Top federal and state prosecutors form Delaware COVID-19 anti-fraud coalition

Today, United States Attorney David C. Weiss and Delaware Attorney General Kathleen Jennings announced the formation of a new Coronavirus (COVID-19) Anti-Fraud Coalition, aimed at better protecting the citizens of Delaware from criminal and civil fraud arising from the pandemic.

The Coalition is comprised of local, state and federal agencies, investigators and prosecutors with significant experience in handling complaints and cases related to consumer fraud, financial fraud, heath care fraud, and cybercrime.  Together, the Coalition will share information and resources to monitor, identify and investigate misconduct to protect the people of Delaware from those exploiting the COVID-19 pandemic for their own advantage.

Agencies participating in the Coalition include:

  • Delaware Department of Justice
  • United States Attorney’s Office
  • Federal Bureau of Investigation
  • U.S. Department of Homeland Security-Homeland Security Investigations
  • U.S. Small Business Administration-Office of Inspector General
  • U.S. Department of Labor-Office of Inspector General
  • Delaware Department of Health & Social Services
  • Delaware Office of Management & Budget
  • Delaware Department of Transportation
  • Delaware Department of Education
  • Delaware Department of Insurance
  • Delaware Department of Finance
  • Delaware Department of Labor
  • Delaware Auditor of Accounts
  • Delaware State Police
  • New Castle County

Participating agencies will take information, tips and complaints from the public, as well as other local law enforcement agencies seeking the Coalition’s assistance.

“This pandemic is ripe for exploitation by scammers,” said Attorney General Jennings. “The Delaware Department of Justice and its Fraud Division works each day to educate consumers, prevent fraud, and bring scammers to justice—but our work will never be done as long as consumers continue to be preyed upon by those who profit shamelessly off of their fears and anxiety. Our collaboration with the U.S. Attorney’s Office is the latest chapter in a longstanding record of partnership, and in this public health and economic crisis it has never been more important for everyone at the federal, state, and local level to collaborate on the people’s behalf.”

“Sadly, criminals look to take advantage of people, regardless of the circumstances,” said David C. Weiss, U.S. Attorney for the District of Delaware.  “But the people of Delaware can rest assured that we will be relentless in bringing to justice those seeking to illegally profit from this crisis. If you believe you are the victim of a scam, or have been contacted by someone falsely claiming to be a representative of the government, please contact the Coalition at one of the below email addresses immediately.  I want to thank our local and state partners for their commitment to combating fraud and protecting Delawareans.  By working together, we are more fully able to identify, investigate, and prosecute these criminal acts of fraud related to the COVID-19 pandemic.  In these challenging times, I am grateful for this type of collaboration, which represents the best of public service.”

Be on the lookout for and be wary of potential COVID-19 scams and abuses. Any information, complaints, or concerns can be reported to the Coalition by email to COVID.DOJ@delaware.gov or USADE-COVIDFRAUD@usdoj.gov.

Delawareans who may have been scammed can also reach out to the Attorney General’s consumer protection hotline at (800) 220-5424. In addition, you can also contact the National Center for Disaster Fraud (NCDF) by hotline (866-720-5721) or to the NCDF e-mail address disaster@leo.gov.

Common scams and frauds include:

  • Economic Impact Payment (Stimulus Check):  Scammers pretend to be government officials offering false economic impact payments (stimulus checks) in order to obtain personal identifying information including social security and bank account numbers.
  • Diagnosis Testing Scams: Scammers offer fake COVID-19 testing kits, particularly door-to-door.
  • Treatment/Cure Scams: Scammers offer fake or unproven treatment regimens that are particularly dangerous because they have the potential to do more harm than good.
  • Charity Scams: Virtually every time there is a disaster or emergency, scammers set up fake charities to solicit donations that they then spend on themselves.
  • Overinflated prices: The Coalition will use every tool available to hold sellers accountable who unlawfully use the COVID-19 pandemic to unreasonably inflate prices.
  • Investment Scams: Scammers make false claims about tests, cures and other matters related to COVID-19 in order to entice victims to make investment decisions based on those false claims that allow the scammer to steal money and assets from Delawareans.
  • Cyber Scams: Scammers send victims emails related to COVID-19 that appear to be from the victims’ banks, health care providers, the World Health Organization, the Centers for Disease Control and Prevention (CDC), and others for the purpose of obtaining the victims’ personal identifying information and exploiting it for the scammers’ own benefit.
  • App Scams: Scammers are creating and manipulating mobile apps designed to track the spread of COVID-19 to insert malware that will compromise users’ devices and personal information.
  • Insurance, Workers’ Compensation and Medicaid Fraud: Businesses and government agencies are not immune to scams. They should also be vigilant to ensure scammers do not take advantage of their businesses or customers during this pandemic.
  • Scams specifically targeted at seniors: Seniors are more vulnerable than ever to common scams like the Grandparent Scam and Government Imposter Scams.  Consumers receiving a call or any contact claiming that loved ones are in danger or hurt, that they owe money and failure to pay will result in their arrest or other harm, or that their benefits are in jeopardy, do not act. Contact your loved ones or the purported agency using known, trusted contact information not sourced from the suspicious communication.


AG Jennings, DOJ Fight Corporate Abuse of Class Action Settlements

Delaware leads bipartisan coalition opposing attempt to weaponize class action settlements against state law enforcement actions

Attorney General Kathy Jennings announced Monday that Delaware has filed an amicus brief in a Minnesota federal court opposing a corporation’s attempt to weaponize a class action settlement against a parallel law enforcement action by the Minnesota Attorney General. Delaware’s brief was also signed by the attorneys general of 35 other states and the District of Columbia.

Following a lengthy investigation, Minnesota’s Attorney General filed suit in 2017 against CenturyLink, Inc. for unlawful business practices, alleging the Louisiana-based telecommunications provider had harmed Minnesota consumers through fraudulent and deceptive billing. Trial in Minnesota’s lawsuit is scheduled for March 2020.

In addition, numerous private litigants have filed class action lawsuits against CenturyLink in connection with the same conduct, which is alleged to have harmed millions of consumers across the United States. In early 2018, the Judicial Panel on Multidistrict Litigation consolidated the private class action lawsuits before Judge Michael J. Davis in the United States District Court for the District of Minnesota.

In October, CenturyLink announced that it had reached a tentative settlement with the private litigants in federal court. Under the proposed settlement, consumers would only receive a small fraction of the losses CenturyLink is alleged to have caused. CenturyLink then asked Judge Davis to bar the Minnesota Attorney General’s state court restitution claims against it, arguing that any further relief ordered by the state court would be “duplicative” of payments consumers will receive under the private settlement.

“Class action settlements aren’t get-out-of-jail-free cards,” said Attorney General Jennings. “This issue is bigger than any one state or business; this is about giant corporations playing by a different set of rules than everyone else. The injunction that CenturyLink has requested would undermine state consumer protection laws and send a message that corporations can violate the law and unilaterally avoid full accountability by leveraging private settlements to squeeze out law enforcement efforts. I’m grateful to my colleagues for standing up to say we won’t let that happen.”

Delaware’s brief makes four principal arguments:

  1. CenturyLink’s request is unconstitutional under the Eleventh Amendment
  2. Additional federal statutes bar the Courts from granting CenturyLink’s request
  3. The approach advocated for by CenturyLink would incentivize class action settlement abuse, diminish recoveries for fraud victims, and enable bad actors to keep more of the proceeds of their misconduct.
  4. State attorneys general are not represented in class actions and are legally separate from private litigants

The Minnesota Attorney General filed a separate brief opposing CenturyLink’s proposal on November 15. A hearing on the matter will be held before Judge Davis on December 11.

Delaware’s amicus brief was also signed by the attorneys general of: Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington, Wyoming, and the District of Columbia.

Delaware’s work in this matter was led by Deputy Attorney General David Weinstein, with assistance from Fraud Division Director Owen Lefkon, Director of Impact Litigation Christian Wright, and Deputy Attorney General Michael Clarke.


Delaware, Newark Manor Nursing Home Reach Settlement

This settlement resolves allegations that Newark Manor provided substandard and worthless care to residents of the nursing facility.

Attorney General Kathy Jennings announced today that the State of Delaware has reached an agreement with Newark Manor Nursing Home (also known as Premiere Healthcare, Inc.), its owner Bruce Boyer, administrator David Boyer and former administrator Susan Comegys, to settle allegations that Newark Manor: (1) provided substandard and worthless services to its residents; (2) inaccurately reported certain residents’ clinical conditions; (3) failed to provide adequate staffing to provide resident care; and (4) failed to prevent harm to its residents. Newark Manor is a privately owned for-profit intermediate care nursing facility in Newark and licensed by the State of Delaware.

“Elderly nursing home residents are among the most vulnerable citizens of Delaware. We are committed to holding facilities accountable and will not tolerate substandard care, or an unsafe environment, for residents of facilities. Today’s settlement holds Newark Manor and its owner responsible for the substandard care provided and sends a message that we will continue to hold facility owners responsible for resident care provided throughout Delaware,” said Attorney General Jennings.

The civil settlement resolves allegations that, from 2011 through 2017 Newark Manor:

    1. persistently failed to provide adequate nursing care including supervision to vulnerable residents of Newark Manor, causing falls, fractures, and other significant injuries;
    2. failed to meet the required daily care hours per resident;
    3. failed to act on monthly pharmacy recommendations, and supply prescribed medication to certain residents;
    4. failed to take steps so that residents were not burned by hot coffee, and failed to adequately treat burns;
    5. failed to maintain hygiene standards;
    6. failed to maintain effective strategies to prevent falls;
    7. failed to ensure that the resident environment was free of accident hazards; and
    8. created incorrect care plans for their residents.

Newark Manor and its owner have agreed to pay $381,000 to resolve this case with $175,000 going to the Division of Medicaid and Medical Assistance within the Department of Health and Social Services. Newark Manor’s owner will reinvest the remaining $206,000 into capital improvements at the facility that will enhance resident care. Additionally, Newark Manor will be subject to a two-year Corporate Integrity Agreement, which subjects Newark Manor, its owner and management, to extensive compliance obligations. The Attorney General’s Medicaid Fraud Control Unit will monitor Newark Manor’s compliance with the settlement terms.

Director Christina Kontis, Deputy Attorney General Laura Najemy, special investigator Paul Reutter, nurse analyst Brian Galbreath, all of the Medicaid Fraud Control Unit, along with forensic accountant Clyde Hartman of the White Collar Crime Unit, handled this case.


DOJ Announces String of Home Improvement Fraud Indictments

Additional victims encouraged to contact Consumer Protection Unit

The Delaware Department of Justice’s Consumer Protection Unit today announced three indictments, including separate criminal charges against two brothers, in a series of home improvement frauds targeting older Delawareans.

Isaac K. Lovell, 44, of Bear was indicted on July 8, 2019 on charges including Racketeering, Conspiracy to Commit Racketeering, Home Improvement Fraud, and Theft Greater than $100,000. The indictment alleges that Isaac Lovell utilized his home improvement business, Phire-Fly Contracting Co., to defraud senior citizens, including an older woman from whom Lovell received over $600,000 between 2015 and 2017. A warrant was issued for Isaac Lovell’s arrest in July 2019; he was recently arrested in Ohio and extradited to Delaware on August 13, 2019.

David H. Lovell, 48, of Wilmington was indicted on August 19, 2019, on charges including Racketeering and Home Improvement Fraud. The indictment against David Lovell alleges that between 2015 and 2017, he used his home improvement business, DHL & Son Contracting, to defraud multiple elderly individuals. In a pattern similar to his brother’s, David Lovell convinced his victims to pay him for home improvement services that he never completed.

Andrew W. Masserelli, 48, of Magnolia was indicted on August 5, 2019, on charges of Home Improvement Fraud and Theft Greater than $1,500. Between 2016 and 2018, Masserelli and his business, Drew’s Tree Service, allegedly defrauded multiple homeowners, including two senior citizens, by failing to substantially complete tree removal work on their properties after accepting money.

Individuals who believe they have been defrauded by any of these individuals or their businesses are encouraged to contact the Department of Justice at (302) 577-8600. Other reports of home improvement fraud, in general, should be made to local law enforcement.

CPU advises Delawareans hiring a contractor for home improvement work to be alert for scams, and to help avoid them by doing homework before hiring a contractor:

  • Contractors should always be bonded and maintain all required licenses for mechanical work.
  • Get references and follow up on them, including conducting online searches and searching for companies at the Delaware Better Business Bureau’s website.
  • Do research and talk to friends and neighbors about a contractor’s reputation.
  • Always have terms with contractors memorialized in writing.
  • Never pay for the work in cash or in full up front, keep detailed payment records, and withhold final payment until you are satisfied with the work.

Because fraud victims are often embarrassed, Delawareans with older loved ones are encouraged to have their loved ones contact them before entering into any home improvement contract, and to visit loved ones’ residence regularly when home improvement work is being performed.

For more tips on hiring a contractor, visit the Federal Trade Commission’s website.

The Delaware Department of Justice reminds the public that an indictment is merely an allegation and is not evidence of guilt. Defendants are presumed innocent and are entitled to a jury trial at which the State bears the burden of proving each charge beyond a reasonable doubt.

 


Police Chief Pleads Guilty

Other defendants plea to gang activity, weapons, murder, rape, and theft charges

Michael Capriglione, Chief of police for the Town of Newport, has pled guilty to charges stemming from official misconduct. In May 2018, Capriglione ordered the deletion of a surveillance video, which depicted him striking another vehicle in the parking lot of Newport Police Department while driving a departmental vehicle. Capriglione pled guilty to Official Misconduct and Careless Driving and will be sentenced following a pre-sentence investigation by the Court. Deputy Attorney General Sonia Augusthy, director of the DOJ Office of Civil Rights and Public Trust, prosecuted the case, which was investigated by the Delaware State Police and Frank Robinson, on behalf of the DOJ.

An 18-year-old member of the Shoot to Kill (STK) gang pled guilty to gun and gang charges. Deputy Attorney General Mark Denney secured the plea from Chaz Cowan of New Castle to 3 counts of Possession of a Firearm by a Person Prohibited and 1 count each of Illegal Gang Participation, and Non-Compliance with Bond Conditions. In February 2018, Cowan, barred from having a gun because of a felony conviction of Possession of a Firearm by a Juvenile in 2015, appeared in a YouTube music video holding a gun. While out on bail in a few months later, Cowan violated a no contact order with co-defendants and cellular phones in November 2018 when police arrested him during a car stop. Police arrested Cowan again in January 2019 after a search warrant — conducted in response to a number of shootings — turned up firearms as well as pictures of Cowan holding at least two of them. A Superior Court judge immediately sentenced Cowan to 1 year in prison, followed by 6 months of either home confinement or work release, then 1 year of probation.

A man and woman have pled guilty to Murder by Abuse or Neglect First Degree in the 2018 beating death of 15-month-old Chosen Smith. Deputy Attorneys General Jim Kriner and Diana Dunn secured the pleas from Tameke Wright, 23 and Lavar Harris, 38, in Superior Court. The couple were babysitting the child in February 2018 when they drove the child to the hospital and reported that he had fallen off a futon. The child died minutes after arriving at the hospital. Upon examination, it was discovered that the child had abrasions and bruises all over his body as well as abusive head injuries, including a fractured skull. The Medical Examiner ruled the death a homicide as a result of blunt force trauma. Detective Devon Jones of the Wilmington Police Department arrested Wright and Harris the following week. Both defendants face a sentence of 15 years to life in prison when sentenced in June. DOJ paralegal Jayna Quillen and victim services specialist Bettina Jones also participated in the prosecution.

A 55-year-old Dover man is awaiting sentencing for raping a teenager. Tyrone Evans pled no contest in Superior Court to Rape Fourth Degree and Unlawful Sexual Contact Second Degree. In June 2018, Evans exposed himself to the teenager and began having sexual intercourse as the victim slept. A Superior Court judge will sentence Evans in March; there is no minimum prison time but the crimes carry as much as 18 years in prison. Deputy Attorney General Kathleen Dickerson prosecuted the case with assistance from Detective Dale Boney of the Dover Police Department, administrative assistant Penny Mannering, social worker Lorraine Freese, paralegal Sue Balik and investigator LaVincent Harris.

A nurse who worked at Brookdale Assisted Living Center in Hockessin has pled guilty to stealing from a resident of the facility. Deputy Attorney General Lisa Barchi of the DOJ Medicaid Fraud Control Unit (MFCU) secured the plea from Jennifer Wilson, 31, of Wilmington. In October 2018, Wilson went into a resident’s dresser drawer and took $180 and a credit card, which Wilson used to purchase a television. Wilson pled guilty in the Court of Common Pleas to Theft Under $1,500 and was immediately sentenced by a judge to 1 year of probation, ordered to pay $560.94 in restitution, and reported to the Adult Abuse Registry. Wilson was referred to the Division of Professional Regulation where disciplinary action on her nursing license is pending. Corporal Joshua Walther of the Delaware State Police investigated the case with assistance from MFCU chief special investigator Bruce Pinkett.