Attorney General Kathy Jennings announced Thursday that Delaware has joined the United States, the District of Columbia, and all 49 other States in settling allegations against Walgreens Boots Alliance (Walgreens). The agreement in principle settles allegations of fraudulently over dispensing insulin pens and violating the False Claims Act for billing Medicaid at rates higher than its usual rates for certain prescription drugs.

The first settlement resolves claims that from January 1, 2006 through December 31, 2017, rather than dispensing the quantity of insulin called for by a patient’s prescription, Walgreens exceeded the prescription amount and falsified information on claims submitted for reimbursement to Medicare and Medicaid, including the quantity of insulin and/or days’ supply dispensed.

Walgreens admitted to programming its computer system to define a full box of five insulin pens as the minimum dispensing package size. This definition prevented Walgreens pharmacists from being able to dispense fewer than five pens even though a patient’s prescription called for a smaller number of pens. This resulted in state Medicaid programs paying for a substantial number of claims that the programs would not have approved if Walgreens had reported the correct supply of medication based on the prescription.

In the second settlement, Walgreens agreed to pay to resolve claims that it overbilled Medicaid by failing to disclose and charge the lower drug prices it offered through its Prescription Savings Club discount program. By doing so, Walgreens received more money in reimbursements from the states’ Medicaid programs than it should have.

“Medicaid is a critical public service that thousands of Delawareans depend on and is one of our State’s highest annual expenditures,” said Attorney General Kathleen Jennings. “Dishonest practices like overbilling and falsifying records undermine Medicaid’s solvency, violate public trust, and waste taxpayer money. Walgreens’ acknowledgement that they knowingly engaged in fraudulent over-dispensing signifies that we will not tolerate fraud and abuse in important programs like Medicaid.”

Under the settlement, Walgreens will pay the United States and the States a total of $269.2-million dollars under the two settlements. Delaware’s Medicaid program will receive a total of $586,000 from the agreements; $575,000 for the over-dispensing of insulin pens, and $11,000 for the false claims to Medicaid for the overcharging for discounted drugs.

“As conscientious stewards of taxpayer funding, we thank the Attorney General’s office for pursuing this case and reaching a settlement on behalf of our Medicaid program,” said Department of Health and Social Services Secretary Dr. Kara Odom Walker, a board-certified family physician. “While our Medicaid clients should expect to receive the medicine and the care they require, it is critical for us – at every level of government – to reduce unnecessary and wasteful health care spending.”

Walgreens, headquartered in Deerfield, Illinois, and incorporated in Delaware, operates the largest retail pharmacy chain in the U.S., with 8,309 locations across all 50 states.

Payments Part of Resolution of Case against Autumn Park and Hidden Creek Apartment Complexes

Residents of two apartment complexes in Newark are eligible to receive some funds as a result of an action by the Delaware Department of Justice Consumer Protection Unit alleging the apartments were advertised to have amenities that they did not have or which were not operational. The owners and property manager of Hidden Creek are also prohibited in the future from renting residential apartment units anywhere in the state suffering the same types of issues.

The Consumer Protection Unit last week settled its suit, which was filed in March 2017, against Metrodev Newark, LLC, the owners of the former Autumn Park Apartments on Winterhaven Drive, Water Polo IV, L.P. the owners of Hidden Creek Commons on Hobart Drive, and the Metropolitan Management Group, Inc., the entity hired as property manager for the two complexes.

Anyone who was a tenant at Autumn Park between March 13, 2012 and June 30, 2017, or a tenant of Hidden Creek between March 13, 2012 and the present can complete a claim form at https://attorneygeneral.delaware.gov/fraud/cpu/aptset/ to receive funds as a result of the action. Tenants can also contact the Consumer Protection Unit at (302) 577-8600 or via email at consumer.protection@delaware.gov.

Prompting the consumer suit were over 80 consumer complaints filed by tenants with DOJ complaining of lack of HVAC services, faulty appliances, plumbing issues, health and safety concerns, and a lack of responsive maintenance. Both complexes had numerous code violations. Despite all this, advertising for the complexes consistently promised amenities such as free heat and hot water, air conditioning, fully equipped kitchens, and 24-hour emergency repair. The Consumer Protection Unit alleged that the failure to provide the promised amenities and services, after having repeatedly advertised their availability, were misrepresentations, false promises and omissions in violation of Delaware consumer fraud laws.

As a part of the settlement, the defendants are prohibited from renting residential apartment units in Delaware that suffer from open code or municipal health, safety, or welfare violations that were active at the time of renting a unit to a tenant. Defendants may not rent units that lack facilities or amenities as advertised or promised to the public, and are prohibited from using false or misleading advertisements. The only property currently under defendants’ ownership or control in Delaware is the Hidden Creek Commons community.

As a part of the settlement, the defendants will provide training to their staff to ensure they are knowledgeable of the requirements of the Delaware Residential Landlord Tenant Code, New Castle County Tenants and Rental Code, and state and federal fair housing laws. The defendants will also institute training for tenants to ensure that tenants are aware of their rights under the Delaware Residential Landlord Tenant Code and the New Castle County Tenants and Rental Code.

Finally, the defendants will pay a civil penalty in the amount of $400,000. These funds will be used to make payments to affected tenant consumers who complete the claim form and provide supporting documentation. Remaining funds will go to the state’s Consumer Protection Fund to repay the costs of the investigation and to fund other consumer protection activities in Delaware.

“This case was a priority of former Attorney General Matt Denn because tenants were living in conditions that were unacceptable,” Attorney General Kathy Jennings said. “I am proud of the work that DOJ has done to send the message that such misleading conduct should not be tolerated.”

This case was handled for the Consumer Protection Unit by CPU Assistant Director Gillian Andrews, Deputy Attorney General Gina Schoenberg, Special Investigators Robert Schreiber, Bruce Pinkett, and LaVincent Harris, and Paralegal Angela Williams.

In the wake of widespread damage caused by Hurricane Florence, the Investor Protection Unit (IPU) of the Delaware Department of Justice cautions investors to watch out for opportunistic investment or charitable scams.

The Investor Protection Unit reminds investors to watch for red flags of hurricane-related scams, including unsolicited email, social media messages, crowdfunding pitches or telephone calls promoting investment pools or bonds to help storm victims, water-removal or purification technologies, electricity-generating devices and distressed real estate remediation programs. Scam artists may linger long after the storm has passed to prey on victims who anticipate receiving large lump-sum insurance settlements for damaged property and other losses.

“Natural disasters bring out the best and worst in people. While news stemming from Hurricane Florence has rightfully focused on the tireless efforts of first responders and neighbors helping neighbors, we know from experience that financial predators will seek to profit from the misfortune of others,” said Attorney General Matt Denn. “Unsolicited investment offers seeking to capitalize on the aftermath of Hurricane Florence should be approached with extreme caution.”
The IPU also cautions about fraudulent charitable solicitations that prey on the goodness of people seeking to help those in need.

“There will be fraudulent solicitations for charities in Florence’s wake,” Denn said, “and donors are reminded to do their research. As with any charitable donation, those who want to contribute to relief efforts should send contributions to organizations that are registered properly with state authorities and with an established track record of getting donations to victims.”

The Investor Protection Unit offered three quick tips to help investors avoid disaster-related scams:

• Delete unsolicited emails or social media messages and hang up on aggressive cold callers promoting hurricane-related investments, especially those from small companies touting unproven or new technologies or products.
• Use common sense. Claims of guaranteed returns or low/no investment risk are classic red flags. Every investment involves some degree of risk.
• Do your homework. Contact your state regulator to check that both the seller and investment are licensed and registered. If not, they may be operating illegally. Contact the Investor Protection Unit at (302) 577-8424, or by email.

The Consumer Protection Unit (CPU) of the Delaware Department of Justice is pursuing criminal charges against a Sussex County-based contractor accused of defrauding multiple Delaware homeowners.

Charges currently pending against Sergio Izzo, Jr., 32, of Lewes, include 4 counts of Theft, 2 counts of Issuing a Bad Check, 2 counts of Home Improvement Fraud, 2 counts of Unlawful Use of a Payment Card, 2 counts of Forgery Second Degree, 2 counts of Criminal Impersonation, and 1 count of Providing False Statements to Hinder an Investigation. Izzo conducted business as Izzo & Son Turf Company, LLC, based in Long Neck.

Allegations in the cases are the Izzo accepted payment from several different victims for home improvement work that he then did not substantially complete, and did not provide refunds. The charges also related to allegations that unauthorized charges were made to customer credit cards, and that he accepted delivery of materials from a building supply company and failed to pay for them.

DOJ Consumer Protection urges other homeowners who believe they may have a similar complaint about Izzo or Izzo & Son Turf Company, LLC, or have information to share with authorities, to contact DOJ Special Investigator Dan Daly at (302)752-3215.

Generally, DOJ Consumer Protection advises Delawareans hiring a contractor for home improvement work to be alert for scams, and 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
• Talk to friends and neighbors about a contractor’s reputation
• Never pay for the work in cash or in full up front

If consumers suspect they are a victim of home improvement fraud, they should contact their local law enforcement agency to make a police report.

In all cases, defendants are presumed innocent until and unless proven guilty.

The Delaware Department of Justice Consumer Protection Unit is alerting residents that a phone scam regarding missed jury duty service is again making its way through Delaware, including recently in Kent County.

In the most recent scam, consumers receive a call from a live person claiming to be calling from a court office (such as the “Kent County Civil Processing Unit”) and that bench warrants have been issued for the consumer’s arrest due to their failure to appear for jury duty. Consumers have reported that were told that, in order to avoid arrest, they must to pay a fine via a money order or gift card purchased at a convenience store or pharmacy. The scam has included someone who refers to themselves as a major and who provides a number with a (302) area code to call back when they are ready to provide the payment.

According to Delaware’s courts, Delawareans eligible for jury duty are always notified about their obligation to serve jury duty by mail; never by telephone. If you do receive a call about jury duty, you can check to see if you have been summoned by calling Delaware Superior Court Jury Services at 302-255-0800 for New Castle County, 302-735-1901 for Kent County, and 302-855-7055 for Sussex County.

DOJ also reminds residents to be extra diligent about this or other telephone scams by:

• Never agreeing to pay any fine or other money over the phone, including by purchasing a money order or gift card at a store and providing the number to someone over the phone or by email. Government agencies do not take payments this way.
• Not answering calls from unknown numbers or unfamiliar persons. Scams can be “spoofed” to appear to be coming from a local number, even though the call is originating from out of state or overseas.
• Hanging up on aggressive callers, particularly those who threaten arrest.

The Attorney General encourages consumers who believe they may have been scammed to call the toll-free Consumer Hotline at 1-800-220-5424 or email the Attorney General’s Consumer Protection Unit at consumer.protection@delaware.gov. If you receive a call but have not paid any money to the scammers, you can report the phone number to the National Do Not Call Registry and file a complaint, www.donotcall.gov.