maintain civil actions if the AG’s office declines to do so.
  • AG Morrisey testified that AG offices in 43 other states have oversight of Medicaid fraud units and that moving the Unit to the AG’s office would increase transparency and strengthen national working relationships.
  • Although H.B. 2867 was defeated in the House Judiciary Committee following AG Morrisey’s testimony, its companion bill S.B. 318 was passed through the state Senate and is currently pending in the House Finance Committee.

Labor & Employment

Massachusetts Attorney General Issues Civil Citations to Construction Company Over Allegedly Failing to Pay Overtime and Prevailing Wages

  • Massachusetts AG Maura Healey issued six civil citations against construction company ERA Equipment LLC and its owners (collectively, “ERA”) over allegations that ERA failed to pay overtime and pay the prevailing wage in violation of state wage and hour laws.
  • According to the AG’s office, ERA allegedly failed to pay any of its employees overtime pay, failed to pay some of its employees the prevailing wage required by law, failed to include some employees in its payroll records, misreported some employees’ hours to avoid paying them overtime, and kept inadequate and inconsistent payroll records.
  • According to the AG’s office, the civil citations require ERA to pay nearly $581,000 in restitution and penalties.