The Delaware Department of Justice announced that it has reached an agreement with Rite Aid of Delaware, Inc. (“Rite Aid”) to resolve allegations that the company, through one of its Delaware pharmacists, Bruce Costa, generated false prescriptions for pharmaceutical products that were submitted for reimbursement to the Delaware Medicaid Program but were not provided to Medicaid beneficiaries. Under the agreement, Rite Aid will pay $435,000 in restitution, to be split between the Delaware Medicaid Program and the federal government. In addition, $20,000 will be paid to the Delaware Department of Justice to reimburse the cost of the investigation.

“This case sends a clear message to the health care community that we will actively and vigorously
investigate allegations of Medicaid fraud and hold offenders accountable,” stated Deputy Attorney
General Daniel Miller, Director of the Delaware Department of Justice Medicaid Fraud Control Unit.

In a previous investigation related to this case, pharmacist Bruce Costa pled no contest (nolo
contendere) in New Castle County Superior Court to three counts of fraudulent acts and two counts of
falsifying business records. He was sentenced on June 11, 2008 to one year of probation on each
count and ordered to pay more than $38,000 in restitution to the Delaware Medicaid Program and a
$6,000 penalty to the state’s general fund. In addition, he was ordered to pay $20,000 for investigative
costs to the Delaware Department of Justice.

The investigation and prosecution of this case was led by Delaware Department of Justice Special
Investigator Daniel Daly and Deputy Attorneys General Susan Purcell and James Apostolico.
# # #

Wilmington – Attorney General Joseph R. Biden, III and the Delaware State Police announced
today that a New Castle County Grand Jury indicted Henry Forrest of Selbyville, Delaware and
Theodore M. Forrest of Bear, Delaware for Home Improvement Fraud and Conspiracy.
“The Delaware law enforcement community is taking action to protect the senior citizens
victimized in coordinated and criminal home improvement scams,” Attorney General Biden
stated.
On May 7, 2007, The Delaware Department of Justice was first contacted by State
Representative Gerald Hocker who reported that an Ocean View area resident was being
scammed. The Department’s Consumer Protection Unit opened an investigation which revealed
that on May 3, 2007 an 88-year old homeowner paid the suspects to power wash his roof. After
beginning their work the suspects advised the victim that additional work was required. After
completion of the work the suspects reported that the repairs would cost $4,100 rather than the
$1,300 previously agreed upon. A home inspector from American Home Inspections
Technologies later determined that the suspects failed to do any of the work the victim paid to
have completed.
The investigation revealed three additional acts of fraud allegedly committed by the suspects:
• On May 4, 2007, during an unsolicited visit with an 82-year old Ocean View area
resident, suspect Henry Forrest offered to clean and repair the victim’s roof and power
wash the victim’s home for $750.00. After beginning their work, the suspects reported
further damage that could be repaired for an additional $2,200. The victim wrote a check
to Henry Forrest, who cashed it using a Virginia driver’s license at a bank in Clarksville,
Delaware.
• On March 28, 2007, a 66-year-old Dagsboro resident responded to a card Theodore
Forrest left at the residence. Forrest provided a price to power wash and seal the victim’s
roof and power wash and stain the home. After beginning the work, Forrest reported
chimney damage requiring repairs. The victim advised Forrest to complete the work.
But, after noticing substandard workmanship, the victim directed the work to stop.
Forrest insisted the work was complete and demanded $6,050 payment which the victim
provided. A home inspector later found that none of the work had been completed.
• On July 26, 2006, during an unsolicited visit with an 88-year-old Lewes area resident,
Theodore Forrest claimed that he could make the home’s roof look like new for $500
using a rubberized protective solution. A worker mixed seven bags of powder with the
assistance of the victim and applied it to the roof. Afterwards, Forrest added a $1,500
charge, arguing seventeen bags of powder were required. After the victim insisted that
seven bags were used Forrest agreed to a total charge of $1,380 if paid immediately.
After the next rainfall, the victim discovered multiple leaks from the roof.
As a result of the investigation, the Delaware Department of Justice and the Delaware State
Police believe that the additional damage the suspects reported in these cases was created by the
suspects themselves. Investigators believe that the suspects then power washed water onto the
damaged area to allow water to leak into the houses.
After completing its initial investigation in early August, the Department of Justice contacted the
Delaware State Police. Detective J.S. Evans in the Financial Crimes Unit at Troop 4 was
assigned to the case and the investigation continued. As a result of the joint investigation a grand
jury indicted the two known suspects, Henry Forrest and Theodore M. Forrest, on August 27,
2007.
On September 4, 2007 Delaware State Police detectives arrested Henry Forrest, of Selbyville,
Delaware at his home without incident. He was charged with two counts of Home Improvement
Fraud, two counts of Felony theft, and two counts of Conspiracy Second Degree. He was
arraigned and released on $6,000 unsecured bond.
The indictment also charges Theodore M. Forrest, also known as Edward Powers, of Bear,
Delaware. Theodore M. Forrest is charged with four counts of Home Improvement Fraud, four
counts of Felony Theft, and two counts of Conspiracy Second Degree. He has not yet been
apprehended and is currently wanted by the Delaware State Police. Anyone with information
regarding the whereabouts of Theodore M. Forrest is asked to contact the Delaware State Police
at (302) 856-5850, call 911, or contact Crimestoppers at (800) TIP-3333.
The Delaware Department of Justice and the Delaware State Police strongly urge anyone who
feels they may have been victimized by these suspects, Henry Forrest and Theodore M. Forrest,
to immediately contact the Delaware Department of Justice Consumer Protection Unit or the
Delaware State Police. At the Department of Justice, please contact Special Investigator John
Desmond at (302) 856-5353 ext. 108. At the Delaware State Police please contact Detective J.S.
Evans of the Troop 4 Financial Crimes Unit at (302) 856-5850 ext. 214.
# # #

Attorney General Carl C. Danberg announced today that YP Corp., (doing business as YP.com) and its wholly owned subsidiary Telco Billing, Inc., have agreed to settle allegations that they engaged in deceptive business practices by using “live” activation checks to obligate businesses and organizations to pay for an enhanced listing (called an “Internet Advertising Package”) on YP.com’s online yellow pages directory. The agreement is the result of an investigation by Delaware and 33 other states regarding YP.com’s use of activation checks.

According to the terms of the settlement, YP Corp. has agreed to stop using activation checks as the sole device to obligate businesses to purchase its products and services. YP Corp. also has agreed to pay $2,000,000.00 collectively, to the investigating states. YP Corp. further agreed to contact its current activation check customers to inform them of their right to cancel their agreement with YP Com and of their potential eligibility for at least a partial refund of monies paid to YP.com

The states alleged that since at least January 1, 2003 YP.xom sent businesses and other organizations “live” activation checks in the mail. These checks were made payable to the business or organization for a small amount, usually around $3.50. Ont he back of the checks, in fine print above the endorsement line, was language stating that by depositing the check, the recipiend agreed to purchase advertising from YP.com for its online yellow pages directory. The fine print also stated that by depositing the check, the recipient authorized YP.com (through it subsidiary Telco Billing, Inc.) to bill the monthly fees in advance, on the business’s telephone bill or by debiting the amount from the bank account into which the recipient deposted the check, or by other methods. The envelope that the check was mailed in also contained YP.com advertising material.

The states’ investigation revealed that some activation check recipients that deposted YP.com’s checks did so without knowing that the deposit constituted a purchase of an enhanced online yellow page listing from YP.com and that the deposit authorized YP.com to bill them monthly fees on their telephone bill, by debit from their account, or any other method. In some of these cases, the recipient remained unaware that it was being billed by YP.com after it deposited the activation check.

The allegations that gave rise to the state’ investigation and the settlement described above have not been admitted by YP.com, and its agreement to address the STate’s concerns and allegations does not constitute an admission of wrongdoing by YP.corp, Yp.com, or Telco Billing, Inc.

Current YP.com customers who are being billed through their telephone bill or bank account for a listing and became a customer by depositing an activation check should be contacted by letter within the next two (2) weeks by YP.com. Any customers with questions are invited to call the Attorney General’s Office at 577-8600.

###

Danberg announced today that Delaware’s Identity Theft Passport Act will go into effect on October 28, 2006. This new law was designed to provide victims of identity theft a way to substantiate a claim of identity theft to creditors and law enforcement.

ID theft occurs when a criminal steals a person’s confidential information such as Social Security Number, birth date, credit card numbers and bank account information. Criminals use stolen information to obtain false drivers’ licenses, utility services, credit cards, loans, government benefits and merchandise. Stolen identities are also used to defraud consumers, commit crimes and avoid arrest.

Now, victims of identity theft have a new way to fight back and reclaim their identity. To be eligible for a passport, victims must file a report witht he police agancy with jurisdiction over their residence. At the same time, they can apply for the passport through the police agancy or they can apply through the Attorney General’s Consumer Protection Unit.

Passports can be presented to a law enforcement agency to help prevent arrest or detention for an offense commited by another, to creditors to aid in the investigation of fraudulent charges, and to a consumer reporting agency as official notice of a dispute.

Consumers can obtain more information about the new law and tips on how to protect themselves from identity theft by calling Attorney General Danberg’s Consumer Protection Unit at 800-220-5424 or on his website at www.state.de.us/attgen

(Wlmington, DE) The Attorney General’s Medicaid Fraud Control Unit
announced that Sachin J. Karnik, 35, owner and operator of Comprehensive Counseling
Services, 1601 Milltown Road, Wilmington, pled guilty to one count of felony Health
Care Fraud in New Castle County Superior Court on October 17, 2006. Superior Court
Judge Fred S. Silverman sentenced Karnik to four years of probation and ordered him
to make restitution in the amount of $63,040.73 to Delaware Physicians Care
Incorporated and $2,500.00 to the Delaware Medicaid Fraud Control Unit. Karnik, a
licensed clinical social worker, admitted that, between November 1, 2005 and May 31,
2006, he engaged in a pattern of presenting fraudulent health care claims to Delaware
Physicians Care, Inc., a managed care organization for Delaware Medicaid, by
presenting false statements in support of claims for payment.
Karnik’s fraudulent scheme involved obtaining additional family information from
his patients and falsely billing for counseling services not provided to the other family
members. He also obtained additional names of Medicaid recipients and billed for
counseling services not rendered.
# # #