razors raise antitrust concerns | Mortgage Services Settlement of $ 86 Million | Creative alleged tax avoidance | Cozen O’Connor

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2020 GA elections

AG in the news

It’s election and awards season for the National Attorneys General Association

  • District of Columbia AG Karl Racine has been elected president of the National Association of Attorneys General (“NAAG”) for 2021, replacing the outgoing president of the NAAG, Montana AG, Tim Fox. AG Racine chose “The People v. Hate: Standing Up for Humanity ”as a presidential initiative.
  • Montana AG and 2020 NAAG President Tim Fox received the annual Kelley-Wyman Award, NAAG’s highest honor, awarded for doing the most to achieve NAAG goals.
  • The NAAG presidential election and awards ceremony were part of NAAG’s annual Capital Forum, which was held virtually this year on December 2.

Antitrust

FTC ends P&G acquisition of DTC Razor start-up Billie

  • The FTC company, Billie, Inc. (“Billie”). According to the FTC press release, the complaint is based on claims that the proposed acquisition would eliminate growing competition in the wet shaving razor market.
  • The FTC says Billie, which sells mid-level women’s razors, is in direct competition with market leader P&G and has seen her online sales increase dramatically in the two years since its inception. The FTC says the proposed acquisition would eliminate competition between the two companies and that the announced deal had already derailed Billie’s planned expansion into brick-and-mortar stores, which the FTC said would have benefited consumers through a stronger competition in retail stores.
  • The FTC has said it intends to file a lawsuit in federal court for a temporary restraining order and a preliminary injunction to stop the deal pending an administrative trial.

Consumer Financial Protection Bureau

Mortgage agent agrees to pay more than $ 86 million to settle lawsuits by CFPB, attorneys general

  • The Consumer Financial Protection Bureau (“CFPB”), a multi-state group of 51 AGs and 53 state bank regulators have entered into an agreement with Nationstar Mortgage, LLC, d / b / a Mr. Cooper (“Nationstar”) to resolve allegations that he mismanaged thousands of mortgages in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Homeowner Protection Act, Real Estate Settlement Procedures Act and its implementing regulations, Regulation X and the consumer protection laws of the respective states.
  • The CFPB complaint alleged, among other things, that Nationstar failed to identify and honor borrowers ‘loan modification agreements, excluded borrowers to whom it had promised foreclosure, unduly increased borrowers’ monthly loan payments despite the changes made to their accounts, and failed to properly manage borrowers’ escrow accounts.
  • Under the judgment stipulated by the CFPB and the concurrently filed consent judgment with the States, Nationstar will pay approximately $ 86 million in recoveries, fees and penalties to consumers, including a civil fine of $ 1.5 million to the CFPB. . The CFPB regulation also requires Nationstar to create a comprehensive compliance plan for mortgage loan management, including revised policies and procedures regarding error resolution, escrow account management, and service transfers.

Consumer protection

Massachusetts Attorney General Sues Medicare Company Over Allegations It Deceptively Marketed Supplemental Insurance Plans

  • Massachusetts AG Maura Healey sued health insurance company HealthMarkets, Inc. and its subsidiaries (collectively “HealthMarkets”) over allegations that HealthMarkets misled consumers into purchasing infringing supplemental health insurance products of the Massachusetts Consumer Protection Act and a 2009 consent judgment ordering the parent company and two other subsidiaries to behave similarly.
  • The complaint alleges that HealthMarkets tricked consumers into seeking traditional health insurance into buying unnecessary supplemental health insurance instead. Further, the complaint alleges that HealthMarkets’ advertising was misleading because, among other reasons, it claimed that its sales agents were objective, their services were free, and that they represented all insurers, but in reality they were being enticed with higher commission rates to sell HealthMarkets supplemental insurance, consumers sometimes had to pay fees for the services, and they did not represent all carriers.
  • The lawsuit seeks forfeiture or suspension of HealthMarkets’ rights to do business in Massachusetts, declaratory and injunctive relief, restitution, civil monetary penalties, and attorney fees and expenses.

False statements

New York supermarket chain resolves tax evasion claims

  • New York AG Letitia James has reached an agreement with the owner of the supermarket chain Hi Jong Lee and its supermarket chain (collectively “Food World”) to resolve allegations of fraudulent tax evasion in violation of the New York False Claims Act , the New York Tax Act, and Executive Law.
  • According to the stipulation and the settlement agreement, which stems from a whistleblower lawsuit, Food World allegedly avoided paying taxes by using lottery cash registers that were not connected to the store’s sales system to process purchases. supermarket items that were not declared for income or sales tax. for tax purposes at the time. Additionally, Food World is said to have avoided taxes by generating fake merchandise return receipts and paying the majority of Food World employees in cash and off books to avoid tax deductions.
  • Under the terms of the settlement, Food World will pay $ 4.7 million, of which approximately $ 3.7 million will go to the state and $ 1 million to the whistleblower. In addition, Food World will pay $ 110,000 for whistleblower attorney fees and costs.

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