Energy Drink Regulatory Update: Monster Sues City of San Francisco in Federal Court, City Fires Back in California State Court

As we reported here last week, the FDA announced that it is conducting an investigation into the use of caffeine in foods and beverages. Since the FDA’s announcement, the energy drink industry has continued to receive significant media attention. On May 6, 2013, the San Francisco City Attorney’s office announced that City Attorney Dennis Herrera, on behalf of the people of the state of California, filed a lawsuit in San Francisco Superior Court against Monster Beverage Corp. (“Monster”) for allegedly engaging in unfair, deceptive and unlawful business practices in violation of California laws. (To read the full press release, please click here.) This lawsuit comes just days after Monster filed a complaint against Dennis Herrera in the U.S. District Court for the Central District of California, alleging that Mr. Herrera’s attempts to regulate energy drinks are preempted by the federal Food, Drug, and Cosmetic Act (“FDCA”) and impinge on Monster’s constitutionally protected speech. By “singl[ing] out” Monster, despite the similarity between its advertising strategy and advertising for other energy drinks on the market, Monster argues that Mr. Herrera “appears to be motivated by publicity rather than science.” (To read the full text of the complaint filed in Monster Beverage Corporation v. Dennis Herrera, please click here.)

Mr. Herrera’s complaint alleges that Monster, the nation’s largest energy drink manufacturer, “promotes consumption of its drinks in an excessive and unsafe manner” and “has failed to adequately warn consumers of the dangers of consuming Monster Energy Drinks.” (To read the full complaint for People of the State of California ex rel. Dennis Herrera v. Monster Beverage Corporation, please click here.) The complaint states that Monster “promotes excessive consumption of its drinks” with statements such as: “bigger is always better,” “chug it down,” “throw [it] back,” a “smooth flavor you can really pound down,” and “the biggest chugger friendly wide mouth we could make.” Furthermore, in describing Monster’s “targeted advertising” toward children and adolescents, Mr. Herrera explicitly refers to Monster’s various social media pages, including Facebook, Twitter, YouTube, and a “Monster Army” social networking site. Mr. Herrera also alleges that Monster advertises to teenage boys by creating a “lifestyle” featuring “extreme sports, music, gaming, military themes, and the scantily-clad ”˜Monster Girls.'” (For more information regarding the litigation between Monster and San Francisco City Attorney Herrera, please read the Los Angeles Times article here.)

To support its allegations that Monster is unsafe for consumption by children and adolescents, Mr. Herrera relies heavily on scientific research that claims there is “a strong correlation between consumption of caffeine at levels found in Monster’s products and adverse health and safety consequences.” The scientific research Mr. Herrera refers to throughout the complaint is the same information contained in a letter from health law experts to the FDA sent in March of this year, which we discussed previously here. The complaint goes on to allege that the despite this scientific evidence, Monster “aggressively markets its products to children and teenagers,” and that its targeted advertising efforts are responsible for the product’s popularity with and frequent consumption by youth.

The complaint against Monster also alleges that Monster’s energy drink products are misbranded and adulterated foods under California law. Although Mr. Herrera acknowledges Monster’s move earlier this year to label its products as conventional beverages instead of dietary supplements, he nevertheless alleges that Monster’s products are misbranded because “Monster’s packaging, labeling, serving size, recommended conditions of use, and advertising statements demonstrate that Monster Energy Drinks are, and have long been, conventional beverages.” Further, the complaint states that Monster’s product are adulterated because they contain levels of added caffeine that “do not satisfy the GRAS [generally recognized as safe] standard because there is no scientific consensus concerning the safety of the caffeine levels in [its] products.”

If this lawsuit is successful, Monster Energy could be enjoined from continuing to engage in conduct the state deems harmful to consumers and competitors, and forced to pay significant civil penalties and restitution. The outcome of this lawsuit could have major repercussions for the energy drink industry, not only in California but across the country.

Fuerst Ittleman David & Joseph, PL will continue to track the progress of this lawsuit and any other developments in the regulation of energy drink products. For more information, please contact us via email at contact@fidjlaw.com or via telephone at (305) 350-5690.

Update: Banking Difficulties May Lead Marijuana Dispensaries to Commit Bank Fraud

As we have previously reported, despite the growing number of States that have sanctioned the use of marijuana in various forms, the federal government has continued its efforts to crack down on dispensaries. (Our recent articles discussing these efforts can be read here, here, and here.). In addition to criminal prosecution for drug trafficking, state sanctioned dispensaries face additional legal barriers which make operating difficult. As we previously reported, one such barrier is the inability of marijuana dispensaries to deduct business expenses. An additional barrier dispensaries face is finding banks, credit card companies, and payment processors to process the proceeds of marijuana sales.

The Colorado Task Force Report on the Implementation of Amendment 64 (which legalized marijuana use) summarized the problems associated with banking marijuana dispensaries as follows:

Financial institutions that are federally licensed or insured are required to comply with federal regulations. Since marijuana is a controlled substance under federal law, banks must either refuse to hold accounts for legal marijuana businesses…or risk prosecution.

The Task Force’s report can be read here.

As a result of marijuana remaining a Class I substance under the Federal Controlled Substances Act, banks face increased anti-money laundering (“AML”) risks when seeking to bank even those dispensaries which are fully compliant with state law. Pursuant to the Bank Secrecy Act, 31 U.S.C. §§ 5311-5330, as part of a bank’s anti-money laundering program, banks are required to create certain reports and records in order to combat fraud, money laundering, and protect against criminal and terrorist activity. More specifically, 12 C.F.R. § 21.11 requires national banks to file Suspicious Activity Reports (“SAR”) when the bank knows, suspects, or has reason to suspect that a transaction involves funds from illegal activities or is intended or conducted in order to hide or disguise funds or assets derived from illegal activities as part of a plan to violate or evade any law or regulation or to avoid any transaction reporting requirement under Federal law. (More information on bank AML requirements under the BSA can be found on the Office of the Comptroller of the Currency’s website.)

Because the sale of marijuana remains prohibited under federal law, banks are placed in a position where they would be required to report any banking transactions involving proceeds from marijuana dispensaries. Moreover, banks face the realistic possibility of federal criminal penalties for assisting in money laundering should they knowingly accept and process funds from dispensaries. As a result of these risks and possible penalties, banks have simply refused to allow marijuana dispensaries to maintain accounts or conduct business with them.

Banks’ refusal to allow dispensaries to maintain accounts has made it extremely difficult for dispensaries to operate. As a result, many legal marijuana businesses have resorted to all cash operations. With the bank prohibition in place, dispensaries are looking for “creative” ways to engage in banking including: 1) establishing shell companies to disguise marijuana proceeds; 2) funneling marijuana derived profits into accounts of other legitimate businesses; and 3) placing marijuana derived profits into bank accounts of family members or personal accounts.

These alternative banking methods were the subject of a recent Bloomberg article, entitled “Pot Shops Can’t Take American Express or Deposit in Banks.” In the article, Bloomberg quotes Dale Gieringer, director of the California office of the National Organization for the Reform of Marijuana Laws, as saying “[a]s long as the bank doesn’t find out, you should be safe.” A copy of Bloomberg’s article can be read here. Despite Mr. Gieringer’s contentions, each of these methods could expose dispensary owners to criminal and civil liability.

Unfortunately, Bloomberg’s article never mentions the potential criminal and civil liabilities faced by dispensary owners should they use any of the above-referenced methods to open bank accounts. Generally speaking, the use of shell companies or other accounts to mask the profits derived from the sale of marijuana could subject the owner of a dispensary to a wide variety of federal criminal penalties, including bank fraud 18 U.S.C. § 1344, wire fraud 18 U.S.C. § 1343, and money laundering 18 U.S.C. § 1956. Additionally, those who assist in such actions, for example the friend or family member who allowed for money to be transferred through his or her account, would also face similar criminal charges. Moreover, should such fraud occur, the payment processors and banks who process this money can still be held liable for money laundering and face criminal and civil fines and penalties. Each of these penalties is available regardless of whether marijuana is legal under State law. Put simply, if a company lies for the purpose of opening a bank account, the consequences are severe.

The online poker industry has already experienced just how severe the consequences can be. There, several online poker companies, such as Full Tilt Poker and PokerStars, established shell companies in order to facilitate payment of gambling winnings to their members. The companies used third party payment processors to disguise financial transactions between the companies and U.S. players so that the transactions would appear to be unrelated to online gambling. The third party payment processors would then lie to U.S. financial institutions about the source of the funds, often facilitated by the creation of nonexistent online companies and phony websites. The ultimate conclusion of that case resulted in $731 million in civil monetary penalties as well as criminal convictions for executives of the payment processing companies that facilitated the fraud. (A full recount of the online poker saga can be read in our previous reports here, here, here, here, and here).

The attorneys at Fuerst Ittleman David & Joseph, PL have extensive experience in the areas of administrative law, constitutional law, regulatory compliance, white collar criminal defense and litigating against the U.S. Department of Justice. You can reach an attorney by emailing us at contact@fidjlaw.com or by calling us at 305.350.5690.

Tax Compliance Update: IRS Aggressively Pursues Foreign Banks; Offshore Voluntary Disclosure Programto Remain Open Indefinitely

In our most recent discussion of the IRS’s Offshore Enforcement Initiatives, found here, we discussed the John Doe Summons recently issued by the U.S. Department of Justice to Wells Fargo seeking information about First Caribbean National Bank and how it could affect foreign account holders in the U.S. We went on to discuss the IRS’s Offshore Voluntary Disclosure Program (“OVDP”), how it worked, and some issues that foreign account holders and foreign entities should consider when deciding whether or not to participate in the program. In this article, we explore how the most recent John Doe summons made its way to the Caribbean and why the IRS has become so interested in pursuing offshore account holders. We begin our discussion with a brief history of what has transpired since the establishment of the IRS’s OVDP back in 2009.

The IRS’s Criminal Manual has encouraged the voluntary disclosure of hidden offshore accounts for many years preceding the establishment of the OVDP. However, prior to the 2009 OVDP, the IRS had no formalized method for determining penalties. This lack of uniformity in making penalty determinations resulted in non-compliant taxpayers being reluctant to disclose information that would expose them to unpredictable financial liability. In response to these concerns and to promote transparency and uniformity, the IRS established the OVDP as a centralized means of processing voluntary disclosures that offered a uniform penalty structure, consistency, and predictability for taxpayers; see IRS discussion of OVDP objectives here.

The IRS’s efforts to increase offshore account transparency through the OVDP have been extremely successful. Since the establishment of the OVDP, the IRS and Tax Division of the Department of Justice have collected a wealth of data regarding previously undisclosed accounts and used this information to aggressively pursue U.S. taxpayers attempting to evade U.S. taxes and violate the Bank Secrecy Act.

Most notably, in February 2009, the Union Bank of Switzerland (“UBS AG”), Switzerland’s then largest bank, entered into a deferred prosecution agreement with the Department of Justice on charges of conspiring to defraud the United States by impeding the IRS. As part of this agreement, UBS AG paid the U.S. $780 million and surrendered data for nearly 5,000 U.S. clients who held United States securities in UBS AG accounts. Due to the intense pressure from U.S. law enforcement, most Swiss banks appear to have abandoned the practice.

Wegelin & Co. (“Wegelin”), the oldest Swiss private bank, saw this as an opportunity to capture market share and allegedly, at the direction of senior management, made efforts to attract old UBS AG clients. Under the assumption that there was no nexus between itself and the U.S. and its compliance with Swiss laws, Wegelin believed itself to be safe from exposure to U.S. prosecution. However, as noted in our previous discussion on this topic, when foreign banks assist U.S. taxpayers in committing tax evasion, a lack of physical nexus is irrelevant.

Wegelin guessed wrong and paid the ultimate price. In January 2013 the bank plead guilty to facilitating U.S. tax evasion by helping over 100 U.S. taxpayers hide more than $1.2 Billion in undeclared assets between 2002 and 2011. In total, Wegelin was required to pay the U.S. about $74 million in restitution, fees, and penalties and was ultimately forced to close. We previously reported on Wegelin’s indictment here and the final penalty issued to Wegelin here.

The success of the OVDP is unquestionably influencing the IRS’s continued focus on tracking down individuals involved in illegal offshore tax evasion. Following UBS AG’s deferred prosecution agreement, the flood gates opened for voluntary disclosure, resulting in the IRS collecting a treasure trove of information and forcing approximately 38,000 disclosures and well over $5 billion in taxes, interest, and penalties. Undoubtedly, the huge volumes of information and disclosures in the wake of the UBS AG indictment are leading to increased identification of key players and institutions that facilitate illegal offshore account activity for U.S. taxpayers.

The continued success of this program has clearly led the IRS to keep the OVDP active indefinitely; see the IRS’s announcement regarding the program remaining open indefinitely here. The IRS’s commitment to the initiative is clear; it seems to have found a formula for promoting disclosure of hidden foreign accounts that is working and it has no intentions of easing up.

The attorneys at Fuerst, Ittleman, David & Joseph have extensive experience working with taxpayers who have undisclosed foreign bank accounts and who have availed themselves of the IRSs voluntary disclosure program. We will continue to monitor the development of this issue, and we will update this blog with relevant information as often as possible. You can reach an attorney by calling us at 305-350-5690 or emailing us at contact@fidjlaw.com.

Medical Device Update: FDA Regulation of Tanning Beds, “Henceforth to be Known as Sunlamp Products”

Yesterday, we reported that FDA had announced its intentions of reclassifying sunlamp products and requiring labeling changes to include warnings discouraging young people from using them. In today’s Federal Register, which you can read here, FDA made those intentions official when it released its Proposed Order entitled “General and Plastic Surgery Devices: Reclassification of Ultraviolet Lamps for Tanning, Henceforth to be Known as Sunlamp Products.” The interested public, including the regulated industry, may submit written comments to the FDA regarding this Proposed Order on or before August 7, 2013.

FDA Shines a Light on Tanning Bed Safety, Proposes Device Reclassification and Warnings to Users Under 18

After issuing a public warning regarding the dangers of tanning nearly three years ago (see our previous blog here), this week the U.S. Food and Drug Administration (“FDA”) issued a proposed order to reclassify sunlamp devices and require labeling changes to include a warning discouraging young people (those under 18) from using them.

If finalized, this proposed order would reclassify sunlamp devices from a class I (low risk) device to a class II (moderate risk) device requiring premarket notification and stricter controls. FDA’s authority to reclassify a device is based on section 513(e) of the Food, Drug, and Cosmetic Act (“FDCA”) which allows FDA to reclassify a device based upon “new information” through an administrative order. As the proposed order explains, “new information” includes information developed as a result of reevaluation of the data before FDA when the device was originally classified. If finalized, this order will heighten the regulatory requirements for tanning bed manufacturers and distributors doing business in the United States.

I. Regulatory History of Sunlamps

The proposed order takes us through the regulatory history of sunlamps. In 1977, the review panels evaluating sunlamp devices recommended that dermatologic UV lamps (intended for use in treatment of dermatologic disorders or for tanning) be deemed class II devices. The reason for this classification being that the panels perceived there to be risks that could not be mitigated with general controls. The identified risks included burns to skin and eyes, aging of skin, skin cancer, and photosensitivity. FDA agreed with the panels’ recommendation. However, in FDA’s final rule, published June 24, 1988 (53 Fed Reg 23856), FDA separated UV lamps for dermatological disorders and UV lamps for tanning. At that time, FDA classified the lamps for dermatological disorders as class II and postponed classification of tanning lamps to consider issuing a proposal classifying them as class I. FDA eventually finalized that classification in November of 1990 (55 Fed Reg 48436). In 1994, FDA amended that classification and published a final rule exempting 148 class I devices from premarket notifications with some limitations, including UV lamps for tanning (59 Fed Reg 63005).

Classifying sunlamp products for tanning as class I devices meant FDA determined that manufacturer premarket notifications for these devices were necessary to protect the public health at that time. In its new proposed order, FDA notes that “[p]rior to the issuance of the 1994 exempting UV lamps for tanning from premarket notification submission, some manufacturers of UV lamps for tanning had already submitted 510(k)s and received clearance for their devices.” Should this proposed order be finalized, device manufacturers may use those devices as predicate devices for future 510(k) submissions.

II. Stricter Classification – 510(k) Process

FDA requires a premarket notification submission (a “510(k)”) for class II medical devices, i.e. devices that are moderate risk and require special controls. Class I, or low risk devices, only require general controls and are not required to submit anything to FDA to begin marketing. During the 510(k) process, FDA reviews technological characteristics, performance, intended use, and labeling of medical devices to ensure the devices are “substantially equivalent” to legally marketed predicate devices before they enter the market. The 510(k) process can be described as a “piggybacking” system with one device piggybacking on the FDA clearance of another, similar device. As FDA explains in the proposed order:

Substantial equivalence requires that a new device must have (1) the same intended use as legally marketed predicates, and (2) either the same technological characteristics as a legally marketed predicate, or if there are significant differences, the differences must not raise new questions of safety and effectiveness and the performance data must demonstrate that the new device is at least as safe and effective as the legally marketed predicate device. (See section 513(i) of the [FDCA].) This assures that new devices that differ significantly in terms of safety and effectiveness from devices already legally on the market will be subject to the more rigorous premarket approval requirement.

In its proposed order, FDA is proposing this heightened classification because it has identified several risks related to UV lamps for tanning. These risks are similar to those identified in 1977 and include increased skin cancer risk, ocular risk, burns to the skin, skin damage, transmission of infectious disease due to improper cleaning, and others. FDA cites a growing body of literature on the association of skin cancer with use of sunlamp devices.

III. Proposed Reclassification and Special Controls, Including Labeling Requirements

FDA is proposing that sunlamp products be reclassified from class I (general controls) to class II (special controls). FDA reasons that general controls alone are insufficient to provide reasonable assurance of safety and effectiveness. FDA has identified special controls it believes will be sufficient to ensure safety and effectiveness for these devices. These special controls include, among others, performance testing, demonstration of mechanical safety, demonstration of electrical safety and electromagnetic compatibility, and specific product labeling.

The proposed labeling requirement includes several warnings. First, it would discourage use of sunlamp devices to those under the age of 18 and those with a personal history or family history of skin cancer. Additionally, the labeling would include a warning that regular users of these types of devices be regulatory evaluated for skin cancer. FDA’s proposed order also suggests that labeling requirements include warnings related to transmission of infectious disease through improper cleaning would mitigate that risk. Furthermore, FDA proposes that a warning be included that these devices should not be used by those with skin lesions or open wounds. Should this proposed order take affect and these warnings be required on tanning beds, it will be interesting to see if there is actually a decrease in tanning bed use by young people. With these warnings, FDA is merely discouraging sunlamp use by young people and not prohibiting their use by anyone under the age of 18. The efficacy of these warnings is called into question even by the proposed order. The FDA cites a study in its proposed order that reported “47 percent of college student had reported using a sunlamp product during the last year because it improved their appearance, despite 92 percent being aware of potential health risk.” (Emphasis added.) That study alone indicates that young people will likely continue the use of tanning beds despite warnings regarding health risks.

IV. Potential Effects on Industry

FDA will take comments on this proposed order for the next 90 days. Any member of the industry or general public may comment on it. Should FDA move forward with finalization of this order, there will be major changes to the regulatory framework governing the tanning bed industry. Upon finalization of this order, FDA has expressed that it expects sunlamp manufacturers to submit a 510(k) and comply with the special controls within one year of the date of the final order or cease marketing their devices. This expectation will apply to sunlamp devices already on the market, meaning that manufacturers of sunlamp devices currently sold in the United States without 510(k) clearance would be expected to obtain 510(k) clearance before continuing sales. Due to the protracted time periods the 510(k) process can take, tanning bed manufacturers should be prepared to move forward with a 510(k) submission if finalization of this rule occurs in order to avoid delays in distribution.

Fuerst, Ittleman, David & Joseph, PL will continue to track and report on FDA’s position related to these types of devices. For more information, please contact us via e-mail at contact@fidjlaw.com or via telephone at (305) 350-5690.

IRS Issues “John Doe Summons” to Wells Fargo Seeking Identities of U.S. Taxpayers with Offshore Accounts at First Caribbean International Bank

Introduction

On April 30, 2013, the United States Department of Justice issued a “John Doe Internal Revenue Code” summons to Wells Fargo Bank, as a provider of correspondent bank services for Canadian Imperial Bank of Commerce’s First Caribbean International Bank (“FCIB”), requiring it to turn over records relating to accounts held at FCIB by United States Taxpayers between 2004 through 2012.  The issuance of this summons is one of the aftershocks of the UBS AG debacle that destroyed Switzerland’s bank secrecy laws. [A discussion on this issue can be found here]. You can read more about the Department of Justice’s John Doe summons to Wells Fargo here.

Because First Caribbean operates in 18 Caribbean countries, it is inevitable that the issuance of the Department of Justice’s summons will reveal thousands upon thousands of U.S. account holders who reside in the United States, and particularly South Florida.  It is also inevitable that some of these U.S. account holders will be prosecuted for failing to disclose their accounts overseas.  Additionally, it is virtually certain that the Department of Justice will start issuing John Doe summonses to other banking institutions that maintain correspondent accounts.

Because of the urgent nature of this issue for holders of foreign accounts who may be unaware of their reporting requirements, and the consequences of failing to report their foreign accounts, over the course of several articles we will present a comprehensive overview of the IRS’s most recent efforts to thwart offshore tax evasion and raise money for the government through tax collection efforts. Additionally, we will explore the intricacies of this issue attempt to explain exactly what the IRS is doing here.

In this article, Part I includes a discussion of what exactly a “John Doe Summons” is and what effects the summons issued to FCIB may have on foreign account holders. Part II of this article focuses on immediate actions expected “violators” can/should take to insulate themselves from prosecution.

Part I:
The John Doe Summons: Who is John Doe?

So what exactly is a John Doe Summons and why is it particularly dangerous for US taxpayers with accounts abroad?

First, “[f]or the purpose of ascertaining the correctness of any return, making a return where none has been made, [or] determining the liability of any person for any internal revenue tax…”, the Internal Revenue Code empowers the Secretary of the Treasury, or its delegate, “[t]o summon the person liable for tax or required to perform the act…or any person having possession, custody, or care of books of account containing entries relating to the business of the person liable for tax or required to perform the act, or any other person the Secretary may deem proper…to produce such books, papers, records, or other data, and to give such testimony…as may be relevant or material to such inquiry.” 26 U.S.C. §§ 7602(a), 7701(11). The IRS power to summon extends even to those situations in which the identity of the taxpayer is unknown. 26 U.S.C. § 7609(f). Where the IRS seeks to summon information that pertains to an unknown taxpayer and is in the custody of a third party, the United States must first make a showing to a court that: 1) its investigation relates to an ascertainable class of persons; 2) a reasonable basis exists for the belief that these unknown taxpayers may have failed to comply with Internal Revenue Laws; and 3) the United States cannot obtain the information sought from another readily available source. Id.

The unknown or unspecified name of the target taxpayer gives rise to the notion of “John Doe.” The IRS defines a John Doe Summons as “any summons where the name of the individual taxpayer under investigation is unknown and therefore not specifically identified.” John Doe summonses are utilized by the IRS primarily to identify individuals participating in activities that would violate internal revenue laws or the Bank Secrecy Act and have most recently been utilized to uncover information regarding foreign accountholders who are illegally failing to report their offshore assets under U.S. tax law. Because the summons allows the IRS to seek information about unspecified taxpayers, the IRS commonly uses them as a means to collect information on an extraordinarily broad scale from financial institutions wherever located.

Although maintaining an offshore account is perfectly legal, United States tax law requires that a Foreign Bank Account Report or (“FBAR”) be filed with the United States Treasury for any citizens holding foreign accounts with balances exceeding $10,000.00 at any time during the calendar year. Under the FBAR regulations, deliberate failure to report a foreign account with a value that exceeds the threshold amount can result in penalties up to 50 percent of the amount in the account at the time of the violation. Of late, the IRS has been making concerted efforts to ensure that taxpayer who evade these reporting requirements are punished and John Doe Summonses have been the IRS’s weapon of choice.

In this most recent summons, IRS served Wells Fargo’s San Francisco branch which maintains correspondent accounts for the Barbados-based FCIB. Correspondent accounts are bank deposit accounts maintained by one bank for another. Typically, correspondent accounts are held by foreign banks without branch offices in the U.S. that do business in U.S. dollars. The United States Department of Justice is expecting that this summons will produce significant information about the account holders as well as the amount of money moved through their accounts. Beyond the identification of tax evaders, the John Doe summons also requires Wells Fargo to produce its own internal anti-money laundering compliance reports.

In a U.S. Department of Justice Press release found here, Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, stated as follows: “The Department of Justice and the IRS are committed to global enforcement to stop the use of foreign bank accounts to evade U.S. taxes”¦This John Doe summons is a visible indication of how we are using the many tools available to us to purse this activity wherever it is occurring. Those who are still hiding should get right with their country and fellow taxpayers before it’s too late.” IRS Acting Commissioner Steven T. Miller went on to say that “[t]his summons marks another milestone in international tax enforcement”¦our work here shows our resolve to pursue these case in all parts of the world regardless of whether  the person hiding the money overseas chooses a bank with no offices on U.S. soil.”

The summons to Wells Fargo naturally begs the question of whether the U.S. government can assert jurisdiction over foreign banks that have no branches or employees within the United States. In response, the U.S. government maintains that despite a bank employee never stepping foot on U.S. soil, if a foreign bank’s employees knowingly assist a U.S. taxpayer evade tax filing obligations, the bank itself can and will be held criminally liable. The way the U.S. Department of Justice sees it, if there is any conspiracy to violate U.S. tax law, the fact that the conduct took place overseas is irrelevant. IRS’s success in pursing illegal offshore account activity in Switzerland which led to the closure of the historic Swiss bank Wegelin & Co., which we previous discussed here and here, is instructive on this point. What is even more damning for FCIB is that its correspondent accounts held at Wells Fargo’s San-Francisco branch further established the nexus – however limited – between it and the U.S. 

This John Doe summons will result in significant exposure to prosecution for foreign account holders, banks, bankers, and account facilitators such as insurance companies, lawyers, accounts and investment advisors who the IRS has suspected of facilitating tax evasion in the United States. Given the nature of the new international information sharing agreements, the disclosure of account names and information is becoming more frequent and intrusive. For example, the Foreign Account Tax Compliance Act  (“FATCA”) was implemented in 2010 to encourage non-U.S. financial institutions to “voluntarily” disclose their U.S. account holders to the IRS and requires foreign financial institutions to report information about financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest directly to the IRS. [See IRS press release here.]

These IRS initiatives to identify individuals evading taxes are moving forward, and as such, foreign account holders and those associated with facilitating those accounts both domestically and abroad will need to prepare themselves to quickly become compliant with U.S. tax laws or prepare for a legal battle with the IRS.

Part II:
The Offshore Voluntary Disclosure Program

We now look more closely at the IRS’s Offshore Voluntary Disclosure Program and what steps suspected holders of unreported offshore accounts can immediately take to mitigate penalties, fines, and possible criminal prosecution.

In 2009, as a means of encouraging U.S. taxpayers to report previously undisclosed income, the IRS created the first offshore disclosure initiative. This initiative was coined the Offshore Voluntary Disclosure Program (“OVDP”) and was a response to the IRS prosecution of wealthy Americans who evaded taxes with the help of UBS AG (located in Switzerland) along with information obtained from disclosures of former UBS AG banker Bradley Birkenfeld in 2008.[ We have previously blogged on the OVDP here, here, and here] This program was considered a success, reportedly collecting over $4 Billion between its inception in 2009 and 2011 and nearly $5 Billion to date. Furthermore, the OVDP has resulted in over 34,500 disclosures and led to information that has assisted the IRS in furthering its investigation into other offshore tax jurisdictions. [See IRS press release on OVDP success here.] Consequently, in 2012, the IRS decided to eliminate any deadlines and kept the program as an open ended vehicle for investigating tax evasion and collecting tax revenue.

The OVDP currently focuses on the main vehicles of offshore tax evasion – unreported foreign financial accounts and unreported foreign entities, examples of which include depositing unreported and untaxed income into foreign accounts and/or omitting investment income earned from the foreign account on tax returns.  Under the OVDP, current tax evaders are encouraged to report previously undisclosed foreign accounts through reduced penalties and elimination of criminal prosecution risks for evasion.

For example, by entering into the OVDP, the IRS will waive FBAR non-compliance penalties. Foreign Bank Account Report (“FBAR”) violations range from $10,000 per account per year of unreported foreign bank accounts exceeding $10,000 during any point in a calendar year to the greater of $100,000 or 50 percent (50%) of the maximum balance of the foreign account exceeding $10,000. In contrast, the ODVP rates general degrees of willful tax evasion, and penalizes tax evaders based upon the underlying severity of the evasive acts. The threshold limits are a respective 27.5%, 10%, and 5% of the maximum foreign account balance based on the three different levels of willfulness.

Beyond its focus on FBAR violations, OVDP also looks to unreported foreign entities. Tax evasion schemes created through sophisticated foreign trusts, corporations, and partnerships that do not report this foreign entity to IRS on annual tax returns are susceptible to between $10,000 and $50,000 in penalties. OVDP however, affords the same 27.5%, 10%, and 5% mitigated penalties for disclosures of foreign business entities.

Individuals and businesses fearful of being identified of illegally evading taxes through undisclosed foreign financial accounts must ultimately assess the prospective risk of penalties and/or criminal prosecution when reviewing their foreign accounts and should consider whether the OVDP is their best option for solving their tax issues. When making this assessment, foreign account holders should be mindful of the following rules under OVDP:

  • The 27.5%, 10%, and 5% penalties apply to all assets related to tax evasion.
  • The OVDP only covers the most recent 8 tax years.
  • The OVDP penalties apply to all tax evasion-related assets that may be both directly and indirectly owned by the tax payer. i.e. the beneficiary of a foreign trust account  that maintains $500,000 will be applied under OVDP the same as a $50,000 car purchased with funds from a non-compliant FBAR account.

When making this final decision we suggest that foreign accountholders contact a competent professional with specialization in offshore disclosures, FBAR compliance, and asset protection to ensure that the accountholder is making the decision that is best suited for his or her specific financial situation.

The attorneys at Fuerst, Ittleman, David & Joseph have extensive experience working with taxpayers who have undisclosed foreign bank accounts and who have availed themselves of the IRSs voluntary disclosure program. We will continue to monitor the development of this issue, and we will update this blog with relevant information as often as possible. You can reach an attorney by calling us at 305-350-5690 or emailing us at  contact@fidjlaw.com.

A Wake-Up Call to the Food Industry: FDA Announces Investigation into Use of Caffeine in Food

On the heels of Wrigley’s new promotion of its new caffeinated gum called Alert Energy, FDA has announced that it will be investigating the safety of caffeine in food products. The use of caffeine in food products has been a hot topic in the media over the past few weeks. As we previously discussed, there has been a growing push by health experts for regulatory changes related to the use of caffeine in foods and beverages. Meanwhile, companies like Monster Beverage have been making changes related to the marketing and labeling of their caffeinated products.

In its recent announcement, FDA stated that it has concerns regarding the presence of caffeine in a “range of new products, including ones that may be attractive and readily to children and adolescents.” FDA provides examples of new food products with added caffeine, including chewing gum, jelly beans, marshmallows, sunflower seeds, and waffles. It noted that the “proliferation of these products in the marketplace is very disturbing to us.” However, when it comes to taking action on this issue, FDA has not made a clear statement as to how it will proceed. Instead it has stated that it “need[s] to better understand caffeine consumption and use patterns and determine what is a safe level for totally consumption of caffeine” and that the agency “need[s] to address the types of products that are appropriate for the addition of caffeine.” FDA has indicated that it is meeting with food companies to discuss uses of caffeine in food products and the appropriateness of those uses.

FDA notes that it has deemed 400 milligrams per day of caffeine (or approximately four or five cups of coffee) as generally safe for consumption by healthy adults. Substances that are generally recognized as safe or “GRAS” (further explained here) are those that FDA deems generally recognized among qualified experts as having been adequately shown to be safe under the conditions of its intended use. FDA has not set a safe daily level of caffeine consumption for children. Under its current regulatory framework, FDA states that manufacturers can add caffeine to food products as long as the manufacturer determines that the addition meets relevant safety standards and the caffeine is listed on the product label’s ingredient list. Notably, FDA stated in its recent announcement that “[w]hile various uses may meet federal food safety standards, the only time FDA explicitly approved adding caffeine was for colas in the 1950s. Existing rules never anticipated the current proliferation of caffeinated products.”

While it is not clear at this time exactly what FDA intends to do about the growing number of caffeinated products on the market, FDA has stated that it may consider enforcement action against individual products as it deems necessary and appropriate. As the food and beverage industry rapidly grows and expands the novel types and categories of products it offers to consumers, FDA regulation has clearly come up short in keeping pace. Because this caffeine issue has garnered national attention, the food and beverage industry will have to be prepared to quickly adapt to (or potentially fight) any new regulation or policy FDA attempts to implement.

Fuerst, Ittleman, David & Joseph, PL will be closely monitoring FDA’s investigation and actions related to the use of caffeine in food products. For more information, please contact us via e-mail at contact@fidjlaw.com or via telephone at (305) 350-5690.

Update: Florida Legislature Adopts OFC Workers’ Compensation Fraud Work Group Recommendations, Passes Law Establishing Real-Time Check Cashing Database and Check Casher Reporting Requirements

On April 30, 2013, the Florida Legislature passed House Bill 217, which when signed into law by Gov. Rick Scott, will place additional duties on check cashers by requiring them to log certain transactions in a real-time electronic statewide database. The bill is the latest effort by State officials to combat and prevent MSB-facilitated workers’ compensation fraud. A copy of the bill can be read here.

As we have previously reported, MSB-facilitated workers’ compensation fraud has been in the crosshairs of Florida officials since August of 2011. At that time, the Financial Services Commission of the Florida Office of Financial Regulation issued a cabinet report to Gov. Rick Scott regarding MSB-facilitated workers’ compensation schemes. The report revealed that MSBs have played an active, critical, and sometimes unknowing part in defrauding the workers’ compensation insurance market in Florida. As a result of these findings, Florida C.F.O. Jeff Atlwater announced the creation of the “MSB Facilitated Workers’ Compensation Fraud Workgroup” to develop comprehensive reforms to combat the fraud scheme. Our previous reports, detailing the fraud scheme, the OFR cabinet report, and the activities of the MSB Workers’ Compensation Fraud Workgroup can be read here, here, here, and here.

The new legislation adopts several of the Workgroup’s recommendations for curbing MSB-facilitated fraud. (A complete list of the Workgroup’s recommendations can be read here.) Once signed into law, House Bill 217 will require check cashers to submit the following information to the electronic check cashing database prior to cashing any checks of an amount greater than $1,000: 1) the transaction date; 2) the payor’s name; 3) the payee’s name; 4) the name of the conductor of the check cashing transaction if different than the payee; 5) the amount of the payment instrument; 6) the amount of currency provided; 7) the type of payment instrument; 8) the fee charged for cashing the payment instrument; 9)the location where the payment instrument was accepted; 10) the type of identification and identification number presented by the payee/conductor; and 11) the payee’s workers’ compensation insurance policy number. The legislation also requires that if multiple checks totaling $1,000 or more are cashed by any one person in one day, the amounts of each transaction must be aggregated, thus triggering a reporting requirement.

The new check cashing database will also be able to interface with databases which currently exist for the Secretary of State and the Department of Financial Services for purposes of verifying corporate registration and determining proof of workers’ compensation coverage. The Office of Financial Regulation believes that the ability to interface and receive real time information between agencies will allow law enforcement to more effectively track and investigate potential fraud. A copy of the Office of Financial Regulation’s press release can be read here.

FIDJ will continue to monitor this situation as implementation of House Bill 217 will result in fundamental regulatory changes for the Florida MSB industry. If you have questions pertaining to the Florida Office of Financial Regulations, the BSA, anti-money laundering compliance, or how to ensure that your business maintains regulatory compliance at both the state and federal levels, please contact us at contact@fidjlaw.com.

Online Sales Taxes Emerging as New York Court of Appeals Shoots Down Overstock and Amazon’s Constitutional Objections

Introduction:

In a March 28, 2013 decision, New York’s highest state court, the New York State Court of Appeals, held that New York’s “click-through” nexus statute, Tax Law § 1101 (b)(8)(vi), does not violate the United States Constitution under either the Commerce Clause or Due Process Clause. [A copy of the opinion can be found here.] This click-through nexus statute, typically referred to as the “Internet Tax”, extends state income taxability to internet retailers who employ website owners residing in New York to advertise for them. The growing popularity of click-through nexus liability and general e-commerce taxability nationwide has become problematic for major ecommerce sites such as Overstock and Amazon, and resulted in significant increases in tax exposure for internet retailers that utilize click-through advertising to increase traffic to their websites.

What is a “Click-Through” Nexus?

So what exactly is this “click-through” or “affiliate” Nexus? In 2008, New York was the first state to enact this form of legislation. The basic premise of this legislation is to update the way in which state governments assert sales and use tax guidelines to reflect advancements in modern technology. The New York legislature was able to accomplish this by amending the Tax Law. More specifically, the New York legislators amended the statutory definition of “vendor” under this law to include:

A person making sales of tangible personal property or services taxable under this article (“seller”) shall be presumed to be soliciting business through an independent contractor or other representative if the seller enters into an agreement with a resident of his state under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an internet website or otherwise, to the seller, if the cumulative gross receipts from sales by the seller to customers in the state who are referred to the seller by all residents with this type of an agreement with the seller is in excess of ten thousand dollars during the preceding four quarterly periods.

(Tax Law § 1101 (b)(8)(vi)). This definition was further clarified by a memorandum issued by the New York Department of Taxation and Finance [a copy of the memorandum can be found here] which made it clear that the presumption of taxation is rebuttable if the web site owner did not engage in any solicitation in New York that would result in a finding of nexus under constitutional standards.

Amazon and Overstock’s Failed Attempt to Challenge Tax Law

The establishment of this “click-through” nexus was challenged by two of the biggest internet retailers, Amazon.com and Overstock.com two days after the statute was enacted in New York in 2008. Both retailers argued that although they ship items to buyers worldwide (including New York), neither has any employees who work or reside in New York and neither maintains offices or property in New York. On the other hand, both Amazon and Overstock maintain affiliate programs whereby associates can maintain links to the respective retailers home pages in turn for a commission based on sales.

Amazon challenged the Tax Law on the grounds that it was an unconstitutional violation of Commerce, Due Process, and Equal Protection clauses. Overstock filed a complaint raising the same issues. These challenges were dismissed in both instances at the trial level. On appeal, the New York Supreme Court affirmed portions of the dismissals, but reinstated the case to determine if the statute violated the Commerce or Due Process Clauses. Amazon and Overstock then appealed their facial constitutional challenges to New York’s highest court, the New York State Court of Appeals.

In deciding the case, the New York State Court of Appeals wrote that it was bound by the U.S. Supreme Court’s holding in Quill Corp. v. North Dakota 504 U.S. 298 (1992), which found that physical presence in the state itself did not need to be substantial in order to establish a nexus with that state. All that is required is more than a “slight presence.” In Quill, the Supreme Court found that a mail-order business that solicited business in a state absent any other physical presence was sufficient to satisfy the nexus requirement. Drawing parallels between Quill‘s mail-order business and the internet retailers’ in-state solicitations, the New York Court of Appeals found that the presence requirement was satisfied so long as economic activities were performed in the state by a seller’s employees or on its behalf. As such, no facial violation of the Commerce Clause occurred.

Similarly, the New York Court of Appeals found that there were no facial violations of Due Process under Quill. The Court of Appeals determined the Commerce and Due Process challenges to be “closely related” and noted that physical presence was not necessary to trigger the Due Process Clause. In support of this holding, the Court of Appeals noted that under Amazon and Overstock’s compensation schemes, New York website owners were paid directly for referrals that resulted in purchases. The Court of Appeals determined that this direct correlation between compensation and referrals illustrated that New York residents were encouraged to actively solicit customers in the state, thus subjecting them to state taxes.

Growing Popularity of Internet Taxation

New York is not the only state that is aggressively moving toward the expansion of click-through taxation. Since 2008, click-through nexus statutes have grown in popularity and spread to several other states. Many states have similarly revised their definitions of terms such as “vendor,” “maintaining a place of business,” and “doing business in” to include remote sellers into their definition of characters susceptible to that respective state’s nexus requirement. Currently, Arkansas, California, Colorado, Connecticut, Georgia, Illinois, New York, North Carolina, Rhode Island, and Vermont have similar click-through statutes. Additionally, Florida, Hawaii, Indiana, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, New Mexico, Pennsylvania and West Virginia have introduced nexus legislation that target remote sellers.

The complete erosion of internet tax exemptions seem to be imminent as states that are in desperate need of funds are looking for new ways to collect additional tax dollars. However, this trend is not just prevalent in state legislatures. In fact, there is currently an Internet Sales Tax law called the “Marketplace Fairness Act” advancing through the United States Congress that would effectively allow 45 states and the District of Columbia to demand that online retailers collecting more than $1million per year in sales collect sales tax on all purchases – irrespective of the internet retailer’s physical presence in a specific state.

This bill is expected to pass the Senate soon and has been projected to result in the collection of between $22 billion and $24 billion in additional tax revenue. The National Retail Federation and many brick-and-mortar retailers are supporting these initiatives due to the loss of traditional retail sales to the online marketplace. They also argue that uniform taxation across these different sales channels could help level the playing field between all retailers.

Small businesses and e-commerce sites, on the other hand, are not as thrilled. There are approximately 9,600 individual tax jurisdictions throughout the United States, all of which have unique tax laws and regulations. While there is significant infrastructure and software to help businesses keep track of the different applicable tax regulations, one can expect significant switching costs for implementation and training – costs that will likely hit small internet businesses and start-ups the hardest.

In support of small business e-commerce sites, EBay has most recently become a part of the efforts to fight these proposed taxing schemes. Recently, EBay CEO, John Donahoe, urged EBay’s merchants to write their respective congressmen and express their disagreement with the legislation. Donahoe has made the claim that the proposed tax legislation would be harmful to small businesses and suggested that the threshold for this tax be raised from the proposed $1 million per year in sales to $10 million per year in out-of-state sales and less than 50 employees. This proposal that could be considered reasonable when, as John Donahoe noted, Amazon makes more than $10 million of sales every 90 minutes.

Concluding Thoughts

As this issue progresses, it will be interesting to see how courts will reconcile internet tax legislation like the Marketplace Fairness Act with the “more than a slight” presence requirement outlined in the Quill holding. The expansion of internet taxation seems to be inevitable, and in the event that the Marketplace Fairness Act becomes law, there will be even less of a connection between the respective taxing jurisdictions and internet retailers. Consequently, we may see the Quill case interpretation broadened; further altering the historic interpretation of the Commerce Clause to keep pace with modern technology.

While consumers and small businesses will likely feel the effects of this proposed legislation the most, it is important to note that irrespective of internet retailers’ presence, the responsibility has been on consumers to report uncollected taxes on internet purchases from day one – a responsibility that has for the most part been ignored. In the states’ defense, they are not creating any new responsibility to pay taxes or arbitrarily taxing retailers, but rather attempting to reconfigure legislation so as to ensure that these sales taxes are actually being collected. From an economic standpoint, this should not be very shocking. About $20 billion in uncollected tax funds are being left on the table, an amount that is too large for states desperately seeking additional revenue to overlook any longer. Long story short, it looks like the free ride may be over for savvy shoppers and the internet retailers who have shifted tax savings to their customers.

The attorneys at Fuerst Ittleman David & Joseph, PL have extensive experience litigating against the IRS and the U.S. Department of Justice and have appeared before the U.S. Tax Court, the various U.S. District Courts, the U.S. Court of Federal Claims, and the various U.S. Courts of Appeal. You can contact an attorney by emailing us at contact@fidjlaw.com or by calling us at 305.350.5690.

FDA Issues Two Warning Letters for Social Media Use: FDA Does Not Approve of “Liking” Consumer Claims and Targets Website Search Results

In 2009, the U.S. Food and Drug Administration (FDA) announced that it intended to release a guidance document explaining how it will regulate industry’s use of social media to advertise products or communicate with consumers. As of today, the FDA still has not done so, and as a result, a regulatory gray area has been created, wherein industry is forced to weigh the risk of reaching out to its consumers through popular forms of social media, such as Facebook or Twitter, with no clear guidelines regarding how to do so. Despite the FDA’s failure to provide industry with any guidance on the proper use of social media in compliance with federal laws and policies, the FDA has not backed down from taking enforcement action for what it views as improper use of social media channels.

FDA Takes Enforcement Action Against Advertiser for “Liking” Consumer’s Facebook Comment

On December 11, 2012, the FDA issued a Warning Letter to AMARC Enterprises (“AMARC”) for claims made on its Facebook account that purportedly promoted its dietary supplement, PolyMVA, as a drug intended for use in the cure, mitigation, treatment, or prevention of disease. (To read the FDA’s Warning Letter to AMARC Enterprises, please click here.) Specifically, the FDA noted that the PolyMVA Facebook page “liked” a comment posted by a consumer, which stated that “PolyMVA has done wonders for me. I take it intravenously 2x a week and it has helped me tremendously. It enabled me to keep cancer at back without the use of chemo and radiation”¦Thank you AMARC.” This claim was included as one of several examples of the company promoting PolyMVA “for conditions that cause the product to be a drug.”

In issuing this Warning Letter to AMARC, the FDA took an unprecedented position on the use of social media to promote or advertise FDA-regulated products. Specifically, this Warning Letter implies that the FDA views the company’s act of “liking” comments or posts on Facebook as akin to adopting or endorsing the underlying claim itself. Although the FDA did not elaborate on or specifically explain how “liking” a user’s comment constitutes drug promotion, it seems that the FDA perceives “liking” a third-party’s comment as creating an implied disease claim. The FDA’s Warning Letter sends a strong message to industry that it should be cautious in its use of Facebook’s “like” function because “liking” a comment or post could inadvertently result in closer FDA scrutiny of those consumer claims. It remains to be seen whether the FDA’s unofficial policy regarding “liking” Facebook comments will be extended to other popular social media venues, such as Twitter, where users can “re-tweet” or “favorite” a message, or Google+, where users can “+1” a post.

FDA Holds Advertiser Responsible for How Consumers Interpret Computer-Generated Search Results

In a second Warning Letter to M.D.R. Fitness Corp. (“M.D.R. Fitness”) dated January 29, 2013, the FDA took the company to task regarding its website. (To read the FDA’s Warning Letter to M.D.R. Fitness, Corp., please click here.) Specifically, the FDA noted that typing well-known diseases like “cancer” or “diabetes” into a search field on the product’s website returned a list of the company’s dietary supplement products. According to the FDA’s Warning Letter, the results of this search create the implication that M.D.R. Fitness is promoting its dietary supplement products “for conditions which cause the products to be drugs” that are “intended for use in the diagnosis, cure, mitigation, treatment or prevention of such diseases.”

Even though the FDA only mentioned the company’s search engine as a passing comment in a list of other deficiencies, this statement has the potential to have significant effects on the regulation of industry. The FDA’s Warning Letter suggests that manufacturers can be held responsible for any associations consumers may make between a disease and a dietary supplement, including any information generated through a search engine. It is unclear whether the company’s search function strategically manipulated the results to include its dietary supplement products or whether the search function is built upon a dynamic tool like Google. This Warning Letter raises serious questions about the extent to which the FDA will hold manufacturers responsible for search results on their own websites and consumers’ interpretations of those search results. Based on the limited information in the M.D.R. Fitness Warning Letter, it seems likely that the FDA is now targeting manufacturers for creating implied drug claims based on no more than search results.

FDA Continues to Delay Release of Guidance on Social Media Use

In 2009, the FDA expressly stated that it planned to develop and issue guidance on the use of social media; however, the FDA has yet to issue any additional information or policies specifically related to the use of popular social media websites, such as Facebook, Twitter, or Google+. Other federal agencies, on the other hand, have recently provided some clarification on how to communicate information to the public through these social media outlets in compliance with federal laws and policies. For example, in March 2013, both the Federal Trade Commission (FTC) and Securities and Exchange Commission (SEC) released guidances that clarified how they intend to regulate the use of social media. (Please click here to access the FTC’s new guidance entitled “.com Disclosures: How to Make Effective Disclosures in Digital Advertising” and click here for more information about the SEC’s policy on the use of social media networks.) The FDA specifically stated that it has “placed developing social media guidance at the top of its work plan for 2013.” (For more information, please read the FDA News announcement here.) However, drug marketers may need to wait as late as a July 9, 2014 deadline for more detailed FDA guidance on allowable medical product promotions via the Internet and social media.

The FDA’s Warning Letters to AMARC and M.D.R. Fitness suggest that the FDA is in the process of shaping its enforcement policies regarding social media use. However, in the absence of any further guidance or information from the FDA regarding the use of social media to promote or advertise FDA-regulated products, industry will continue to face the challenge of operating these social media channels relatively blindly. Although it remains uncertain whether the FDA will continue to patrol search results on product websites or take enforcement action against companies for their use of social media prior to issuing a formal guidance document, these Warning Letters serve as notice to industry to exercise caution.

Fuerst, Ittleman, David & Joseph, PL will continue to monitor the developments in the FDA’s regulation of social media use. For more information, please contact us via e-mail at contact@fidjlaw.com or via telephone at (305) 350-5690.