Tag: Fraud

WEST HOLLYWOOD—The city is launching an effort to help inform community members about how to protect themselves from cryptocurrency fraud and scams.

The city of West Hollywood reported on its website that cryptocurrency is digital currency acquired through an app on a phone, a website, or at a cryptocurrency Automated Teller Machine (ATM). Bitcoin and Ether are well-known cryptocurrencies, but there are others. Scammers can use cryptocurrencies because they do not have the same legal protections as credit cards or debit cards, and payments usually cannot be reversed.

Here are some tips to avoid cryptocurrency scams:

-Only scammers demand payment in cryptocurrency. No legitimate business or government agency will demand any type of payment with cryptocurrency; that is a scam.
-Never pay a fee to get a job. If someone asks for upfront payment to secure a job with cryptocurrency or any other type of payment; that is a scam.
-Never mix cryptocurrency and online dating. If a potential online date asks for cryptocurrency or wants to “help” invest in crypto; that is a scam.
-Do research on companies and organizations before investing or sending money to avoid falling victim to an illegitimate company or website. When companies or websites (fake or not) have look or sound-alike names to well-known organizations, the potential confusion created for consumers is real. Attempting to take advantage of such confusion is a tactic employed by bad actors looking to profit from unsuspecting consumers.

The State of California Department of Financial Protection and Innovation (DFPI) announced the launch of a Crypto Scam Tracker to help Californians spot and avoid crypto scams. The tracker details apparent crypto scams identified through a review of complaints submitted by the public and allows California consumers and investors to complete their own research and prevent harm to themselves and others.

The site features a database searchable by company name, scam type, or keywords to learn more about the crypto-specific complaints the DFPI received. An accompanying glossary aims to help consumers better understand common scams. As reports of new crypto scams emerge, the DFPI will continually update this tracker to promptly alert and protect the public.

For community members who believe they have been a victim of a scam or fraud, or hear about a scam that is currently not listed on the Scam Tracker should notify the DFPI immediately by filing a complaint with the DFPI online at https://dfpi.ca.gov/submit-a-complaint or by calling toll-free: (866) 275-2677.

For more details contact Anita Shandi, West Hollywood’s Public Safety Manager at (323) 848-6446 or at ashandi@weho.org. For people who are Deaf or hard of hearing call TTY (323) 848-6496.

By Trevor

BRENTWOOD–On Friday, February 5, the U.S. Department of Justice announced that Navid Vahedi, 41, of Brentwood, pleaded guilty to one count of conspiracy to commit health care fraud and payment of illegal remunerations. Vahedi also entered a guilty plea to the offense on behalf of his business, Fusion Rx Compounding Pharmacy.

Fusion Rx was a provider of compounded drugs, which are products doctors may prescribe when the FDA-approved alternative does not meet the needs of a patient. In their plea agreements, Vahedi and Fusion Rx admitted routing millions of dollars in kickback payments through the businesses of two marketers to steer prescriptions for compounded drugs to Fusion Rx.

Vahedi and the two marketers provided physicians with preprinted prescription script pads that offered “check-the-box” options on the form to maximize the amount of insurance reimbursement for the compounded drugs. From May 2014 to February 2016, Fusion Rx received approximately $14 million in reimbursements on its claims for compounded drug prescriptions.

Fusion Rx was obligated to collect co-payments from patients as part of contracts with various insurance networks. According to court documents, Fusion Rx did not collect co-payments with any regularity and, in other instances, it provided gift cards to patients to offset the amount of the copayments. Vahedi directed Fusion Rx funds to be used to purchase American Express gift cards, which were then used to make copayments for certain prescriptions without the patients’ knowledge after an audit raised concerns that Fusion Rx’s failure to collect copayments would be discovered. Fusion Rx later submitted claims on these prescriptions falsely representing that patients had paid the required copayments.

Vahedi and Fusion Rx have agreed to pay restitution related to the copayment reimbursement part of the scheme, which is estimated to be $4,405,926. Vahedi also agreed to forfeit $1,338,511 in addition to his obligation under the plea agreement.

Fusion Rx has also agreed to pay a fine sufficient to divest itself of all its remaining assets and Vahedi has agreed to have his pharmacist license revoked. Both Fusion Rx and Vahedi will be excluded from federal health care programs such as Medicaid and Medicare going forward.

A sentencing hearing is scheduled for June 28, in which Vahedi will face a maximum sentence of five years in federal prison.

By Danielle