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Tax Underreporting, FDA Import Lawsuit, Project OPEN: State Attorneys General January 9 Update

Litigation

New York AG Eric Schneiderman and New York’s Acting Commissioner of Taxation and Finance Nonie Manion announced on January 4 the “conviction of Gary Mole, . . . the former CEO of Glacial Energy Holdings (“GEH”), stemming from the underreporting of over $18.5 million dollars in taxable income” by Glacial Energy of New York (“GENY”), a GEH subsidiary, according to a press release. Both GENY and Mole pleaded guilty to and were convicted of Criminal Tax Fraud in the Second Degree. The press release states that “[i]n approximately 2006, Mole allegedly began personally investing taxable revenue of GENY in a mining operation in the Democratic Republic of Congo, . . . known as ‘Gemico,’” and between 2006 and 2008 “diverted over $18.5 million in taxable revenue from GENY to Gemico.” Mole and GENY then “improperly deducted the monies invested in Gemico as consulting expenses on GENY’s tax returns for years 2006, 2007 and 2008, thereby understating GENY’s New York State taxable income by millions of dollars,” and in so doing “evaded a total of over $670,000 in New York State income taxes,” according to the press release. As a condition of his plea, Mole “repaid $335,000 in restitution to the State of New York,” per the press release.

Texas AG Ken Paxton announced on January 3 that his office “filed a lawsuit against the U.S. Food and Drug Administration (FDA) for illegally delaying the state’s importation of thiopental sodium,” according to a press release. Thiopental sodium is used by the Texas Department of Criminal Justice “as part of enforcing lawfully imposed capital sentences through lethal injection.” According to the press release, the drug has been “detained by the FDA for over 17 months without the FDA issuing a final decision on the admissibility of the drug, in gross violation of the FDA’s legal obligation to issue a ruling within a ‘reasonable’ time period.” Specifically, the FDA is withholding “based on allegations that the drug violates three provisions of the new drug approval requirements,” however the drug “falls squarely within the ‘law enforcement’ exemption of that rule and is not for patient use,” according to the press release. AG Paxton said that there were only “two reasons” for the FDA to take 17 months to issue a final decision: “gross incompetence or willful obstruction.” The AG’s office’s complaint asks the court to “declare the FDA’s delay unlawful and compel the FDA to make a final decision on the admissibility of the drugs,” according to the press release.

Advocacy

New Mexico AG Hector Balderas has announced a new initiative “aimed at attacking opioid abuse in the state,” according to an Associated Press report in The Fresno Bee. The anti-opioid initiative – named “Project OPEN: Opioid Prevention & Education Network” – is intended to educate the public on “New Mexico’s opioid crisis,” according to the report. The report notes that opioids “are the main driver of drug overdose deaths nationwide and in New Mexico” and that in 2015, only seven other states had higher overdose rates than New Mexico. The initiative’s “kick-off event,” scheduled for January 11th in Albuquerque, will feature workshops ranging from “treatment options to identifying fraud,” according to the report.

© Copyright 2017 Squire Patton Boggs (US) LLP

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About this Author

Clark Kent Ervin government investigations partner Squire Patton Boggs law firm attorney
Partner

Clark K. Ervin is a member of the Litigation Practice, helping clients under investigation, or facing the prospect of investigation, by federal Offices of Inspector General, to craft, coordinate and implement strategic defenses. An integral member of the firm’s Defense Policy Practice, as well as its International Policy Practice, Clark also provides invaluable counsel to clients on issues of national security and foreign policy.

Having served as Inspector General of three federal agencies during the administration of President George W. Bush,...

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Benjamin D. Tarbell, Squire Paton, Government Enforcement Lawyer,
Attorney

Benjamin Tarbell draws on his experience in regulatory policy to assist clients in the technology and communications sectors, specializing in matters before government agencies including the Federal Communications Commission (FCC).

While attending law school, Ben clerked full-time for Commissioner Ajit Pai of the FCC. In that role, he worked alongside the Commissioner’s advisors to draft statements, speeches and agency publications, and advise the Commissioner on FCC issues including the Broadcast Incentive Auction, media ownership, market competition and mergers, AM Radio spectrum allocation and licensing, program access, program carriage, public safety and Next-Generation 911, Connect America funding, Universal Service Fund compliance, the TCPA and Title II forbearance.

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