The State AG Report Weekly Update September 1, 2016


Michigan Attorney General Settles with Firefighting Charity Over Alleged Violations of Charitable Solicitations Law

  • Michigan AG Bill Schuette reached a settlement with Firefighters Support Services, Inc. (“FSS”), resolving allegations that the charity violated the state Charitable Organizations and Solicitations Act.
  • According to the Notice of Intended Action issued against FSS and its licensed professional fundraiser Associated Community Services, Inc. (“ACS”), ACS solicited donations with a deceptive and misleading script, which claimed that the organization raised funds to aid firefighters and fire victims but omitted that it allegedly spent ninety percent of the $4.2 million it raised on fundraising and administrative costs and salaries, among other things unrelated to aid.
  • Under the terms of the settlement, the directors of FSS must, among other things, pay $144,000 over the next three years, never again serve as directors or officers of a charity, and dissolve operations within sixty days. As we previously reported, Minnesota AG Lori Swanson also recently reached a settlement with ACS to resolve alleged charity law violations.


Consumer Financial Protection Bureau

CFPB Settles with Bank for Allegedly Illegal Credit Card Practices

  • The Consumer Financial Protection Bureau (“CFPB”), acting jointly with the Office of the Comptroller of the Currency (“OCC”), reached a settlement with First National Bank of Omaha over the bank’s alleged violations of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Federal Trade Commission Act by deceptively marketing credit card add-on products.
  • According to the CFPB, First National Bank of Omaha allegedly failed to clearly disclose that the products and services it advertised were not free, made it difficult for consumers to reap the benefits of and cancel such services, and charged consumers for credit monitoring services that were never provided.
  • Under the terms of the consent order, First National Bank of Omaha must, among other things, pay $27.75 million in restitution to affected customers, pay $4.5 million to the CFPB’s Civil Penalty Fund, and no longer offer credit card add-on products until a compliance plan is provided to the CFPB. Under the OCC consent order, the company must also pay a $3 million civil penalty to the U.S. Treasury.


Consumer Protection

New York Attorney General Settles with NYC Developer Over Alleged Real Estate Securities Violations

  • New York AG Eric Schneiderman reached a settlement with Boymelgreen Family LLC, 343 LLC, City View Gardens Phase II, LLC, and its owners (collectively “the developers”) to resolve allegations that they violated the Martin Act, New York’s wide-ranging securities law.
  • According to the AG’s office, the developers failed to renovate properties intended to be converted from corporate offices to residential space, while taking advantage of tax breaks offered by New York City to encourage residential development in the area. The developers also allegedly failed to obtain permanent certificates of occupancy as required of real estate securities sellers, and did not set aside the required money needed to complete projects.
  • Under the terms of the settlement, the developers must pay $100,000 to the AG’s office to cover the cost of the investigation, pay $250,000 to one of the property’s board of managers as restitution for construction defects, refrain from participating in securities sales in New York for two years, and set aside money to complete the renovation projects, among other things.



Maryland Attorney General Settles with Energy Company Over Alleged Environmental Law Violations

  • Maryland AG Brian Frosh reached a settlement with NRG Chalk Point LLC (“NRG”) and related entities to resolve allegations that two of the company’s electric generating stations violated environmental laws related to their water discharge permits. According to reports, NRG neither admitted nor denied violations in the settlement.
  • According to the AG’s office, the electric stations were unable to meet required nitrogen level reductions after the installation of new air pollution control technology.
  • Under the terms of the settlement, NRG must, among other things, install “membrane ultra-filtration technology” for wastewater treatment at the two stations, pay the Maryland Department of Environment a $1 million fee, pay $75,000 in attorney’s fees, and implement $1 million worth of “supplemental environmental projects” to benefit the Potomac and Patuxent watersheds.


False Claims Act

Connecticut Attorney General Settles with Pediatric Dentist Over Alleged False Claims Act Violations

  • Connecticut AG George Jepsen, in conjunction with the U.S. Department of Health and Human Services Office of Inspector General/Office of Investigations, and the Connecticut Department of Social Services Office of Quality Assurance, reached a settlement with Fairfield Pediatric Dentistry, LLC, Haven Pediatric Dentistry, LLC, and its owner to resolve allegations of state and federal False Claims Act violations.
  • According to the AG’s office, the dentist allegedly submitted false claims to the state’s Medicaid program for x-rays that were taken by uncertified dental assistants between 2010 and 2014. In order to qualify under Medicaid, the x-rays must be taken by a certified assistant.
  • Under the terms of the settlement, the clinics will pay $1,367,466 to the state and federal government, of which $820,479 will be given to the state in order to reimburse its Medicaid program.


State AGs in the News

Pennsylvania’s New Attorney General Confirmed by State Senate

  • The Pennsylvania State Senate confirmed the nomination of Inspector General Bruce Beemer to serve as the state’s next Attorney General. AG Beemer replaces former AG Kathleen Kane, who resigned following her conviction for perjury and other charges this August.
  • Governor Tom Wolf appointed AG Beemer to the Inspector General’s post in July after he left his position as First Deputy of the Criminal, Civil, and Public Protections Division in the AG’s office. AG Beemer is also a former Deputy District Attorney.
  • AG Beemer will not stand for election this year and reportedly will resume his role as Inspector General once a new AG is elected and sworn into office in January 2017.


South Dakota Attorney General and NAAG Host Opioid Abuse Training

  • South Dakota AG Marty Jackley and the National Association of Attorneys General (“NAAG”) hosted an Opioid Abuse Consumer Protection Training in Sioux Falls on Monday, August 29 at the South Dakota Medical School.
  • This training illustrates the continuing AG focus on combatting opioid abuse. As we reported earlier in the year, 33 AGs submitted a comment letter to the U.S. Department of Health and Human Services in which they urged the agency to amend a proposed regulation to permit opioid treatment programs to provide dispensing data to state prescription drug monitoring programs. At the beginning of the year, 35 AGs also urged the Centers for Disease Control and Prevention to finalize guidelines for prescribing opioids.
  • Opioid abuse will be the topic of discussion at the NAAG Midwestern Regional Meeting, which will be held on October 6 and October 7. The meeting will focus on heroin and prescription opiates as a growing threat to public health and safety in the United States.