Orthopedic Implant Companies Out of Fed Oversight

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Four primary orthopedic implant companies that have been accused of violations to the federal anti-kickback laws are no longer the subject of the U.S. Attorneys offices federal oversight and have also been dismissed from criminal allegations that surgeons had received enormous sums of money as incentives to use their devices.

To avoid prosecution, the companies had agreed to accepting rigorous regulatory compliance procedures and a monitoring program by the federal government. Those agreements drew a great deal of criticism to U.S. Attorney Christopher Christie, when it was revealed that the former Attorney General, John Ashcroft, was appointed by Christie to a monitoring program contract estimated to be worth up to $52 million. Christie, the Republican gubernatorial nominee hopeful, faced some tough questions about his relationship to, and the appointment of federal monitoring program supervisor – former federal Judge Herbert J. Stern. Judge Stern and his law firm were responsible for contributions of more than $20,000 to Christies campaign fund.

When asked about the current relationship in light of the circumstances, Christie simply dismissed the matter as, “typical political stuff …”

After federal prosecutors discovered incidents where orthopedic surgeons had received consultation fees upwards of $200,000 a year for the promotion of products from orthopedic implant companies, the U.S. Attorneys office pursued formal criminal charges alleging the actions were a violation of federal anti-kickback laws that govern Medicare provisioned hospitals and healthcare professionals.

According to the federal prosecutors, the medical device companies were using the consulting agreements as a cover-up for payoffs to use specific implant products for artificial hip or knee replacement operations. Furthermore, the U.S. Attorneys office claim that these payments and fees are commonplace in the industry and may also be accompanied by luxurious gifts, and extravagant trips.

The investigators found evidence that the physicians had actually performed very little to no consulting work whatsoever and had received funds from the orthopedic companies solely for the use of their products, and failed to keep accurate reports disclosing their relationship with the medical device companies to the patients that received the surgery or the hospitals where the surgeries were performed.

Biomet Orthopedics Inc., Zimmer Inc., Smith & Nephew Inc., and DePuy Orthopeadics Inc., agreed to paying $311 million in a civil settlement agreement and accepted a deferred prosecution agreement which would expire should the companies agree to an extended monitoring program and implement stringent reforms.

The appointee to the monitoring of Zimmer Inc., was John Ashcroft. Zimmer Inc., was not willing to disclose the amount that was paid to Ashcrofts law firm. However, according to the firms spokesperson, the payments were around $6 to $9 million dollars a quarter.

Madoff Investors Getting Some Relief from IRS

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Madoff Ponzi Scheme Victims may be able to receive tax relief and refunds by the new IRS guidelines.

Douglas Shulman, Commissioner of the IRS, announced to Congress that the relief is intended for those who incurred losses by Ponzi Schemes such as the one at issue in the Madoff Ponzi Scandal.

If Madoff investors reported and paid taxes on the earnings from their Madoff investment, they may be due a refund on those taxes because the profits reported were never actually realized.

At a Senate Finance Committee hearing, Shulman stated that the investors in some of the cases were actually entitled to a theft loss deduction which is not subject to limits placed on traditional capital losses.

Mr. Shulman continued to state that theft loss deductions may be taken for the year in which the fraud was discovered, except when the investor may have a “reasonable prospect” in recovering the capital loss.

Shulman went on to say that identifying the actual amounts and times of the losses from Ponzi schemes may be “factually difficult” and could take a considerable amount of time to identify the prospects of the lost money.

Shulman, in his testimony to the Senate, continued:

“Some taxpayers have argued that they should be permitted to amend tax returns for years prior to the discovery of the theft to exclude the phantom income and receive a refund of tax in those years The new IRS guidelines do not address that argument.”

From the time that the Madoff scandal was made public, roughly $1 billion in assets have been identified for Madoffs victims. That figure, however, is only a fraction of the $65 billion that Madoff claimed he had possession of. Some have estimated that the Madoff Ponzi Scheme may have cost the IRS as much as $17 billion in lost tax revenues from investors that had earned fictitious profits.

Securities Investor Protection Corp., an organization that backs failed brokerage firms, has already started sending out checks to the victims of the Madoff Ponzi Scheme. Madoffs victims are eligible for up to $500,000 up until July of 09 from the SIPC. Furthermore, Mr. Shulman stated that investors should be aware that they need to deduct the amount they receive from the SIPC from their Madoff investment based “theft loss” deduction.

According to Shulman, the financial statements which were provided to Madoff Ponzi Scheme investors, should be sufficient documentation enough to establish losses for filing tax claims.

Do you need to speak with an attorney about IRS tax relief?
Contact us for a consultation about fraud-related tax losses.

Federal Agencies Publish “Good Importer Practices”

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On January 12, 2009, the Interagency Working Group on Import Safety published draft guidance for industry entitled “Good Importer Practices.” The working group is comprised of the U. S. Departments of Health and Human Services (Food and Drug Administration), Agriculture, Commerce, Homeland Security, and Transportation and the U.S. Consumer Product Safety Commission, the U.S. Environmental Protection Agency, and the Office of the U.S. Trade Representative.

The Working Group organized the guidance into four broad “guiding principles”:

– establishing a product safety management program;
– knowing the product and applicable U.S. requirements;
– verifying product and firm compliance (throughout supply chain and life cycle); and
– taking corrective and preventive action (when necessary).

These principles give importers a roadmap they can follow to ensure that the products they import, and the processes they use to import those products, comply with myriad U.S. statutes and regulations. While the document is not a “how to” guide “ with steps that match up to specific code citations “ the guidance is an indispensible tool for management, which they can use to make sure that they are asking the right questions, and establishing the right programs and processes, for regulatory compliance.

The draft guidance encourages importers to focus on the life cycle of an imported product; for example, from growing and harvesting, to processing, packing, transporting, and distributing. At each step, importers should consider how to implement controls to help decrease the risk that the product could cause harm to people, animals, or the environment. In doing so, importers will help ensure overall regulatory compliance.

The guidance is also important for third-parties in the import process, such as consolidators, shippers, brokers and distributors. In the current regulatory environment, in which the government is focusing on everyones role in the security and safety of imports (and penalizing those who break the rules), even these third-parties should have processes in place to make sure that the importers with whom they work are complying with government rules and regulations.

Following this guidance laid out by the government is essential for all U.S. importers. If you dont follow the roadmap, you may soon be lost.

The complete “Draft Guidance for Industry Good Importer Practices” can be found here.

Let Fuerst Ittleman help you with your roadmap for regulatory compliance. Our attorneys have years of experience in designing programs, policies and procedures to help importers stay on the right path and avoid problems with regulators. Contact us at 305-350-5690 or contact@fidjlaw.com.

A Rosa gallica by any other name?USDA Levies New Requirements on Imported Plants and Plant Products

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The Lacey Act is the U.S. Department of Agriculture’s primary tool for combating illegal imports of wildlife, fish, and plants. Under the Act, it is unlawful to import – or for that matter to “export, transport, sell, receive, acquire, or purchase” – any plant harvested or traded in violation of any state’s laws, or most foreign laws.

Amendments to the Act in 2008 expanded its reach to protect more plants and plant products. (Before these amendments, many of these restrictions only applied to endangered species.) As of December 15, 2008, certain plants and plant products cannot be imported into the United States without an import declaration. This declaration must indentify the following information:

– scientific name of any imported plant (including genus and species),
– value of the importation,
– quantity of the plant, and
– name of the country from which the plant was taken (not just exported).

There are certain types of plants that are exempt from the new amendments. These include “common cultivars” (except trees), common food crops, scientific specimens of plant genetic material used in research, and plants that are to remain planted or to be planted or replanted. The USDA will be defining exactly what is meant by a “common cultivar” in the coming months.

It is important to note that import declarations are also required for plant products. Examples of such products – to the extent that they contain covered plants – include lumber, paper, furniture, sporting goods, musical instruments, vehicles, pharmaceuticals and textiles. The effect for importers will be far-reaching.

An electronic system soon will become available for collecting the information required on the declaration. In the meantime, importers may submit a paper form containing the required information on a voluntary basis. Once the electronic systems are in place, declarations will be mandatory and civil and criminal penalties may apply for failure to comply. Merchandise found to be in violation of these provisions may be subject to seizure and forfeiture.

To help importers generate the required information, USDA’s Animal and Plant Health Inspection Service (APHIS) has developed an online tool for looking up the genus and species names of plants. The tool is invaluable for complying with the new Lacey Act amendments. It can also make you sound smarter as you present your loved one with a gorgeous bouquet of Dianthus caryophyllus.

Fuerst Ittleman has years of experience in meeting USDA and other government agency requirements for the importation of plants and plant products. For assistance with your valuable importations, please contact us at 305 350 5690 or contact@fidjlaw.com.

A Happy, and More Secure, 2009

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Instead of merely wishing its people a “Happy New Year” for 2009, U.S. government regulators have taken many recent actions to ensure that 2009 will be a more secure new year as well – secure from potential threats posed by foreign imports.

U.S. Customs and Border Protection recently (CBP) enacted its “10+2” rule, more formally called the “Importer Security Filing and Additional Carrier Requirements.” This rule requires U.S. importers to provide CBP with ten additional data elements (such as the manufacturer and country of origin) as part of import filings, and requires import vessel carriers to provide two extra pieces of information to the agency. The purpose of this rule is to enhance CBP’s ability to identify high-risk shipments – such as potential weapons for terrorists – before they enter the United States.

Similarly, the Consumer Product Safety Improvement Act (CPSIA) was signed into law in 2008 and gives the Consumer Product Safety Commission powerful new tools to safeguard us from hazardous imported products. The CPSIA is primarily aimed at protecting children from imported toys and other products, which may contain hazardous substances such as lead and other contaminants. It requires that manufacturers – including importers – and private labelers of certain products certify (by issuing a certificate that accompanies the product) that the products comply with all applicable consumer product safety rules.

Joining the fight against potential threats posed by hazardous, imported products, the U.S. Food and Drug Administration’s Food Protection Plan targets the $49 billion worth of food imported into the United States each year, and the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service is busy safeguarding the meat, poultry, egg product, and agricultural commodities coming over our borders every day.

Does all of this regulation make us more secure?

We know so. We have seen melamine-laced consumer products stopped at our ports and disease-infested meats denied entry to the U.S. We have first-hand knowledge of dangerous materials being intercepted by CBP and unsafe medical products kept from entering U.S. commerce.

Thanks to the tireless efforts of these government regulators and the men and women serving at our borders, like you, we are looking forward to a happy, prosperous and more secure 2009.

Best wishes to all of our friends and clients in the coming year!

For more information on how Fuerst Ittleman can assist you in meeting these requirements or your other regulatory or legal needs, please contact us at 305 350 5690 or contact@fidjlaw.com.

International Business Leadership Award 2008

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FHI has been nominated to receive the International Business Leadership Award 2008. This award is sponsored by the Greater Miami Chamber of Commerce. One hundred Corporations were initially nominated and FHI is now in the final twenty five under consideration for the award. FHI has shown great success in the areas considered for the award which are Innovation/Innovative Practices, Long Term Success, Near-Term Achievement, Special Regional Recognition, Community Involvement and Not-For-Profit

FDA Food Protection Plan

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FHI Briefing on Import Prototype Proposal: Accreditation of Global Compliance Verification Services

“The prototype proposed by FHI in June 2005 consists of a voluntary Third Party
Verification and/or Self Certification in the United States. The purpose of this pilot
program is similar to that used in the medical device industry to: (1) provide exporters of
food into the U.S. a proactive review process that could yield more rapid admissibility
decisions at the time of entry; and (2) enable FDA to use its scientific and regulatory
review resources for high-risk food products, while maintaining confidence in the review
by third parties of low-to-medium risk foods as well as certain high risk foods. The
prototype contemplated a program for all food manufacturers. The initial prototype was
formulated as a proposal for implementation as to bottled water.”

To read the full notice in PDF format please click here.

Download Mitchell S. Fuerst’s vCard

Mitchell S. Fuerst, Esq., and Andrew S. Ittleman, Esq.,

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Mitchell S. Fuerst, Esq., and Andrew S. Ittleman, Esq., C.A.M.S. will speak at the International Money Transmitters Convention on November 15–16, 2007 at the Bahia Mar Beach Resort, 801 Seabreeze Blvd., Fort Lauderdale, FL

Link : http://www.nmta.us/portal/page.php?47

Additional information:

The panel : Ask the Experts: Money Transmitters and Money Laundering Prosecutions for The Defense:
– George Brown, Merle, Brown & Nakamura P.C.
– Sam Rosenthal, Curtis, Mallet-Prevost, Colt & Mosle LLP
– Mitchell Fuerst, Fuerst Ittleman
– Andrew Ittleman, Fuerst Ittleman

The IMTC is being organized by the National Money Transmitters Association www.nmta.us in cooperation with the Florida International Bankers Association (FIBA). Anyone who has an interest in the money transfer industry will benefit and is invited to attend, including not only transmitters and their employees, but also agents, bankers, credit unions, micro-finance institutions, professional service providers, folks from all related MSB industries, and government officials.

Fuerst Ittleman Blog

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Fuerst Ittleman brings together specialists in the fields of regulatory compliance (FDA, customs, USDA, EPA and international trade law), tax and tax litigation, anti-money laundering business compliance and litigation, corporate commercial transactions and complex civil and white collar litigation related to these areas.

The firm is located in Miami and represents both domestic and foreign clients before the governmental and international agencies that regulate and influence international commerce and in the Federal and State courts that adjudicate these matters.