Were You Sold Unsuitable Investments by a Wells Fargo Stockbroker?

Wells Fargo Advisors has repeatedly been caught pushing unsuitable investments on their clients. One would think that after all the scandals that have engulfed the beleaguered bank, senior management would start taking their customers more seriously.

Our first post on Wells Fargo selling unsuitable investments was in 2011. It’s now 2021 and we are still re-writing this post.

In 2011, we first wrote that Wells Fargo’s brokerage arm agreed to pay $2 million to settle charges that one of its brokers sold unsuitable investments to clients in their 80’s and 90’s. The Financial Industry Regulatory Authority (FINRA) claimed Alfred Chen sold reverse convertible notes to many of his elderly clients.  Reverse notes (RCN’s) are a complex investment vehicle not usually found in the portfolio of older and retired persons.

Why RCN’s?  According to Investopedia, these notes carry high commissions meaning the broker pockets more than on routine stock or bond trades. They are often quite risky and “toxic.”

Chen was so successful in selling these exotic securities that Wells Fargo promoted him to a senior financial consultant and a vice president. According to FINRA, he is now out of the securities business. During his tenure as a stockbroker, however, he racked up 23 customer complaints.

In addition to the RCN complaints, FINRA says that Chen traded securities in the accounts of two dead customers. (The Forbes headline said it best, “Despicable Broker Traded Dead Customers’ Accounts.”

Fast forward to 2020 and Wells Fargo got spanked again, this time for $35 million by the SEC.

According to SEC,

From April 2012 through September 2019, Wells Fargo recommended that many retail investment advisory clients and brokerage customers  buy and hold single inverse exchange-traded funds  without having adequate compliance policies and procedures and without providing financial advisors proper training and supervision of single-inverse ETFs. As a result, certain investment adviser representatives and registered representatives (referred to by Wells Fargo as “financial advisors”) made unsuitable recommendations to certain clients.

Single-inverse ETFs are complex financial instruments that seek investment results that are the opposite of the performance of an index for a stated trading period, typically a single day. When held longer than a day, particularly in volatile markets, investors may experience large and unexpected losses. As disclosed in the prospectuses for single-inverse ETFs, when held for longer than a day, single-inverse ETFs will lose money when the level of the index is flat. Put differently, even if the index performance is zero percent, the single-inverse ETF based on that index will lose money. The prospectuses further disclose that single-inverse ETFs could lose money even if the level of the index falls, and warn that the products may not be suitable for all investors and should be used only by knowledgeable investors who understand the risks. The prospectuses also state that investments in single-inverse ETFs should be actively monitored as frequently as daily.

Wells Fargo recommended that certain retail clients buy and hold, in many cases for months or years, single-inverse ETFs with daily reset features, including in retirement accounts. Some of these clients had little or no relevant investing experience and had been identified to Wells Fargo as clients with moderate or conservative risk tolerances. Moreover, some of these clients did not fully understand the risk of losses when holding these inverse ETFs long term and were not aware of the need to, and therefore did not, actively monitor the positions. Similarly, some Wells Fargo financial advisors who recommended single-inverse ETFs also did not adequately understand the products or properly monitor the positions. During the relevant period, the clients collectively sustained millions of dollars of losses in the product by holding the positions [emphasis added].

Stockbrokers are obligated to make recommendations that are suitable for their clients. Whereas a younger, wealthier client might be willing to accept the high risk of reverse convertible notes or single-inverse ETFs, these investments are not recommended for people living on fixed income who need their investments for living expenses.

Unauthorized trading, especially in the accounts of dead clients, is an obvious violation too.

Did You Get Bad Advice from a Stockbroker (Rogue Stockbroker)?

Claims against stockbrokers are usually handled by arbitration.  Although the filing fees can often exceed $1000, the process is generally considered more efficient and much quicker than law suits filed in courts. Typically cases turn around in about a year.

If you received unsuitable investment advice or unauthorized trades were made in your account, contact an experienced securities fraud lawyer. The stockbroker fraud lawyers at Mahany Law have helped many victims of investment fraud get back their hard earned money. For a no obligation consultation, contact attorney Brian Mahany online, by email brian@mahanylaw.com or by phone at 202-800-9791. Cases accepted nationwide.

Mahany Law – America’s Fraud Lawyers

[photo credit: Photo by Alec Favale on Unsplash]

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Elder Financial Abuse Is on the Rise. Learn What You Can Do to Protect Yourself or a Loved One!

If the figures coming from the North American Securities Administrators Association (NASAA) are correct, the number of fraud actions involving victims over the age of 50 is staggering.  We don’t have 2020 data yet and with COVID, we expect 2020 will be another record breaking year for fraudsters.

Sadly, regulatory agencies only have enough resources to investigate a small percentage of the reports that come in each year. And even fewer people report the crime. For each case prosecuted, many others are not investigated or even reported.

Often older victims are too embarrassed to report that they were the victims of an investment fraud. Other times they are in such an advance state of dementia they don’t even know they were scammed.

According to NASAA’ 2019 data, the states received 6,698 complaints involving securities fraud. This doesn’t include the thousands received by the SEC and the Financial Industry Regulatory Authority.  The feds don’t break out complaints by age group but the states do. NASAA says that in frauds involving seniors, the top scams are as follows:

• unregistered securities (over 50% of claims involving seniors)
• traditional securities
• affinity fraud
• variable annuities
• viaticals / life settlements
• equity indexed annuities

Unregistered securities frequently involve promissory notes.  In 2019, state securities regulators overwhelmingly reported that promissory notes and other unregistered securities were the products most often associated with new enforcement actions.

Typically, a promissory note is a written promise to pay (or repay) a specified sum of money at a stated time in the future or
upon demand. Companies may sell promissory notes to raise capital, but unfortunately, promissory notes are often touted
to unsuspecting investors who are enticed by unrealistic yields. In this economy, it is hard to find high rates of return. Fraudsters will promise unusually high percentage yields and claim the notes are “guaranteed.”

Unfortunately, these promissory notes are often sold by unlicensed stockbrokers looking for higher commissions. Because unlicensed brokers don’t work for legitimate securities brokerage firms, trying to collect any judgment can be difficult.

Many of these bad actors attempt to convince investors to open a self-directed IRA with a nonbank custodian to hold investments such as promissory notes. These bad actors bank on the fact that certain custodians providing these accounts are not subject to the same requirements as custodians regulated under the securities laws, including Know Your Customer rules.

How to Combat Elder Financial Abuse

Elder financial abuse is rampant. As baby boomers enter their retirement years, they continue to be the fastest growing age group of our population. That means that numbers of elder fraud victims will likely continue to increase.

What can you do? First, deal only with reputable brokers. Although just about every brokerage firm has had a few bad apples, larger firms can make good your losses if you are scammed.  Stockbrokers that rely almost exclusively on cold calls frequently work for so called boiler room shops; firms that are here one day and gone the next.

How can you tell if your broker is properly licensed and has a clean record? That is easy. FINRA’s BrokerCheck system is an easy to use online system that contains all the information you need to know. If your broker isn’t listed, he or she isn’t licensed. (And if they tell you they don’t have to be licensed, check with your state securities regulator. All are happy to help.)

Be very wary of brokers that pitch you because you belong to the same church, ethnic group or religion.  Many people have been victimized by these affinity frauds.

Make sure that you understand what you are purchasing. If you can’t easily explain how it works then you probably should be making the investment.

Another question to ask is how easy is the investment to sell if you suddenly need the money? Frequently older investors find themselves stuck in illiquid real estate trusts, promissory notes or complex derivatives for which there is no developed secondary market.

Finally, don’t be afraid to look over the shoulder of your parents or older relatives.  Make sure they aren’t being taken for a ride. If they can’t explain what they want to purchase or if they only talked to the stockbroker by telephone and never met, its time to get involved and ask serious questions.

We have met far too many clients that are spending their golden retirement years worrying about money. Money that was taken from them by fraudsters, greedy stockbrokers and even accountants and bankers.

There are remedies of course for victims of investment fraud but those remedies are only as good as the company or person behind the investment. If you were scammed by a stockbroker or financial professional, there is probably a “deep pocket” – a solvent company or insurance policy that can pay.  Recovering assets from boiler room operations or unlicensed people can be difficult, however.

A little prevention and due diligence can go a long way to making sure you or someone you love doesn’t spend their golden years worrying about how they can afford food or medical bills.

Want to learn more? Visit our investment fraud recovery page.

Ready to speak with a lawyer? Have you or someone you love has been the victim of a fraud committed by a stockbroker, accountant or other financial professional? Give us a call. The investment fraud lawyers at Mahany Law can be reached online, by email brian@mahanylaw.com or by phone at 202-800-9791.

All inquiries are confidential and without obligation. We accept cases nationwide and handle most cases on a contingency or “success” fee basis meaning you pay nothing unless we recover money on your behalf. Our minimum loss size is $100,000.

Mahany Law – America’s Fraud Lawyers.

[Photo credit: Photo by Roland Kay-Smith on Unsplash]

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Were You Sold Unsuitable Investments by a Wedbush Securities Stockbroker?

We first began writing about Wedbush Securities in 2011. Back then, a headline indicating that Wedbush was ordered to pay $3.5 million to one of its own former employees. The amount alone was enough to warrant some investigation. It turns out that Wedbush has a long and sordid history with regulators. One that continues through today.

In the 2011 case, a Financial Industry Regulatory Authority (FINRA) arbitration panel ordered Wedbush to pay a former employee $3.5 million in back pay. Perhaps more telling, the panel called Wedbush’s actions towards its former employee a “morally reprehensible failure.”  It turns out that this isn’t the only failure by Wedbush in recent years.

A search of FINRA disclosable events reveals the firm has recently been the subject of 174 disclosable events. That includes 111 regulatory events, 60 arbitrations and 2 civil events.  Millions of dollars of judgments and arbitration awards have been entered against Wedbush – some for some very serious conduct. Breach of fiduciary duty, breach of contract, fraudulent activity and failure to supervise are among a few of the recent charges.

For its part, Wedbush has approximately 1000 brokers. Their website says they are dedicated to your financial success – the question is whether the company is rewarding the personal success of their customers or simply lining their own pockets.

Broker dealers have bad days just like the rest of us. Everyone makes mistakes and no firm can satisfy every investor. Any organization is liable to have the occasional rotten apple. Wedbush seems to be rife with them. Over a 100 violations claimed in recent years should be cause for concern.

Since this post was first written, Wedbush continues to disappoint both regulators and investors.

In 2016, an elderly California couple sought $247,000 from Wedbush and one of its brokers, Mark Augusta. They claimed the firm and Augusta engaged in “unsuitable recommendations; failure to supervise; constructive fraud, common law fraud and fraud by material misrepresentations/omissions; unjust enrichment; and elder financial abuse.” A FINRA arbitration panel awarded approximately $1.8 million including $1,080,000 in punitive damages for elder financial abuse. Despite the award, Wedbush went to court in an attempt to vacate the decision of the arbitrators. A Los Angeles Superior Court Judge refused and instead confirmed the award.

In 2018, the SEC accused Wedbush of failing to supervise a broker involved in a “pump and dump” penny stock scam.

In June 2019, the Wedbush paid $8.1 million to settle SEC charges that the brokerage firm failed to properly supervise its securities lending desk personnel. In September the company paid almost $2 million to settle additional SEC charges. Wedbush settled in both cases without any admission of guilt.

2020 was remarkably quiet for Wedbush. Hopefully they have learned their lesson.

Wedbush Securities Is Responsible for the Misconduct of its Brokers

Stockbrokers and their employers can be held responsible for lying to their clients, fraud and even improper markups on the products they sell. In the case of Wedbush, there seems to be many significant problems. If you purchased municipal securities or other investment products through Wedbush and lost money, contact us.  You may be entitled to recoup any losses caused by their negligence.

For more information, visit our stockbroker fraud recovery page. Ready to see if you have a case? Contact Brian Mahany online, by email at brian@mahanylaw.com or by phone at 202.800-9791.

Our stockbroker fraud lawyers have helped people across the United States. In most cases, we can represent you on a pure contingent fee basis meaning you need not worry about finding money for a lawyer. Minimum loss $100,000.

Mahany Law – Stockbroker Fraud Attorneys

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IRS Accuses Deutsche Bank of $190 Million Abusive Tax Shelter

Whistleblower Rewards for Information about Banks Peddling Phony Tax Shelters

[Post updated and rewritten January 2021] Back in 2014 we announced that the IRS and Justice Department had filed a civil suit against Deutsche Bank seeking to collect $190 million in taxes. The government accused the German bank of using shell companies in a complex abusive tax shelter scheme. The lawsuit comes on the heels of $554 million criminal penalty paid by the bank in 2010. That case accused the bank of helping individual customers commit evade taxes through the use of abusive tax shelters.

According to the complaint, Deutsche Bank “acquired a corporation in the fall of 1999 that held stock with a very low cost-basis, such that the sale of this stock would trigger more than $100 million in taxable gain as a result of the appreciation in value of the stock.” To avoid paying tax on the stock’s built in gain, the bank made arrangements with a firm that created three shell companies that served no purpose other than to be stuck with a huge IRS bill it had no ability to pay.

The complaint said that the bank and the 3 shell companies executed a complex series of pre-planned transactions. First, the bank sold the corporation holding the appreciated stock to a shell company for a price that did not represent fair market value. The shell company then “paid” for the stock using a short-term loan conditioned on the completion of the pre-planned transaction. Immediately after purchasing the stock, the shell company then sold the stock back to the bank. The sale triggered the tax liability on the gains in the stock value. The shell company would pay off the loan but have no cash to pay the taxes. The bank was able to profit by selling the stock with the stepped up basis without having to pay taxes.

The IRS has been very aggressive in pursuing transactions that have no economic substance and are only designed to avoid taxes. The use of nominee or shell companies in transactions that are not arms length also attracts increased scrutiny. If the allegations of the complaint are accurate, the bank has a tough road ahead.

The government claims that the scheme helped the bank evade $190 million in taxes, interest and penalties.

In announcing the lawsuit, U.S. Attorney Preet Bharara said: “Through fraudulent conveyances involving shell companies, Deutsche Bank tried to make its potential tax liabilities disappear. This was nothing more than a shell game.”

The bank claimed that the IRS abandoned these claims in 2009 and announced they were “vigorously defending” against the charges. Fast forward to 2017 when the bank agreed to pay an additional $95 million to settle the claims. The settlement required Deutsche Bank to admit and accept responsibility for its actions.

A former Deutsche Bank broker was also sentenced to 42 months in prison for his role in the scheme.

Abusive tax shelters and tax evasion often go hand in hand. Unfortunately, schemes like this are often marketed by promoters who sell these schemes to unsuspecting taxpayers. Even if there is no criminal prosecution, the IRS civil penalties for having an abusive tax shelter are huge.

Whistleblower Rewards for Banking Misconduct

The traditional whistleblower reward program for banking misconduct is FIRREA (Financial Institutions Reform Recovery and Enforcement Act). Passed after the savings and loan crisis left several banks without enough assets to pay depositors, Congress and the FDIC passed a comprehensive reform package to reform banking practices. Several years later Congress passed a second law that allows whistleblowers to receive up to $1.6 million for reporting bank fraud.

Rewards can be based on wrongdoing of the bank itself, bank officers or third parties whose actions jeopardize the financial health of the bank. Until the Trump administration, the law became the favored method of prosecuting bank misconduct. We like FIRREA because it pays rewards to whistleblowers willing to stick their necks out in an effort to fight fraud and corruption.

Early reports are that the new Attorney General is a proponent of FIRREA.

FIRREA isn’t the only reward program available to whistleblowers. The Deutsche Bank case involved phony tax shelters, something within the domain of the IRS. For over 100 years the IRS has been paying out rewards and continues to do so now and at a record pace.

The IRS whistleblower program pays rewards of up to 30% of whatever monies are collected from the wrongdoer. And unlike FIRREA, there is no cap. UBS whistleblower Bradley Birkenfeld received a record breaking $104 million reward from the IRS.

In 2021 Congress overrode a presidential veto and passed a brand new Anti Money Laundering AML whistleblower rewards program. (The president’s veto was not related to the whistleblower reward provisions of the law.)

Deutsche Bank Continues to Break the Law

Often a big bank pays a multi-million or billion fine we hear from other whistleblowers within the organization. Simply because a bank gets caught and prosecuted doesn’t mean the feds know everything that is going on. The prime examples are Bank of America and Wells Fargo. Don’t think that Deutsche Bank has become an angel, however.

In 2019, Deutsche Bank paid a $16 million fine for violating the Foreign Corrupt Practices Act (FCPA) by hiring relatives of foreign government officials in order to improperly influence them in connection with investment banking business. Under the SEC whistleblower program, the government can also pay 30% whistleblower rewards.

The SEC doesn’t name whistleblowers so we don’t know if the case was initiated by a whistleblower but most foreign bribery cases are. Once again, if you have information about misconduct by a bank, you may be eligible for a large cash reward.

Did Deutsche Bank learn its lesson? Apparently not. Last week the bank agreed to pay $120 million to settle claims brought by both the Department of Justice and the SEC. $43 million of the settlement was allocated to the SEC meaning someone may be receiving a $12,900,000 reward. The SEC claimed that the bank paid $7 million in bribes and then classified the bribes as legitimate business expenses on their books and records.

Still not enough? The CFTC fined the German banking giant $30 million for allegedly manipulating the precious metals market. We say allegedly because the bank settled without admitting liability. And yes, the CFTC also has a whistleblower reward program.

The bottom line? When banks break the law, whistleblowers are the eyes and ears of regulators. Especially when the misconduct occurs overseas, it is often insiders who first spot the misconduct. Unlike most every other nation, the United States offers cash whistleblower rewards as an incentive to get whistleblowers to step forward.

When a bank is involved in the misconduct, whistleblower rewards may be available under a wide variety of programs including FIRREA, IRS Whistleblower Program, the CFTC Whistleblower Program, the SEC Whistleblower Program and the new AML whistleblower law.

Are You a Banker or Third Party with Information about Bank Fraud?

The whistleblower lawyers at Mahany Law help whistleblowers fight fraud and corruption and obtain the maximum rewards allowed by law. We can also help protect you against illegal retaliation. To learn more, visit our IRS, FIRREA FCPA and SEC whistleblower reward information pages.

Ready to see if you are entitled to a reward? Contact us online, by email brian@mahanylaw.com or by phone 202.800.9791. Whistleblower cases accepted worldwide. All inquiries are protected by the attorney – client privilege and kept strictly confidential.

Mahany Law – America’s Bank Fraud and AML Whistleblower Lawyers

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Have Information About Misuse of Payroll Protection Program Funds (PPP Fraud)? You May Be Eligible for a Large Cash Reward

Since the government first announced the Payroll Protection Program, tens of thousands of businesses and self-employed individuals have signed up. Because the program was rushed in order to get relief to businesses hurt by the pandemic, neither the government nor the SBA did much due diligence. We trusted applicants to be honest.

Most applicants were honest. Unfortunately, billions of dollars were lost to companies and individuals who scammed the system.  Since the program was first announced, the Department of Justice has criminally prosecuted over 50 fraudsters for ripping off the PPP program. Because the program is funded with tax dollars, these fraudsters are ripping off both the American people and the government.

On January 12^th, the U.S. Attorney in Sacramento announced the first civil PPP fraud prosecution brought under the federal False Claims Act. Under that law, whistleblowers with inside information about fraud involving government funds or programs can receive large cash rewards for reporting the fraud.

PPP Program and Eligibility Requirements

According to the SBA, the Paycheck Protection Program (PPP) is a forgivable loan designed to provide a direct incentive for small businesses to keep their workers on payroll. The first round of PPP loans was issued in the spring of 2020 to help fund payroll costs, including benefits, and to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, and certain other expenses.

Beginning in January 2021, a second round of PPP was opened with slightly different eligibility requirements.

On paper, the program is only available to:

• Sole proprietors, independent contractors, and self-employed persons
• Any small business concern that meets SBA’s size standards (either the industry size standard or the alternative size standard)
• Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans’ organization, or tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:

• • 500 employees, or
  • That meets the SBA industry size standard if more than 500
• Any business with a NAICS code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location

There are several disqualifiers too:

• Your business wasn’t in existence in February 2020
• Your business is in bankruptcy
• Anyone owning 20% or more of the business is in prison, probation or was convicted of a felony within the past year
• Hedge funds and private equity firms
• Businesses in an industry deemed disqualified by the SBA
• You or your business defaulted on an SBA loan within the last 7 years.

Prosecution of SlideBelt Inc. and CEO Brigham Taylor

SlideBelts Inc is an internet retailer of fashion accessories. Brigham Taylor is the company’s CEO. In April 2020, the company filed two PPP applications, one with a local credit union in Sacramento and the other with a bank in New Jersey.

One of the standard questions in the application is whether the company is in bankruptcy. Taylor completed the applications on behalf of the company and responded the company was not in bankruptcy. Taylor’s response was false, the company had filed a Chapter 11 bankruptcy in August 2019.

The local credit union was familiar with the company and knew of the bankruptcy. A manager there declined the application and told Taylor that his company was not eligible for PPP. Three hours later Taylor made a third application, this time to a bank in Minnesota. He once again indicated his company wasn’t in bankruptcy.

The New Jersey bank approved SlideBelts PPP application on behalf of the SBA. The company received $350,000.

The government prosecuted both SlideBelts and Brigham Taylor under the False Claims Act and the Financial Institutions Reform Recovery and Enforcement Act – FIRREA. Both laws pay whistleblower rewards. Whistleblower rewards under the False Claims Act are between 15% and 30% of whatever the government collects from the wrongdoer while FIRREA awards are also based on a percentage but are capped at $1.6 million.

The government sought $4,196,992.00 but because the company was broke, the case settled for $450,000.00. (That is a common problem when prosecuting bankrupt companies and individuals.) Although Taylor and SlideBelts were allowed to settle without any admission of wrongdoing, they did acknowledge the underlying facts.

In announcing the settlement, Sacramento’s United States Attorney said,

“The defendants made false statements to multiple banks in order to obtain a Paycheck Protection Program loan that should have been disbursed to an honest small business suffering financially from the economic effects of the COVID-19 pandemic. The Department of Justice and our partners at the SBA will use all tools at our disposal, including civil fraud statutes, to aggressively pursue those who exploit federal programs intended to help those in need during this national emergency.”

PPP Fraud Whistleblower Rewards

We have long advocated for whistleblowers with inside of information of COVID-19 related fraud to step forward. (Visit our coronavirus whistleblower rewards page for more information – rewards are not limited to the Payroll Protection Program.) The action brought in Sacramento against the bankrupt SlideBelts Inc although small is validation that whistleblower cases for PPP fraud case are real.

To qualify for a reward, one must have original source (inside) information about COVID-19 related fraud. Here are the common schemes we have seen to date or anticipate:

• PPP Fraud
• Other SBA and Grant Fraud
• Procurement Violations
• Bid Rigging and Collusion
• cGMP Violations (adulterated or underpotent COVID drugs)
• Kickbacks
• SEC Fraud (phony claims of cures or financial reporting fraud)
• Off Label Marketing
• Best Price Violations
• Defective Products (PPE, Ventilators)
• Clinical Trial Fraud

To qualify for a reward involving PPP fraud, one must have inside information about the fraud.

Claiming a reward involves filing a complaint under seal (secret) in federal court. The government then has the opportunity to investigate. Ultimately the government can take over the case, allow the whistleblower’s legal team to prosecute or ask the court to dismiss the case. While the government is investigating, the case is sealed meaning no one – not even the whistleblower’s employer – knows who filed the claim.

To learn more, visit our coronavirus whistleblower page. Ready to see if you qualify for a reward? Contact attorney Brian Mahany online, by email brian@mahanylaw.com or by phone 202-800-9791.

PPP fraud cases accepted nationwide. All inquiries protected by the attorney – client privilege and kept strictly confidential.

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Have Information About Insider Trading? You May Be Eligible for a Huge SEC Whistleblower Reward

[Original post Feb 2011, Updated and Reposted Feb. 2021] The U.S. Attorney’s Office in Manhattan has charged a hedge fund manager with insider trading. Donald Longueuil was charged with conspiracy to commit securities and wire fraud and obstruction of justice. The obstruction charge stems from Longueuil’s middle of the night efforts to destroy computer hard drives.

The FBI and SEC have been investigating allegations of insider trading on Wall Street for years. This month’s charges are thought to be the tip of the iceberg with many more charges to come.

According to prosecutors, Longueuil and others obtained inside information about various semiconductor and technology companies. At times they would pay workers in these companies to leak privileged information. In one instance, Longueuil obtained quarterly earnings reports for Marvell Technology Group, a publicly traded company. He received the information before it became public. Prosecutors say Longueuil and another trader purchased over a million shares of the stock. A short time later the stock price jumped 23% when the earnings became public generating over $1 million in profits for Longueuil’s efforts.

Perhaps the most telling is the behavior leading up to the obstruction charge. The feds say that Longueuil became concerned when the Wall Street Journal ran a story about the insider trading investigation. They say he and co-defendant Samil Barai began a campaign to destroy evidence.

Prosecutors say Barai sent a text message to a cooperating undercover informant that said, “Shred as much as u can” and “put all ur data files onto an encrypted drive.”

Later Barai told the same informant to leave his laptop with his doorman so that Barai could obtain the laptop and “do a dept of defense delete.” The feds say he picked up the laptop and never returned it.

For his efforts, Samil Barai was also charged.

Longueuil’s efforts to destroy and conceal evidence are even more colorful. Prosecutors recovered messages he sent to another cooperating witness. In those messages, Longueuil said he “just fucking ripped it [the flash drive]… fucking pulled the external drives apart… Destroyed the platter… Put ‘em into four separate little baggies, and then at 2 a.m. … 2 a.m. on a Friday night, I put this stuff inside my black North Face jacket,… and leave the apartment and I go on like a twenty block walk around the city.. and try to find a, garbage truck… and threw the shit in the back of like random garbage trucks, different garbage trucks… four different garbage trucks.”

Longueuil faces twenty-five years in federal prison. He was arrested in his apartment.

Like all criminal charges, he is only accused of these crimes at this point. Of course, ripping up hard drives with pliers is not consistent with someone who is innocent and wishes to cooperate in an investigation. Preet Bharara, the U.S. Attorney for the Southern District of New York, summed it up best, “When people frantically begin shredding sensitive documents and deleting computer files and smashing flash drives and chasing garbage trucks at 2 a.m., its not because they have been operating legitimately.

Many white-collar defendants attempt to destroy evidence, unfortunately destruction of evidence and obstruction of justice are themselves separate crimes. These crimes are often more serious than the underlying original charge.

Update: It didn’t take long for Longueuil to plead guilty. He was sentenced in July to 30 months in prison and order to forfeit over $1 million which the Justice Department says were his profits for the insider trading scheme.

Insider Trading Schemes and SEC Whistleblower Rewards

Longueuil was convicted of criminal insider trading charges and sentenced to prison. Although the $1.25 million Longueuil was ordered to forfeit sounds like a lot of money, multi million insider trading schemes are unfortunately common. The Dodd-Frank Wall Street Reform and Consumer Protection Act established a whistleblower rewards program within the SEC. That SEC can pay whistleblowers with insider information about insider trading rewards of up to 30% of whatever the agency collects from the wrongdoer. In fact, the program includes rewards for many types of wrongdoing, not just insider trading.

Some examples of the kind of misconduct the SEC is interested in include:

• Ponzi scheme, Pyramid scheme, or a High-Yield Investment Program
• Theft or misappropriation of funds or securities
• Manipulation of a security’s price or volume
• Insider trading
• Fraudulent or unregistered securities offering
• False or misleading statements about a company (including false or misleading SEC reports or financial statements)
• Abusive naked short selling
• Bribery of, or improper payments to, foreign officials
• Fraudulent conduct associated with municipal securities transactions or public pension plans
• Initial Coin Offerings and Cryptocurrencies
• Other fraudulent conduct involving securities
• Anti-money laundering (AML)

Longueuil story garnered much of the media intention because of his emails and text messages boasting about the cover up. The bigger story involved the company he worked for, SAC Capital. Although he may have made $1.25 million in profits from his scheme, the hedge fund made hundreds of millions.

In November 2013, SAC Capital Management Companies pled guilty to federal securities fraud charges. As part of  a plea deal the company agreed to pay $1.8 billion, the largest fine ever paid for insider trading case. After the plea, an FBI spokesperson said,

“What SAC Capital’s plea demonstrates is that cheating and breaking the law were not only permitted but allowed to persist. The result is $1.8 billion in fines and forfeiture, the largest penalty in an insider trading case ever, and termination of their investment advisory business. The problem of insider trading is real. For companies that willfully turn a blind eye, be on notice: how your employees make money is just as important as how much they make.”

The potential whistleblower rewards in insider trading cases are huge. But it takes a whistleblower to step forward and report the offense. Unlike many other whistleblower programs, the SEC allow whistleblowers to remain completely anonymous.

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Mahany Law is a full service, national boutique law firm that represents whistleblowers and victims of banking and financial fraud. If you have information about insider trading or other corporate misconduct, you may be eligible for a reward. To learn more,  visit our SEC whistleblower rewards page. To see if you have a case, contact attorney Brian Mahany online, by email brian@mahanylaw.com or by phone 202.800.9791.

Cases accepted nationwide. All inquiries protected by the attorney – client privilege and kept completely confidential.

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Lawsuit Blames Skowhegan Paper Mill For Dangerous Chemicals Found In Neighboring Town’s Wells

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A new lawsuit claims that a Skowhegan paper mill is responsible for the toxic chemicals that are now being found in dangerous levels in the well water of a neighboring community.

For five years, Fairfield residents have felt a growing sense of alarm about that class of man-made chemicals, which are widely known as PFAS, or “forever chemicals,” and have been used to manufacture everything from pizza boxes to fire fighting foam.

First, they were found in high concentration in the milk and wastewater sludge at a local dairy farm. Since then, dangerous levels have been found in the water of more than 40 private wells and testing is ongoing for 20 others.

Now, the owner of one of the wells, Nathan Saunders, has sued several past and present owners of the Sappi Paper mill in Skowhegan. One of his attorneys, Brian Mahany, says Sappi used PFAS to make paper food packaging, then allowed the chemicals to enter the surrounding community as landfilled and composted wastewater sludge.

“We were confident that there were biosolids that were coming from the Somerset Mill that had been spread on a dairy farm that we believe is the source of the contamination for residents in Fairfield,” Mahany said.

In a written statement, Sappi Paper spokesperson Olga Karagiannis denied that the Skowhegan mill is the source of the PFAS contamination in Fairfield and said the company has been an environmental steward at all its mills. She said the company had not been served with the new lawsuit or had a chance to review it as of Monday morning.

David Madore, a spokesperson for the Maine Department of Environmental Protection, said the agency does not currently “have enough information” to say whether the PFAS contamination in Fairfield can be traced back to the Skowhegan mill.

Mahany hopes that other Somerset County residents sign onto the class-action suit and that other communities become more aware about the risk of PFAS contamination. He is seeking financial damages and ongoing medical monitoring for the Fairfield plaintiffs.

The lawsuit also names as a defendant Casella Waste Systems and accuses the company of running a landfill in Fairfield that accepted waste from the Sappi mill that was contaminated with PFAS. A Casella spokesperson, Joe Fusco, said that the company just learned of the lawsuit on Monday and “has never operated a landfill in Fairfield.” He suggested it may have been “incorrectly” named as a defendant.

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Class-action lawsuit filed for dangerous chemical levels in Somerset County well water

A class-action lawsuit has been filed for dangerous levels of toxic chemicals found in Somerset County well water.

PFAS have been linked to increased risk of cancers and other health issues.

The class-action lawsuit claims Sappi’s Somerset mill in Skowhegan produced PFAS-treated paper products, which later were turned into fertilizer, and when spread on farms, that got into area well water, putting people at risk.

• PFAS Class Action – Brian Mahany Maine Lawyer by Wgme Producers on Scribd

Catherine and Bruce Harrington say they started noticing the trucks bringing the biowaste years ago to a farm behind their home.

“Everybody said, ‘It’s OK, they’re all set. It has chemicals, so you’re perfectly safe.’” Catherine Harrington said.

A water test a few months ago proved otherwise. The EPA set a health advisory once levels hit 70 parts per trillion. Theirs is around 26,000 parts per trillion.

“We’re angry. We’re scared, because you know, with all these chemicals through us all this time, what’s it going to mean medically for us? And our kids and our grandkids?” Catherine Harrington said.

The Department of Environmental Protection started testing area wells last year.

“The highest one I can think of is around 28,000 parts per trillion. So there’s quite a range,” DEP Bureau of Redemption and Waste Management Director David Burns said.

They’ve found more than 40 wells with elevated levels. They’ve been installing treatment systems to get residents clean water and continue to test well systems.

“That process will continue until we’re comfortable that we’ve identified every impact in that area,” Burns said.

Brian Mahany is an attorney for the class-action lawsuit.

“It’s a forever chemical, folks are going to need to be tested and monitored unfortunately, probably for the rest of their life,” Mahany said.

They’re seeking monetary and punitive damages, along with medical monitoring for those with elevated levels or exposed to the PFAS.

“We want to make sure they get the help that they need going forward, and we want to hold the mill accountable for the damage that has been done,” Mahany said.

CBS13 did contact the company that owns the Somerset mill, Sappi Global, but we have not received a response to the request for comment.

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Skowhegan paper mill ‘strongly disputes’ lawsuit alleging fault for contaminating water wells

Fairfield resident Nathan Saunders filed a class-action suit Friday, saying the Sappi mill is the source of high levels of ‘forever chemicals’ in a growing number of Fairfield area wells.

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The Somerset County paper mill now the subject of a class-action lawsuit says it “strongly disputes” allegations that its facility has led to so-called “forever chemicals” contaminating a growing number of residential water wells in the Fairfield area.

Sappi North America, the company that owns the Skowhegan mill, made the statement Monday following the filing of a lawsuit that alleges the mill is the source of high levels of per- and polyfluoroalkyl compounds, known as PFAS, in a growing number of wells.

“Sappi has not been served with the lawsuit and has not yet had the opportunity to review it in detail,” Sappi spokesperson Olga Karagiannis wrote in a response Monday. “Sappi strongly disputes any contention that Sappi’s Somerset mill is the source of PFAS contamination in Fairfield. Sappi is well known for its record of environmental stewardship at the Somerset mill and at all of its manufacturing facilities.”

The lawsuit was filed Friday by Fairfield resident Nathan Saunders, 60, through attorney Brian Mahany, of Mahany Law Partners LLC, at Somerset County Superior Court in Skowhegan. Mahany is partnering with national law firm Grant & Eisenhofer, which specializes in PFAS mitigation law.

The lawsuit alleges Sappi’s Somerset Mill in Skowhegan is the source of PFAS, dubbed “forever chemicals” in Saunders and other Somerset County residents’ wells. The lawsuit alleges that the PFAS came from biosolids spread in the form of sludge from the mill’s wastewater treatment plant.

The lawsuit seeks damages “in an amount to be determined,” but Mahany said he expects damages to be in the “tens of millions of dollars.”

Introduced in the 1940s, PFAS are a group of man-made chemicals that were commonly used in household products for their water, grease and stain-resistant nature.

Nicknamed “forever chemicals” because they do not break down easily, exposure to these chemicals has been linked to various health issues. Some studies link PFAS exposure with an increased risk for certain cancers.

Since February of 2020, Maine’s Department of Environmental Protection has found a growing number of local water wells with high concentrations of the chemicals. To date, 45 wells in Fairfield with levels of PFAS compounds higher than the EPA’s maximum limit of 70 parts per trillion have been identified by state officials, according to Maine Department of Environmental Protection Acting Commissioner David Madore. The department is awaiting test results for 20 more wells.

On Jan. 13, Saunders’ well was found to be contaminated with PFAS at 12,910 parts per trillion.

“These things have to be proven, but there is a significant impact to our family that we are trying to understand more about,” said Saunders, a 33-year Fairfield resident, on Monday. “The possibility of these chemicals causing significant issues in our family makes me want to investigate this further to see what’s really happening.”

The class-action suit is open for anyone to join who experienced damages related to the PFAS contamination of local wells. The suit is still just Saunders, but Mahany said the firm is hearing from various people, including a concern from parents about exposure for their children. If the court certifies the class-action suit, notice will be sent out to those in the area.

Mahany also intends on pursuing individual suits for those impacted with health issues who believe it is related to PFAS exposure from the mill.

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Maine man sues paper mill over levels of ‘forever chemicals’

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A Maine man is suing a paper mill company that operates in the state about levels of long-lasting chemicals in wells and elsewhere.

Nathan Saunders of Fairfield filed the lawsuit Friday against Boston-based Sappi North America. The lawsuit concerns per- and polyfluoroalkyl compounds, which are also called PFAS and are sometimes referred to as “forever chemicals.”

The lawsuit makes the claim that the chemicals in water sources in Somerset County came from biosolids from the mill’s wastewater treatment plant, the Morning Sentinel reported. An attorney for Saunders, Brian Mahany, told the Sentinel that the damages “will be in the tens of millions of dollars.” He said homeowners have suffered from elevated levels of PFAS in their water.

Sappi North America told the Morning Sentinel it “strongly disputes” the allegations. The company touted its record of environmental stewardship.

State officials have found dozens of wells in Fairfield had higher levels of the compounds than the federal limit.

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Maine man sues paper mill over levels of ‘forever chemicals’

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A Maine man is suing a paper mill company that operates in the state about levels of long-lasting chemicals in wells and elsewhere.

Nathan Saunders of Fairfield filed the lawsuit Friday against Boston-based Sappi North America. The lawsuit concerns per- and polyfluoroalkyl compounds, which are also called PFAS and are sometimes referred to as “forever chemicals.”

The lawsuit makes the claim that the chemicals in water sources in Somerset County came from biosolids from the mill’s wastewater treatment plant, the Morning Sentinel reported. An attorney for Saunders, Brian Mahany, told the Sentinel that the damages “will be in the tens of millions of dollars.” He said homeowners have suffered from elevated levels of PFAS in their water.

Sappi North America told the Morning Sentinel it “strongly disputes” the allegations. The company touted its record of environmental stewardship.

State officials have found dozens of wells in Fairfield had higher levels of the compounds than the federal limit.

The Maine Department of Environmental Protection does not have enough information at the moment to identify parties that are responsible for elevated PFAS levels, said David Madore, the department’s acting deputy commissioner. The department has “remained focused on providing safe drinking water,” he said.

The lawsuit is a class action lawsuit and is open to residents of Somerset County, Saunders’ lawyer said. The chemicals don’t break down easily in the environment, and have been linked to human health problems in some scientific studies.

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Fairfield man files class-action lawsuit against Sappi paper mill over ‘forever chemicals’

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A Fairfield man filed a class-action lawsuit Friday against Sappi North America over high levels of per- and polyfluoroalkyl compounds, known as PFAS, found in Somerset County wells and at other sites.

Nathan Saunders filed the lawsuit through lawyer Brian Mahany at Somerset County Superior Court in Skowhegan.

The lawsuit alleges Sappi’s Somerset Mill in Skowhegan is the source of the PFAS, known as “forever chemicals.”

Specifically, the lawsuit alleges the PFAS came from biosolids from the mill’s wastewater treatment plant. The biosolids were spread in the form of sludge, according to the lawsuit.

“I think the damages will be in the tens of millions of dollars,” Mahany, who is licensed to practice law in Maine but operates a national practice, said Sunday evening in a telephone interview. “There are so many homeowners that are affected, and so many homeowners that have elevated levels of PFAS in their water.”

Officials with Sappi North America did not reply Sunday night to an email seeking comment.

The lawsuit seeks damages “in an amount to be determined.” It also seeks coverage for property damage, out-of-pocket expenses, personal property damage, loss of use and enjoyment of property, diminution in property value, costs for long-term medical monitoring and other issues.

The lawsuit is a public document and “open to anyone in Somerset County,” Mahany said.

“Plaintiff and the Class Members’ actual and significant exposure to these dangerous levels of PFAS is the direct and proximate result of each of Defendants’ intentional, willful, wanton, reckless or negligent acts or omissions in connection with the use, emission, discharge, disposal, distribution and spraying of PFAS throughout Somerset County,” the lawsuit reads.

“As a direct and proximate result, … Plaintiff and the Class Members are at risk of developing cancer, and other illness, disease and disease processes, resulting in their present medical need for periodic diagnostic medical examinations.”

Introduced in the 1940s, PFAS are a group of man-made chemicals that became widely used in household products for their water, grease and stain-resistant nature.

The “forever chemicals” moniker comes from PFAS’ strong structure, which does not break down easily in the environment or human body.

Exposure to the chemicals can cause health issues, including elevated cholesterol, thyroid disease, damage to the liver and kidneys, adverse effects on fertility and low birth weight, according to studies. Some studies have linked PFAS with an increased risk of certain cancers.

The state of Maine began investigating PFAS contamination in Fairfield wells in February 2020 as a result of retail milk testing.

Since then, the state Department of Environmental Protection has found 29 wells in Fairfield that had levels of PFOA and PFOS, compounds in PFAS, that are higher than the EPA’s maximum limit of 70 parts per trillion.

The lawsuit alleges Sappi knew the discharge had been happening for decades and should have been aware of the dangers.

Saunders filed the lawsuit individually and on the behalf of others with similar experiences, according to the lawsuit.

On Jan. 13, Saunders’ well was found to be contaminated with PFAS at 12,910 parts per trillion.

Saunders was not available for comment Sunday evening.

“The class action is on behalf of all the residents whose water is affected, or who have PFAS in their bodies from whatever source it came from,” Mahany said.

Mahany said he is also going to file individual lawsuits on behalf of people whose health has allegedly been affected by the chemicals. Two people have been identified so far who have lost their kidneys because of the contamination, Mahany said.

“I’m crossing my fingers that there aren’t hundreds of people who have suffered tragic health effects,” Mahany said. “We think this is going on in a lot of other communities.”

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Do you remember those Holiday Inn Express commercials? My favorite is the one where a man dressed like a doctor is performing surgery in a hospital operating room. At the end of the surgery he takes off his mask and a nurse quickly realizes he is not a doctor. As the man walks out of the OR, he admits that he is not a doctor but stayed at a Holiday Inn Express last night.

A Houston area chiropractor has been charged with collecting over $3.9 million from Medicare and TRICARE. Dr. Suhyun An claimed she was implanting neurostimulator electrodes. Prosecutors say that she was instead using inexpensive acupuncture needles. She and her staff claimed they watched YouTube videos to learn the procedure.

Prosecutors say that instead of actually performing the surgical procedure with real implants, Dr. An heard of a money making scheme that involved buying cheap devices for a few hundred dollars each (an inflated price justified only by the devices’ reimbursement potential), taping them to patients’ ears, submitting a $10,000 claim to Medicare for each service, and receiving between $6,000 and $8,000 in reimbursement for each bogus claim.

The only proper way to collect  is to actually perform a special surgical procedure. Taping needles behind a patient’s ear and connecting them to a Duracell 9 volt battery doesn’t count! The services she was performing aren’t even covered by Medicare.

Is Dr. An an innocent victim who simply made a mistake? Hardly. The feds say she made a “test” claim and after she was paid, “she wrote in an email that, while she could make a lot of money billing p-stim devices, she wanted to utilize a goldilocks approach—billing enough to make significant money but not overdoing it so that she could ‘fly under the audit radar.’”

If that isn’t enough evidence of fraud, the feds also say,

“An was warned by her staff, her billing company, and even her then-husband who worked at the clinic that p-stim devices were not billable as implantable neurostimulators and that she was likely committing fraud. She was even pointed directly to the guidance of a Medicare contractor stating that these devices were not payable. Nevertheless, she continued billing—sometimes for as many as 11 devices per patient.”

When her billing company warned her that her bills seemed fishy, Dr. An emailed a consultant to see how much he would charge to make her records audit proof.

Even her husband, another chiropractor, warned her. In an email he said, “I know you don’t like problems but if this is correct, we are dispensing a device not Medicare approved, billing under an incorrect [billing code] backed by false medical documentation. So at worse we should not dispense this product to Medicare patients.”

An wouldn’t even listen to her own husband.  Prosecutors say that An made it clear that she did not want to change anything about her practices or inform Medicare. She forwarded Ybarra’s message to her office manager and wrote that “I hope this mo fo didn’t send or do anything” and that “I feel like killing him right now.”

Like so many other Medicare fraudsters, the feds say Dr. An used the money to fund a lavish lifestyle; luxury cars and a million dollar home. Unfortunately for us, Medicare and TRICARE are funded with tax dollars. For just a couple minutes work, An was making thousands of dollars. Money for a service not even recognized by Medicare at the time.

Patient Complaints Lead to Medicare Fraud Complaint

Suhyan An may have thought her “Goldilocks” approach would keep her “under the audit radar” but several astute patients were appalled when they received explanation of benefits (EOB) forms showing thousands of dollars in charges to the Medicare program. Some of those patients even contacted Medicare to report An’s fraud.

False Claims Act and Whistleblower Rewards

An is being prosecuted under the federal False Claims Act, an 1863 law that allows the government to collect triple damages and high fines. The $3.9 million collected by An could result in her having to pay the government $11,700,000.00 plus penalties.

We like the False Claims Act because the law also allows whistleblowers to receive between 15% and 30% of whatever the government collects from the wrongdoer. In this case, that could be millions of dollars.

To qualify for a reward, one must have inside information about fraud involving government funded Medicare, Medicaid or TRICARE. Approximately 30 states and the District of Columbia have their own rewards program for the state funded portion of Medicaid. That means two rewards are possible in many states.

Obtaining a reward means filing a sealed complaint in federal court. Our experienced team of whistleblower lawyers handle the investigation, filing the complaint and even prosecuting the case on behalf of the government (Justice Department or state attorney general) fails to do so.

The federal government pays hundreds of millions of dollars in rewards each year. But they can only do so when concerned citizens step forward and report fraud. Medicare fraud isn’t a victimless crime. It costs taxpayers billions of dollars each year.

To learn more, we invite you to visit our Medicare fraud whistleblower page. Ready to see if you qualify for a reward? Contact attorney Brian Mahany online, by email brian@mahanylaw.com or by phone 202.800.9791.

We accept cases nationwide. All inquiries protected by the attorney client privilege and kept strictly confidential.

Now for some fun… Holiday Inn Express “Surgeon” commercial courtesy of YouTube!

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Toxic Water in Fairfield

Erin Brockovich helping Fairfield residents dealing with wells highly contaminated with PFAS

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The Environmental Protection Agency limits PFAS chemicals in drinking water to 70 parts per trillion.

But at least 52 private wells in the town of Fairfield have levels up to 460 times higher.

The state of Maine is installing water filtration systems as they discover more and more affected wells.

And each Friday, the town of Fairfield hands out bottled water.

But residents with toxic wells want more action taken.

And they’ve enlisted the help of a very famous and very vocal activist.

Joy Hollowell with part two of her special report on toxic water in Fairfield.

“Your state now is in serious trouble.”

Famed clean water activist Erin Brockovich and her partner, Bob Bowcock have serious concerns about the levels of PFAS being found in Fairfield.

“It’s certainly one of the higher levels that we’ve found which is why it’s getting the attention that’s it’s getting,” says Bowcock.

In addition to drinking water, the state is investigating other potential impacts including livestock and private gardens.

“Any concern that’s raised to us, we try to be responsive to,” says David Burns, director of Bureau of Remediation and Waste Management at the Maine Department of Environmental Protection.

But those in Fairfield fear the damage is already done. Back in 2001, the state investigated reports of brain cancer clusters in Fairfield and whether it was environmental. They concluded while the rate of brain cancer among young adults was significantly high, they could not support or rule out any factor as a cause.

“It’s a high enough concern that our priority is towards expansion of public drinking water,” says Fairfield Town Manager Michelle Flewelling. “That really is the only solution that has presented itself at this point and time.” The town is working on grants to make that happen and try and avoid increasing property taxes. “We do have to take care of the entire municipality,” she says. “And while 1 group of residents may very well want this service, there’s another group of residents who very well may not want to pay for it.”

Fairfield has been 6,500 and 6,700 residents.

Flewelling says they were alerted last October by David Burns with the DEP that a residential well in Fairfield tested high for PFAS chemicals.

“He let me know that they were higher numbers than they had ever seen and thought that they were probably higher than some of the numbers that have been across the country,” says Flewelling.

According to Flewelling, there’s little the municipality can do to help affected residents directly.

“These are private wells and we have to be very careful about spending taxpayer dollars for personal gain,” she explains. “So to help an individual with their private well is something that the law doesn’t allow us to do necessarily with taxpayer dollars.”

To date, Fairfield and the Maine Department of Environmental Protection provide drinking water to 54 property owners. They have the potential to receive 938 gallons of water a week, according to Flewelling. She notes the town can’t actually purchase the water with taxpayer dollars so the state picks up most of the tab. Additionally, donations have come in from the area including Sunset Flowerland and Greenhouse in Fairfield that sold poinsettias at Christmas time to raise money. The town also received leftover funds from the town of Skowhegan after they dealt with a Boil Water Order in November.

As for concerns by residents that the value of their homes and property will decline due to contaminated wells, Flewelling says right now, it appears people are still coming to the area believing their water is now even cleaner because of the filtration systems installed by the state. “We haven’t had any indications yet that it’s going to stop the move to location,” she says.

According to the Maine DEP, the PFAS comes from sludge spread on farm fields for decades.

Brockovich and Bowcock believe the water filtration systems are a good start by the state. But ultimately, soil scrapings and removal, health and welfare surveys and more testing will also have to take place.

“Whether you like it or not, you ingest quite a bit of dust on a bike ride on a sunny afternoon in Maine,” says Bowcock. “It’s just a reality that this stuff becomes airborne, it’s all over.”

Bowcock calls PFAS a bioaccumulator in the body for up to 9 and a half years. And while the EPA sets 70 parts per trillion as the maximum limit for PFAS in drinking water, in 2018 New Jersey became the first state to establish a drinking water standard for a PFAS chemical at 13 parts per trillion.

Brockovich credits residents in Fairfield for taking a stand. “I think Fairfield is responding well,” she says. “They’re organizing and they’re prepared to show up.”

She also has a message for the state of Maine.

“You better be taking a look at the polluters in your state and going to them for clean up costs,” says Brockovich.

But just who is responsible?

“The bio-solids were spread out on those fields from sometime around the last 1970s, maybe 1980 through 2003 from the Kennebec Sanitary Treatment District facility,” says Burns.

In a statement to WABI by David Madore, Acting Deputy Commissioner of the Maine Department of Environmental Protection, he states, “The Department has been aware that Huhtamaki contributes a significant industrial wastewater component to KSTD. This is included in language in KSTD’s MEPDES permit, along with references to other industrial inputs.”

In a statement to WABI, Huhtamaki says, “Our commitment to protecting the environment is something we take very seriously everywhere we operate. In Waterville, as in all locations, we comply will all applicable environmental and product safety laws and regulations. And while we are tracking and reviewing developments with PFAS related matters, we have not been contacted by authorities regarding the matter.”

Fairfield resident Nathan Saunders is suing Sappi Paper Mill for allowing these dangerous chemicals to contaminate his property and drinking water. Saunders is represented by Brian Mahany with MahanyLaw out of Milwaukee, Wisconsin. In an email to WABI, Mahaney says, “At this point our main focus is identifying other groups of folks who may have been impacted by contaminated biosolids. We don’t think that these dangerous compounds are limited to a single farm in Fairfield. We are also working with several individuals who have suffered specific health outcomes. We will be filing individual lawsuits for those who have cancer, kidney disease or other health problems associated with PFAS contamination.”

“There is also a second material that was spread on some of the fields between 2006 and 2015,” says Burns.

That came from the Soil Prep, Inc. facility in Plymouth, according to the DEP. The state says “full consideration” must be given to this second source as well.

WABI spoke to Soil Prep, Inc. Company President Phil McCarthy. He calls it an “industry and social issue” adding that he’ll let the state of Maine move forward with its investigation before he makes any further comments,

“It’s not a matter of blame, to me, it’s a matter of learning new information about a material that you didn’t know about in the past,” says Burns. “And I think certainly the companies that produced this material need to be looked at because they were aware of what was in their products and what the concerns were and that information had not been shared out with others.”

Right now, the state says it’s priority is identifying the extent of contamination. They’re beginning to look at other central Maine towns and hope to start testing in the next couple of months.

“The Department’s focus has been to emphasize investigation of the extent of contamination in residential wells nearby to the licensed fields where sludge was land applied in order to provide temporary bottled water followed by filter treatment systems to remove the PFAS contaminants,” says Madore in an email to WABI. “Simply stated, this focus ensures impacted residents have water that is safe to drink. This remains the Department’s priority in Fairfield. There will be time at a later date to consider all of the KSTD inputs, the two types of materials land-applied, and discuss the potential for responsible parties. That evaluation and discussion can be a lengthy process and will not immediately result in water that is safe for the residents to drink.”

“We will get to these sites, it’s a matter of resources and time,” says Burns. “We are continuing to prioritize sites based on as review of historical records. We’re not going to stop based on the results in Fairfield.”

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Did You Lose Money at Securities America? You May Have a Case

[Post updated March 2021] When this post was first written in 2011, Ameriprise had just released its annual report, which showed its securities broker dealer subsidiary, Securities America, was hemorrhaging cash. Securities America’s capital had dropped by a whopping 86% in just one year as the company defended itself against investor lawsuits. The company’s actual capital on hand at the close of 2010 was a mere $2 million, down from $15 million just a year earlier.

Securities America has been facing a large number of lawsuits and securities arbitration claims from investors who lost money in two of the company’s prior offerings. Those claims have been tentatively settled.

That’s not the end of the company’s problems, however. More claims and class action suits are pending, this time involving allegedly fraudulent private placements offered by the company. Ameriprise says it will set aside $40 million to deal with those claims.

Securities America has a minimum capital requirement of $250,000. If their capital on hand goes below that, regulators can shut down the company. As a practical matter, however, even $250,000 isn’t enough money to pay all potential claims.

Is Securities America a safe place to do business? At this point, yes. As long as parent Ameriprise continues to set aside reserves, there should be enough money to pay claims.

Note that not every broker dealer has a financially strong parent company standing behind it. If you are dealing with a smaller broker dealer, be very wary of low capital on hand.

More problematic is how and why Securities America was apparently duped by phony offerings. Brokerage firms are required to perform due diligence on the products they recommend to customers.

Securities America Today

2021 Update: Ten years ago we were concerned about the financial stability of Securities America. Had they not had a strong parent, the firm would have likely failed. We believe most of their losses back then were caused by selling junk to customers. We are shocked that a supposedly sophisticated firm could have been so badly duped.

Fast forward to 2021, the firm remains in business but still makes mistakes. Last month the firm was censured for selling customers’ personal information to third parties. This included social security numbers and financial data. Thankfully it does not appear any of that information was misused.

In November 2020, the SEC charged Securities America Advisors with claims related to unsuitable sales of complex exchange-traded products to retail investors.

In 2018, Securities America was fined for failing to supervise their representatives regarding sales practices of variable annuities.

Customers have continued to successfully bring claims against the firms well. In fairness to the company, the number of new claims has slowed.

If you lost money because of a stock or investment recommended by a Securities America stockbroker (Ameriprise), contact a securities lawyer for a second opinion.

Not every loss, of course, is the fault of the broker. Bad investment advice, however, always warrants a second opinion.

—

Mahany Law is a national boutique law firm that concentrates in fraud recovery, whistleblower actions and complex civil litigation matters against banks and financial institutions. We have helped people recover money lost to Ponzi schemes, stockbroker fraud and banking misconduct.

For more information, visit our stockbroker fraud recovery page. Ready to see if you have a case? Contact Brian Mahany online, by email brian@mahanylaw.com or by phone at 202.800.9791.

[Disclosure: The author of this post previously maintained an account at Ameriprise.]

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Is Disposable Dinnerware Like that Made by Chinet and Others Safe?

PFAS is an extremely dangerous chemical. We believe that its makers knew for years of its dangers yet continued to sell the product to a wide variety of industries including paper companies. Today the Environment Working Group estimates that over 100 Americans have PFAS in their drinking water.

Unlike many chemicals, PFAS stays in the environment for many years. That is why scientists have dubbed it a “forever chemical.” To be technically precise, PFAS is a family of similar chemical substances known as perfluoroalkyl and polyfluoroalkyl substances. There are over 4,700 varieties, some more dangerous than others. Unfortunately, two of the most common (PFOS and PFOA) are also the most dangerous.

In November 2020, a California woman, Velma Hernandez, filed a class action against Huhtamaki, maker of Chinet paper plates. Huhtamaki may not be a household name but the company is huge with manufacturing plants located all over the world. The United States has over a dozen facilities.

According to Hernandez, Huhtamaki advertises their disposable dinnerware (Chinet paper plates) as eco-friendly and compostable. She correctly points out that the plates contain dangerous PFAS chemicals that leach into the soil after they are disposed.

She wants the company to stop its deceptive trade practices and misleading advertising.

We certainly support her efforts but the real victims are those who have suffered kidney or other cancers associated with PFAS exposure or who have contaminated wells because of their proximity to a Huhtamaki plant or disposal site.

In March of this year we filed a groundbreaking class action lawsuit on behalf of Somerset County, Maine residents who have contaminated wells. We know of several people who have lost their kidneys or suffered thyroid cancer because of exposure to PFAS.

The suit initially named. The Somerset Mill in Skowhegan, Maine which is today operated by South African Pulp and Paper – SAPPI. Our investigation now reveals other area paper mills may be responsible for PFAS contamination including Huhtamaki’s Waterville, Maine plant.

We bring class action lawsuits on behalf of residents with contaminated wells, states or towns with contaminated water systems and individuals who may have suffered from health complications caused by PFAS exposure.

Common health problems linked to PFAS include:

• developmental effects to fetuses during pregnancy or to breastfed infants (e.g., low birth weight, accelerated puberty, skeletal variations),
• cancer (e.g., testicular, kidney),
• liver damage
• immune effects (e.g., antibody production and immunity),
• thyroid damage, and
• other health effects (e.g., cholesterol changes).
• suppressed immune system
• decreased vaccine response
• ulcerative colitis
• hormone imbalance
• other forms of cancer

Unfortunately, research into PFAS health effects is still in its infancy. We believe that is largely the fault of the companies that made these dangerous chemicals. We think they knew about the dangers but hid those facts from the consumers and regulators.

At this time we are accepting kidney and testicular cancer cases if there are detectable levels of PFAS in one’s blood or drinking water. Talk to your doctor if you need to be tested. We are also considering birth defect and thyroid cancer cases although every case needs to be reviewed individually.

Most of the patient health studies have focused on PFAS exposure from drinking water.

Are Chinet Paper Plates Safe to Use?

We have not seen any studies suggesting that coated paper plates and fast food packages aren’t although their subsequent disposal can cause problems depending on where they end up. We also question whether the coatings could contaminate food if heated in a microwave.

The Center for Environmental Health warns against products that use PFAS but we are not aware of a study that shows that these chemicals can leach into food. Once again, there isn’t much research out there so it may be better to be safe than sorry.

Were You Injured Because of PFAS Exposure?

If you or a loved one was exposed to PFAS contamination and were subsequently diagnosed with a serious disease or injury, you may be entitled to compensation for your injuries and other losses. Homeowners and farmers with contaminated soil or wells may also be entitled to compensation. Even if you have yet to suffer health complications, you may be eligible for lifetime medical monitoring. To learn more, visit our PFAS contamination and injury page. Do you have a positive test for PFAS in your blood or have PFAS in your drinking water? Contact a PFAS contamination lawyer at Mahany Law online , by email pfas@mahanylaw.com or by phone at 202-800-9791.

There is never a charge for a consultation and all inquiries are kept confidential. We consider cases nationwide.

The post Huhtamaki Chinet Plates, PFAS & Cancer: Everything You Need to Know appeared first on Mahany Law.

Maine Residents Sue Paper Mills Over PFAS Contamination

Nathan Saunders, a resident of Fairfield, Maine, has recently initiated a PFAS class-action lawsuit against Sappi North America and several affiliates. According to the lawsuit, the State of Maine recently found that the water in Saunders’ private well was “contaminated with PFAS at 12,910 parts per trillion—nearly 185 times greater than the United States Environmental Protection Agency Health Advisory limit of 70 ppt.”

Per- and polyfluoroalkyl substances, known as PFAS, have been linked to various cancers and other life-threatening conditions. They are known as ‘forever chemicals’ because they don’t break down after entering the human body and continue to accumulate over time. Today, millions of Americans rely on drinking water sources with a dangerous level of PFAS pollution.

According to Saunders’ complaint, Sappi’s paper mill in Skowhegan contaminated drinking water wells across Somerset County, Maine. If the class action is certified, any person who resided in Somerset County for at least a year between 1967 and the present could potentially join. Saunders and his attorney, Brian Mahany, seek compensation to cover health monitoring for any affected individuals and other damages. The renowned whistleblower attorney estimates damages could amount to hundreds of millions of dollars.

PFAS Regulations in Maine

As of March 2021, Maine legislators are considering a bill that would mandate the disclosure of PFAS content in consumer products. Known as HP706, the bill would require manufacturers to report any addition of PFAS to their products, starting in 2023. Michigan is currently evaluating similar legislation.

Another bill would extend the time period to sue for PFAS related injuries. In a recent testimony given in support of extending the statute of limitations (time period to sue), Nathan Saunders told the State of Maine’s Legislature:

“On the other side of the street from our home are many acres of cornfields where spreading of some material, I thought it was just manure, has occurred for many years and according to the DEP, was stopped in 2003. In 2010, seven years later, my wife’s kidneys failed hard. To keep her alive, she went on kidney dialysis three hours per day, three times a week, for eight months until we were fortunate in that I was able to donate a kidney to her. Although the kidney transplant was lifesaving, this event has been life-changing and very challenging to my wife and me, and has had a significant impact on our whole family.”

According to an EPA report cited by Saunders, “Several epidemiological studies on occupational, general, and community populations report an association between exposure to PFAS and reduced kidney function.”

Saunders spoke in favor of two bills that would allow Maine property owners to file lawsuits up to six years after discovering pollution in their land.

PFAS Exposure

PFAS have been in use since the 1940s. Discovered by chance at a DuPont manufacturing facility, they became popular due to their water and oil repellent capabilities.

Since then, PFAS have been found everywhere, from Arctic polar bears to open ocean waters and from farmlands to private water wells. The CDC has detected PFAS in umbilical cord blood, breast milk, and the blood of 98 percent of Americans.

According to the Environmental Protection Agency, PFAS can be found in:

• Food grown using contaminated soil or water
• Food packaging materials
• Stain- and water-repellent fabric
• Nonstick pans (notably Teflon)
• Polishes, waxes, paints
• Cleaning products
• Fire-fighting foams (responsible for much of the contamination around military bases)
• Chrome plating, electronics manufacturing, and oil recovery facilities
• Drinking water (in the vicinity of polluting facilities)
• Fish and animals

How PFAS Impact Human Health

The EPA has stated that exposure to PFAS can cause:

• Reproductive problems
• Liver conditions
• Kidney conditions
• Immunological problems
• Low infant birth weights,
• Cancer
• Thyroid hormone disruption
• High cholesterol
• Reduced vaccine effectiveness

Maine’s PFAS Pollution

Saunders is only one among thousands of Maine residents whose lives were dramatically altered by the presence of high levels of PFAS in the environment. The State has tested the water from dozens of private wells, consistently finding levels of the chemicals hundreds of times higher than federal safety limits. In Fairfield alone, the State of Maine found over 45 wells with PFAS levels over the current health advisory standard.

Liquid waste from paper mills has customarily been used as fertilizer on farm fields.

While wastewater has usually gone through sewage treatment plants, this process does not remove PFAS. For decades, toxic sludge has been spread over fields without undergoing PFAS testing. This has resulted in extended contamination of produce, farm animals, and groundwater.

At the epicenter of contamination in Fairfield is a dairy farm that unknowingly used the polluted sludge as fertilizer. According to a spokesperson for the dairy farm,

“The manufacturers of these chemicals knew the dangers of these chemicals. They kept those dangers a secret.”

“At the time the sludge was spread,” one of the owners of the now inactive farm said, “we had no idea what PFAS was and certainly did not know about the dangers of the chemicals. Farmers across the state were sought out to participate in the sludge program, which offered it as free fertilizer that was good for the land and would help all those involved.”

Saunders’ lawsuit states,

“Upon information and belief, Defendants were, at all times relevant, aware that PFAS is highly carcinogenic, mutagenic and/or otherwise harmful to humans. . . Upon information and belief, Defendants were, at all times relevant, aware of the considerable health risks associated with the discharge of PFAS, including the risk of causing various forms of cancer in the surrounding population.”

It appears that much like the tobacco companies, the manufacturers of PFAS kept Americans in the dark for decades about the widespread impact of the chemicals on human health.

Over 200 Million Americans Exposed to PFAS in Drinking Water

Although PFAS, a category that includes thousands of compounds, are no longer used by U.S. manufacturers, they are still present all over the country, most alarmingly in our drinking water supplies.

The Environmental Water Group (EWG), a reputable nonprofit, has “mapped PFAS contamination of drinking water or groundwater at more than 2,300 sites in 49 states.” According to EWG estimates, over 200 million Americans have at least 1 ppt of PFAS in their drinking water.

Over the last few years, several states and water agencies, including the Santa Clarita Water Agency, various water districts in Orange County, the State of Michigan, and the State of Minnesota, have sued PFAS manufacturers over water pollution, securing many multimillion-dollar settlements. These funds have later been used to cover PFAS cleanup costs.

PFAS Government Lawsuit Settlements

• 2020    $55 million      Michigan
• 2020    $113 million    Michigan
• 2019    $2.7 million     Minnesota
• 2019    $35 million      Alabama
• 2018    $850 million    Minnesota
• 2018    $4 million         Alabama

The EWG has urged the Biden administration to “fulfill its pledges to set a drinking water standard for PFAS, to end non-essential uses of PFAS in household items, and to designate PFAS as hazardous substances.”

As we hope for more anti-PFAS legislation to succeed in Maine and the rest of the country, people whose health has suffered due to PFAS contamination are resorting to multimillion-dollar lawsuits to try to obtain compensation and protect their families.

 Were You Injured or Affected by PFAS?

We are currently seeking anyone who has PFAS in their drinking water or who suffered injuries from PFAS contamination. Right now we are accepting injury cases for people with kidney cancer, loss of kidney function, and testicular cancer. We are also considering birth defect and thyroid cancer cases.

We have a proven track record of serious, high-value results.  That means we believe in our ability to win your case and therefore accept cases on a contingency fee basis. No fees or costs unless we win. We also don’t charge for consultations.

Dealing with a contaminated drinking water, cancer or a birth defect can be a difficult time in anyone’s life. However, it’s important to remember that the companies that produced, used or disposed of dangerous chemicals take responsibility for their actions and protect the public from harm. If you or a loved one were affected by PFAS, contact us. The PFAS lawyers at Mahany Law are dedicated to protecting your rights.

For more information, visit our PFAS Lawyer / PFAS Contamination Lawsuit page. Ready to see if you have a case? Contact us online, by email pfas@mahanylaw.com or by phone 202-800-9791. Cases accepted in Maine, Wisconsin, D.C., Florida, Maryland, Virginia, Michigan and nationwide. All inquiries are kept strictly confidential.

Mahany Law – America’s PFAS Lawyers

The post The Threat of ‘Forever Chemicals’ – PFAS appeared first on Mahany Law.

Plenty of Whistleblower Reward Opportunities in the Biden Administration

Earlier this year, the Federal Bar Association held a conference on whistleblower claims under the False Claims Act. That law allows ordinary citizens to claim cash rewards for reporting fraud involving fraud involving federal programs. The timing of the conference was perfect, everyone wants to know what to expect from the Biden administration.

One of the speakers at the conference was Senator Chuck Grassley, the modern day patron saint of whistleblowers. During the conference he said it was time for the government to “come down with a sledgehammer, not a toothpick” against fraud.We agree but what exactly should we expect from President Biden and his new attorney general, Merrick Garland?

The Department of Justice is still getting organized but the acting chief DPJ’s civil division has already outlined the government’s enforcement agenda (and there are plenty of opportunities for whistleblowers).

COVID -19 Fraud

There should be no surprises here. The government spent trillions of dollars trying to restart the economy, roll out testing and vaccine programs and beefing up PPE for hospitals, nursing homes and first responders. Unlike other stimulus programs, the government had to quickly get money where it was needed. That meant many of the traditional checks against fraud were absent.

Today we are paying the price. Billions of dollars of unemployment money were siphoned away from those legitimately in need, bad actors delivered defective personal protective equipment like masks and dishonest businesses used PPP money to buy luxury cars instead of paying workers.

Now that our country is slowly getting back to normal, we are finding just how extensive the fraud is. For example, the SBA Office of the Inspector General believes that over 57,000 PPP loans were made to ineligible companies and people.

We are investigating several reports of healthcare providers who are submitting phony claims for COVID-19 testing even though no tests were performed.

Opioid Abuse

The Trump administration made opioid abuse a priority of the Justice Department and the new administration says that this will remain a priority. How is does this create opportunities for whistleblowers?

We are aware of several clinics that are pushing opioids and billing Medicare, Medicaid or Tricare for these drugs. While there are legitimate uses for narcotic drugs, some doctors appear to be catering to addicts and just pushing pills… pills that are paid for by taxpayers. It is hard to argue that Medicare fraud is a victimless crime when we are creating a generation of addicts because of these bad practices.

Pharmaceutical companies themselves can be prosecuted under the False Claims Act (whistleblower statute) when they aggressively market opioids without properly disclosing to physicians the addictive nature of their drugs.

Elder Abuse – Fraud Against Seniors

In the final year of the Trump administration, then Attorney General William Barr made protecting nursing home residents a priority of the Justice Department. Called the National Nursing Home Initiative, Barr said prosecutors would focus on nursing homes that provide grossly substandard care. The new administration at the Department of Justice says the focus on substandard nursing home care and crimes against the elderly will continue.

Nurses and staff in nursing homes are on the front lines and often are the first to blow the whistle on poor or medically unnecessary care. These folks that blow the whistle are true heroes that not only prevent the waste of tax dollars but save lives too.

Electronic Health Records

This one surprised us a bit. The government says the benefits of electronic health records (EHR) include

• Providing accurate and up-to-date information about patients at the point of care
• Enabling quick access to patient records
• Securely sharing electronic information with patients and other clinicians
• Helping providers more effectively diagnose patients, reduce medical errors, and provide safer care
• Improving patient and provider interaction and communication
• Enabling safer, more reliable prescribing
• Helping promote legible, complete documentation and accurate, streamlined coding and billing (no more errors because a doctor’s handwriting was illegible)
• Enhancing privacy and security of patient data
• Reducing costs through decreased paperwork

While EHR sounds great, there are risks to patient privacy, unauthorized access (and manipulation) of patient data and the use of EHR to “upcode” patient bills.

In January 2020, the Justice Department announced it had settled a whistleblower claim involving an Electronic Health Records provider. Practice Fusion agreed to pay $145 million to settle the case.  In announcing the settlement, Vermont’s U.S. Attorney said,

“Practice Fusion’s conduct is abhorrent.  During the height of the opioid crisis, the company took a million-dollar kickback to allow an opioid company to inject itself in the sacred doctor-patient relationship so that it could peddle even more of its highly addictive and dangerous opioids.  The companies illegally conspired to allow the drug company to have its thumb on the scale at precisely the moment a doctor was making incredibly intimate, personal, and important decisions about a patient’s medical care, including the need for pain medication and prescription amounts.”

Telehealth Scams

Telehealth was virtually unheard of prior to COVID. Now it is commonplace. During the pandemic, the CARES Act and many states waived the need for face to face visits between patients and their provider. Many of these restrictions are likely to become permanent.

While if properly managed, telehealth can save time and inconvenience for patients – particularly the elderly and those in rural areas – they also provide fertile ground for fraudsters.

Cybersecurity Whistleblower Claims

We have long been on the forefront of cybersecurity fraud. The Mahany Law whistleblower team brought some of the first cybersecurity whistleblower cases in the U.S.

As the world becomes more dependent on technology, cybersecurity has become a critical concern for government agencies, banks, investors and the public. Entire businesses can and have been wiped out because of hacking incidents. People have lost their life savings in the blink of an eye. Nation state hackers even try to steal sensitive data and influence elections.

Typically, we only hear of these incidents after the fact (if at all). We are aware of companies and defense contractors that deliberately conceal vulnerabilities or successful hacking incidents for months or years. That’s  where whistleblowers step in. They are critical in protecting the public, businesses and the government.

During the recent Federal Bar Association conference, Acting Civil Division AAG Boynton noted that whistleblowers and use of the False Claims Act to prosecute businesses that fail to comply with cybersecurity rules will be a priority of the Justice Department.

Biden Administration Whistleblower Opportunities

There are hundreds of ways in which whistleblowers can help eliminate fraud and corruption, protect the public and save tax dollars. While the above list represents the first peak at enforcement priorities under the Biden administration, we remind everyone that wherever fraud exists, there is often an opportunity for whistleblowers. The False Claims Act discussed above requires a loss to a government project or of government funds. There are plenty of other opportunities.

The SEC, IRS, and CFTC have their own whistleblower reward programs. Other laws provide for rewards involving bank fraud, bribery of foreign government officials and anti-money laundering violations. 29 states and several cities have their own reward programs too.

If you are aware of fraud, give us a call. We will confidentially review your case and let you know if you may be eligible for a reward. There is no obligation or fee for our review. We can also discuss protections against retaliation and to help you receive your reward anonymously where allowed.

To learn more, contact us online, by email brian@mahanylaw.com or by phone 202-800-9791. Cases accepted worldwide.

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In 2018, the Environmental Defense Fund submitted a Freedom of Information Act request to the FDA. What it found was shocking: in 2009 and 2010, the agency ignored warnings from PFAS manufacturers about the imminent threat of PFAS in papermill wastewater.

In their yearly environmental assessments, Daikin America and Chemours told the FDA that massive amounts of the PFAS they manufactured were polluting land and water in the vicinity of paper mills.

As revelations about the FDA´s failure to protect Americans from dangerous PFAS made headlines, the EPA feared a “public relations nightmare” over the discrepancy between the level of PFAS in drinking water tolerated by the EPA and the Department of Health and Human Services’ more stringent guidelines.

In 2021, we still don’t have federal legislation in place to protect Americans from the toxic level of PFAS in paper mill wastewater, which has polluted drinking water sources all over the country, putting at least 200 million Americans at risk.

When the EDF investigated the impact of PFAS pollution, it found a high level of PFAS in the water of nine rivers flowing through 17 states. The percentage of the chemical polluting these waterways was much higher than what the EPA considered safe.

At the time, an EDF official stated their findings suggested “that papermills may present a significant source of PFAS,” and “Communities across the country need to know where PFASs are being used and the environmental impact of these uses.”

Three years later, we are still waiting for policy changes and more environmental protection. For many Americans, the impact of PFAS on their daily lives is devastating. And they are beginning to sue the culprits.

Water districts that sued companies over PFAS pollution have secured over one billion dollars in settlements. Individuals who developed cancer and kidney problems due to PFAS exposure are also filing lawsuits and reaching multimillion-dollar settlements. In January 2021, a group of Peshtigo, Wisconsin, residents reached a $17.5 million settlement with three companies over PFAS contamination in the Peshtigo and Marinette areas.  (If you or a loved one has cancer or developmental disabilities and have PFAS in your drinking water, visit our PFAS lawsuit information page for more information and our short video.)

What Is PFAS?

Per- and polyfluoroalkyl substances (PFAS) are synthetic compounds used in wide variety of consumer products including nonstick pans and pizza boxes. From tap water in Michigan to residential wells in Maine and lakes in North Carolina, alarming levels of PFAS have been found everywhere in the country.

Known as “forever chemicals” because they do not easily break down over time, PFAS are water soluble and can easily contaminate groundwater. No matter how much chlorine is added to drinking water systems, it cannot remove PFAS. And once forever chemicals enter the human body, they never leave.

At the center of PFAS pollution clusters, there is often a papermill. PFAS’ nonstick quality has made it a preferred chemical for the interior of pizza boxes, paper plates and coasted paper. As paper mills manufacture these boxes, they discharge massive amounts of PFAS-rich wastewater into waterways and landfills. For many years, paper mill sludge has also been used as a fertilizer at neighboring farms.

According to the Agency for Toxic Substances and Disease Registry and other research organizations, PFAS have been linked to:

• Cancer
• Immune suppression
• Diabetes
• Infertility
• High cholesterol
• Kidney conditions
• Low infant birth weight

PFAS are commonly found in fire retardant foams. For this reason, military bases in many U.S. locations have become epicenters of widespread PFAS pollution.

PFAS in The U.S.

‘Forever chemicals’ have been used in U.S. manufacturing since the 1950s. While the nonstick-pan material Teflon, which contains PFAS, was banned years ago, other variations are still present in many products. In fact, hundreds of PFAS compounds are still in use in the U.S. today, and only two, PFOA and PFOS, are banned.

According to data collected by the Environmental Working Group, the U.S. states with the largest number of drinking water systems contaminated with dangerous levels of PFAS are:

• Ohio
• California
• Michigan
• North Carolina
• Pennsylvania
• New York
• New Jersey
• Massachusetts
• New Hampshire
• Kentucky
• Alabama
• Georgia
• Colorado
• Minnesota
• Florida

Using a new testing method, Harvard researchers recently found previously undetectable PFAS in six watersheds (Childs, Quashnet, Mill Creek, Marstons Mills, Mashpee, and Santuit) on Cape Cod. Pollution in the region is associated with the use of firefighting foam at facilities like the Joint Base Cape Cod and the Barnstable County Fire Training Academy.

The new water testing technology could be revolutionary, as the EPA only tests for about 25 compounds from the PFAS family, which actually comprises thousands.

PFAS contamination in Maine recently made headlines as dairy farmers, including Fred Stone from Stone Ridge Farm, discovered industrial sludge had polluted their land, causing cows to produce milk with high levels of PFAS. Other Maine residents who live close to paper mills have reported long and devastating illnesses caused by years of exposure to dangerous levels of the chemicals in their private water wells.

Recently, groundwater in Denver, Colorado, was found to contain PFAS levels nearly 3,000 times higher than the federal advisory limit. Meanwhile, in New Jersey, the EPA forced a Solvay Plant to stop using a dangerous PFAS compound, but the company replaced it with a lesser-known and equally dangerous group of PFAS, which were found in high concentrations in the vicinity of the plant. In October 2020, the State of New York sued Solvay over the issue.

In Michigan, there are at least 11,000 sites contaminated with PFAS, according to estimates. The situation has been described as the biggest environmental crisis in the state in 40 years. In August 2020, the State of Michigan approved a new rule limiting seven PFAS compounds in municipal drinking water, hardly sufficient considering the amount of dangerous PFAS in use today.

In Kentucky, researchers testing water systems connected to the Ohio river found PFAS in every sample. When testing 81 water plants that serve half of the state’s population, they detected dangerous PFAS levels in samples coming from 50 percent of the facilities.

For every U.S. state, there is a tragic PFAS contamination story, and very little has been done to fix the problem.

Forever Chemicals, Seldom Rules

PFAS legislation efforts have failed to protect Americans. Legislators are so far behind that they are only beginning to demand federal funds for PFAS testing.

In 2018, senators from both parties introduced Bill S. 3382, which would “require the Director of the United States Geological Survey to perform a nationwide survey of perfluorinated compounds [PFAS].” The legislation vowed to allot $45 million to soil and water testing to detect PFAS, but died in Congress. It was later reintroduced by Michigan Senator Debbie Stabenow as “S. 950 (116th): PFAS Detection Act of 2019” but did not receive a vote.

Although the EPA has issued guidelines, there are currently no enforceable federal limits for PFAS in drinking water. Moreover, the EPA guidelines only reference PFOS and PFOA, leaving out thousands of toxic PFAS. Independent testing has found hundreds of these compounds in the environment.

Maine Governor Janet Mills recently wrote a letter to her state’s four members of Congress, asking them to secure funds to address PFAS pollution in Maine and beyond. Governor Mills referred to the dangerous chemicals as “a national problem that ultimately requires a federal response.”

The Governor is currently testing water, milk, meat, and treated sewage to detect PFAS contamination. With more funding, she believes, Maine could expand these efforts and take remedial action.

Describing PFAS as an “emerging threat,” Mills stated, “PFAS contamination is not a Maine problem. . . we encourage the federal government to act quickly and decisively in its own right.”

Senator Stabenow’s and Governor Mills’ initiatives are commendable, but the fact remains that funding for PFAS testing is still shockingly inadequate. If it weren’t for PFAS lawsuits, we might never learn that Americans are getting sick because they have been drinking PFAS-contaminated water for decades.

One can only hope that the surge in PFAS lawsuits all over the country will eventually prompt our government to restrict the use of the chemicals, expand testing, and install purification systems to ensure drinking water maintains non-toxic levels of PFAS.

 Were You Injured Because of PFAS Exposure?

If you or a loved one was exposed to PFAS contamination and were subsequently diagnosed with a serious disease or injury, you may be entitled to compensation for your injuries and other losses. Homeowners and farmers with contaminated soil or wells may also be entitled to compensation. Even if you have yet to suffer health complications, you may be eligible for lifetime medical monitoring. To learn more and to see our short video, visit our PFAS contamination and injury page. Do you have a positive test for PFAS in your blood or have PFAS in your drinking water? Contact a PFAS contamination lawyer at Mahany Law online , by email pfas@mahanylaw.com or by phone at 202-800-9791.

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Maine Cancer Victims and Those with Contaminated Wells May Be Getting Some Relief after the Legislature’s Judiciary Committee Approved PFAS Legislation that Makes It Easier to Sue

For much of the afternoon, members of the Maine Legislature’s Joint Standing Committee on the Judiciary debated two virtually identical bills designed to extend the time period for victims of PFAS contamination to seek damages. PFAS is a family of similar chemical substances known as perfluoroalkyl and polyfluoroalkyl substances.

Under the proposed PFAS legislation, any action for harm or injury caused by PFAS can be commenced within 6 years after the plaintiff discovers or should have discovered such harm or injury. Many people were subjected to PFAS contamination in the 1980’s and 1990’s but are just finding out about it now. Some have already died.

Legislators held a public hearing last month that generated support from every corner of Maine. Similar legislation last year died without a vote.

The two new bills were assigned to the Legislature’s Judiciary Committee. That committee voted out one of the two bills today as “Ought to Pass” meaning the committee believes the bill should be voted on by the full house and senate. The vote was unanimous with three legislators absent from the vote.

The legislation (“LD 363”) says,

Ҥ752-F. Perfluoroalkyl and polyfluoroalkyl substances

“An action arising out of any harm or injury caused by a perfluoroalkyl or polyfluoroalkyl substance must be commenced within 6 years after the date the plaintiff discovers or reasonably should have discovered such harm or injury. For the purposes of this section, “perfluoroalkyl or polyfluoroalkyl substance” means any member of the class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom. This section does not affect application of notice requirements for filing under section 8107 or the limitation on actions against a government entity under section 8110.”

The companion bill was voted down. The sponsors of both bills agreed that it didn’t matter which bill came to a vote as long as victims of PFAS poisoning could get their day in court.

The PFAS legislation is important because requiring PFAS victims to file within 6 years of suffering from contamination would mean most victims would not be able to sue. For example, assume your land was contaminated in 1990 but you don’t find out until your water is tested in 2021 or you develop kidney cancer in 2019. Without so-called “discovery rule” language, it might be too late to take action.

The discovery rule says that the 6 years begins to run when the victim discovers or should have discovered that they have suffered from PFAS contamination.

Opposing the legislation was Maine’s insurance lobby. They claim the legislation is “overly broad and detrimental to creating appropriate and more societal solutions to the developing hazards of PFAS.” We were not surprised by their position. Sadly, they  say they have sympathy for the victims yet offered no alternatives other than to let victims suffer and fend for themselves.

A wide coalition of people supported the legislation. If adopted, Maine will join the vast majority of other states with a discovery rule.

Thirty-seven other states, including Maine’s closest neighbors, New Hampshire and Vermont, have discovery laws similar to that approved by the Judiciary Committee. Residents and cancer victims should not be left out of legal remedies simply because they live in Maine and not New Hampshire.

The lack of the discovery rule benefits big corporations and industry, not regular Mainers.

Without the new law, cancer victims, homeowners and local water districts are more likely to be on the hook for cleanup and medical expenses.

Are You the Victim of PFAS Contamination?

The PFAS lawyers at Mahany Law along with their partners have filed a lawsuit seeking to force papermills, landfills and others who are responsible for PFAS contamination to pay damages including future medical monitoring costs.

We are also bringing individual claims for those that contracted kidney and testicular cancer, birth defects and other serious health problems because of exposure to PFAS.  To learn more, visit our PFAS Contamination – PFAS Lawsuit information page and video. Ready to see if you have a case? Contact us online, by email brian@mahanylaw.com or by phone 202-800-9791. Cases accepted nationwide.

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