Miami Lawyer Leads Startup’s COVID-19 Screening Device to FDA Approval

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By Raychel Lean
April 06, 2021

Andrew S. Ittleman

A first-of-its-kind screening device for identifying COVID-19 biomarkers has secured emergency approval from the U.S. Food and Drug Administration, with the help of Miami’s Fuerst Ittleman founding partner Andrew S. Ittleman.

It took a year of “elbow grease, communication and patience” to get to this point, according to Ittleman, who said he’s learned the importance of building rapport and respect with the FDA, as it navigated a public health emergency.

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Banks Cash In On PPE, But Risks Could Haunt Them

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By Al Barbarino
June 19, 2020

U.S. banks are facilitating a flurry of deals to bring personal protective equipment into the country from China and elsewhere in exchange for hefty fees, but inherent risks could come back to bite them as regulators continue to expose underlying fraud.

Presiding over these anything-but-ordinary deals can be a risky business, with “know your customer” due diligence increasingly difficult when sorting through a newfound market that the latest headlines suggest is rampant with fraud, attorneys say.

“Everyone in the world has their hair on fire to get these masks and the rest of the PPE,” said Andrew S. Ittleman, a founding partner of Fuerst Ittleman David & Joseph. “With so much more risk of fraud out there … the banks certainly have their work cut out for them.”

The PPE deals often include a web of entities, including brokers in the U.S. calling on relationships in China to access the products. Banks may provide so-called back-to-back letters of credit that guarantee the payments — one bank for the U.S. buyer, and a foreign bank for the seller — which attorneys say could prove problematic down the road.

Ittleman said his work dealing with PPE transactions has made him aware of at least one “very large bank” on the U.S. side executing letters of credit on the deals.

“I would imagine that a bunch of the bigger [banks] are involved too,” he said. “There are going to be all sorts of fees for the letters. … They’re not doing it as a charity. They’re doing it because they have the capabilities and they know how to make money doing it.”

While the attractive fees may be enticing, banks could find themselves in a vulnerable position as they seek to comply with KYC and anti-money laundering rules around customers who may have little to no experience selling PPE.

“They were selling Chinese widgets in the United States yesterday. They were selling plastic flowers or ping pong tables,” Ittleman said. “That requires a lot of trust on behalf of the bank to work with the broker to make sure everything is being conducted the way it should be.”

Regulators have begun to expose fraud in this newfound booming market for PPE. This month, the U.S. Department of Justice charged a Chinese manufacturer with producing and exporting nearly half a million misbranded and defective masks to the U.S. And 3M has now filed at least a dozen lawsuits accusing companies of everything from price-gouging legitimate 3M products to selling counterfeit masks.

Last week, New York State Attorney General Letitia James brought a suit against a Buffalo-area businessman for “soliciting the state of New York” and hospitals across the country with “fake offers of critically needed PPE.” And in late May, a New Jersey used car salesman was arrested and charged in federal court with running a $45 million scheme to sell price-gouged N95 face masks to New York City.

While no banks were indicated in the cases, actions — most likely from the DOJ’s civil division — could start trickling down in the coming weeks or months as more fraud is exposed and the role of banks in any potential transactions is uncovered, attorneys say.

While these types of investigations typically begin with the alleged fraudsters, investigators will ultimately explore all facets of the transactions, said William Barry, a member of Miller & Chevalier who assists clients with a range of financial compliance and regulatory issues.

This will include whether the bank was knowingly involved in its customer’s scheme, if it was “willfully ignorant” of wrongdoing, and if it took the necessary KYC and AML precautions.

“Step one will be to look at the actual suspected fraudster,” Barry said. “Step two is to get the bank’s help in understanding the transaction record. Step three, they’ll consider whether the bank’s processes were deficient or worse than deficient in connection with the fraudulent conduct.”

“The primary risk area is letters of credit and any looseness in those relationships,” he added. “Of course, any bank is interested in having that customer relationship and the fees that it generates, but may not do sufficient diligence to understand who the beneficiary of the letter of credit is or who the client is.”

Community to mid-sized banks are at risk, as many of them lack the safety net of “sophisticated electronic risk monitoring systems” that are commonplace at larger banks, Barry said. But he added that larger banks could face still issues, as their automated processes could fail to identify the PPE transactions as materially significant.

Instances of criminal activity, such as a bank employee being involved directly in a fraudulent scheme, would fall into an entirely separate, and rarer, bucket, experts say.

Clifford Stanford, a partner with Alston & Bird LLP’s bank regulatory team and former assistant general counsel at the Federal Reserve, echoed that most potential penalties will come down to whether KYC and AML standards have been met, with more aggressive action taken if systemic issues are found.

“If it’s systemic … that’s when you start to see banking regulators and the DOJ coming after banks,” he said. “If a bank has failed in performing that KYC and AML discipline and has allowed transactions to move through without appropriate monitoring or reporting, they could also be swept up in a broader review.”

Despite the growing instances of PPE fraud coming to light, attorneys noted the bad apples aren’t representative of the broader lot of legitimate brokers who are simply businesspeople looking to make deals.

Rachel Wolkinson, a partner in Brown Rudnick LLP’s white collar defense and government investigations group, said she’s worked with a number of well-intentioned brokers seeking legal assistance as they look to nail down prospective PPE transactions.

“I don’t know why the bank wouldn’t want to deal with them,” she said, noting many brokers are sophisticated, informed and well-intentioned. “I think it really is going to be very specific to the individual broker. Not every broker is a shady cat looking to exploit the COVID pandemic. Just because you are entrepreneurial, that doesn’t make you a criminal.”

–Additional reporting by Rachel O’Brien and Bill Donahue. Editing by Philip Shea and Marygrace Murphy.

Ex-Boca school counselor who pushed fentanyl spray for Insys is heading to prison

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By John Pacenti
January 23, 2020

Alec Burlakoff was the sales mastermind of a conspiracy to pay doctors “speakers fees” so they would prescribe Subsys in higher amounts and greater doses.

Alec Burlakoff — the one-time Boca Raton high school counselor who masterminded a bribery scheme to get doctors to prescribe a potent fentanyl spray — was sentenced to 26 months in prison on Thursday in a Boston courtroom, benefiting from flipping against the owner of the company.

Burlakoff, 45, had a checkered past at previous pharmaceutical companies before helping turn Arizona-based Insys Therapeutics into a Wall Street juggernaut, birthing his bribery scheme in South Florida.

As vice president of sales, he recruited strippers, waitresses and cheerleaders to be sales reps to lure doctors into prescribing the deadly fentanyl spray Subsys by paying them for bogus speaking engagements. He and Insys funneled $16.3 million into doctors’ pockets over 2½ years.

All of this occurred as the nation struggled in the grip of a crippling opioid crisis. As a result, Insys became the subject of a congressional hearing and its own episode on CNBC’s “American Greed.”

“I didn’t think of who we were at Insys, and how unethical what we were doing was,” Burlakoff told U.S. District Judge Allison Burroughs in Boston on Thursday. “The only thing I could think was how could I keep up with the fast and furious pace necessary to get ahead.”

Burlakoff’s metamorphosis to hapless victim of greedy Big Pharma was belied by the fact he once bragged that he took his sales tactics from the movie “The Wolf of Wall Street.”

He also dressed up as a giant bottle of Subsys for a rap video played at a sales conference. The video urged Insys sales reps to get doctors to prescribe fentanyl at the highest, most addictive dose.

Burlakoff threatened to fire any rep who could not get their doctors to write at least one script per day, according to a federal lawsuit.

The higher the dose, the more money Insys made for a drug that costs $1,800 retail for 30 spray bottles at its lowest strength and as much as $6,000 at its highest dose.

Insys made $500 million in 2014 and 2015 under Burlakoff’s guidance. Subsys sales rose 3,200 percent. The company filed for bankruptcy in 2019.

“This was an offense of greed,” Burroughs said. The judge previously called Burlakoff one of the “co-architects” of the Insys bribery and fraud conspiracy.

Burroughs told Burlakoff he will have “to live with the fact that some of these other people got swept into this because you recruited them.” She then gave him six more months than prosecutors requested.

What was missing in Burlakoff’s sentencing were the patients who suffered immeasurably under the addictive drug. At least 908 patients died with Subsys the primary suspect in their deaths, The Palm Beach Post reported in its multipart 2018 investigation, “Pay to Prescribe: The Fentanyl Scandal.”

The fentanyl spray was approved by the FDA only for cancer pain, but doctors under the Burlakoff plan prescribed the spray for routine back pain, migraines and intestinal disorders.

Prosecutors asked Burroughs to “hold your nose” and give Burlakoff a 20-month sentence, far less than other executives and doctors in the scandal, because he had testified at trial against Insys’ owner and chairman, John Kapoor, who got 5½ years in prison Thursday.

“The conduct of the Insys’ executives was nothing short of evil, Alec Burlakoff being a central actor,” said attorney Richard Hollawell, who is suing Insys on behalf of a family who lost a daughter, Sarah Fuller, to Subsys.

“I do commend him for being the first to step up and cooperate. His cooperation helped with Kapoor’s conviction and those of many others.”

Unlike in the Burlakoff sentencing, seven victims and family members of victims who were prescribed the spray gave emotional statements to the court concerning Kapoor.

“Far too many people have died, or like me, have had their lives changed, at the hands of your greed and cruelty,” said one victim, Paul Lara. “It’s unrealistic to believe that Insys Therapeutics executives could not see the results of their behavior.”

Burlakoff certainly got off easy considering that the judge called him one of the “co-architects” of the bribery and fraud conspiracy.

Other executives, even those who pleaded out, received sentences between 27 and 33 months.

Sunrise Lee — a West Palm Beach stripper turned Insys sales Siren — was sentenced to a year in prison on Wednesday. She once gave a doctor a lap dance and she was a regional sales manager for Insys.

Doctors have also been prosecuted. Leading the pack are Alabama’s Dr. Xiulu Ruan and John Patrick Couch. They are serving 21- and 20-year prison sentences for their role in promoting Subsys and other opioid scams.

Florida doctors, some who netted hundreds of thousands of dollars in speaker fees, have largely escaped the wrath of federal prosecutors.

Insys paid Florida physicians more than $2.1 million from August 2013 through 2015 The Post analysis of Medicare data showed. Florida topped the nation for Subsys claims in 2014 and 2015.

Burlakoff brought the sham speaker programs from his previous job at Cephalon, which settled with the Justice Department for $425 million for pursuing off-label prescriptions of its fentanyl lollipop and two other drugs.

Before that, he was fired from Eli Lilly and Co., a pharmaceutical giant, and as a sales rep in Palm Beach and Broward counties. He and two other salespeople sent unsolicited Prozac through the mail.

But Burlakoff attorneys and supporters told the judge the man who once counseled teens and coached them at basketball at Pine Crest School in Boca lost his way when his brother committed suicide by cop after gunning down his wife on a Boca Raton street.

In a letter to the judge, a friend of Burlakoff’s said after his brother’s death “his thinking was a little out of whack.”

“This shocking trauma took place in October 2013 when Mr. Burlakoff was in the midst of the conspiracy at Insys,” attorney Joshua Ruby wrote in a sentencing memorandum. “Tellingly, Dr. Kapoor ordered Mr. Burlakoff to return to work after only a matter of days of grieving.”

Burlakoff caved to Kapoor’s win-at-all-cost culture at Insys, Ruby told the court, and “let his drive and competitiveness — which had served him so well as a coach — overcome his judgment.”

Burlakoff pleaded guilty to a single count of racketeering conspiracy in November 2018, setting up his dramatic testimony in Kapoor’s trial.

Federal prosecutors in Boston used a landmark approach, charging Insys executives under the Racketeer Influenced and Corrupt Organizations Act. RICO is a charge often reserved for mob bosses and drug lords.

Miami attorney Andrew Ittleman said for years opioid companies operated with impunity in breaking the law.

The Insys prosecutions, Ittleman said, “may very well be a bellwether for future prosecutions in the opioid industry, especially as the public learns more about it on an almost daily basis,” he said.

Bloomberg and USA TODAY contributed to this story.

Click here to view the original article.

He Knew All About Money Launderers. The U.S. Says He Joined Them

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By Bob Van Voris and Jonathan Levin
November 20, 2019

Bruce Bagley, an international studies professor, knew all about how corrupt Venezuelan officials were moving vast sums into South Florida. He cultivated contacts with Latin American policymakers, top criminal lawyers and U.S. anti-money-laundering officials. And, prosecutors say, he knew how to get a taste for himself.

Bagley, a 73-year-old white-bearded University of Miami academic who wrote about drug trafficking and international organized crime, was charged this week with helping move about $3 million into the U.S. from Venezuela and taking a 10% cut.

Colleagues and neighbors expressed shock that a man known for his scholarship and care of his disabled wife could be arrested on such charges. But it was easy to see how Bagley — who in recent years had narrowly escaped a foreclosure sale — could have put his expertise to practical use, said John Polga-Hecimovich, a U.S. Naval Academy professor who knew him through academic networks.

“In the course of where he lives and in the research he does, I’m sure he came into contact with figures like the ones he’s accused of coming into contact with,” Polga-Hecimovich said Tuesday. “It’s plausible.”

Bagley’s lawyer, Daniel Forman, said his client would be vindicated. Bagley, who was placed on leave by the University of Miami, is free on a $300,000 bond.

His indictment Monday hinted at how Venezuelan’s vast corruption has seeped into South Florida, where officials associated with Nicolas Maduro’s and Hugo Chavez’s regimes have parked cash and bought real estate.

This year, the U.S. government auctioned off one such cache from Alejandro Andrade, a former Venezuelan treasurer who pleaded guilty to taking more than $1 billion in bribes. The sale included prize-winning show horses and mansions.

Criminals for years have concealed money stolen from state oil company Petroleos de Venezuela SA, the nation’s main source of income and foreign currency, American prosecutors have said. In September, a former company president was charged in Houston with money laundering in a probe of a $1 billion bribery scheme. A former Venezuelan government official and a former officer at Corpoelec SA, the state power company, were charged in June with taking bribes to award $60 million in business to Florida-based companies.

Intimate Acquaintance

It’s a milieu Bagley knows well. Testifying as an expert defense witness in a Miami cocaine-trafficking trial last month, he told jurors about his constant efforts to keep abreast: teaching six times a year in Colombia, talking with colleagues at professional conferences, scouring newspapers and government reports.

“I sometimes interview people in jail here in Miami and in other parts of the United States,” Bagley testified. “I try to use all the sources that are available to me, but it’s often, because it’s a clandestine and often-violent industry, sometimes difficult to get all the information that you need.”

Bagley is a native Californian who first saw the drug trade up close as a Peace Corps volunteer in Colombia, he told jurors. He got his undergraduate degree at the University of California, Berkeley, then a master’s and a Ph.D. from the University of California, Los Angeles.

He taught in Colombia and at the Johns Hopkins University School of Advanced International Studies before moving to Miami, where he recently finished his 30th year. He’s taught a generation of academics, government and law enforcement officials, published books and articles and testified as an expert about 100 times.

“He’s an icon,” said Jonathan Rosen, a political scientist who said he’s published books with Bagley and counts him as a mentor. Rosen described Bagley as somebody with a “big personality” and a boisterous laugh.

“He could retire any time,” Rosen said. “He does this because he really loves it.”

Laugh Line

Every year, Bagley teaches a course on drug trafficking, he told the trial jurors.

“He always said, ‘This is not a how-to course,’” said Miami lawyer Erick Cruz, a former student who was also the defense attorney in the cocaine trial, in which his client was convicted.

It wasn’t immediately clear why an academic with a reputation cultivated over decades would launder money.

Bagley supports his wife, who was disabled after a stroke. He lost a foreclosure judgment of $660,000 in 2014 after he and his wife defaulted on a mortgage, court records show. The bank allowed them to sell the property for less than they owed.

Bagley doesn’t own his current home in Coral Gables, part of a gated area tucked beside mangroves and Biscayne Bay, according to property records. On Tuesday, two SUVs were parked in the driveway. Bagley left the house at 9:23 a.m. in a blue button-down shirt, carrying a thick manila envelope and a book, and drove off in his black Nissan Rogue, declining to answer questions.

Almost 1,400 miles southeast, Venezuela is mired in a yearslong political and economic crisis caused by Maduro’s misrule and a decline in oil prices. The nation is a gallery of socialist showpieces in various stages of completion. Railway projects lead nowhere and an expansion of the hydroelectric dam system has been halted even as residents go without power.

The money that Bagley laundered, U.S. prosecutors said, was skimmed from such public works projects and the professor took a cut as it passed through his accounts.

He opened a bank account using a company he owned, taking in 14 payments from November 2017 to October 2018, according to the indictment. The payments came from Swiss and United Arab Emirates accounts held by a “purported food company” and a wealth management firm, prosecutors said. They accused Bagley of withdrawing 90% as cashier’s checks payable to an account held by an unnamed person and transferring the rest to his own account.

Even after the bank account was shut down for suspicious activity in October 2018, Bagley opened a second one in December, where he received money twice, prosecutors said.

The professor, as prosecutors told it, took chances of which he should have been aware: He was a consultant for FinCEN, a bureau of the Treasury Department that fights laundering. The sums were sometimes moved in chunks of more than $200,000, large enough to draw investigators’ attention.

That would leave “a pretty clear documentary trail leading to where the dead bodies are buried,” said Andrew Ittleman, a Miami defense lawyer.

Former student Nilda Garcia said Bagley inspired her to get her doctorate and she now teaches about trafficking herself at Texas A&M University.

“He’s been like a big inspiration in my life,” she said.

Garcia laughed when she remembered his office, full of books and papers from floor to ceiling. “It was insane,” she said.

“When someone is really that brilliant, sometimes the simple things are hard to do.”

The case is U.S. v. Bagley, 19-cr-00765, U.S. District Court, Southern District of New York (Manhattan).

— With assistance by Fabiola Zerpa

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Disclosure requirements for all-cash purchases have been eased — slightly

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By Rebecca San Juan
November 13, 2019

South Florida remains under the government microscope for all-cash transactions. But it — and other regions — are getting a break when it comes to purchases made by publicly traded companies.

The change came Friday when Financial Crimes Enforcement Network (FinCEN), a branch of the U.S. Treasury department, updated and renewed its transparency requirements for all-cash real estate transactions in South Florida.

Beginning in 2016, Treasury issued a “geographic targeting order” requiring title insurance companies to identify the person or people behind shell companies that pay cash for residential real estate above $300,000 in select metropolitan areas. FinCEN renews its GTO every six months.

Florida’s counties Miami-Dade, Broward and Palm Beach are the only ones in the state required to file such disclosures. Counties in eight other states are also on the list, including in Texas, New York, California, Hawaii, Nevada, Washington, Massachusetts and Chicago.

But at least one Miami Realtor says the change will hurt efforts to curb money laundering through real estate purchases.

 

Andrew Ittleman

“Writing something into regulation is a difficult process. That’s the reason why FinCEN hasn’t done so yet,” said Andrew Ittleman, attorney and partner at Miami-based Fuerst Ittleman David & Joseph.

 

“It’s good lobbying from publicly traded companies,” said Jeff Morr, chair of the Master Brokers Forum and partner with Rubin + Morr group at Douglas Elliman. “It defeats the purpose of the legislation. Investors can now launder money through publicly traded companies.”

Pushback from publicly traded companies led FinCEN to eliminate the requirement, said Andrew Ittleman, attorney and partner at Miami-based Fuerst Ittleman David & Joseph. But, Ittleman said, public company filings show who owns and manages the business and how it earns money.

“That information can be found elsewhere,” said Ittleman.

As for whether the legislation has curbed money laundering in real estate, Ittleman said, “It’s hard to say. Theoretically, this can still happen in the US” — but is less likely in metros covered by the GTO disclosure requirements.The GTO program began March 2016 as a way to stem money laundering. Federal agents looked to monitor transactions in cities with high concentrations of cash real estate purchases by foreigners, starting with Miami and Manhattan. The department ordered insurance companies to identify the true owners of shell companies that paid $1 million or more in cash for homes in Miami-Dade and $3 million or more for homes in Manhattan. The program limits later changed to require disclosure of purchases of $300,000 or more in South Florida.

The regulation has impacted real estate purchases in Miami-Dade. A 2018 study found a 95% drop in the amount of money spent by foreign companies on all-cash purchases. The decline began immediately after the rule took effect.

Looking forward, Ittleman said the GTO renewals will likely continue every six months until a permanent regulation is put in place. U.S. Senator Marco Rubio tried to take the policy national in 2018.

Said Ittleman, “Writing something into regulation is a difficult process. That’s the reason why FinCEN hasn’t done so yet.”

Click here to read the full article.

Regulator renews order targeting shell companies buying South Florida real estate

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November 12, 2019
By Ashley Portero

The U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) renewed its Geographic Targeting Orders (GTOs) for South Florida.

The region is one of 12 metropolitan areas undergoing a crackdown on real estate-related money laundering.

The order requires title insurance companies to identify individuals behind shell companies that facilitate all-cash purchases of residential real estate. It applies to transactions above $300,000.

That has a significant impact on the region, which has one of the nation’s largest supplies of $1 million condos. Wealth migration is fueling the Miami market, according to the Miami Association of Realtors, which reports Miami- area luxury home sales increased almost 12% in the third quarter of 2019.

The order, in effect Nov. 12 to May 9, 2020, does not require reporting for purchases made by legal entities that are U.S.-based publicly-traded companies.

Andrew Ittleman, partner at Miami law firm FIDJ, said South Florida’s proximity to Latin America and thriving real estate market makes it a hot-spot for money laundering. He noted several Venezuelans in government positions have been prosecuted for moving funds out of Venezuela and laundering them through South Florida real estate as the country descended into economic crisis.

“When you’re in Miami you can’t help but admire the beautiful buildings in our skyline,” Ittleman said. “But when you understand where some of the money has come from, the FinCEN efforts make more sense.”

FinCEN initially issued a GTO for Miami in 2015 — the only city in the nation targeted at that time.

The newest order includes Miami-Dade, Broward and Palm Beach counties, as well as Boston, Chicago, Dallas-Fort Worth, Honolulu, Las Vegas, Los Angeles, New York City, San Antonio, San Diego, San Francisco and Seattle.

“Back then, FinCEN determined that ill-gotten money, proceeds of crime of one variety or another, was making it into Miami’s legitimate stream of commerce through real-estate purchases,” Ittleman said. “The GTO allowed FinCEN to get more information about real estate transactions in real time, and it was so effective that it was spread out to other U.S. jurisdictions.”

Ittleman said he expects the U.S. Treasury Department will eventually need to formalize the GTOs by writing regulations, rather than renewing temporary orders every six months. But those regulations would likely face steep opposition from real estate developers and investors, he said.

“It would take a lot to put regulations in place,” he said. “in the end, the title insurance industry would need to champion it and it doesn’t look like that will happen anytime soon.”

Click here to read the full article.

The new policy will increase scrutiny and pressure on stem cell clinics, according to industry experts.

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By Ashley Yeager
September 9, 2019

On Friday (Sept. 6), Google announced it would “prohibit advertising for unproven or experimental medical techniques such as most stem cell therapy, cellular (non-stem) therapy, and gene therapy.” The treatments, the company says in the statement, can have “dangerous health outcomes” and therefore have “no place” on the its platforms.

“Google’s new policy banning advertising for speculative medicines is a much-needed and welcome step to curb the marketing of unscrupulous medical products such as unproven stem cell therapies,” Deepak Srivastava, president of the International Society for Stem Cell Research, says in the statement. “The premature marketing and commercialization of unproven stem cell products threatens public health, their confidence in biomedical research, and undermines the development of legitimate new therapies.”

Some of these treatments have caused severe physical impairment, with several women going blind after receiving stem cell injections into their eyes. Scientists say many of the treatments’ claims are false, so the new policy could intensify scrutiny of the companies, according to The Washington Post. The US Food and Drug Administration has begun cracking down on the practices and marketing of stem cell clinics, which have otherwise largely skirted regulation.

“A number of us have pushed for this kind of policy over the years so this news is a welcome surprise,” University of California, Davis, stem cell biologist Paul Knoepfler tells The Post. He’s been criticizing the Google ads for stem cell treatments for years and says the move is a big deal because the ads recruited many of the same patients negatively affected by the treatments.

Andrew Ittleman, a Miami lawyer who represents several stem cell clinics, tells The Post the policy will damage companies with legitimate treatment claims. “It puts Google in the position of being a quasi regulator, taking on quite a significant amount of jurisdiction,” Ittleman says. “They’re painting the industry with a broad brush and companies with legitimate arguments are going to be collateral damage.”

The ban would go into effect in October, according to Fortune, and the company would not reveal how it would vet medical ads.

“The American Medical Association believes it is critical to distinguish between treatments that have been validated by appropriate scientific study, those that are promising, and those that are without foundation,” Patrice Harris, the association’s president, tells Fortune in an emailed statement. “We urge [Google] to make public the process they use to vet advertisements and what evidentiary standard they use for determining which treatments are appropriate to advertise.”

Despite the lack of details, proponents of the policy say it’s a big step forward and a long time coming. “These ads have been present on the Internet for at least 15 years—at least,” Sean Morris, chairman of the Society of Stem Cell Research, tells Fortune. “But better late than never.”

Click here to read the full article.

Money Laundering: US crackdown on Venezuelan cash

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In 2018, a Venezuelan banker was convicted of operating a $1.2bn money-laundering scheme funded with stolen government money. Investigators say most cash was used to buy real estate in Florida.

August 23, 2019

Last year, a Venezuelan banker was convicted of running a $1.2bn money- laundering scheme, all with stolen government money.

Investigators say most of the cash was used to buy real estate in Florida. The money was stolen from a country that is in a deep humanitarian and economic crisis.

United States authorities have launched a renewed crackdown on these kinds of schemes.

Click here to read the full article.

Google is banning ads for quack cures after years of profiting from them

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By Antonio Regalado
September 6, 2019

After brazenly taking ad money from health-care scammers, Google is finally saying no to ads for unproven stem-cell treatments.

New policy: Google, which pulls in more than $110 billion a year in online ad revenue, said in a statement posted on its advertising pages that under the new policy it will now “prohibit ads selling treatments that have no established biomedical or scientific basis.”

The policy will cover a host of bogus cures for cancer and ALS, as well as treatments that are under study but don’t have enough “formal clinical testing to justify widespread clinical use.” Ads for government-sanctioned clinical trials will be allowed, according to the Washington Post.

Big problem: Ads from stem-cell clinics have been a fixture of Google’s search results for years, funneling desperate patients to a growing industry of doctors who collect blood or other cells from patients, then re-inject them. Testimonials from celebrity NFL players and others have helped spread the quackery to sports medicine and orthopedics centers.

The treatments have little evidence to support their use and can be hazardous. Several people have ended up blinded or developed bizarre tumors. In China, the search giant Baidu was rocked after a 21-year-old college student died from a treatment he learned about in a promoted search result.

Growing embarrassment: Google’s advertising of sham medicine became a bigger liability in 2015 after the company launched Calico, a company seeking remedies for aging, and a health research subsidiary called Verily.

“We know that important medical discoveries often start as unproven ideas,” Google said in its statement today. “At the same time, we have seen a rise in bad actors attempting to take advantage of individuals by offering untested, deceptive treatments.”

Hype problem: Stem cells have been touted as the cure for just about anything, and some medical clinics claim the procedures are also exempt from regulation if they involve a person’s own cells, such as fat, blood concentrates, or bone marrow.

The US Food and Drug Administration has sometimes pursued the clinics, though, winning a case this summer against a Florida stem-cell company, US Stem Cell, and issuing a broad warning to consumers earlier this week.

Experts intervened: According to the International Society for Stem Cell Research, a body representing academic scientists, it helped draw Google’s attention to the role of ads in harming patients. In early 2019, executives from the internet giant were invited to presentations about the problems caused by the clinics as part of the National Academy of Sciences’ Forum on Regenerative Medicine.

“Google’s new policy banning advertising for speculative medicines is a much-needed and welcome step to curb the marketing of unscrupulous medical products,” the president of the society, Deepak Srivastava, said in a statement. “While stem cells have great potential to help us understand and treat a wide range of diseases, most stem cell interventions remain experimental and should only be offered to patients through well-regulated clinical trials.”

Ads still visible: The Washington Post, which first reported the new ad policy, says it will go into effect in October. A Google search today from Cambridge, Massachusetts, still returned numerous advertisements, such as one for the Boston Stem Cell Center, which sells a variety of treatments involving a person’s own cells.

Google as regulator?  Andrew Ittleman, a Miami lawyer who works for stem-cell clinics, told the Post that the ad ban could penalize “good” companies trying to follow regulations, as well as bad actors. Ittleman said some clinics had already been banned by Google starting two years ago.

“It puts Google in the position of being a quasi regulator, taking on quite a significant amount of jurisdiction,” he told the Post. “They’re painting the industry with a broad brush.”

Click here to read the full article.

New Google policy bars ads for unproven stem cell therapies

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By William Wan and Laurie McGinley
September 6

Responding to ubiquitous online marketing by stem cell clinics selling unapproved treatments for everything from achy joints to Alzheimer’s, Google announced Friday it will no longer accept ads for “unproven or experimental medical techniques,” including most stem cell therapy, cellular therapy and gene therapy.

The Internet giant said it was taking the step after seeing “a rise in bad actors” trying to take advantage of patients by offering “untested, deceptive treatments.” Often, Google said in a post explaining the new policy, “these treatments can lead to dangerous health outcomes and we feel they have no place on our platforms.” Its new policy will prohibit ads for treatments that have “no established biomedical or scientific basis.”

The new position comes as stem cell clinics have grown into a sprawling direct-to-consumer industry. Some clinics have told patients their treatments can help them with ailments such as macular degeneration, ALS, multiple sclerosis and degenerative lung diseases. Scientists and medical associations have likened the procedures to modern snake oil and accused the purveyors of preying on the hopes of seriously ill patients. The untested treatments, many researchers say, is imperiling patients and the reputation of a promising field.

After years of little enforcement, the federal regulators have begun to crack down on the clinics. And the new Google policy will add to the growing scrutiny and pressure, industry experts said.

When asked by The Washington Post last December about its policies about advertising by stem cell clinics, Google declined to answer questions about actions against specific companies. In a statement, the company said: “If we find ads that violate our policies, we take immediate action, which can include taking down violating ads or suspending an account altogether.”

At the time, the company said its existing policies already prohibited marketing potentially dangerous and fraudulent health products — a stance some stem cell experts criticized as insufficient.

“Google’s new policy banning advertising for speculative medicines is a much-needed and welcome step to curb the marketing of unscrupulous medical products,” said Deepak Srivastava, president of the International Society for Stem Cell Research, a leading group of scientists that gave Google advice on the policy. “The premature marketing and commercialization of unproven stem cell products threatens public health, the confidence in biomedical research, and undermines the development of legitimate new therapies,” he said.

Some treatments have resulted in severe injuries, including at least five women who were blinded after stem cell clinics injected its product into their eyes.

Stem cell clinics say they are offering treatment to patients who have few other options and that their treatment may have ways of helping patients that science can’t yet explain.

Some industry representatives criticized Google’s new ad policy on Friday. The ban on ads will unfairly devastate “good” companies along with “bad actors” without discriminating which ones are trying to treat patients safely and follow evolving FDA regulations, said Andrew Ittleman, a Miami lawyer who represents several stem cell clinics.

In the past two years, Google had already begun refusing ads from several stem cell companies on a case-by-case basis, said Ittleman, who has been hired by a few such companies to try, unsuccessfully, to appeal such decisions with Google.

“It puts Google in the position of being a quasi regulator, taking on quite a significant amount of jurisdiction,” Ittleman said. “They’re painting the industry with a broad brush and companies with legitimate arguments are going to be collateral damage.”

Google’s new ad policy, however, is unlikely to put the industry out of business. Many clinics have shown an ability to adapt nimbly to new regulatory rules and changes such as Google’s ad policy.

“This kind of ad ban hits hard because most companies rely on Google for a large share of their quality sales leads,” said a former marketing head for a Florida stem cell company. “But there are plenty of other channels you can switch to — Facebook, Bing, Yahoo.”

The marketing executive, who spoke on the condition of anonymity to avoid professional retaliation, said “These kinds of businesses are pretty savvy and have had to adapt a lot already. Many have previously been kicked off Google already. You learn to pivot and be resourceful.”

Another recent example of the industry’s ability to adapt, experts note, came when the Food and Drug Administration won a landmark lawsuit in June against a stem cell company selling stem cell procedures that extract clients’ fat tissue, spin it to isolate certain cells, and inject them back into the body.

Health officials hailed the case as a turning point in the government’s struggle to regulate the booming industry. But ahead of the legal victory, the industry had already begun to shift. Because the FDA was focusing on fat-based treatments, many clinics switched to treatments derived instead from s blood, bone marrow and birth-related tissues, such as amniotic fluid and umbilical cord blood.

Google officials said Friday they would continue to accept ads for clinical trials cleared by the government. It said that while important medical discoveries often start as unproven ideas, “we believe that monitored, regulated clinical trials are the most reliable way to test and prove important medical advances.”

The ban will take effect across Google’s ad services, including YouTube and ads Google helps place on third-party websites. And the ban includes treatments that are rooted in scientific findings and preliminary clinical experience “but currently have insufficient formal clinical testing” to justify widespread use. The new policy, which will take effect in October, was detailed in a blog post by Adrienne Biddings, the company’s policy adviser.

The post said that the “digital ads ecosystem can only flourish if it’s a place that is safe and trustworthy for users.” The company said it will use a combination of machine learning and human review to enforce it.

To formulate the new approach, a spokeswoman said, the company’s policy team has reviewed the literature on the field and worked with various stem-cell experts.

Paul Knoepfler, a stem cell biologist at the University of California at Davis and longtime critic of the for-profit stem cell industry, called the new Google policy a big deal. Many patients who have been seriously harmed, he noted, were initially recruited as customers via Google ads.

“A number of us have pushed for this kind of policy over the years so this news is a welcome surprise,” Knoepfler said.

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