News in September 2019

The U.S. Justice Department has charged 35 defendants with carrying out an alleged Medicare fraud scheme that charged the government $2.1 billion for tests for genetic links to cancer.

The complaint alleges the tests were unnecessary and that the defendants -- including nine doctors -- pushed patients to undergo these tests and then billed the taxpayers.

“These defendants allegedly duped Medicare beneficiaries into signing up for unnecessary genetic tests, costing Medicare billions of dollars,” said Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division. “Together with our law enforcement partners, the department will continue to protect the public and prosecute those who steal our taxpayer dollars.”

The wide-ranging investigation covered a number of different states in the South. U.S. Attorney Peter Strasser for the Eastern District of Louisiana said the defendants specifically targeted elderly and disabled patients, enticing them to undergo unnecessary tests that resulted in huge losses for Medicare.

“Schemes such as these have a profound effect on our nation, not only by the monies lost in the scheme but also by stoking public distrust in some medical institutions,” Strasser said. 

Dozens of companies named

The 35 defendants in the action represent dozens of telemedicine companies and cancer genetic testing laboratories. The government claims these companies convinced a large number of Medicare patients that the tests were necessary or would improve their odds of avoiding cancer.

Investigators say the defendants took advantage of the recent popularity of DNA testing to convince patients -- seniors in particular -- that the tests could be beneficial to their long-term health. However, the government charges that, in some cases, the tests were worthless and in others, they weren’t even administered. But Medicare got a bill.

“The defendants are alleged to have capitalized on the fears of elderly Americans in order to induce them to sign up for unnecessary or non-existent cancer screening tests,” said U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida. “The genetic testing fraud schemes put personal greed above the preservation of the American health care system.”

Federal officials say the scope and sophistication of the alleged health care fraud “are nearly unprecedented.” The defendants in the case are based in Florida, Georgia, South Carolina, Texas, and Louisiana.

Forever 21 filed for bankruptcy over the weekend and said it would be restructuring in an effort to focus on the “profitable core part of its operations.” 

The clothing retailer, which has 815 stores in 57 counties, said it plans to shutter most of its international locations in Asia and Europe; however, it said it will continue operations in Mexico and Latin America. The chain has requested court approval to close up to 178 U.S. stores. 

"The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords,” the retailer said in a statement.

Restructuring effort

In a letter to customers, Forever 21 said the restructuring will allow it to “continue to operate its stores as usual.” The company added that it’s taking “positive steps to reorganize the business so we can return to profitability and refocus on delivering incredible styles and fashion you love for many years to come.” 

“This was an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and reposition Forever 21,” said Linda Chang, Executive Vice President of Forever 21. 

Forever 21 said it received $275 million in financing from its existing lenders, with JPMorgan Chase Bank NA as agent. It received another $75 million in new capital from TPG Sixth Street Partners and certain other affiliated funds.

“With this capital, Forever 21 intends to operate in a business as usual manner, honoring all Company policies, including gift cards, returns, exchanges, reimbursement and sale purchases. Forever 21 will use these proceedings to right size its store base and return to basics that allowed the Company to thrive and grow into the fast fashion leader,” the company said.

String of bankruptcy filings

Forever 21 joins a growing number of retailers that have been forced to file for bankruptcy in response to competition from online retailers and changing consumer preferences. Sears Holdings, Toys “R” Us, Payless ShoeSource, and others have all struggled to stay afloat over the past two years. 

In addition to competition from online sites, Forever 21 has also had to contend with younger consumers’ increasing preference for sustainable fashions. 

“Younger and more environmentally conscious shoppers are also choosing brands that ethically source garments instead of retailers that use cheap fabrics to make T-shirts that are snapped up for $5,” Reuters noted. “Resale sites like thredUp.com, which calls itself the largest online thrift store, are also growing in popularity.” 

On Monday, Vermont senator and Democratic presidential candidate Bernie Sanders published a tax plan that would involve raising taxes on businesses led by CEOs who make at least 50 times more than their average employee. 

Under the proposal, many U.S. companies would be forced to pay significantly higher annual taxes. Walmart, for example, would have paid up to $793.8 million more in taxes if the plan had been imposed last year, according to the campaign. 

"The American people are sick and tired of corporate CEOs who now make 300 times more than their average employees, while they give themselves huge bonuses and cut back on the healthcare and pension benefits of their employees," Sanders said. "It is time to send a message to corporate America: If you do not end your greed and corruption, we will end it for you."

Sending a message to large corporations

Sanders said the plan would apply to all private and public companies with annual revenues of more than $100 million. The estimated $150 billion the plan would raise over the next decade would go towards eliminating U.S. medical debt.

“The revenue generated from this income inequality tax will be used to pay for Bernie’s plan to eliminate medical debt,” Sanders said. “But the goal of this income inequality tax is not just to raise more revenue. It is to send a message to corporate America: stop paying your workers inadequate wages while CEOs make outrageous compensation packages.” 

Sanders says the public wants the nation’s largest companies to "pay their fair share of taxes."

“The American people want corporations to invest in their workers, not just dividends, stock buybacks and outrageous compensation packages to their executives,” Sanders said of the proposal. “That’s what this plan is all about.” 

The presidential hopeful has taken aim at large corporations before. Last September, he introduced a bill that would tax companies like Walmart, McDonald’s, and American Airlines an amount equivalent to the value of the government benefits their workers are forced to rely on. He also successfully lobbied for Amazon to raise its minimum wage. 

Two new reports suggest consumers are beginning to feel some of the pain that has slowed other parts of the U.S. economy.

The Commerce Department reports consumer spending was practically flat in August, despite it being a prime month for back-to-school purchases. Spending was up just 0.1 percent from July. Consumers spent more on recreation and cars but less at restaurants and hotels.

Whether the reduced spending was linked to tariffs on Chinese consumer products remains to be seen, but the drop in spending coincided with some tariffs taking effect and the announcement of others.

A second report suggests another possible reason consumers might be spending less. A monthly tracking report from CompareCards.com shows consumers’ confidence in their ability to pay their credit card bills continues to decline. The recent trend is an abrupt change from earlier in the year when the report showed consumers were putting more purchases on plastic but were highly confident they could pay for them.

"Trillion-dollar credit card debt and sky-high card APRs are finally taking a toll on U.S. cardholders' confidence when it comes to paying off their credit card balances," said Matt Schulz, chief credit card analyst at CompareCards.com. "For years, Americans seemed to successfully navigate the growing debt, but it was only a matter of time before the mountain of debt started to cause real issues.”

Struggling to pay credit card debt

The report shows fewer consumers are paying their credit card balances in full each month. In fact, 23 percent said they didn’t pay their bills in full a single time over the last six months. That’s the highest percentage since CompareCards began tracking the statistic.

On the flip side, just 38 percent of consumers with credit cards say they are “very confident” they will be able to pay their credit cards' statement balance in full this month. That's the lowest in the 13-month history of the index.

Schulz says it isn’t immediately clear what’s behind the shift and how long it will last. What is clear, he says, is that cardholders today aren't feeling as good about their credit card bill as they did just a few months ago.

Politics can be a contentious subject for some consumers, and a new study conducted by researchers from the University of Nebraska-Lincoln confirms that it is also a major source of stress. 

The researchers found that stress-related symptoms might be worrisome for some consumers, as the study revealed that politics has lead to sleepless nights and overall feelings of sickness. 

“It became apparent, especially during the 2016 electoral season, that this was a polarized nation, and it was getting even more politically polarized,” said researcher Kevin Smith. “The cost of that polarization to individuals had not been fully accounted for by social scientists or, indeed, health researchers.” 

Physical manifestations of stress

The researchers analyzed data from an analytics firm and conducted a survey to determine how politics was affecting consumers’ stress levels. Participants answered questions about their overall attitudes towards politics, as well as the effects it had on their mental health, social life, physical health, and overall behaviors. 

“Stress is a real phenomenon that can have disastrous health effects,” said Smith. “If politics is a significant contributor to the levels of stress that American adults are experiencing, then yeah, it makes sense that there’s a real add-on health effect from that. If we understand what’s causing it, that can lead us to ameliorative strategies.” 

Ultimately, 40 percent of survey respondents reported feeling stressed in some way because of politics, with over 31 percent saying they were overwhelmed by hearing opposing viewpoints. The survey also revealed that politics made participants more short-tempered while also negatively affecting their health and overall mood. 

“Quite a few of the numbers jumped out at me,” said Smith. “Twenty percent have damaged friendships because of political disagreements. One in five report fatigue. And it’s a small (proportion), but four percent of the people in our sample said they’ve had suicidal thoughts because of politics. That translates to 10 million adults.” 

These findings confirm what a study from earlier this summer revealed, citing that a good number of social media users are sick of the endless barrage of political posts on their feeds. The researchers plan to continue doing work in this area to better understand consumers’ ideologies and how these issues are affecting them on a day-to-day basis. 

U.S. Food and Drug Administration (FDA) officials are warning pet owners not to buy Performance Dog frozen raw pet food produced on or after July 22, 2019. 

The agency said it collected two samples of raw pet food manufactured by Bravo Packing -- Performance Dog, as well as a beef variety -- during a routine inspection of the company’s manufacturing plant.

“The sample of Performance Dog raw pet food lot 072219 tested positive for Salmonella and L. mono,” the FDA said in a statement. “The sample of the beef raw pet food tested positive for Salmonella, but the product had not yet been distributed.” 

Should be discarded

The FDA recommends throwing away any Performance Dog products purchased on or after the date specified. All 2-pound and 5-pound plastic pouches of Performance Dog frozen dog food are involved in the recall.

The agency added that it’s concerned that consumers may still have these products in their possession since they’re sold and stored frozen. 

Although no pet or human illnesses have been reported, health officials said the product “represents a serious threat to human and animal health.” Symptoms of the infection include vomiting, diarrhea, fever, and loss of appetite.

“People with symptoms of Salmonella or L. mono infection should consult their health care providers,” the FDA said. “Consult a veterinarian if your pet has symptoms of Salmonella or L. mono infection.” 

This isn’t the first time Bravo Packing has been forced to issue a recall. In September 2018, another sample of the Carney’s Point, N.J-based company’s pet food also tested positive for contamination. 

Mercedes-Benz USA(MBUSA) is recalling 1,478 model year 2020 GLE 350 4MATICs and GLE 450 4MATICs.

The owner's manuals do not include information regarding the adjustment of the head restraints of the third row seats.

Improperly adjusted head restraints increase the risk of injury to the third row seat passengers in the event of a crash.

What to do

MBUSA will notify owners, and dealers will provide a supplementary owner's manual with the necessary information free of charge.

The recall is expected to begin November 8, 2019.

Owners may contact MBUSA customer service at (800) 367-6372.

Mylan has agreed to pay $30 million to settle charges that it failed to disclose to investors the impact of a DOJ investigation into its EpiPen overcharges, the Securities and Exchange Commission (SEC) announced on Friday. 

In its complaint, the SEC accused Mylan of significantly overcharging Medicaid for EpiPen allergy treatment devices. 

Several years ago, Mylan wrongly classified EpiPen as a generic drug under the Medicaid Drug Rebate Program. As a result, Mylan ended up paying lower rebates to the government than if EpiPen had been classified as a brand-name drug. 

A Justice Department investigation into the matter was initiated after the Centers for Medicare and Medicaid Services informed Mylan that it had misclassified EpiPen as a generic drug. The drug maker settled the charges in October 2016 but failed to immediately disclose to investors its $426 million liability prior to the deal, the SEC said. 

‘Investors were kept in the dark’

"As alleged in our complaint, investors were kept in the dark about Mylan's EpiPen misclassification and the potential loss Mylan faced as a result of the pending investigation into the misclassification," said Antonia Chion, Associate Director in the SEC's Division of Enforcement. "It is critical that public companies accurately disclose material business risks and timely disclose and account for loss contingencies that can materially affect their bottom line."

Mylan agreed to pay $30 million to settle the charges without admitting or denying wrongdoing. 

“Mylan believes at this time, taking all other matters into consideration, that this settlement is the right course of action for the Company,” the company said in a statement. 

Mylan added that it continues to be “committed to the highest levels of integrity with respect to all aspects of its business operations, including its public filing disclosures and communications with investors.” 

There’s nothing to let travelers know where personal space perpetrators, seat kickers, or other etiquette offenders are sitting on a flight, but if you’re a flyer who agonizes about being seated close to a baby, one airline is rolling out the means to give you a heads-up.

Japan Airlines (JAL) has made the first move in letting passengers know what seats have been selected by other fliers traveling with children between 8 days and 2 years old. When a traveler goes to select their seats online, a child icon will appear on those seats. Whether those travelers want to seek out solace somewhere else on the flight is up to them.

It’s not a perfect system, though. JAL wants fliers to know that where those child icons show up might not be correct if the aircraft changes after booking. Seats booked as part of a tour, through the use of awards, or seats chosen through any other way than the JAL website aren’t part of the system either. 

Other airlines offer something similar, but not in the same technology-driven manner as JAL. Abu Dhabi-based Etihad Airways offers free flying nannies on some long-haul flights; Scoot Airlines, Singapore Air's budget brand, has child-free seating zones; and AirAsia X has a "quiet zone" on its flights, albeit for a $15 upcharge.

Improving the industry

Some travelers may think that the federal government should regulate seating. However, the Federal Aviation Administration (FAA) doesn’t hold that same view.

In spite of complaints about potential safety issues caused by the shrinking sizes of seats and legroom, the agency says it’s not in that business and it “has no evidence that there is an immediate safety issue necessitating rule-making at this time.”

Fliers have no “bill of rights,” per se. However, while flying continues to be low on the list of things consumers look forward to, airlines and airports are both doing what they can to turn that perception around. 

Airports are going as far as creating mazes, selling tacos, offering ice rinks, and even making 24/7 animal care and veterinary services available to travelers while they wait. And the airlines? There’s a lot of infrastructure that has to be modified, but airlines are trying to catch up to the digital age by offering charging outlets and free Wi-Fi.

For high school athletes, focusing on practice and athletic achievements can be a top priority. Spending hours at practices or in training can be rather common. 

While there are countless benefits for kids who are involved in sports, a new study found that overworking the body during athletic training could impact the brain. 

“The lateral prefrontal region that was affected by sport-training overload was exactly the same that had been shown vulnerable to excessive cognitive work in our previous studies,” said researcher Mathias Pessiglione. “This brain region therefore appeared as the weak spot of the brain network responsible for cognitive control.” 

How decision-making is affected

To get a better understanding of how physical fatigue affects the brain, the researchers had nearly 40 competitive male athletes participate in the study. Half the group increased their training regimen by 40 percent, and the other half remained consistent in their athletic training over the course of three weeks. 

All of the participants received fMRI scans and filled out questionnaires every two days of the study so the researchers could gauge how the training was affecting them both mentally and physically. The team learned that participants felt the fatigue from excessive training in more than just their bodies -- their brains were affected too. 

Overall, participants who increased their training over the course of the study reported feeling more physically tired than their counterparts who stayed consistent in their exercise routines. However, that fatigue also affected their decision-making and led to riskier choices. 

The researchers explained that these findings are important because with compromised decision-making, some athletes may not recognize when it’s time to call it quits for the day and could push their bodies past their limits. The researchers hope that consumers can use these findings to better understand their bodies and know when it’s time to rest -- and just how beneficial that rest can be. 

“You need to control the automatic processes that make you stop when muscles or joints hurt,” said Pessiglione. “Our findings draw attention to the fact that neutral states matter: you don’t make the same decisions when your brain is in a fatigued state.”

If you signed up for DoorDash before April 5, your personal information may have been compromised. The food delivery service reports a data breach that may affect as many as 4.9 million consumers.

In a blog post, the company said that in addition to customers, delivery personnel and restaurants may have been affected by the breach.

Company officials say the breach apparently occurred on May 4 of this year, but it was not discovered until nearly four months later. The company pins the blame on a third-party service provider but DoorDash declined to name the company.

“Earlier this month, we became aware of unusual activity involving a third-party service provider,” the company said in its blog post. “We immediately launched an investigation and outside security experts were engaged to assess what occurred.”

The investigation revealed that an “unauthorized third party” accessed some DoorDash user data on May 4, 2019. 

“We took immediate steps to block further access by the unauthorized third party and to enhance security across our platform. We are reaching out directly to affected users,” the company said.

What the hackers got

The company believes the hackers gained access to customer profile information that includes names, email addresses, delivery addresses, order history, phone numbers, as well as hashed, salted passwords — a form of rendering the actual password indecipherable to third parties.

It does not appear the hackers got away with customers’ credit card data. The company says in some cases the hackers may have gotten the last four digits of credit cards, but not the full number nor the CVV number, which is often required to make an online purchase.

For about 100,000 delivery personnel, the company says hackers may have gained access to their driver’s license numbers.

If your information was compromised expect to receive contact from DoorDash in the near future. The company said it is reaching out to those affected with instructions about what they should do.

While it is not believed passwords were compromised in the breach DoorDash says it may be prudent for those affected by the breach to reset their passwords.

Gasoline prices have leveled off after increases triggered by an attack on Saudi Arabian oil fields earlier this month. The exception is California, where prices are sharply higher due to refinery issues.

The AAA Fuel Gauge Survey shows the national average price of regular gas is $2.65 a gallon, a penny less than a week ago. It’s seven cents higher than a month ago. The average price of premium gas is $3.24, up a penny in the last seven days. The average price of diesel fuel is $3.01 a gallon, two cents higher than last Friday.

California added to its lead as the most expensive state for gasoline, with the statewide average rising nearly 13 cents a gallon in the last week. Refinery bottlenecks have temporarily reduced available fuel supplies, causing prices to rise.

GasBuddy’s head of petroleum analysis, Patrick DeHaan, reported at mid-week that the price at the pump in some California markets was closing in on $4 a gallon. The price is moving in the other direction in Michigan, falling 11 cents a gallon in the last seven days.

Elsewhere, prices were mostly stable because gasoline stockpiles rose. The Energy Information Administration (EIA) reports domestic fuel supplies rose by 500,000 barrels last week, helped by a big increase in gasoline imports. The extra supply came in handy since consumer demand for gasoline rose slightly.

The states with the most expensive regular gas

These states currently have the highest prices for regular gas, according to the AAA Fuel Gauge Survey:

• California ($3.84)

• Hawaii ($3.68)

• Washington ($3.21)

• Nevada ($3.18)

• Oregon ($3.07)

• Alaska ($2.98)

• Arizona ($2.91)

• Utah ($2.81)

• Pennsylvania ($2.79)

• Illinois ($2.78)

The states with the cheapest regular gas

The survey found these states currently have the lowest prices for regular gas:

• Mississippi ($2.32)

• Louisiana ($2.32)

• Arkansas ($2.33)

• Alabama ($2.34)

• South Carolina ($2.34)

• Virginia ($2.36)

• Texas ($2.37)

• Tennessee ($2.38)

• Oklahoma ($2.38)

• Missouri ($2.38)

Randsland Farms is recalling Randsland brand Super Salad Kits and Randsland brand Kale.

The products may be contaminated with Listeria monocytogenes.

There have been no reported illnesses associated with the consumption of these products.

The following products, sold in retail stores in the Canadian provinces of New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island, are being recalled:

What to do

Customers who purchased the recalled products should not consume them, but discard or return them to the store where purchased.

Consumers with questions may contact the company at (902) 670-3139.