Attorney General Bondi gives Broward Health deep discount in fraud settlement

By Dan Christensen, FloridaBulldog.org 

Florida Attorney General Pam Bondi

Eighteen months ago, the office of Florida Attorney General Pam Bondi demanded Broward Health pay more than $5.3 million to settle state Medicaid fraud claims uncovered during a federal whistleblower probe that cost Broward Health $69.5 million.

On Monday, Broward Health’s commissioners gleefully approved paying instead $1.5 million to settle with the state.

“Obviously we would have preferred zero, but we need to get this behind us and have it over done,” said Commissioner Linda M. Robison, the board’s secretary/treasurer.

Commission Chairman Rocky Rodriguez called the settlement payout “a drop in the bucket.”

No explanation was given to explain the deep discount that Broward Health got.

Florida Bulldog reported the state’s claim on Broward Health in March 2106 after Bondi’s office released a copy of the state’s demand letter in response to a public-records request.

The precise amount originally sought was $5,325,671, which Assistant Attorney General Jill Bennett informed Broward Health’s lawyers “represents damages recoverable under the Florida False Claims Act.

“This settlement demand amount is based upon (the) North Broward Hospital District having entered into financial relationships with physicians that violated the Physician Self-Referral Law, the Florida Anti-Kickback Statute, Florida statutes and the Florida False Claims Act,” Bennett’s letter said.

The North Broward Hospital District is Broward Health’s legal name.

Scheming to defraud

The letter accused Broward Health of scheming to defraud Medicaid with nine of its doctors who had been given improper and illegal contracts. The various contracts were in force for between six and 14 years. The doctors named in the letter were George Caldwell, Michael Chizner, Violeta McCormack, Hector Rodriguez-Cortes, Rudolph Roskos, John Rozanski, Ashok Sharma, Erol Yoldas and Shazia Zafar.

Coincidentally, commissioners on Monday renewed for two years Broward Health’s employment agreement with Dr. Rodriguez-Cortes. Rodriguez-Cortes is the Medical Director for pediatric hematology oncology services at the Salah Foundation Children’s Hospital at Broward Health Medical Center in Fort Lauderdale.

The state’s allegations mirrored the federal Medicare/Medicaid fraud case against Broward Health.

Broward Health General Counsel Lynn Barrett announced the settlement at Broward Health’s regular board meeting. “We thought this is a very, very good settlement,” she told commissioners while recommending they approve the deal.

Negotiations that led the state to significantly discount its own claim also put an end to concern that the state might go through with its threat to sue in Leon County Court and seek treble damages and civil penalties of not more than $11,000 for each false claim that Broward Health submitted.

Florida and the federal government share the cost of the state’s Medicaid program, which provides medical coverage to low-income individuals and families.

Huge debt-relief fraud in Pompano Beach bilks $70 million from thousands of victims

By Joseph A. Mann Jr., FloridaBulldog.org 

Jeremy Lee Marcus, accused of bilking thousands of consumers in a $70 million fraud, as pictured in a February 2016 press release by his Helping America Group.

In a debt-relief scheme that affected about 15,000 people across the country, three telemarketing executives headquartered in Pompano Beach and using a branch in Panama bilked victims out of an estimated $70 million, according to the Florida Attorney General’s Office, the Federal Trade Commission (FTC) and the attorney working to retrieve assets in the complex case.

A civil complaint filed recently in federal court in Fort Lauderdale by the Attorney General’s office and the FTC alleged that telemarketers at several of the companies managed from the Pompano Beach office building offered to consolidate personal debts for customers, pay off, settle or obtain dismissals for these obligations and improve their credit ratings.

Customers were allegedly convinced to pay from a few hundred to more than a thousand dollars per month to one of the so-called debt-relief companies that were part of the scheme, according to the complaint.

In most cases, no payments were made to reduce these debts. Moreover, customers ended up becoming victims: They incurred even greater indebtedness thanks to fake loans obtained from the companies, loans that were supposedly being used to pay their pre-existing debt. Some customers were sued by their old creditors or were forced into bankruptcy.

Running since 2013 with a headcount reaching around 150 managers, telemarketers, administrative staff and others, this South Florida-based operation was shut down in May by a federal judge who issued a preliminary injunction and asset freeze order affecting the individuals and companies involved.

The court also appointed a Receiver, Jonathan E. Perlman, a shareholder at the Miami-based law firm Genovese Joblove & Battista and an attorney with extensive experience in receivership roles. His formidable task is to sift through the maze of companies, accounts and financial operations to recover funds for defrauded customers.

Defendants – human and corporate

On May 8, the FTC and the State of Florida filed a complaint seeking an injunction with the U.S. District Court of the Southern District of Florida. (Case No. 17-cv-60907-Altonaga) The defendants in the case were Jeremy Lee Marcus, who was described by the Receiver as the CEO and an owner of the group of companies in the debt relief operation; Craig Davis Smith, the COO and also an owner; and Yisbet Segrea, an executive who ran the office in Panama, plus dozens of corporate defendants controlled by the individual defendants. These included 321Loans Inc., Financial Freedom National Inc., Helping America Group, Marine Career Institute Sea Frontiers Inc., Instahelp America Inc. and Breeze Financial Solutions.

Receiver Perlman believes there could be more than 80 companies involved as corporate and related defendants, but that 23 are currently investigation targets since they offer the best potential for recovery, he told the Florida Bulldog.

The Pompano Beach office building described by authorities as the headquarters for the multi-million dollar fraud. Photo: Joseph A. Mann Jr.

The companies operated as a “common enterprise” through an interrelated network with commingled funds, all allegedly controlled by the three defendants, the complaint says.

According to the FTC and Florida Attorney General’s complaint, these are the basics: The defendants made their money by promising customers large debt consolidation loans at attractive rates, or by telling customers they were taking over the task of servicing consumers’ pre-existing debt relief accounts. In both cases, customers paid the defendants millions of dollars under the false premise that these alleged debt-relief companies would pay off, settle or obtain dismissals of consumers’ debts and improve their credit ratings.

In fact, there were no actual loans. Defendants kept most of the loan payments and paid very little or nothing toward reducing their customers’ debts. Eventually, the victims found out that no one was paying their original debts, their accounts were in default and their credit scores had suffered. In some cases, original creditors filed lawsuits against the consumers and some were forced into bankruptcy.

One scam victim, Derek S. from Vero Beach, told about his experience with the debt-relief group in an April affidavit.

Two years ago, he said, he did a Google search for a debt consolidation firm and found Helping America Group (HAG), one of the corporate defendants. “At that time, I was current on my debts and was making the minimum payments monthly,” he said in the affidavit. “I was looking for a company to consolidate my debt and to make one lower monthly payment.”

A fake loan

After calling HAG and learning about their services, Derek was told that another defendant firm, 321Loans, would be making the loan to him and would pay off his creditors. The loan, a fake, was for a total of $10,835 plus interest at 9.99 percent. He was also told to stop paying his creditors, not to talk to them and that another group firm, Breeze Financial, would help improve his credit score.

He started making monthly payments to Paralegal Support, still another firm in the group, and subsequently called several times to ask for a progress report. He was told “it would take time to negotiate the debt.”

A few months later, he called two of his creditors, who said they never heard of HAG or 321. He tried to cancel his agreement but was not allowed to do so until after he had filed complaints with the Florida Attorney General and the Better Business Bureau. Last December, 321Financial – another element in the scheme — issued a cancellation letter and a refund of $200.13.

“I paid thousands of dollars to HAG/321 and they did not do anything they promised,” he said. “My debt effectively had been doubled.”

The joint state-federal complaint filed last May states that the defendants were in violation of the Federal Trade Commission Act, the FTC’s Telemarketing Act (covering consumer fraud and abuse) and the FTC’s Telemarketing Sales Rule (TSR). The Florida Attorney General brought the action under the state’s Deceptive and Unfair Trade Practices Act and the Telemarketing Act.

The defendants, who are free, have denied any wrongdoing. While the current case against the defendant group is a civil action, a criminal suit could be filed in the future, according to an attorney familiar with fraud actions.

The FTC and the Florida Attorney General’s office declined to comment on the progress of the case, since it is still open.

Finding customers and making the pitch

The scheme attracted potential victims by using Internet advertising and websites, direct mail and unsolicited phone calls. The defendants also bought presumably legitimate debt-relief firms and acquired their clients’ names as well as personal and financial information. Here’s how it allegedly worked:

  • Companies in the group used ads on their websites or sent personal letters to the potential client’s home address. Sometimes falsely identifying themselves as nonprofits, they offered low-interest loans so a consumer could combine all debts and make one payment at a more favorable interest rate. For example, a typical letter sent by one of the group companies, 321Loans, offered up to $35,000 at 4 to 7 percent interest to cover debts from credit cards, private student loans, accounts in collection, medical bills, etc. The letter said the credit was pre-approved.
  • The group supplied its Pompano Beach telemarketing staff with training manuals that taught “The Art of the Sale.” Some nuggets from the manuals: “The more time you spend qualifying (researching) the prospect, the less time you will waste pitching unqualified people for hours only to find they HAVE NO $$$,” and “so remember your ABC’s – Always Be Closing!”
  • When people called a “customer approval center” (or when sales staff made unsolicited phone calls), prospects were told that a loan would be made to cover the full amount of their debt, plus interest. The loan would be used to pay off all indebtedness, and the lucky consumer would only have to make monthly payments that were much less than what they were paying. The companies told consumers they could provide low-interest loans because their nonprofit status allowed them to borrow at favorable rates.
  • While potential clients were still on the phone, telemarketers emailed them a link to a document designed to look like a loan agreement. Consumers clicked on highlighted areas to initial and sign the agreement, which committed them to pay back the loan and fees, wherever applicable. The 50 to 75 page document in fact contradicted the sales pitch made by the telemarketers.
  • Consumers agreed to have their bank accounts debited immediately for their first loan “repayment” or for a processing fee. Then monthly “repayments” were automatically taken from their accounts, ranging from $200 to over $1,000.  Few or no payments were made to creditors, and a consumer with, say, $8,000 in old debts, would owe the pre-existing amount, plus the $8,000 “loan” taken out from a defendant company.
  • When consumers were told by original creditors that none of their bills had been paid, dismissed or settled, the defendant companies strung them along with false explanations, such as more time was needed to validate the consumers’ debts or to confirm payoff amounts. Clients who called to complain were given excuses and treated badly. Sometimes, the only contact number available was disconnected.
  • In another aspect of this scam, the group, using mostly outside legal counsel, worked with some clients who were sued by creditors before the operation was shut down in May, according to the Receiver’s Amended First Interim Report filed in June. In these cases, the group’s attorneys ironically won large claims for clients related to supposed violations of the Telephone Consumer Protection Act or the Florida Consumer Collection Practices Act by credit card companies. But clients only received a small portion of the damages. For example, one client received $1,000 from a law firm working with the group after a credit card company paid a total of $80,000. Many cases followed a similar pattern, and some customers apparently were not aware of the amount of the total settlement.

Recovering assets for victims

“I’m essentially the CEO of this defunct enterprise,” Perlman, the court-appointed Receiver, told the Florida Bulldog. “My main goal is to conserve and protect all the assets of the receivership.”

Assets – cash and a wide range of real estate – include a 50,000 square foot headquarters building at 1410 SW 3rd St., Pompano Beach. Other tenants in the building who were unrelated to the defendant group continue to provide revenue to the receivership.

So far, the receivership has served over 30 banks with orders for records, and continues to look for other financial institutions that might be a source of assets.

Perlman told a Florida Bulldog reporter that the information his office has gathered so far indicated that “the amount taken from customers has been $70 million, and continues to rise.” It will increase as more bank records come in. The estimate in May was $50 million.

“We come in unannounced and serve papers to all the institutions we know about,” he said. “We try to obtain money and other assets voluntarily. If not, you take it to the judge.”

While the receivership is identifying and seizing assets related to the case, reimbursement to victims will come after the asset search is completed and the current civil proceeding resolved.
Perlman’s team has set up a website, www.321loansreceivership.com, to inform victims and the public about developments in the receivership process. Currently, he is the Temporary Receiver, but has petitioned the court to be named Permanent Receiver.

Florida Attorney General demands Broward Health pay $5.3 million for Medicaid fraud

By Dan Christensen, FloridaBulldog.org 

Florida Attorney General Pam Bondi

Florida Attorney General Pam Bondi

The Florida Attorney General’s office has demanded that Broward Health pay more than $5.3 million to settle state Medicaid fraud claims uncovered during a federal whistleblower investigation.

Broward Health paid $69.5 million to settle the federal case last summer. The arrival of Attorney General Pam Bondi’s ominous demand seeking millions more in state damages comes amid snowballing legal troubles at the beleaguered North Broward Hospital District.

The specific settlement demands $5,325,671, an amount that Bondi’s office said is “recoverable under the Florida False Claims Act.”

“If this matter is not resolved through settlement, we may pursue Florida False Claims Act litigation in Leon County Circuit Court, seeking treble damage and civil penalties of not more than $11,000 for each false claim submitted,’’ says a March 10 letter signed by Assistant Attorney General Jill Bennett.

Bondi’s office released a copy of the letter in response to a public records request from FloridaBulldog.org.

Florida and the federal government share the cost of the state’s Medicaid program, which provides medical coverage to low-income individuals and families.

The letter accuses Broward Health of participating in an illegal scheme to commit Medicaid fraud with nine of its doctors. The letter says Broward Health violated the federal Physician Self-Referral Law, the Florida Anti-Kickback Statute and the Florida False Claims Act.

The state’s allegations mirror the federal Medicare/Medicaid case made against Broward Health.

A page from the PowerPoint presentation shown to Broward Health's board of commissioners by the district's lawyers on Aug. 20.

A page from the PowerPoint presentation shown to Broward Health’s board of commissioners by the district’s lawyers on Aug. 20.

The nine physicians whose contracts Florida contends were “improper and in violation of’’ the Physician Self-Referral Law are the same doctors identified earlier in the federal probe. Those contracts date as far back as 2000.

The doctors: orthopedists George Caldwell and Erol Yoldas; cardiologists Michael Chizner, Violeta McCormack, John Rozanski and Ashok Sharma; oncologists Hector Rodriguez-Cortes, Rudolph Roskos and Shazia Zafar.

Bondi’s office declined further comment “as this matter is active and ongoing.”

Broward Health Chairman David Di Pietro said, “We’ll look into the legality of the claim and figure out the best way to resolve it in the best interest of the district.”

FloridaBulldog.org reported in October that the Justice Department had discussed the case with Bondi’s office last June and that Bondi’s office was reviewing the matter.

In advance of the federal settlement, the district’s lawyers cautioned that Bondi could sue to recover Florida’s Medicaid losses from the scheme.

“I don’t think it’s likely,” said attorney Linda Baumann, of Washington, D.C.’s Arent Fox. Still, she said, it was possible if Florida needs “some extra money, because it’s a relatively easy way.”

A ‘scheme of mutual enrichment’

Federal court documents describe the huge Broward Health healthcare fraud as an illegal “scheme of mutual enrichment” between the hospital system and its doctors.

The settlement capped a five-year-old federal investigation that began with a 2010 federal False Claims Act lawsuit filed in secret by whistleblower Dr. Michael Reilly. The government paid the Fort Lauderdale orthopedic surgeon a $12-million reward, or a bit more than 17 percent of the settlement amount.

Broward Health paid Reilly an additional $860,000 for attorney’s fees and costs, bringing the district’s outlay to $70.4 million. That did not include more than $11 million the district has paid to Baumann’s law firm for legal advice in the matter.

The state’s Medicaid damages claim is the latest in a series of recent shocks to Broward Health, a public hospital system that provides services to both paying clients and those who can’t afford to pay.

The late Dr. Nabil El Sanadi, Broward Health's chief executive. Photo: WSVN

The late Dr. Nabil El Sanadi, Broward Health’s chief executive. Photo: WSVN

The first blow came Jan. 23 with the suicide of the district’s CEO/President Dr. Nabil El Sanadi. Two more shocks hit on Jan. 29, the day of El Sanadi’s funeral.

The first came in a letter from Gov. Rick Scott’s Chief Inspector General Melinda Miguel, announcing that her office would conduct a review of every contract entered into by Broward Health since July 1, 2012. The second was contained in an email to Broward Health’s board of commissioners from well-known Miami private investigator Wayne Black, who’d been quietly hired by El Sanadi in the spring of 2015 to look into alleged corruption.

Black’s email disclosed the existence of an FBI investigation into possible procurement fraud, kickbacks and other crimes at Broward Health, and asserted that Broward Health General Counsel Lynn Barrett had not cooperated and had withheld evidence. Barrett has denied Black’s claims.

A few weeks later, FloridaBulldog.org reported that a Fort Lauderdale federal grand jury had subpoenaed Broward Health’s records about former procurement officer Brian Bravo and 16 companies that do business with the district. The records sought go back 10 years.

Counsel Barrett generated significant controversy in early February when she advised the board to meet “in the shade,” that is not in public, to discuss Black’s assertions about her. The attorney general’s office later issued an opinion declaring Barrett’s advice to be wrong.

In the following weeks, FloridaBulldog.org disclosed recent plans by Broward Health to award a $71.4 million no-bid contract for advertising to a politically connected advertising firm, Zimmerman Advertising. Months earlier, Zimmerman threw a fundraiser for Broward County Judge Nina Di Pietro, the wife of Broward Health Chairman David Di Pietro.

The Bulldog also reported last month that in 2012 Broward Health’s board of gubernatorial appointees awarded a 25-year, no-bid contract to provide radiation oncology services to a company with financial ties to Gov. Scott. The contract is with 21st Century Oncology, a Fort Myers cancer care company that’s owned by Vestar Capital Partners.

Scott’s financial disclosure files indicate that at the time of the board’s vote to award the contract he owned a $210,000 indirect interest in 21st Century Oncology via his investment in Vestar Capital. 21st Century Oncology later donated nearly $400,000 to Gov. Scott’s re-election campaign.

More controversy followed news that Broward Health Acting President/CEO Kevin Fusco signed deals in February to pay a total of more than $400,000 in hush money to the district’s former chief financial officer who was fired after publicly criticizing the proposed $71.4 million no-bid deal with Zimmerman Advertising. Fusco, whose signing authority is limited to $250,000, did not seek board approval for that deal, or a second deal that paid another executive $537,000 to go away quietly.

On Wednesday, the board voted to replace Fusco as chief executive and installed Pauline Grant as Interim CEO/President. Grant was chief executive of Broward Health North in Pompano Beach.

Di Pietro led a push to fire General Counsel Barrett, but failed on a 4-3 vote of the board. Instead, Barrett was put on a 30-day review plan and her performance will be considered again next month.

Florida education on trial; Lawsuit seeks to redefine public education to benefit poor

By Eric Barton, FloridaBulldog.org flaed

A case that could fundamentally change how Florida funds and administers education is center stage in a trial that begins next Monday in a Tallahassee courtroom.

The lawsuit, brought by a public advocacy group, wants a judge to declare the state’s public education system unconstitutional. Such a ruling could require lawmakers to envision a new way to fund schools that would seek better parity between the rich and the poor.

The trial is expected to be a rebuke of Florida’s public education system. Parents, teachers, school administrators and a slew of experts will seek to prove the state has failed to provide a quality education to public school students.

In its defense, the state will attempt to demonstrate that Florida’s public schools are among the best in the nation. In a written response to inquiries from the FloridaBulldog.org, Meghan Collins, spokeswoman for the Department of Education, claimed the lawsuit “ignores the success we have had in Florida schools.

“Working with local education officials, the state remains focused on providing every student in Florida with the opportunity to receive a great education,” Collins wrote.

Critics, however, say Florida schools fail minority and poor students, a fact that’s reflected in graduation rates.

“There are some serious inequities, especially for African-American students and students where English is a second language, in Florida public schools,” said H. Richard Milner, director of the Center for Urban Education at the University of Pittsburgh and an expert for the plaintiffs. “Structures and mechanisms are not in place to make sure poor and minority students are not underserved in the state.”

Leon County Circuit Judge Gene Reynolds III

Leon County Circuit Judge Gene Reynolds III

The non-jury trial that begins March 14, and is likely to last five weeks, will be presided over by Leon County Circuit Court Judge George Reynolds III. The trial stems from a lawsuit filed in 2009 by Citizens for Strong Schools. The little-known nonprofit was formed in 2008 in hopes of improving education in Alachua County where it supported a local property tax increase passed by voters to help pay for public schools. It has since raised about $12 million annually.

A constitutional amendment

The suit backers pin their case on a constitutional amendment voters passed in 1998 that declares education of children “to be a fundamental value” and requires the state to make education a “paramount duty.” The amendment says the state must “make adequate provision for a uniform system of free public schools” within “an efficient, safe, secure, and high quality system.”

The amendment, however, doesn’t define what the state must do to live up to that requirement. Using a set of statistics and experts, the plaintiffs contend the state has failed its public school students. Perhaps most damaging to the state’s cause: Florida ranks among the lowest states in the nation in per-pupil funding, according to the U.S. Census Bureau.

Attorney Neil Chonin Photo: University of Florida, Bob Graham Center

Attorney Neil Chonin
Photo: University of Florida, Bob Graham Center

The lead attorney representing the group is Neil Chonin, a lawyer for 54 years who retired from his Miami firm to work for Southern Legal Counsel, a nonprofit public interest law firm based in Gainesville. The three-attorney office faces a team of lawyers from the Florida Attorney General’s Office. “This is certainly a David versus Goliath case,” Chonin said from his Tallahassee office.

Florida’s lead is Jonathan A. Glogau, special counsel chief of the Attorney General’s Complex Litigation Office. He declined comment, as did the Attorney General’s spokesperson.

Department of Education spokeswoman Collins, in a written response, noted that Florida “has had historic K-12 funding for the last two years.” That repeats a claim Gov. Rick Scott made in October, apparently in reference to the over-all education budget, which supporters say has reached its highest level in recent years.

However, it’s a claim PolitiFact Florida ranked false, because per-student spending is lower than it was in the 2007-2008 school year and is dramatically down when accounting for inflation.

In court documents, the state has indicated it plans to call 16 witnesses, mostly state-level administrators, including Pamela Stewart, the Florida Department of Education commissioner. The state will also use several experts, including from the conservative, but nonpartisan Hoover Institution and the University of Arkansas. Also expected to take the stand in support of the state will be Frank Brogan, chancellor of the Pennsylvania state system of higher education and former Florida lieutenant governor. Brogan didn’t return an email and phone message left at his office, and the state’s other experts declined to comment, citing the ongoing lawsuit.

successA key to the state’s defense will be to insist that it’s reasonable to assume some schools and some students will underperform. “To the extent that deficiencies exist in certain schools, those deficiencies are not caused by nor can they be remedied” by the state, Glogau wrote in Florida’s response to the lawsuit.

The state will also employ statistics to show successes of Florida’s education system. Collins noted in her statement that Florida’s high school graduation rate has increased 18 percentage points since the 2003-04 school year. Over that period, the graduation rate for black and Hispanic students has increased 22 percentage points.

The plaintiffs, however, plan to show that there’s another side to those statistics and that Florida nevertheless remains nine percentage points below the national graduation rate of 80 percent. Only six states and the District of Columbia have lower graduation rates than Florida.

Worse for minorities and poor

Chonin says it’s worse for minorities and the poor. Only 59 percent of black students graduate in Florida, compared to the national average of 67 percent. It’s similar for economically disadvantaged students, with only 60 percent graduating, compared to a national average of 70 percent.

“It blew me away when I first started realizing how many kids in the state can’t read and don’t graduate,” Chonin said. “It’s time we hold the state accountable for failing these kids.”

Milner, the University of Pittsburgh professor, said the case could become a landmark rebuke of public education and could set the standard for similar lawsuits elsewhere in the country.

Rarely has the quality of public education been subject to such a public tribunal, and Milner said the closest comparison may be the landmark 1954 U.S. Supreme Court decision in Brown v. Board of Education, which led to school desegregation. While the Florida case likely won’t lead to any national changes, it could expose flaws in the practice of desegregation, Milner said.

“Schools in Florida are largely still not integrated, with rich white communities providing far better education than poor black schools,” Milner said. “There are still major inequities in public education in Florida, and this lawsuit threatens to expose that.”

Chonin said he can prove at trial that the state has violated the constitutional amendment because it has failed to provide a “uniform and efficient” public school system. The state, Chonin said, funds education using local taxpayers, meaning poorer counties have fewer resources.

“You have counties like Sarasota or Palm Beach that have high property taxes, and then you compare them to Gadsden or Savannah or Jefferson counties,” Chonin said. “Their taxes are far less, and because of that, the performance of their schools can’t compare.”

Jonthan A. Glogau, special counsel at the Florida Attorney General's Office.

Jonthan A. Glogau, special counsel at the Florida Attorney General’s Office.

The plaintiffs will claim the state’s testing methodology is unfair to minorities and serves only to hurt the education process. They have listed 70 potential witnesses, with 40 who could appear in person at the trial. The list includes several instructors. Among them is Alachua County kindergarten teacher Susan Bowles, who refused in 2014 to administer the state’s standardized tests and garnered headlines and public support for her decision. Also expected to testify is Chris Guerrieri, the Jacksonville teacher who writes a blog critical of the state’s education bureaucracy.

School administrators also are expected to take the stand in support of the plaintiffs, including superintendents from Franklin, Hernando, Duval and Alachua counties.

If Citizens for Strong Schools succeeds at the non-jury trial, Judge Reynolds has wide leeway in what he could order. The lawsuit asks the judge to declare that the state has failed to fulfill its constitutional duty to provide a quality education, especially to disadvantaged and minority students. If the judge agrees, he could order the Legislature to rewrite the way education is funded in the state, scrap standardized testing and require new safeguards to assure all students get the same level of education.

Taking sides

Multiple education groups have joined the suit on both sides. Among the groups that oppose portions of the lawsuit is Florida Voices for Choices, which supports voucher programs that allow public school students to attend private schools. Its executive director, former Tampa schoolteacher Catherine Durkin Robinson, says the voucher program lets parents choose the best education model for their children. If lawmakers are forced to create a new funding model for education, voucher programs could be at stake.

“Funding is important, but empowered parents choosing from a robust array of options is more important,” Robinson wrote in an emailed response to questions.

But Broward County Public Schools Superintendent Robert Runcie says the voucher programs have contributed to poor funding for education that has crippled schools in the state. That has meant inadequate salaries for teachers, which leads to more turnover and fewer chances to lure teachers from other professions, he said in a recent interview.

“These are dollars that could positively impact teachers’ salaries and provide a better education for our kids,” Runcie said. “This is not how we should treat the people who are teaching the next generation. Teaching should be a profession like any other where we are providing competitive wages.”

Miami-Dade teacher Liane Harris is expected to testify in support of the lawsuit. She teaches at a Secondary Student Success Center (S3C) in Hialeah, a program for students who have been held behind two or more grades.

In 2014, Harris joined several hundred educators and others in a march in downtown Miami to protest Gov. Scott’s education policies. Harris says the state’s standardized tests have failed low-income kids and cuts from voucher programs have left schools struggling to provide even the basics.

“There are kids being left back, year after year,” Harris said. “These tests and these cuts have failed these children.”

U.S. settles case against Broward Health for millions less than it lost in alleged fraud


By Dan Christensen, FloridaBulldog.org 

Broward Health Medical Center in Fort Lauderdale

Broward Health Medical Center in Fort Lauderdale

The U.S. Justice Department settled a massive healthcare fraud case against Broward Health last month for millions of dollars less than the government lost as a result of the alleged fraud, records show.

Broward Health paid the government $69.5 million to end a vexing investigation begun in 2010 after Fort Lauderdale orthopedic surgeon Michael Reilly blew the whistle on improper financial relationships between the hospital system and its physicians dating back more than a decade. The scheme allegedly cheated American taxpayers, Medicare and Medicaid.

Documents released to FloridaBulldog.org by the North Broward Hospital District under Florida’s public records law add new perspective to the deal that Justice Department attorneys touted as an unqualified achievement.

The records show that even after significantly narrowing the scope of the alleged fraud to facilitate settlement, the government accepted $2.1 million less than its claimed losses, and $5.5 million less than the $75 million in losses that Broward Health itself had calculated.

Likewise, Broward Health was not required to reimburse the government for the costs of the five-year probe by attorneys and agents at both the Justice Department and the Department of Health and Human Services.

“The government’s goal is to change behavior,” said Patrick Burns, co-director of the Washington-based Taxpayers Against Fraud Education Fund. “If in fact you only recover what was stolen, then you have not sent a deterrent message, and when you have a recovery less than what was stolen, you have sent the opposite message.”

Mark Lavine, the South Florida assistant U.S. attorney who helped lead the case against Broward Health, said he was not authorized to respond to media inquiries. He forwarded a request for comment to the public information office, but no response was received before deadline.

Broward Health Chairman David Di Pietro said the $1.27 billion hospital system paid the settlement with funds drawn from its $800 million in reserves.

INCENTIVES TO SETTLE

The documents, including a 115-page transcript of a confidential Aug. 20 meeting between Broward Health’s seven-member board of commissioners and its lawyers, show that a favorable payout number wasn’t the only incentive for Broward Health to settle.

Without an agreement, Broward Health faced the chilling prospect of prolonged and embarrassing litigation with the government seeking excess of $500 million in actual and punitive damages under the False Claims Act. Other risks included a possible expansion of the investigation to include more doctors and exclusion from federal health care programs – the so-called corporate “death penalty.”

Broward Health's healthcare lawyers, Linda Baumann and D. Jacques Smith

Broward Health’s healthcare lawyers, Linda Baumann and D. Jacques Smith

“The vast majority of cases settle. They don’t want to run the risk of being kicked out of Medicare and Medicaid. Exclusion is just too big a threat,” Linda Baumann, a healthcare attorney with Washington’s Arent Fox law firm, told commissioners at the two-hour Aug. 20 meeting.

Commissioners, each appointed by Gov. Rick Scott, voted unanimously to settle that day after viewing a PowerPoint presentation outlining settlement talks and listening to Baumann’s colleague, attorney D. Jacques Smith, call the proposed $69.5 million penalty and a requirement that Broward Health establish a corporate integrity program, “very reasonable.”

The whistleblower investigation kicked off by Dr. Reilly’s False Claims Act lawsuit looked at alleged Medicare and Medicaid fraud that arose from overly generous contracts Broward Health gave to doctors who referred patients for tests and procedures. The federal Stark Law limits financial relationships hospitals may have with referring physicians.

In May 2011, federal agents subpoenaed 10 years of Broward Health’s records from 27 staff physicians. Over the next few years, the inquiry focused on nine doctors the Justice Department was “most interested in,” according to Smith.

Broward Health produced a total of 1.7 million documents. Included were internal emails that attorney Smith told commissioners “weren’t what Linda and I would call ‘best practices,’ okay?”

“Some of the documents we turned over, and some of the things we saw, frankly were troubling,” Smith said.

‘SMOKING GUNS’

But those weren’t Broward Health’s only problematic records. There were thousands of additional documents the government never saw because Broward Health’s lawyers claimed they were privileged due to attorney-client relationships or for other legal reasons.

If the case had continued, government investigators may have been able to get a look at those records. Here’s how attorney Baumann characterized them before the board: “You have documents that are on the privilege log that are not the greatest, but I really didn’t see a huge number of smoking guns.”

A page from the PowerPoint presentation shown to Broward Health's board of commissioners on Aug. 20.

A page from the PowerPoint presentation shown to Broward Health’s board of commissioners on Aug. 20.

The law firm’s PowerPoint presentation provides a breakout by physician of the losses they caused to the government and the liability that resulted for Broward Health. The top five: cardiologist Violeta McCormack, $30.1 million; pediatrician Hector Rodriquez-Cortes, $11.2 million; pediatrician Rudolph Roskos, $9.2 million; cardiologist Michael Chizner, $8.5 million; and hematologist Shazia Zafar, $5 million. Dr. Zafar now works for Memorial Healthcare.

The nine doctors faced no regulatory action or penalties as a result of their involvement in the allege fraud scheme. “The irony of the Stark Law is that all the penalties are directed at the organization and not the doctors,” Baumann explained to Broward Health’s board.

Broward Health doctors with contracts that paid them annual salaries in excess of a million dollars took pay cuts last year when their contracts were renegotiated to make them “commercially reasonable.” Still, a bad taste remained for some commissioners.

“So what do we say, though, when somebody says that Dr. Chizner cost us $8.5 million and is still making $860,000 a year?” asked board chairman Di Pietro.

“Well, you have to be very confident that your current contract is totally squeaky clean,” replied Baumann.

Will Broward Health seek to recover those lost millions by filing clawback lawsuits against its physicians?

“We have not formally considered that option, but likely no,” said Di Pietro, citing legal reasons.

NO ADMISSION OF WRONGDOING

Broward Health, which received $146.1 million in property taxes last year, admitted no wrongdoing in the board-approved settlement. Still, Di Pietro and several other commissioners expressed concern about public accountability – with Di Pietro noting for the record that physician contracts used to be handed out in secret by the board chair, the chief financial officer and the chief executive officer.

“Is there any responsible party still at the district on an executive level?” Di Pietro asked.

“Not that I’m aware of, said Baumann. “To me, the fault lay in an inadequate legal staff to be honest…You just didn’t have hardly any lawyers. And this is a huge organization.”

Meanwhile, Broward Health, a medical safety net for Broward County, faces the prospect of having to pay extra millions for additional misconduct outside the scope of the settlement.

For example, attorney Baumann told the board that a coding audit of Broward Health’s medical records, apparently done by the Department of Health and Human Services, found “a 53 percent error rate” and “no indication of follow up.”

Overpayments to Broward Health from federal healthcare programs now must be returned.

“You know, that’s a million or two. It’s relatively small,” Baumann told commissioners.

Baumann added that Broward Health also is liable for various failures to make required disclosures to the government under the federal Stark Law. “There is going to be money that has to be paid under the Stark self-disclosure,” she said, without elaborating.

Broward Health Chief Executive Officer Dr. Nabil El Sanadi and Di Pietro declined to comment on the coding audit or the district’s other outstanding liabilities saying they were unfamiliar with those matters.

Further, the lawyers warned, Broward Health could face having to pay Florida millions of dollars if state Attorney General Pam Bondi decides to sue under the Florida False Claims Act to recover the state’s Medicaid losses from the scheme.

The Justice Department discussed the case with Bondi’s office in June, but Broward Health has not heard back from the state.

“I don’t think it’s likely,” said Baumann. Still, she said, it’s possible if Florida needs “some extra money, because it’s a relatively easy way.”

Asked Tuesday about Attorney General Bondi’s intentions, spokesman Whitney Ray said, “We plan to review the settlement for any needed action.”

Sex offender convinces appeal court to reverse Broward judge

By Dan Christensen, FloridaBulldog.org 

Fourth District Court of Appeal in West Palm Beach

Fourth District Court of Appeal in West Palm Beach

Every day, state prisoners flood Florida’s courts with appeals and pleadings about their cases that they’ve written themselves. Those pro se filings – Latin for “on his own behalf” – rarely get far.

This spring, however, an inmate sex offender serving a life sentence convinced the Fourth District Court of Appeal in West Palm Beach that a Broward judge erred when she failed to order prosecutors to explain potentially serious discrepancies about his Miranda rights warning form.

The state introduced the Miranda form as evidence at Charles D. Williams’ 1998 trial, but Williams contends the document was a fraud and that police forged his signature. For years, Williams and his family filed public records requests seeking to obtain a copy.

“After serving multiple requests to the Broward County Clerk and the State Attorney’s Office over a course of years, his brother finally obtained a copy of a Miranda waiver form,” says the unanimous order by a three-judge appeal panel. “The date on the form produced differed from the date on the form introduced at trial, and the signature on the form produced varied from the petitioner’s signature.”

The panel ordered Broward Circuit Judge Lisa Porter to require prosecutors and the clerk’s office to respond to the “factual issue of whether the form produced is the same as the form introduced at trial.” If the response doesn’t resolve the matter, Porter was instructed to “hold an evidentiary hearing.”

Imprisoned sex offender Charles D. Williams

Imprisoned sex offender Charles D. Williams

The court issued its mandate to Judge Porter on June 12 after denying a request for reconsideration by Florida Assistant Attorney General Richard Valtunas, who in previous court papers called Williams’ assertions “outlandish allegations of fraud and skullduggery.” The judge had not taken action as of Monday.

Williams, who next week turns 76, was a longtime Pompano Beach resident when Broward Sheriff’s detectives arrested him in 1996 on multiple counts of sexually battering or molesting his teenage stepdaughter. He was convicted after a three-day trial in March 1998. His conviction was upheld on appeal.

Starting in 2006, Williams and his family began filing public records requests for a copy of the Miranda waiver form presented by the state as evidence at his trial. After repeated visits and phone calls, Clerk Howard Forman’s office advised that it didn’t have the form in their file. Meanwhile, the State Attorney’s Office provided a copy, but Williams claims it wasn’t the same form the state used at trial and that the signature on it isn’t his signature.

Williams, housed at the Department of Correction’s South Florida Reception Center in Doral,  petitioned Broward Circuit civil Judge John Bowman in 2011 to compel the state to produce a “true” copy of his Miranda waiver form. He based his claim on the signature discrepancy and “trial testimony from a police officer in which the officer referred to the document as an ‘Affidavit of Conform’ and described the rights on the form differently than as written on the ‘Waiver of Counsel’ form provided by the State Attorney’s Office to his brother,” according to the appellate decision.

Bowman found Williams’ petition legally sufficient and transferred the matter to Porter in the criminal division, where it sat for three years until Porter denied it and entered an order prohibiting Williams from further pro se filings.

“Because the petition established a legally sufficient basis for relief, as determined by the civil court judge, the criminal court judge erred in denying the petition,” the appeal court’s decision says.

Customers accuse Broward flying machine maker of fraud; Attorney General investigating

By: Ann Henson Feltgen, Browardbulldog.org 

A marketing photo for JetLev's Acquaflyer

A marketing photo for JetLev’s Acquaflyer

A Dania Beach firm that sells James Bond-style jetpacks is being sued for fraud by a California watersports company that alleges it lost more than $1 million because equipment it paid for was never delivered and contracts it was counting on were not honored.

Dean O’Malley, president of Newport Beach-based Jetpack America, filed the eight-count complaint against JetLev, a designer and manufacturer of water recreational systems. O’Malley’s firm distributed JetLev products.

O’Malley is not alone in his complaints. The Florida Attorney General’s office is investigating four complaints brought by unhappy customers against JetLev and Matt Rosenblatt, an Aventura resident described in the lawsuit as the company’s chief executive officer.

In addition, BrowardBulldog.org has identified nine other customers – individuals and companies – who accuse JetLev of bilking them. Those customers are from Arizona, California, New York, Texas, Washington, Australia, Canada and the Bahamas.

The lawsuit, filed Dec. 5 in U.S. District Court in Santa Ana, Ca., alleges fraud, breach of contract, misrepresentation, intentional interference with prospective economic advantage, conversion and negligence.

The defendants are JetLev, several affiliated companies, Rosenblatt and Seth Gerszberg, a New York-based financier who took control of JetLev in 2013.

While JetLev’s website is still up and the company remains listed as active in Florida’s corporate records, JetLev’s phone numbers no longer work.

JetLev Chief Executive Matt Rosenblatt, interviewed by CNBC in August 2013.

JetLev Chief Executive Matt Rosenblatt, interviewed by CNBC in August 2013.

In an interview, Rosenblatt denied any wrongdoing, noting he never even got a paycheck from JetLev.

“I have never taken a penny out of JetLev,” said Rosenblatt, adding that he is no longer with the company, but believed it would soon file for bankruptcy. Customers, however, said he remains involved.

Neither Gerszberg or his New York City attorney, Gregg Donnenfeld, responded to numerous requests for comment by phone and email.

JetLev customers, including Jetpack America, say problems began last year after they made down payments on products but never received the equipment or a refund. Victims and former company insiders interviewed for this story say total losses by all customers range from $600,000 to more than $3 million.

THE COMPANY’S BEGINNINGS

Raymond Li, a Canadian inventor, founded JetLev. In 2011, the company introduced its first product – a water-propelled jetpack that allows thrill-seekers to soar up to 30 feet above the water. The devices use a floating pump that forces water up a hose to an apparatus worn by the user. The apparatus expels the water at high velocity, generating lift, according to the lawsuit.

The initial price tag was $100,000, a drawback to all but the wealthy, according to watersports publications and an Associated Press story.

Li went on to develop and patent two lower priced jetpacks – the Aquaflyer and Aquaboard – that retailed for about $10,000 each. The price drop led to an increase in demand.

But by late 2011, Li faced financial problems and Gerszberg became an investor, the lawsuit says.

Gerszberg became co-owner with Li and incorporated JetLev, LLC in Delaware in December 2011, according to corporate records. JetLev replaced Li’s company, JetLev Technologies Inc. In exchange, Gerszberg provided financial backing for the company.

In July 2013, Li assigned his patents to one of Gerszberg’s companies, according to the U.S. Patent and Trademark Office. Within a year, Li left the company and returned to Canada. Around the same time, Gerszberg brought in his friend Rosenblatt to run the company.

Li could not be reached for comment. However, former JetLev employees said Li was forced out and the company owed him money.

Rosenblatt blames Li for JetLev’s financial troubles.

“The former owner left the company in disarray. I came in and cut costs and provided new products,” Rosenblatt said.

JetLev’s corporate papers mention Gerszberg’s affiliation with well-known fashion designer Marc Ecko.

Gerszberg co-owns several companies affiliated with Ecko, a designer of urban hip-hop clothing popular in the 1990s, according to the lawsuit. One of those companies, a chain of retail stores across the United States that exclusively sell Marc Ecko clothing, recently filed for bankruptcy. The chain was later sold to another Gerszberg company, according to the lawsuit

Rosenblatt said Gerszberg pumped close to $5 million total into JetLev, adding that he invested money, too.

In August 2013, Rosenblatt fired many of the 20-some people who worked at JetLev, said Keith Paul, a former employee. Paul said Rosenblatt cut costs to the bone and told employees who threatened to sue for back pay that JetLev might file for bankruptcy.

The lawsuit alleges that Rosenblatt and Gerszberg created another Florida company, Aquaflier LLC, as part of a corporate shuffle intended to dodge Jetlev’s legitimate debts and shield its existing assets “so that Aquaflier could hit the ground running once it had a viable commercial product.’’

VICTIMS TELL SIMILAR STORIES

In interviews, JetLev’s customers identified Rosenblatt as the man who cheated them.

Jeff Gerlitz, a watersports enthusiast from Seattle, said he got caught up with Rosenblatt a year ago when he said he learned that JetLev was going to introduce two new and affordable jetpack products.

“I really wanted one,” said Gerlitz. “Matt said he’d cut me a deal for $8,000 if I’d wire him a $5,000 down payment.”  Gerlitz said he sent the payment in December 2013, but not his item.

In May in flew to Florida, rented a car and went to the address listed for JetLev where he met a few workers. He said he later received an email from Rosenblatt threatening him with arrest if he ever returned to the office.

Persons who complained to the Florida Attorney General’s Office, like those spoke with BrowardBulldog.org, told similar stories: that Rosenblatt wanted money up front, then didn’t deliver. Later, they said, he cut off all communication with them.

As of two months ago, Rosenblatt was still asking clients for money, according to Frazier Grandison, a Fort Lauderdale resident and ex-JetLev employee who said he originally had shares in JetLev and helped the company get on its feet with its initial product. He said he is considering a class action lawsuit against Rosenblatt as he too lost money.

“Rosenblatt is still taking money; a guy from the Bahamas sent in $50,000 a year ago and Matt told him a month ago that if he’d send in another $7,000 he would get the machines in a couple of weeks,” Grandison said in an interview last month.

O’Malley, the president of Jetpack America, said his company was the largest seller and supplier of JetLev products. A year ago, “Matt came in and promised different equipment and models,” O’Malley said, adding that he sent in the required deposits.

“He said he would deliver the products to us in November 2013. But then it was December, March, April and May. I had a number of clients waiting.”

O’Malley said that when he confronted Rosenblatt the JetLev CEO told him he planned to file for bankruptcy and walk away from the company.

But according to O’Malley’s lawsuit, the company has not filed for bankruptcy. A search of the U.S. Bankruptcy Court Website shows no record of a bankruptcy filing for JetLev.

“In fact, JetLev continues to offer jetpack equipment for sale, taking deposits on equipment that has yet to be delivered,’’ the lawsuit states. “Plaintiffs did not discover that JetLev had not gone bankrupt until just recently.”

The Florida Attorney General’s Office has urged victims to file a complaint by phone or online. They can call 1-866-9NO-SCAM or 1-850-414-3990.  To file a complaint online, go to www.myflorida.legal.com

Controversial “Wizard of Claws” dog seller back in business; target of federal lawsuit

By William Hladky, BrowardBulldog.org 

James Anderson’s Teacup Puppies Store at 4001 N Federal Highway, Fort Lauderdale

James Anderson’s Teacup Puppies Store at 4001 N Federal Highway, Fort Lauderdale

“Wizard of Claws” dog seller James Anderson, who shut his business four years ago amid numerous allegations of wrongdoing and a lawsuit by Florida Attorney General’s Office, is back in business in Fort Lauderdale under a new name and again is involved in legal controversy.

Anderson’s new businesses, the Puppy Collection and the Teacup Puppies Store, are the target of a federal lawsuit alleging that he has engaged in unfair and deceptive trade practices.

Also, a former customer of Anderson’s claimed in an interview that Anderson stocks sick dogs.

Competitor Eleonora Bonfini sued Anderson last month alleging he violated a permanent state injunction when he infringed on Bonfini’s federal trademarks, causing unfair competition.

In 2010, Anderson and his wife Gilda consented to a judgment and permanent Injunction after the late Broward Circuit Court Judge Cheryl Aleman found that they and Wizard of Claws had violated state law by misrepresenting to customers the source, pedigree and adult size of their dogs. Many had bought puppies believing that they would stay “teacup-size” into adulthood.

ALLEGATIONS OF MASS-PRODUCED DOGS

The Wizard of Claws case, highlighted by allegations that the pet store sold unhealthy dogs that were mass-produced at puppy mills, made headlines across South Florida.

The injunction was the end result of about 17 lawsuits filed against the Andersons, including suits brought by the Attorney General and the Humane Society of the United States.

The Humane Society’s suit was the first of its kind in its history.

A year before the injunction was finalized, the Andersons filed for bankruptcy and the national Humane Society removed more than 30 puppies from their store.

The injunction ordered the Andersons not to use the words “teacup puppies” and “puppy boutique,” or several variations of those names in any future businesses or web sites.

Bonfini’s business, TeaCups, Puppies and Boutique, is located at 9003 Taft Street, Pembroke Pines. Her website is www.TeaCupsPuppies.com. She has registered the store’s name and a picture of a puppy sitting in a teacup as trademarks.

Anderson’s Teacup Puppies Store is located at 4001 N Federal Highway. His many web sites include www.TeacupPuppiesBoutique.com, www.TeacupPuppiesStore.com, and www.PuppyBoutiqueStore.com. Anderson also shows photographs of puppies sitting in teacups on one of his web sites.

Anderson’s wife’ Gilda, is not connected with Anderson’s new business and is not being sued.

‘SOUR APPLES’ BY A COMPETITOR?

Roberto Stanziale, Anderson’s attorney, said in an interview that the words and picture that Bonfini claims are hers couldn’t be trademarked because they are generic.  The Fort Lauderdale attorney labeled the suit “sour apples” because Anderson “is very competitive in the market”

“Each one of those words is so pervasive in the industry that to say that they have exclusive use of those words is silly,” Stanziale said, adding that Anderson is in compliance with the injunction.

In addition to the trademark infringements, Anderson is misleading customers into believing that are dealing with Bonfini’s company when they order dogs from him, Bonfini’s attorney Miriam Richter said in an interview. Between 20 and 30 customers have complained recently to Bonfini about Anderson’s misrepresentation.

Richter said Bonfini noticed something was amiss during last Christmas’ shopping season when her business dropped by $50,000. Bonfini also heard reports about how Anderson was allegedly misrepresenting his store as her business.

Richter said several customers have given her client statements about the misrepresentation. Two women said they each deposited $2,000 with Anderson’s business to buy puppies after Anderson’s employees told them that were at Bonfini’s store. After they realized that they had been misled, one woman stopped payment through her credit card company and the other woman demanded a refund from Anderson, Richter said.

AN UNHAPPY CUSTOMER

Morgan Rohrhofer purchased a Boston Terrier puppy for more than $1,700 from Anderson’s store in May. Within days of the purchase the puppy got sick. A veterinarian diagnosed the puppy as having giardia, an intestinal parasite.  Dogs become infected by coming in contact with contaminated food, soil, or water.

Rohrhofer sent Anderson an email to complain. “According to the vet he contracted the parasite from where he was picked up given the short amount of time between departure from Teacup Puppies and showing of symptoms,” she wrote.

Rohrhofer said in an interview that she spent nearly $400 in vet bills, but Anderson’s business reimbursed her more than $200. She said her now five-month-old pup, Blake, is still ill and on medication.  

Puppies at Anderson’s store were kept in cramped glass cages, about 1½ foot by two feet, with three to six dogs per cage, she said,” she said. She saw the puppies “crapping on each other,” she said. “That’s how (Blake) got giardia…I’m so glad that I got him out of that situation. It’s so terrible.”

Rohrhofer said her Boston Terrier came from RCW Kennels located in Elk City, Kan.

The Humane Society of the United States in a 2007 video report listed RCW Kennels as a puppy mill. The puppies lived in “worn out wire cages exposing dogs to sharp edges,” the report stated, adding that a Kansas state inspector in 2006 reported that “urine ammonia smell was so strong in an unventilated building that it burned her nose and eyes.”

The Florida injunction states that James and Gilda Anderson may not acquire animals from breeding facilities that they know “or has reason to know” that the animals were kept “in substandard conditions…”

Attorney Stanziale said his client does not buy puppies from suppliers who raise animals in substandard conditions.

“Mr. Anderson is under scrutiny every month about where he purchased the puppies,” he said. The injunction requires Anderson to report his business activities monthly to the state Attorney General’s Office.

Stanziale questioned the Humane Society’s objectivity in labeling RCW Kennels a puppy mill, claiming that the society “has its own interest.” He said the Humane Society wants to steer people to shelters and away from retail stores that sell “beautiful” dogs.

“There is no way in a million years you can sell thousands of puppies that one won’t be sick,” Stanziale argued. “Where would you want to buy a puppy? I would want to buy a puppy from a guy who is being monitored by the State of Florida.”

Molly McFarland, deputy press secretary for the Florida Attorney General, said in an email that her office is not investigating Anderson for any alleged injunction violations.

“Should consumers believe that this company and its owners are in violation of the injunction filed…under the previous administration, we encourage them to contact our office…,” she said.

 

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