December 4, 2021

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Justice Department and FTC File Suit to Stop Deceptive Marketing of Nasal Spray Product Advertised as Purported COVID-19 Treatment

13 min read
<div>The Department of Justice, together with the Federal Trade Commission (FTC), Thursday announced a civil enforcement action against defendants Xlear Inc. and Nathan Jones for alleged violations of the COVID-19 Consumer Protection Act and the FTC Act.</div>
The Department of Justice, together with the Federal Trade Commission (FTC), Thursday announced a civil enforcement action against defendants Xlear Inc. and Nathan Jones for alleged violations of the COVID-19 Consumer Protection Act and the FTC Act.

More from: October 29, 2021

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  • Tennessee State Senator and Nashville Social Club Owner Indicted for Alleged Campaign Finance Scheme
    In Crime News
    A federal grand jury in Nashville, Tennessee, returned an indictment Friday charging Tennessee State Senator Brian Kelsey and a Nashville social club owner with violating campaign finance laws as part of an alleged scheme to benefit Kelsey’s 2016 campaign for U.S. Congress.
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  • Judicial Security Bill Advances: Judge Who Lost Son Urges Final Passage
    In U.S Courts
    A bill to protect federal judges and their families from threats and attacks has advanced to the full Senate, and a U.S. district judge from New Jersey, whose son was slain by an angry litigant, urged Congress to pass the legislation without delay.
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  • Former Construction Executive Sentenced to 46 Months in Prison for Tax Evasion and Bribery Scheme
    In Crime News
    A New York construction executive was sentenced today in Manhattan federal court to 46 months in prison for evading taxes on more than $1.4 million in bribes he received from building subcontractors.
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  • Telemedicine Company Owner Charged in Superseding Indictment for $784 Million Health Care Fraud, Illegal Kickback and Tax Evasion Scheme
    In Crime News
    A federal grand jury in Newark, New Jersey, returned a superseding indictment today charging a Florida owner of multiple telemedicine companies with orchestrating a health care fraud and illegal kickback scheme that involved the submission of over $784 million in false and fraudulent claims to Medicare. This is one of the largest Medicare fraud schemes ever charged by the Justice Department. The superseding indictment also charges the defendant with concealing and disguising the proceeds of the scheme in order to avoid paying income taxes.  
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  • Contingency Contracting: Observations on Actions Needed to Address Systemic Challenges
    In U.S GAO News
    The Department of Defense (DOD) obligated about $367 billion in fiscal year 2010 to acquire goods and services to meet its mission and support its operations, including those in Iraq and Afghanistan. GAO's work, as well as that of others, has documented shortcomings in DOD's strategic and acquisition planning, contract administration and oversight, and acquisition workforce. These are challenges that need to be addressed by DOD and by the Department of State and the U.S. Agency for International Development (USAID) as they carry out their missions in Iraq and Afghanistan and prepare for future contingencies. Today's statement discusses (1) contract management challenges faced by DOD, including those that take on heightened significance in a contingency environment; (2) actions DOD has taken and those needed to address these challenges; and (3) similar challenges State and USAID face. The statement is drawn from GAO's body of work on DOD contingency contracting, contract management, and workforce, as well as prior reports on State and USAID's contracting and workforce issues.DOD faces a number of longstanding and systemic challenges that hinder its ability to achieve more successful acquisition outcomes--obtaining the right goods and services, at the right time, at the right cost. These challenges include addressing the issues posed by DOD's reliance on contractors, ensuring that DOD personnel use sound contracting approaches, and maintaining a workforce with the skills and capabilities needed to properly manage acquisitions and oversee contractors. The issues encountered with contracting in Iraq and Afghanistan are emblematic of these systemic challenges, though their significance and impact are heightened in a contingency environment. GAO's concerns regarding DOD contracting predate the operations in Iraq and Afghanistan. GAO identified DOD contract management as a high-risk area in 1992 and raised concerns in 1997 about DOD's management and use of contractors to support deployed forces in Bosnia. In the years since then, GAO has continued to identify a need for DOD to better manage and oversee its acquisition of services. DOD has recognized the need to address the systemic challenges it faces, including those related to operational contract support. Over the past several years, DOD has announced new policies, guidance, and training initiatives, but not all of these actions have been implemented and their expected benefits have not yet been fully realized. While DOD's actions are steps in the right direction, DOD needs to (1) strategically manage services acquisition, including defining desired outcomes; (2) determine the appropriate mix, roles, and responsibilities of contractor, federal civilian, and military personnel; (3) assess the effectiveness of efforts to address prior weaknesses with specific contracting arrangements and incentives; (4) ensure that its acquisition workforce is adequately sized, trained, and equipped; and (5) fully integrate operational contract support throughout the department through education and predeployment training. In that regard, in June 2010 GAO called for a cultural change in DOD that emphasizes an awareness of operational contract support throughout all aspects of the department. In January 2011, the Secretary of Defense expressed concerns about DOD's current level of dependency on contractors and directed the department to take a number of actions. The Secretary's recognition and directions are significant steps, yet instilling cultural change will require sustained commitment and leadership. State and USAID face contracting challenges similar to DOD's, particularly with regard to planning for and having insight into the roles performed by contractors. In April 2010, GAO reported that State's workforce plan did not address the extent to which contractors should be used to perform specific functions. Similarly, GAO reported that USAID's workforce plan did not contain analyses covering the agency's entire workforce, including contractors. The recently issued Quadrennial Diplomacy and Development Review recognized the need for State and USAID to rebalance their workforces and directed the agencies to ensure that they have an adequate number of government employees to carry out their core missions and to improve contract administration and oversight. GAO has made multiple recommendations to the agencies to address contracting and workforce challenges. The agencies have generally agreed with the recommendations and have efforts under way to implement them.
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  • Warfighter Support: Preliminary Observations on DOD’s Progress and Challenges in Distributing Supplies and Equipment to Afghanistan
    In U.S GAO News
    In fiscal year 2009, the Department of Defense (DOD) reported that it spent $4 billion to move troops and materiel into Afghanistan, a mountainous, arid, land-locked country with few roads, no railway, and only four airports with paved runways over 3,000 meters. The terrain and weather in Afghanistan and surrounding countries pose further challenges to transporting supplies and equipment. In December 2009, the President announced that an additional 30,000 U.S. troops will be sent to Afghanistan by August 2010. Today's testimony discusses GAO's preliminary observations drawn from ongoing work reviewing DOD's logistics efforts supporting operations in Afghanistan, including (1) the organizations involved and routes and methods used to transport supplies and equipment into and around Afghanistan; (2) steps DOD has taken to improve its distribution process, based on lessons learned from prior operations; and (3) challenges affecting DOD's ability to distribute supplies and equipment within Afghanistan, and its efforts to mitigate them. In conducting its audit work, GAO examined DOD guidance and other documentation relating to the processes of transporting supplies and equipment to Afghanistan and met with various cognizant officials and commanders in the United States, Afghanistan, Kuwait, and Qatar.Movement of supplies and equipment into and around Afghanistan is a complex process involving many DOD organizations and using air, sea, and ground modes of transportation. DOD's ability to provide timely logistics support to units deploying to Afghanistan or already in theater depends on its ability to synchronize all of these activities into one seamless process. For example, U.S. Transportation Command manages air and surface transportation from the United States to and around the U.S. Central Command area of operations; U.S. Central Command's Deployment and Distribution Operations Center validates and directs air movements and monitors and directs surface movements within theater; the Air Force's Air Mobility Division assigns and directs aircraft to carry materiel within the theater; and the Army's 1st Theater Sustainment Command monitors strategic movements of materiel and directly influences movements into theater. Most cargo in theater is transported commercially by ship to Pakistan and then by contractor-operated trucks to Afghanistan, but high-priority and sensitive items are transported by U.S. military and commercial aircraft directly from the United States and other countries to logistics hubs in Afghanistan. DOD has taken some steps to improve its processes for distributing materiel to deployed forces based on lessons learned from prior operations. For example, in response to lessons learned from problems with keeping commanders informed about incoming materiel in Operation Iraqi Freedom, U.S. Transportation Command established the Central Command Deployment and Distribution Operations Center, which now helps coordinate the movement of materiel and forces into the theater of operations. Also, since GAO reported in 2003 that radio frequency identification tags were not being effectively used to track materiel in transit to, within, and from Iraq, DOD developed policies and procedures to increase tag use on cargo traveling through the U.S. Central Command theater of operations, including Afghanistan. Challenges hindering DOD's ability to distribute needed supplies and equipment to U.S. forces operating in Afghanistan include difficulties with transporting cargo through neighboring countries and around Afghanistan, limited airfield infrastructure, lack of full visibility over cargo movements, limited storage capacity at logistics hubs, difficulties in synchronizing the arrival of units and equipment, lack of coordination between U.S. and other coalition forces for delivery of supplies and equipment, and uncertain requirements and low transportation priority for contractors. DOD recognizes these challenges and has ongoing or planned efforts to mitigate some of them; however, some efforts involve long-term plans that will not be complete in time to support the ongoing troop increase. DOD is also working to address these challenges through planning conferences to synchronize the flow of forces into Afghanistan. At these conferences, DOD officials stressed the need to balance and coordinate multiple requirements in order to sustain current operations in Afghanistan and Iraq, draw down forces and equipment in Iraq, and increase forces and equipment in Afghanistan.
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  • Judiciary Makes the Case for New Judgeships
    In U.S Courts
    The creation of new judgeships has not kept pace with the growth in case filings over three decades, producing “profound” negative effects for many courts across the country, U.S. District Judge Brian S. Miller told Congress today.
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  • Iraq Contract Costs: DOD Consideration of Defense Contract Audit Agency’s Findings
    In U.S GAO News
    The government has hired private contractors to provide billions of dollars worth of goods and services to support U.S. efforts in Iraq. Faced with the uncertainty as to the full extent of rebuilding Iraq, the government authorized contractors to begin work before key terms and conditions were defined. This approach allows the government to initiate needed work quickly, but can result in additional costs and risks being imposed on the government. Helping to oversee their work is the Defense Contract Audit Agency (DCAA), which examined many Iraq contracts and identified costs they consider to be questioned or unsupported. The Conference Report on the National Defense Authorization Act for Fiscal Year 2006 directed GAO to report on audit findings regarding contracts in Iraq and Afghanistan. As agreed with the congressional defense committees, GAO focused on Iraq contract audit findings and determined (1) the costs identified by DCAA as questioned or unsupported; and (2) what actions DOD has taken to address DCAA audit findings, including the extent funds were withheld from contractors. To identify DOD actions in response to the audit findings, GAO selected 18 audit reports representing about 50 percent of DCAA's questioned and unsupported costs on Iraq contracts. GAO requested comments from DOD on a draft of this report, but none were provided.Defense Contract Audit Agency audit reports issued between February 2003 and February 2006 identified $2.1 billion in questioned costs and $1.4 billion in unsupported costs on Iraq contracts. DCAA defines questioned costs as costs that are unacceptable for negotiating reasonable contract prices, and unsupported costs as costs for which the contractor has not provided sufficient documentation. This information is provided to DOD for its negotiations with contractors. Based on information provided by DCAA, DOD contracting officials have taken actions to address $1.4 billion in questioned costs. As a result, DOD contracting officials negotiated contract cost reductions of $386 million according to DCAA. Based on the information provided by DCAA, as of July 2006, the remaining $700 million in questioned costs is still in process. Because unsupported costs indicate a lack of contractor information that is needed to assess costs, DCAA cannot and does not render an opinion on those costs. Therefore, DCAA does not track the resolution of unsupported costs. For the 18 audit reports selected for this review, GAO found that DOD contracting officials took a variety of actions to address DCAA's audit findings, including not allowing some contractor costs. In the contract documentation GAO reviewed, DOD contracting officials generally considered DCAA's questioned and unsupported cost findings when negotiating with the contractor. GAO found DOD contracting officials were more likely to use DCAA's advice when negotiations were timely and occurred before contractors had incurred substantial costs. For example, in three audit reports related to a logistics support task order negotiated prior to the onset of work, DCAA questioned $204 million. According to DCAA's calculations, $120 million of these questioned costs was removed from the contractor's proposal as a result of its audit findings. In contrast, DOD officials were less likely to remove questioned costs from a contract proposal when the contractor had already incurred these costs. For example, in five audit reports comprising about $600 million of questioned costs reviewed, GAO found that the DOD contracting officials determined that the contractor should be paid for all but $38 million of the questioned costs, but reduced the base used to calculate the contractor's fee by $205 million. By reducing the base, the DOD contracting official reduced the contractor's fee by approximately $6 million. In addition to identifying questioned and unsupported costs, DCAA has the option of withholding funds from the contractor and chose to withhold a total of $236 million for eight cases included in this review.
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  • Beam Suntory Inc. Agrees to Pay Over $19 Million to Resolve Criminal Foreign Bribery Case
    In Crime News
    Beam Suntory Inc. (Beam), a Chicago-based company that produces and sells distilled beverages, has agreed to pay a criminal monetary penalty of $19,572,885 to resolve the department’s investigation into violations of the Foreign Corrupt Practices Act (FCPA).
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  • Federal Research: Agencies Need to Enhance Policies to Address Foreign Influence
    In U.S GAO News
    U.S. research may be subject to undue foreign influence in cases where a researcher has a foreign conflict of interest (COI). Federal grant-making agencies can address this threat by implementing COI policies and requiring the disclosure of information that may indicate potential conflicts. GAO reviewed five agencies—which together accounted for almost 90 percent of all federal research and development expenditures at universities in fiscal year 2018—and found that three have agency-wide COI policies, while two do not (see figure). The three agencies with existing policies focus on financial interests but do not specifically address or define non-financial interests, such as multiple professional appointments. In the absence of agency-wide COI policies and definitions on non-financial interests, researchers may not fully understand what they need to report on their grant proposals, leaving agencies with incomplete information to assess the risk of foreign influence. GAO found that, regardless of whether an agency has a conflict of interest policy, all five agencies require researchers to disclose information—such as foreign support for their research—as part of the grant proposal that could be used to determine if certain conflicts exist. Elements of Conflict of Interest (COI) Policies at Agencies with the Most Federal Research Expenditures at Universities Based on a review of university documents, GAO found that all 11 of the universities in its sample have publicly available financial and non-financial COI policies for federally funded research. These policies often align with the financial COI policies or requirements of the grant-making agencies. All five agencies have mechanisms to monitor and enforce their policies and disclosure requirements when there is an alleged failure to disclose required information. All agencies rely on universities to monitor financial COI, and most agencies collect non-financial information such as foreign collaborations, that can help determine if conflicts exist. Agencies have also taken actions in cases where they identified researchers who failed to disclose financial or non-financial information. However, three agencies lack written procedures for handling allegations of failure to disclose required information. Written procedures for addressing alleged failure to disclose required information help agencies manage these allegations and consistently apply enforcement actions. In interviews, stakeholders identified opportunities to improve responses to foreign threats to research, such as harmonizing grant application requirements. Agencies have begun to address such issues. The federal government reportedly expended about $42 billion on science and engineering research at universities in fiscal year 2018. Safeguarding the U.S. research enterprise from threats of foreign influence is of critical importance. Recent reports by GAO and others have noted challenges faced by the research community to combat undue foreign influence, while maintaining an open research environment that fosters collaboration, transparency, and the free exchange of ideas. GAO was asked to review federal agency and university COI policies and disclosure requirements. In this report, GAO examines (1) COI policies and disclosure requirements at selected agencies and universities that address potential foreign threats, (2) mechanisms to monitor and enforce policies and requirements, and (3) the views of selected stakeholders on how to better address foreign threats to federally funded research. GAO reviewed laws, regulations, federal guidance, and agency and university COI policies and requirements. GAO also interviewed agency officials, university officials, and researchers. GAO is making nine recommendations to six agencies, including that grant-making agencies address non-financial conflicts of interest in their COI policies and develop written procedures for addressing cases of failure to disclose required information. Five agencies agreed with GAO's recommendations. The National Science Foundation neither agreed nor disagreed with GAO's recommendation, but identified actions it plans to take in response. For more information, contact Candice N. Wright at (202) 512-6888 or wrightc@gao.gov.
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  • Foreign Assistance: The United States Provides Wide-ranging Trade Capacity Building Assistance, but Better Reporting and Evaluation Are Needed
    In U.S GAO News
    From 2005 to 2010, 24 U.S. agencies provided more than $9 billion in trade capacity building (TCB) assistance to help more than 100 countries reduce poverty, increase economic growth, and achieve stability through trade. To report on TCB funding, the U.S. government conducts an annual survey of agencies and publicly reports the data in a TCB database administered by the U.S. Agency for International Development (USAID). GAO examined (1) how agencies' TCB activities are aligned with the agencies' goals, (2) the extent to which the TCB database provides sufficient information on key trends and funding, and (3) the extent to which USAID monitors and evaluates the effectiveness of its TCB activities. GAO focused on the agencies that reported the most funding for TCB activities since 2005--the Departments of the Army and State, the Millennium Challenge Corporation (MCC), and USAID--and the Office of the U.S. Trade Representative (USTR). GAO analyzed U.S. government data; reviewed agencies' strategic, budget, and program documents; and met with U.S. and foreign government officials in select countries.USAID and State conduct TCB activities that are aligned with their primary goals, but TCB is secondary to the goals of other agencies. USAID and State have developed strategic plans that include TCB-focused goals. Aligned with these goals, USAID and State assist countries in negotiating and implementing trade agreements. In addition, USAID assists countries in taking advantage of economic growth opportunities stemming from trade, often in conjunction with other agency goals. TCB is not a primary focus of MCC and the Army, however, they conduct activities to meet their broader agency goals that have trade-related effects. MCC identifies trade-related assistance it considers TCB as part of its programs' poverty reduction goals. The Army implements TCB-related physical infrastructure projects as part of its disaster response objectives and in support of its reconstruction and economic development efforts in Iraq and Afghanistan. The U.S. government TCB database has reported that annual TCB funding has increased from $1.35 billion in 2005 to $1.69 billion in 2010, but the database does not adequately describe certain factors underlying this growth and other significant changes in the composition of TCB funding. From 2005 to 2010, two agencies--MCC and the Army--began reporting significant TCB funding, primarily for physical infrastructure projects. Their funding comprised 54 percent of total TCB, and physical infrastructure projects comprised 45 percent of total TCB. However, the TCB database does not adequately explain significant factors driving changes in the composition of TCB funding. In particular, the annual TCB survey methodology attempts to identify and quantify just the trade-related components of projects, but this can be difficult in practice, particularly for physical infrastructure projects. Although GAO found the survey data to be generally reliable, these factors can lead to limitations in the data that are not described for its users. Clear reporting and transparent methodology and data collection are essential to understanding levels of funding and changes in the nature of TCB over time. USAID has improved its assessment of TCB activities, including developing performance indicators and taking the positive step of commissioning a multicountry evaluation of the effects of TCB, but it has yet to develop plans to make use of the evaluation's valuable insights. USAID uses trade and investment indicators to assess the immediate results of its TCB activities. However, officials explained that it is difficult to attribute trade-related trends revealed by the indicators to the effects of TCB assistance and collect valid and reliable data to measure progress. To assess longer-term results, USAID has commissioned evaluations of TCB programs in specific countries, but these are limited in number. It recently commissioned a multicountry evaluation of the long-term effectiveness of its TCB activities agencywide. While USAID is beginning to incorporate the evaluation's results in its training, it has yet to develop plans for disseminating best practices to missions and offices on the methods they may use to better manage and assess their activities. Furthermore, it has not made plans for conducting evaluations on an ongoing basis. GAO recommends that the Administrator of USAID publicly report identified limitations and key distinctions in the categories of TCB assistance in the database. GAO also recommends that USAID develop a written plan for using its recent TCB evaluation and for conducting evaluations on an ongoing basis. USAID stated that it has already taken steps consistent with the GAO recommendations.
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    In Crime News
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  • North Carolina Sport Supplement Company and Its Owner Plead Guilty to Unlawful Distribution of Steroid-like Drugs
    In Crime News
    A North Carolina resident and his sport supplement company pleaded guilty today to a felony charge relating to the introduction of unapproved new drugs into interstate commerce, the Department of Justice announced.
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