Category: Alerts

Opioid Kickbacks Scheme Uncovered by Justice Department

By Emily Cox
opioid kickbacks
ccPixs.com

According to U.S. Department of Justice, a Rhode Island doctor pled guilty to an opioid kickbacks scheme Wednesday. He admitted to healthcare fraud and conspiring to receive kickbacks in exchange for prescribing an opioid fentanyl spray to patients who didn’t have cancer pain.

Dr. Jerrold Rosenberg, 53, indicated that he participated in the opioid kickback scheme between 2012 and 2015. Allegedly, opioid manufacturer Insys Therapeutics paid Rosenberg a total of about $188,000 to prescribe the company’s Subsys fentanyl product. Furthermore, he wrote a great deal of these prescriptions to patients without cancer.  Insys provided the illegal kickbacks under the guise of sham speaking engagements. The Justice Department said that Medicare at least partially reimbursed the cost of the drug in many cases.

“Patients trusted Dr. Rosenberg to make medical decisions based on the best available treatment, not based on speaker fees, kickbacks, and other financial incentives,” the Rhode Island Attorney General said.

“He violated the law and his oath as a physician to do no harm when he placed greed over patient care, thinking little of the long-term consequences of patients taking this extremely powerful, highly addictive opioid.”

Opioid Kickbacks Scheme Indictment

The Justice Department charged Rosenberg with 13 counts of health care fraud, one count of conspiracy to pay and receive kickbacks, and five counts of receiving opioid kickbacks. In his plea, he admitted to one count of health care fraud and one count of conspiracy to receive opioid kickbacks. However, his decision to negligently prescribe Subsys wasn’t entirely for personal gain. His son was an Insys sales representative from 2012 -2013. His son also made commissions off his father’s inappropriate prescriptions.

The FDA approved Subsys in 2012 to treat breakthrough cancer pain for patients. But, this indication is only for patients already receiving and tolerant of opioid therapy for ongoing cancer pain. However, Rosenberg blatantly misrepresented that patients were suffering from cancer pain when they weren’t in order to secure insurance approvals for prescriptions.

The court has sent Rosenberg’s sentencing for January 16, 2018. He could face as many as 15 years in prison and fines up to $500,000. However, Rosenberg has already agreed to pay $754,736 in restitution.

As the opioid crisis continues to embroil the nation, one has to consider how much of it was bought and paid for by pharmaceutical companies. Furthermore, how many of our doctors were bought and paid off in the process?

 

 

Glyphosate Exposure Is Skyrocketing in America

But federal regulators are still failing to take acknowledge significant risks that have already caused the European Parliament to ban glyphosate.

By Emily Cox
Glyphosate Exposure
Flickr/Chafer Machinery

A new study indicates that glyphosate exposure is higher than ever. But, as Monsanto continues to saturate the market with crop seed that is genetically modified for glyphosate use, regulatory authorities continue to make little effort to track its health effects even in the face of mounting lawsuits asserting the popular herbicide causes cancer.

The medical journal JAMA published the glyphosate exposure study today. Researchers indicate that human glyphosate exposure has increased almost 600%  in the past decade. Given the prevalence of the herbicide on the worldwide market and serious allegations of its toxicity, one of the most surprising findings is that it’s essentially the only one of its kind. Studies have evaluated how much glyphosate is in our food, air, and water. However, this is one of the only studies that has looked into how much of this chemical is making its way into our bodies. Given its widespread use, the study merely confirms what many scientists have feared for the past decade.

“This study demonstrates something many scientists have been worried about,” says Michael Hansen, Ph.D., senior scientist at Consumer’s Union. “As use of the chemical grows, more of it is getting into our bodies.”

The Rise of Glyphosate Exposure

Glyphosate is the active ingredient in the popular weed killer Roundup. Beyond lawns, gardens, and golf courses, it’s used on a wide range of crops. In fact, Roundup helped Monsanto corner the global seed market with its genetically modified Roundup ready crops, launching GMOs into mainstream commerce. These crops include maize, cereals, legumes, sunflower, potatoes, and cotton.

As its use has grown, so have concerns over potential risks from glyphosate exposure. In 2015, the World Health Organization classified glyphosate as a probable carcinogen. Earlier this year, California mandated cancer warning labels for products containing the chemical after the pending Roundup cancer litigation released Monsanto internal documents that indicate the agrochemical giant knew that glyphosate exposure may cause cancer. And, now the European Parliament has voted in favor of totally banning glyphosate by 2022.

However, despite all of this, U.S. federal regulators are shockingly silent on glyphosate. In fact, the EPA continues to insist that glyphosate is safe. And, in 2013, the agency actually increased allowable levels so that twice as much of the herbicide can be used on certain crops. Furthermore, somehow, the Department of Agriculture’s pesticide program still does not monitor glyphosate. Likewise, the Centers for Disease Control and Prevention’s program on human exposure to environmental chemicals does not factor glyphosate exposure.

“It’s a huge gap in our safety net,” Hansen says.

U.S. Glyphosate Exposure Findings Reflect Regulatory Indifference

Monsanto’s domination of America’s food chain through lobbying, insidious legal tactics, and its genetically modified seeds, manufactured solely for the purpose of increasing glyphosate’s market share, has come at a price. And, if worldwide cancer concerns are legitimate, then the price may be too high.

California researchers in the Rancho Bernado study measured the urine concentrations of glyphosate of 100 elderly people living in the large southern California suburb. They collected samples between 1993 and 1996, and then again between 2013 and 2016.

Researchers found a staggering increase in overall glyphosate exposure levels that exceeded detection limits. Originally, only 12 of the samples had detectable levels of glyphosate. By the 2010’s, 70 not only had detectable levels. They had thirteenfold the concentration of these levels compared to the 1990’s. Also, the body’s release of metabolite chemicals required to process the chemical increased by more than 300 percent. Researchers expressed concerns over their findings and indicated that the chemical has made its way into the regular dietary intake of many Americans.

“We’re being exposed to more and more of this chemical,” says Paul J. Mills, Ph.D., a professor at the UC San Diego School of Medicine and the study’s lead author.

“Most people don’t even realize that they are consuming it through their diet.”

Mills and his fellow researchers are planning several follow-up studies to assess health outcomes and glyphosate exposure in different parts of the country.

Glyphosate Exposure Risks Are Still Largely Unknown

In 2016, Environmental Health published a report that looked at glyphosate exposure in human and animal studies. Researchers found a link between glyphosate exposure and numerous health problems. These included liver and kidney damage, non-Hodgkin’s lymphoma, and endocrine disruption. However, very few human studies exist on glyphosate exposure. So, researchers had to rely on mostly animal studies.

Consequently, there’s no way to truly assess how much glyphosate is potentially harmful to humans.

“The safety limits we have right now are complete guesses,” says Bruce Blumberg, a scientist at the University of California at Irvine who has studied glyphosate.

Given recent developments that indicate that Monsanto had its hand in glyphosate studies that the EPA used to determine the chemical’s safety, it might be about time that the U.S. took a page from the European Parliament’s playbook and revisited glyphosate’s safety.

Opioid Investigation Probes Massive Painkiller Shipments

By Emily Cox
Opioid Investigation
Flickr/Me

Lawmakers in the ongoing opioid investigation into West Virginia’s ruinous epidemic are turning up the heat on an Ohio wholesaler over its shockingly large pain killer shipments to the drug-ravaged state.

Amid allegations that Miami-Luken shipped inordinate amounts of powerful painkillers to West Virginia’s southern counties and failed to report “suspicious” local pharmacy orders, a congressional committee investigating the state’s opioid crisis is looking for answers and documents from the prescription drug distributor.

On Monday, the US House Committee on Energy and Commerce requested Miami-Luken to turn over West Virginia pharmacy drug shipment records. Specifically, the panel asked for files regarding the company’s painkiller shipments to four south West Virginia drugstores. These include Westside Pharmacy in Oceana, Beckley’s Colony Drug, Tug Valley Pharmacy in Williamson, and Kermit’s former Sav-Rite Pharmacy.

Kermit is a small town in Mingo County on the Kentucky border with less than 400 residents. However, Miami-Luken sold more than $3 million a year of opioids to the Kermit pharmacy for six consecutive years.  During this period, the company distributed 14.7 million doses of hydrocodone throughout Mingo County. The county has a population of only 27,000. This is an average of 90 doses per year for every adult and child in the county.

“As we have continued our investigation, it became increasingly clear that we needed to extend our oversight into Miami-Luken, a significant opioid distributor that we know has been active with West Virginia’s pharmacies,” said committee Chairman Greg Walden, Rep – OR, and committee Ranking Member Frank Pallone Jr., D – NJ, in a joint statement. “West Virginia is among the hardest hit states by this epidemic, and it’s critical we get to the bottom of how such large quantities of opioids were readily available in such small towns.”

The DEA’s Miami-Luken Opioid Investigation

The congressional committee’s opioid investigation is also requesting copies of the company’s written protocol for identifying suspicious orders. The lawmakers also wish to see suspicious order reports filed with the DEA. As part of an ongoing separate federal opioid investigation, the DEA cited Miami-Luken’s inordinately large drug shipments in a “show-cause” order. The order indicates that company higher-ups failed to take action even when employees flagged suspicious sales. According to the order, a sales representative reported to superiors that Tug Valley Pharmacy’s prescription painkiller sales were unusually “high” in 2008. The sales rep noted that the pharmacy also filled nearby pain clinic prescriptions. However, superiors at the company never investigation the legitimacy of these prescriptions.

In 2009, Miami-Luken went on to ship 258,000 doses of hydrocodone to Tug Valley Pharmacy in just one month. This is more than 10 times what typical rural West Virginia pharmacies receive each month.

Bankruptcy records indicate that Miami-Luken was also major supplier for Sav-Rite Pharmacy. According to the DEA, Miami-Luken “failed to maintain effective controls against diversion” of hydrocodone between 2008 and 2011. The small Mingo County pharmacy purchased 10.8 million doses of the painkiller during this time.

The DEA has also called Miami-Luken’s shipments to Colony Drug in Raleigh County into question. For example, the company shipped 16,400 doses of oxycodone to the Beckley pharmacy in March 2008. This shipment jumped 227 percent to 37,200 doses the very next month. The prescription distributor never investigated this substantial increase. Meanwhile, Wyoming County’s Westside Pharmacy can legally only receive 6,000 monthly doses of oxycodone. Miami-Luken’s shipments exceeded this limit every month from September 2008 to December 2015. But the company only ever reported one suspicious order from the pharmacy.

Opioid Investigation Probes Suspect Terminations

The committee also requested personnel records of those the company terminated over prescription drug compliance issues. The committee is particularly interested in employees who lost their position once the DEA began its investigation. This includes former CEO, Anthony Rattini. In the face of the DEA inquiry, Miami-Luken stripped Rattini of his duties to report suspicious opioid orders. In fact, court records indicate that the company’s board Chairman Joseph Mastandrea intends to testify the he relieved Rattini of these duties “as DEA inquiries increased.” The congressional committee wants documents detailing this removal and the specific reasons behind it.

West Virginia has the highest drug overdose rate in the nation. However, Miami-Luken also distributes to Ohio, Indiana, Kentucky, western Pennsylvania, and southern Michigan. Maybe not so coincidentally, these are the regions hit hardest by the opioid epidemic, according to the Centers for Disease Control.

“These are the areas where the [opioid-related] death rate is so high that some of the funeral homes have to have refrigerator trucks to store bodies in waiting for funerals,” committee leader Tim Murphy, R – PA said.

As the opioid investigation continues, Miami-Luken is fighting the DEA’s efforts to revoke its license so that it can continue distributing “medicine” into the very heart of darkness.

 

Opioid Addiction Danger Eclipses Significant Treatment Drug Interactions

By Emily Cox
opioid addiction
Flickr/Beth Scupham

As the opioid crisis continues to intensify, the FDA is advising that opioid addiction treatment has become paramount and addiction medications should not be withheld from patients taking benzodiazepines or other drugs that suppress the central nervous system (CNS) despite the substantial risks of serious side effects. The agency indicated that the combined use of these drugs can be dangerous. However, the harm caused by untreated opioid addiction now outweighs these considerations.

The FDA issued the advisory this past week, recommending concurrent use of these drugs when necessary. Previously, the agency has advised against using opioid addiction medications, like buprenorphine and methadone, with benzodiazepines, anti-anxiety medications, and other CNS depressant drugs. Taken together, these drugs can pose a substantial threat to the central nervous system as a whole. But the threat of opioid addiction or combining these drugs outside the scope of a carefully crafted treatment plan could prove far deadlier for CNS patients who are denied medication-assisted treatment (MAT) for their addiction.

Buprenorphine and methadone are often invaluable weapons in the fight against opioid addiction. Not only do they reduce withdrawal symptoms to manageable levels for many patients. They actually block opioid receptor sites, preventing the intense euphoric high from any continued opioid use. Thus, these drugs also help reduce opioid cravings. Previously, treatment centers and healthcare providers would withhold these drugs from opioid addicts who were also taking CNS depressants due to the risk of serious side effects, including overdose and death. However, the FDA now indicates that not treating opioid addiction could pose these same risks but at a higher rate.

FDA Opioid Addiction Treatment Recommendations

While the FDA is advocating MAT for CNS patients, the agency cautions that healthcare professionals must take certain steps and proceed with caution when treating opioid addiction with MAT concurrent with CNS depressant use.

First, doctors need to educate patients about the serious risks associated with the combined use of these drugs. Overdose and death can still occur with CNS depressants even when patients use them as prescribed. Healthcare providers also need to develop strategies to manage CNS depressant use. If a patient is taking CNS medication for a verifiable medical diagnosis, physicians should consider other treatment options for conditions like anxiety and insomnia. Ideally, doctors should taper CNS use to discontinuation, if possible. Healthcare providers should also coordinate care with other prescribers to ensure they are aware of the patient’s opioid addition medication.

Physicians also need to recognize that patients may require opioid addiction medications indefinitely. Use should continue as long as patients are benefitting and meeting treatment goals.

The agency warned that patients using any of these prescription drugs should never stop taking or add new medication without consulting their doctor first. The agency is adding these new recommendations to buprenorphine and methadone drug labels. Labels will also include detailed instructions for reducing opioid addiction medication and CNS depressants use.

Opioid Addiction May Be Shortening Overall Life Expectancy

The FDA’s new MAT recommendations come amidst the ever-worsening opioid abuse firestorm that is currently consuming the U.S. and everyone in its path. JAMA recently published a study that shined a light along the epidemic’s path of destruction. The study indicates that opioid deaths may be starting to bleed over into the overall life-expectancy for Americans. While life expectancy increased overall between 2000 and 2015, this increase actually began to reverse between 2014 and 2015. Researchers found that opioids were the defining factor in this reversal. The last time one factor contributed so drastically to decreasing life expectancy was during the HIV/AIDS epidemic’s peak in 1993.

 

 

 

Opioid Epidemic is Officially a National Emergency

By Emily Cox
opioid epidemic national emergency
Flickr/Gage Skidmore

President Donald Trump declared a national emergency Thursday, thrusting the weight of the White House into the battle against the opioid epidemic that is ravaging the United States with increasing ferocity.

“The opioid crisis is an emergency, and I’m saying officially right now it is an emergency. It’s a national emergency,” Trump said.  “We’re going to spend a lot of time, a lot of effort and a lot of money on the opioid crisis.”

“It is a serious problem the likes of which we have never had… This is a national emergency and we are drawing documents now to so attest,” he continued.

This is the first time that a long-term public health crisis has been officially designated as a national emergency. Consequently, it’s not entirely clear how this designation will play out. However, experts say that the national emergency declaration will allow the administration to allocate essential funds to expand treatment facilities and supply police officers with anti-overdose medication. The designation will also allow the executive branch to waive certain federal rules, including Medicaid restrictions on where recipients can receive addiction treatment. Currently, the federal aid program offers few options for those suffering from addiction. The administration has also expressed interest in reviewing medical privacy regulations to let addicts’ families know about overdose treatment.

The declaration comes on the heels of the White House opioid commission’s impassioned recommendation to declare a national public health emergency to provide immediate aid in battling the deadly epidemic.

“Our citizens are dying. We must act boldly to stop it,” the commission, headed by New Jersey Gov. Chris Christie, said in its interim report.  “The first and most urgent recommendation of this Commission is direct and completely within your control. Declare a national emergency.”

Opioid Epidemic Blazes Out-of-Control

In its report, the opioid epidemic commission indicated that there are 142 opioid deaths every day across the country. Consequently, opioids are claiming as many lives as September 11th every three weeks. Every three days, they are killing the equivalent of a full jetliner crash.

As shocking as this statistic is, the report is actually a significant understatement. The commission based its estimate on the number of overdoses in 2015. However, new federal data for the first nine months of 2016 shows that the death toll jumped significantly from 2015’s numbers. There could be almost 10,000 more deaths in 2016 than 2015. The 20 percent increase is a clear indication that, despite growing efforts, the epidemic continues to blaze unfettered, consuming all in its path. Furthermore, even these numbers don’t account for the totality of the epidemic’s devastation. These are only overdose deaths.

The American Journal of Public Health published a study this past month indicating that the number of drivers killed in car accidents who tested positive for opioids had increased 700 percent from 1995 to 2015.

In 1995, only one percent of fatally injured drivers tested positive for these drugs. By 2015, this number had risen to seven percent. Given that one out of three Americans took prescription opioids in 2015, this isn’t entirely surprising. If this number remained constant for 2016, this indicates that as many as 3,000 fatally injured drivers were under the influence of opioids.

There’s no question that there is no quick fix to extinguish the devastating epidemic. However, declaring a national emergency makes the opioid epidemic the government’s top priority. The designation will infuse desperately needed funds into hard-hit areas and bolster resources for the long battle ahead.

 

 

 

$4.5M Opioid Settlement Reached

By Emily Cox
Opioid Settlement
Flickr/Mark Bonica

Insys Therapeutics Inc reached an opioid settlement Thursday, agreeing to pay $4.5 million to resolve claims by the Illinois’ attorney general that the company marketed an addictive fentanyl-based cancer pain drug for off-label uses in order to increase market share.

Attorney General Lisa Madigan filed the lawsuit in August 2016. The opioid settlement stems from Madigan’s investigation into allegations that Insys was marketing Subsys for off-label uses. Allegedly, Subsys persuaded doctors to use the drug to treat chronic conditions other than cancer, including back and neck pain. Insys also pushed doctors to prescribe higher, more expensive doses of the drug. This runs contrary to FDA mandates aimed at keeping patients on the lowest effective dose. She claimed that this type of boundless greed is the very foundation of the opioid epidemic ravaging the nation.

“This drug company’s desire for increased profits led it to disregard patients’ health and push addictive opioids for non-FDA approved purposes,” Madigan said.

“It’s this type of reprehensible and illegal conduct that feeds the dangerous opioid epidemic and is another low for the pharmaceutical industry.”

Madigan’s investigation also opened the doors for a federal inquiry. She found that Insys also provided illegal incentives to doctors across the country to prescribe Subsys for off-label uses. These incentives included payments for sham speaking events and dinners at expensive restaurants. In Illinois, the top Subsys prescriber must have had a very large appetite. The anesthesiologist, who treats few, if any, cancer victims, wrote approximately 58 percent of the Subsys prescriptions in the state.

These findings prompted Boston federal prosecutors to charge six Insys executives and managers, including former Chief Executive Michael Babich, with engaging in a bribery scheme to further increase sales despite the risks to patients.

Opioid Settlement Should Strengthen Ongoing Investigations

Within the past year, at least 25 states, cities and counties have filed opioid lawsuits. These lawsuits aren’t only targeting manufacturers. They are also going after the distributors and large drugstore chains that contribute to the $13 billon-a-year opioid industry. In the past few months, attorneys general for Ohio, Missouri, and Oklahoma joined the charge to fight the worst drug epidemic in U.S. history. The district attorneys for three Tennessee counties also joined the fray. Each opioid settlement continues to strengthen these cases.

In June, Madigan herself joined a massive bipartisan effort to investigate the role opioid manufacturers played in igniting the raging opioid inferno engulfing the nation. The investigation is being led by a coalition of attorneys general across the U.S. It will focus on “whether the manufacturers have engaged in unlawful practices in the marketing and sale of opioids.”

“I want to know whether drug companies, seeking higher profits, have intentionally, recklessly and unlawfully pushed addictive opioids,” Madigan said in a statement.

“We must hold drug companies accountable for their role in the epidemic levels of opioid overdoses and deaths in Illinois and around the country.”

The Epidemic Behind the Opioid Settlement

The opioid settlement should come as no surprise other than the relatively low amount for the overwhelming damage Insys caused through its greed and negligence. Thanks to the efforts of likeminded individuals, Americans are now the largest consumers of highly-addictive opioids on Earth. The U.S. even gobbles down 99 percent of the planet’s hydrocodone supply. In 2016, doctors wrote approximately 300 million opioid prescriptions. The population of the U.S. was 322 million in 2016…and 73 million of that figure were children.

Last year, these drugs killed 20,101 people. That’s more than the total U.S. casualties from 9/11 taken with the Iraq and Afghanistan wars combined. In fact, it’s more than double, and it happens every year. And, these are just the overdose deaths. A new study highlights that overdosing is not the only thing claiming the victims that the pharmaceutical industry has enslaved to satiate its bottomless greed.

The American Journal of Public Health published a study this past month indicating that the number of drivers killed in car accidents who tested positive for opioids has increased 700 percent from 1995 to 2015.

In 1995, before Big Pharma began to sink its voracious teeth into the very heart of America with opioids, only one percent of fatally injured drivers tested positive for these drugs. By 2015, this number had risen to seven percent.

Somehow most experts find the steady rise in traffic deaths completely unfathomable. Could it be Big Pharma’s virtual army of perpetually doped-up victims on the road? One thing is for certain. These people turned to physicians and companies they trusted for help with legitimate problems. However, they ended up with even worse ones instead.

 

 

Did Fox News Create Fake News to Protect Trump?

By Emily Cox
Fox News
Flickr/Diego Cambiaso

According to a new lawsuit, the White House, Trump supporters, and Fox News conspired to fabricate an insidious story connecting Democratic leaks to an unsolved murder to discredit the Russia investigation that has shadowed Trump’s early presidency.

Rod Wheeler, a private investigator and Fox News contributor, filed the explosive lawsuit Tuesday. He alleges that the network and a wealthy President Trump supporter worked together under the guidance of the White House to spin a conspiracy about the death of a young Democratic National Committee (DNC) aide to deflect attention from growing concerns about the administration’s ties to the Russian government. Wheeler charges that a Fox News reporter manifested quotations out of thin air and attributed them to him to propel her story.

The lawsuit pays particular attention to Ed Butowsky in weaving these fabrications. Butowsky, a wealthy Dalllas investor and unpaid Fox financial commentator, is a devote Trump supporter. In February, Butowsky reached out to Wheeler and offered to pay him to investigate the death of DNC aide, Seth Rich, on behalf of Rich’s parents.

Rich, 27, was shot and killed in the early morning hours of July 10, 2016, near his Washington D.C. apartment. Police believe the murder was an attempted robbery but have not made any arrests. Rich’s death quickly became fodder for conspiracy theorists. They postulate that it was actually Rich leaked the Democratic emails to WikiLeaks and that it cost him his life, thereby negating the need for a Russia probe into the matter. However, no evidence has come to light support this theory, despite the story Fox News ran on May 16 to the contrary.

Butowsky Begins Crafting the Fox News’ Narrative

When Wheeler initially met with Butowsky, there was an unexpected third guest – Malia Zimmerman, a Fox News investigative reporter. When Butowsky later introduced Wheeler to the Rich family, he allegedly warned him to not mention that he even knew Zimmerman and “play down” Fox News.

It quickly became clear that Butowsky wasn’t looking to solve the murder but prove the Rich email leak conspiracy. When Wheeler met with a D.C. detective investigating Rich’s murder, he indicated that there was no evidence that the killing was anything more than a robbery. In response, Butowsky allegedly emailed Wheeler, saying that if the detective didn’t help, “we will go after him as being part of the cover up.”

Despite the FBI informing Butowsky, Wheeler, and Zimmerman that the agency was not assisting in the Rich investigation, Butowsky continued to insist the agency had a report showing that Rich’s laptop showed contacts with WikiLeaks. According to lawsuit transcripts, Butowsky said reporter Seymour Hersh had an FBI source who confirmed the report. However, Hersh said that no such confirmation exists.

“I hear gossip,” Hersh tells NPR on Monday. “[Butowsky] took two and two and made 45 out of it.”

White House Gives Fox News Fabrication Green Light

Despite not making much progress, Butowsky quickly began to divulge details of the “investigation” to the White House. Before Wheeler ever even met with D.C. investigators working on Rich’s case, Butowsky brought him to meet with White House press secretary Sean Spicer to discuss the investigation and the Fox News’ story. Butowsky directed Wheeler to create a bullet-pointed investigation summary, highlighting the Rich email connection.

After the May 9 firing of FBI Director James Comey, the mechanization behind the fabrication kicked into high gear. On May 10, Butowsky and Zimmerman called Wheeler with claims of an FBI source confirming Rich sent emails to WikiLeaks. However, they did not share the source’s identity. Then, Zimmerman sent Wheeler a draft of her story with no quotes from Wheeler. Meanwhile, Butowsky increasingly indicated that the White House was calling for the story’s immediate release.

On May 14, Butowsky left a voice message for Wheeler, saying, “”We have the full, uh, attention of the White House on this. And tomorrow, let’s close this deal, whatever we’ve got to do.”

He also texted Wheeler, “”Not to add any more pressure but the president just read the article. He wants the article out immediately. It’s now all up to you.”

Butowsky Coaches Fox News Before Story Breaks

Butowsky busied himself with orchestrating the media maelstrom the evening before the story broke. He sent an email to Fox News producers and hosts letting them know how he wanted them to frame the story. Recipients included Fox & Friends hosts, Steve Doocy, Ainsley Earhardt, and Brian Kilmeade.

“I’m actually the one who’s been putting this together but as you know, I keep my name out of things because I have no credibility,” Butowsky wrote.

“One of the big conclusions we need to draw from this is that the Russians did not hack our computer systems and ste[a]l emails and there was no collusion” between “Trump and the Russians.”

Meanwhile, Botowsky was also coaching Wheeler on what to say on air. “[T]he narrative in the interviews you might use is that you and [Fox News reporter Malia Zimmerman’s] work prove that the Russians didn’t hack into the DNC and steal the emails and impact our elections.”

In another text, he writes: “If you can, try to highlight this puts the Russian hacking story to rest.”

Fox News Runs with the Story

The Fox News report went national on May 16. The story indicated that there was evidence on Rich’s laptop that proved he had contacted WikiLeaks just days before the site posted the emails in question in the Russia probe. The report also claimed that powerful forces were preventing an official investigation into his death. Fox & Friends deemed the story a “bombshell.” Zimmerman’s story cited an unnamed “federal investigator” for its findings. It also cited Wheeler with two key quotations with the investigator taking ownership of the accusations.

  • “My investigation up to this point shows there was some degree of email exchange between Seth Rich and WikiLeaks.”
  • “My investigation shows someone within the D.C. government, Democratic National Committee or Clinton team is blocking the murder investigation from going forward. That is unfortunate. Seth Rich’s murder is unsolved as a result of that.”

Wheeler alleges both quotations were fabricated and untrue. However, the Riches still condemned the investigator for the report.

Wheeler Challenges Fox News Report

Following the report, Zimmerman wrote a letter to Seth Rich’s father, distancing Fox News from the story. She indicated that Wheeler had provided much of the incendiary information.

Consequently, Wheeler challenged Zimmerman over the letter during a three-way phone conversation with her and Butowsky. Wheeler told he that “much, much of the information did not come from me.” Allegedly, Zimmerman acknowledged that the information about the emails and WikiLeaks connection didn’t actually come from Wheeler, but the rest of the story did. However, the story was about emails and the WikiLeaks connection. So, what information did she get from Wheeler? The date and time of Rich’s death?

Following, Zimmerman’s acknowledgement, Butowsky thought he should throw in his two cents on the falsely attributed quotes.

“One day you’re going to win an award for having said those things you didn’t say,” he said.

Later that evening, Zimmerman issued instructions for Wheeler’s appearance on Sean Hannity’s show.

“Reread the story we sent you last night [that contained the invented quotes] and stick to the script,” she texted Wheeler.

Wheeler played along but only offered speculation. He told Hannity that he didn’t personally know about Rich’s emails or computers but that someone like him could begin to believe the story’s implications. However, he never even went so far as to say that he actually did believe the report’s findings.

“It’s very consistent for a person with my experience to begin to think well perhaps there were some e-mail communications between Seth and WikiLeaks,” he told the host.

Aftermath of Fox News Bombshell

A week after the bombshell hit the nation, Fox News posted an unsigned statement, retracting the online story. However, the network provided no apologies or explanations. The statement only indicated that the article didn’t meet the network’s editorial standards.

A Fox News executive spoke with NPR under the condition of anonymity.

“The story was published to the website without review by or permission from senior management.”

In response to Fox News pulling the story, Butowsky took to Twitter.

“Fox News story was pulled b/c Rod Wheeler said [he] didn’t say a quote … How much did DNC pay him?”

Wheeler replied that Butowsky had a “major battle with the truth.”

DNC spokeswoman Xochitl Hinojosa weighed-in on Wheeler’s lawsuit.

“If these allegations are true, it is beyond vile that the White House — and possibly even Trump himself — would use the murder of a young man to distract the public’s attention from their chaotic administration and Trump’s ties to Russia,” she said.

The Rich murder remains under investigation, as does the Russian DNC email hacking and involvement in the 2016 presidential election probe.

 

 

 

 

Securities Fraud Class Action Filing Reaches Record High

By Emily Cox
Securities Fraud Lawsuits
More People Than Ever Are Taking a Stand Against Securities Fraud (Flickr/Anthony Quintano)

The number of securities fraud class action federal filings surged to a record high for the first half of 2017, reaching their highest level in more than twenty years. Traditional filings, as well as merger and acquisition (M&A) litigations, only continue to swell.

Cornerstone Research and Stanford Law School released the semiannual report Tuesday. The report indicates that plaintiffs have initiated 226 federal securities fraud class actions over the past six months. This is more than in any equivalent period since the enactment of the Private Securities Litigation Reform Act of 1995 (PSLRA). The 226 filings constitute a 135 percent increase from the historical semiannual average of 96 filings between 1996 and 2016.

“The record-setting pace of securities fraud litigation in equity market trading is causing record-setting head scratching among many analysts,” according to Professor Joseph Grundfest, director of the Stanford Law School Securities Class Action Clearinghouse.

“Part of the spike is clearly attributable to the migration of merger claims from state to federal court by plaintiffs looking to avoid the experienced, skeptical judiciary in Delaware,” he continued. “But another part of the spike seems attributable to a decline in the quality of complaints filed by attorneys who have recalibrated their business strategies to pursue a portfolio of cases with more remote payoffs because the costs of building such a portfolio remains low.”

Both traditional and M&A filings reached record levels. Traditional filings increased from 95 in the second half of 2016 to 131 for the first half of 2017. M&A filings rose from 57 to 95.

2017 Securities Fraud Class Actions May Double Historical Averages

If these litigation rates remain constant, the annual rate will more than double the historical average.

“If the litigation rate of traditional securities class actions in the second half of 2017 equals that of the first half, the annual rate will nearly double the historical average,” said Dr. John Gould, a senior vice president at Cornerstone Research.

“If one considers M&A filings as well, 2017 is on pace to be more than double the historical average.”

A relatively strong economy and rising stock market could be contributing factors in the case increase. However, much of the uptick is the result of an increase in federal M&A litigation. These cases have flowed into federal court since the Delaware Chancery Court ruled in 2016 that it would no longer approve settlements for M&A class actions that contain broad releases in exchange for supplemental disclosures.

Pharmaceutical companies are a classic target for securities fraud cases following bad trial results. However, they have also seen an unprecedented increase in litigation recently due to fluctuating stock prices. Filings against health care firms hit 69 for the first half of 2017. Comparatively, 2016 only saw a total of 80 such cases. However, 2017’s figures completely dwarf the historical average of 17 per half-year period.

Securities Fraud Lawsuit Increase Could be Due to Lower Dollar Amounts

As Professor Grundfest indicated, some of the securities fraud suit increase could be due to an influx of smaller plaintiff firms bringing more cases. New entrants to the field likely have lower requirements for bringing a class actions. The report indicates that these firms are suing when less money is at stake.

The report measures cases by “Disclosure Dollar Loss,” or DDL. This metric measures the difference beween a defendant’s market capitalization on the trading day before the end of the class period and the trading day immediately after the end of the class period. This shows the impact of information at the end of the period. Total DDL did in fact increase from the second half of 2016. However, this is due to the increase in overall cases. The median loss was 26 percent lower over the same period, and the average loss decreased by 15 percent.

Another metric, “Maximum Dollar Loss (MDL),” measures the change in the market cap between the trading day with the highest capitalization during the class period and the day immediately following the period. The median MDL was a staggering 64 percent lower for the first of 2017 than the second half of 2016.

Filing against foreign companies also increased for the first part of 2017. In particular, suits against European-based firms jumped 83 percent from the latter half of 2016.

 

 

 

VW Now to Pay $300M in Emissions Lawyer Fees

By Emily Cox
VW
Volkswagen. Das Criminal. (Flickr/Blowing Puffer Fish)

A federal judge approved $125 million for lawyers’ fees and costs Friday in the Volkswagen AG lawsuit over excess emissions issues with 88,000 VW 3.0-liter diesel vehicles.

This is on top of the $175 million in fees and costs District Judge Charles Breyer approved in March for a similar 2.0-liter Volkswagen diesel settlement involving nearly 500,000 owners. This brings the lawyers’ grand total to $300 million for negotiating VW emission settlements.

In approving the 3.0-liter settlement Friday, Breyer indicated lawyers were billing an average of $462 an hour for their work during the settlement. Billing rates for partners ranged from $250 to $1,650 per hour.

Breyer cited the lawyers “extraordinary results” in obtaining generous buyback and compensation offers, along with separate funds to offset excess emissions.

Of the $300 million, $288 million is for legal fees and $12 million is for reimbursable expenses.

In total, Volkswagen has agreed to spend up to $25 billion to address claims in the U.S. from owners, regulators, states, and dealers. The company has also offered to buy back more than 500,000 polluting U.S. vehicles.

VW Emissions Scandal

In September 2015, the EPA announced that the world’s largest automobile company had intentionally programmed its turbocharged direct injection (TDI) diesel engines to dodge emissions testing, launching the VW emissions scandal, also known as emissionsgate or dieselgate. This programming caused the vehicles to activate some emissions controls only during laboratory emissions testing. While the vehicles’ NOx output met U.S. standards during testing, it was up to 40 times greater during real-world driving.

According to the EPA, VW refuted emission allegations for a year before the outbreak of the scandal. The company continually insisted that discrepancies were merely technical glitches. Volkswagen only formally admitted to wrongdoing after the EPA threatened to withhold approval for the company’s 2016 VW and Audi diesel models. The company had deployed the emission cheating programming in about 11 million cars worldwide during model years 2009 through 2015. More than 500,000 of these vehicles were sold in the U.S.

VW formally pleaded guilty in a Detroit courtroom this March to federal charges. These charges included conspiracy to violate the Clean Air Act and obstruction of justice. In April, a federal judge formalized the punishment for these charges. The judge ordered Volkswagen “to pay a $2.8 billion criminal fine for rigging diesel-powered vehicles to cheat on government emissions tests.”

VW Still Faces More Trouble in Europe

Undoubtedly, Volkswagen has made big strides toward resolving legal problems in the U.S. But, Volkswagen’s troubles in Europe may be just beginning. Europe remains a big wild card for the company. The German carmaker faces an expanding criminal investigation and thousands of lawsuits from consumers across the Continent demanding recourse.

There are far more diesel car owners in Europe than in the U.S., so the financial implications are staggering. However, the automaker is refusing to negotiate with unhappy European diesel owners as it did with their American counterparts. Instead, VW is betting that Europe’s less consumer-friendly laws will save it from potentially ruinous financial damage. Furthermore, the company is claiming that its emissions-cheating software isn’t even illegal under European Union law.

President Trump Goes on the Offensive Against Justice Department

By Emily Cox
President Trump
Flickr/Gage Skidmore

The Justice Department’s investigation into connections between the Trump campaign and Russia is still in its infancy; however, the president is already maneuvering to impede on any possible charges. President Trump’s legal team is exploring options to discredit special counsel Robert Mueller and his team. In case that fails, the president is looking into his options to pardon himself and those close to him.

The Russian investigation over the Trump campaign’s alleged collusion with Russia to influence the 2016 election continues to expand. Trump’s lawyers are already working to bridle the probe, questioning the propriety of the special counsel’s work. According to several of Trump’s legal advisers, they are actively compiling a list of potential conflicts of interest in order to discredit Mueller’s findings. A conflict of interest could also remove Mueller entirely from the investigation.

Members of Trump’s legal team are disputing these allegations. However, they aren’t hesitating in broadcasting the potential conflicts of interest that they claim that they aren’t compiling. Among these potential conflicts of interest facing Mueller are donations to Democrats by some of his prosecutors.

Another potential conflict is an allegation that Mueller had a dispute with Trump National Golf Club over membership fees when he left the club in 2011. However, a spokesman for Mueller denies any such dispute.

President Takes Aim at Sessions

Traditionally, Justice Department leaders strive to maintain a degree of autonomy from the White House to ensure prosecutorial independence. However, Trump lashed out about this very independence. He expressed anger and disappointment in Sessions not coming to heel over the Russian probe.

Trump publicly denounced Attorney General Jeff Sessions and Rosenstein, whose actions led to Mueller’s appointment. In an interview Wednesday, the president told the New York Times that he never would have nominated Sessions if he knew the AG was going to recuse himself from the probe. Some Republicans with strong ties to the White House are viewing this as a warning sign that the attorney general is on his way out.

One Republican with connections to the administration commented that the president is “laying the groundwork to fire” Mueller with his public actions.

“Who attacks their entire Justice Department?” the Republican questioned. “It’s insane.”

President Explores the Extent of His Pardon Power

Trump has been asking his advisers about his power to pardon aides, family members, and even himself from possible probe indictments.

Article II, Section 2, of the Constitution, gives the president the power to “grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachments. This means this authority extends to federal criminal prosecution but not to state level or impeachment indictments. A president can also pardon an individual at any time, even before there are actual criminal charges.

As no president has ever sought to pardon himself, no courts have ever reviewed it. But, if Trump pardoned himself from implications of Mueller’s investigation, it would set off a legal and political firestorm over whether a president can use the constitutional pardon power to save his own skin. The Constitution does not explicitly prohibit the president from pardoning himself. However, some experts argue that, implicitly, a pardon is something you can only give to someone else. Experts predict that such an action would move eventually make its way to the Supreme Court.

A White House advisor says that the president is simply expressing curiosity in the scope of his pardoning authority, as well as the limits of Mueller’s investigation. However, the timing of this curiosity is certainly suspect.

President Concerned About Scope of Russian Probe

After FBI Director James B. Comey launched the Russian investigation in earnest, Trump was quick to fire him. Officially, he claimed that Comey’s handling of the Hillary Clinton email scandal deemed him unfit for office. However, the president had previously praised this very handling. Furthermore, he indicated publicly that Comey’s involvement with the Russian probe played a substantial role in his dismissal. Even more damning, Trump told Russian officials in the Oval Office last month that firing Comey relieved “great pressure” on him from the Russian investigation.

“I just fired the head of the FBI. He was crazy, a real nut job,” Trump said, according to a document read to the New York Times by a U.S. official. “I faced great pressure because of Russia. That’s taken off.”

Consequently, when the investigation was handed to Mueller, he not only received broad authority to investigate links between Russian government and Trump’s presidential campaign. He also received authorization to look into “any matters that arose or may arise directly from the investigation.”  This includes perjury and justice obstruction. Upon Mueller’s appointment, Trump took to Twitter, ranting that the investigation was a “witch hunt.”

Trump’s raging about the probe hit a new high in recent weeks after potential legal questions that he and his family could face came to light. He is specifically concerned that the probe may spread into scrutinizing his finances.

Trump is particularly disturbed that Mueller would be able to access several years of his coveted tax returns. Normally, these records would already be readily available. All presidents since Jimmy Carter have released their tax returns. However, Trump has repeatedly refused to make his tax returns public.

 

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