Latest news with #kickback
Reuters
5 days ago
- Business
- Reuters
Class action administrators, banks accused of kickback scheme in new lawsuits
May 30 (Reuters) - Leading companies and banks involved in the administration of class action settlements have been engaged in a years-long kickback scheme that eroded payouts to class members in thousands of cases, a pair of new lawsuits alleged on Thursday. The lawsuits filed in federal courts in New York, opens new tab and Florida, opens new tab accused class action service providers Epiq Solutions, Angeion Group and JND Legal Administration of taking illegal payments from Huntington National Bank and Western Alliance Bank in order to maintain dominance in the settlement administration market. The class members who filed the lawsuits said the administrators for years have diverted settlement deposits to the two banks, and in exchange received a cut of profits from them. The lawsuits said the alleged scheme reduced competition in the class action administration industry and illegally fixed prices in violation of U.S. antitrust law. JND in a statement said, "the allegations in these complaints regarding JND are baseless and JND will defend itself vigorously in court." Huntington declined to comment. Epiq, Angeion and Western did not not immediately respond to requests for comment. Prominent litigator David Boies of law firm Boies Schiller Flexner, who represents the plaintiffs, did not immediately respond to a similar request. Court-appointed class action administrators oversee all facets of settlement administration, including notifying class members. They work with banks, which are also appointed, to hold funds and distribute them to class members once a settlement is approved. Huntington and Western, the lawsuits said, oversee more than 80% of the settlement funds in class and mass actions in the United States. Epiq, Angeion and JND oversee more than 65% of the market for class action administration services, according to the complaint. The lawsuits said the rise of interest rates in 2021 spurred the alleged scheme. Settlement administrators threatened to refrain from using the banks if they did not agree to share profits, the lawsuits alleged. The interest rates Huntington and Western provided on settlement deposits should have been higher in a competitive market, the lawsuits said. The lawsuits claimed the settlement administrators have reaped hundreds of millions of dollars in undisclosed kickbacks and compensation from the bank defendants. The cases are Mary Jane Whalen v. Epiq Systems Inc et al, U.S. District Court, Southern District of New York, No. 1:25-cv-04499, and Roger Tejon v. Epiq Systems et al, U.S. District Court, Southern District of Florida, No. 1:25-cv-22453. For plaintiffs: David Boies, Mark Mao, James Lee and Alison Anderson of Boies Schiller Flexner For defendants: No appearances yet Read more: Lawsuit accuses American Arbitration Association of monopolizing consumer market US court reporter group sued over fees, certification rules Law firm Milberg skirts sanctions over fake claims in credit card fees case
CBC
10-05-2025
- CBC
Landlord, case worker named in alleged city kickback scheme
Court documents reveal the name of the landlord and the former housing worker charged in an alleged kickback scheme that, according to an investigation by Ottawa's auditor general, resulted in the city paying inflated rents through a housing allowance program. The landlord is Sandeep A. Aggerwal, 56, who was a director of the corporation Subhkin Canada Inc. He's facing charges of fraud, breach of trust and bribing a municipal employee. That municipal employee is Kim A. Simon, 55. The court documents identify her as a case worker for a public housing program. She's also charged with fraud and breach of trust, as well as accepting a bribe as a municipal employee. The documents allege Simon, in her role as a case worker, helped Aggerwal attain higher rental fees and received "bonuses" in exchange. They allege that both Simon and Aggerwal defrauded the public of money. That matches what the city's auditor general found in a report published last year. The allegations cover the period from Nov. 14, 2023, to Oct. 1 of last year. Aggerwal was receiving payments from city housing programs even before that period, according to city records. In 2020, Aggerwal and Subhkin Canada Inc. received a combined $159,117 in rent supplements and housing allowances from the city. Payments through the program don't appear in 2021 documents. But in 2022, the sum was $129,280. Aggerwal and his company got $106,933 from city homelessness programs in 2023. Those figures do not necessarily represent the entirety of the rent subsidy money, since some funding under the program is provincial. The city's totals only represent subsidies covered entirely through municipal funds. Last year's records, which would reveal the bulk of the payments during the period Aggerwal was allegedly paying bonuses, are not yet available and the city media relations department said it was unable to release the totals at this time. Names revealed in court documents Three other directors of Subhkin Canada Inc., all of whom share Aggerwal's last name, also appear in the payment records and collected tens of thousands of dollars more. None of those three people are facing charges, however. According to Subkhin Canada's website, it is a real estate, property management and land development company specializing in retail, apartment and industrial warehouse projects. Its website says that the company controls more than 300 rental units in the Ottawa area. The corporation is now inactive. Corporations Canada's directory reveals it was discontinued in May of last year. But Aggerwal is still a director of an active Ontario registered corporation called Subhkin Management Inc. Police announced the charges on Monday, but not the names. CBC obtained them from documents police filed with the court to launch proceedings. Aggerwal is due to appear in court on June 10, while Simon's court date is June 13. None of the allegations against Simon and Aggerwal have been proven in court. Simon did not respond to CBC's request for comment posed via Facebook. Reached by phone, Aggerwal said "let me call you back," but did not do so before this article was published. Lengthy fraud investigation The charges follow a lengthy investigation by the Ottawa Police Service's organized fraud section. That investigation was itself triggered by a report the city's auditor general released in December. Responding to a tip through the city's fraud and waste hotline, the auditor general's office found evidence of what she described as a "kickback scheme." Her report alleged that the landlord paid more than $22,000 to the case worker from November 2023 until last October. Her investigation examined banking records and messaging data. In one message, the landlord allegedly referred to the payment as a "bonus" paid in exchange for helping him score higher rents from her clients. According to the auditor general's report, the rents were well above market rates — in one case 63 per cent higher. Those rents were covered in part by housing allowances through a taxpayer-funded rent subsidy program meant to get homeless people off the street and into private market homes. The revelations prompted the city to temporarily pause new intakes into the program late last year, leading to a backlog of applications that worried housing advocates who said it would leave people waiting longer for homes. The auditor general recommended to the city six changes, all of which were accepted. At the time, the city confirmed that the case worker was no longer employed there.
CTV News
06-05-2025
- CTV News
City of Ottawa employee, landlord charged in alleged ‘kickback scheme'
A former City of Ottawa case worker and a landlord are facing charges in connection to an alleged kickback scheme involving a housing allowance program, according to police. Auditor General Nathalie Gougeon released details of a fraud investigation in December 2024, called 'allegations of a kickback scheme.' The Ottawa Police Service's Organized Fraud Section launched an extensive investigation following a review of the documentation provided by the Auditor General. On Tuesday, police announced a former City of Ottawa case worker is facing charges of beach of trust, municipal employee receiving a bribe and fraud over $5,000. A landlord is facing charges of bribing a municipal employee and joint charges for breach of trust and fraud over $5,000. Police did not release the name of the former city employee or the landlord. Gougeon said in December that the city's Fraud and Waste Hotline received a tip alleging a city employee was 'receiving kickbacks from a group of landlords participating in housing benefit programs administered by the city.' 'The investigation revealed that the City of Ottawa employee received over $22,000 in payments from a landlord for services they provided as part of their employment with the City,' the auditor general said in a statement on her website. 'The Auditor General concluded that these actions, as well as additional issues observed during the course of the investigation, represented breaches of the City of Ottawa's Code of Conduct.' Gougeon told the Audit Committee that the kickback payments began in January 2024, 'although the landlords received more favourable rental rates starting in approximately October 2023.' According to the Auditor General's report, rents were as much as 63 per cent above the average market rate for their respective areas. 'We observed multiple instances where Employee A assisted housing clients into entering lease agreement which significantly exceeded the average market rent for the area,' Gougeon told the Audit Committee on December 2. 'We observed evidence that would support Employee A's involvement in the determination of the rental amounts.' City staff told the Audit Committee in December that an employee was fired and a second employee resigned following the Auditor General's investigation. Mayor Mark Sutcliffe said he was glad to see this type of allegation is being taken seriously. 'Whenever there is an allegation of this kind, it needs to be taken seriously, and I'm encouraged by the fact that the processes is being followed and these allegations are being taken seriously,' Sutcliffe told reporters Tuesday afternoon. 'That's why we have a fraud and waste hotline, so that information like this can be brought to the attention of the authorities.' With files from CTV News Ottawa's Ted Raymond
CBC
06-05-2025
- CBC
Police lay fraud charges in alleged kickback scheme involving city housing worker
Ottawa police have charged two people in connection with an alleged kickback scheme involving a City of Ottawa housing program. Police revealed on Tuesday that they have charged a former City of Ottawa case worker with breach of trust, fraud over $5,000 and receiving a bribe while working as a municipal employee. They have also charged a landlord with bribing a municipal employee, as well as breach of trust and fraud over $5,000. Police are not releasing the names of the former case worker or the landlord. They said both accused were released on an undertaking and will appear in court at a later date. None of the charges have been proven in court. Police said the charges followed an extensive investigation by their organized fraud section that was triggered by a report from the City of Ottawa's auditor general. Auditor General Nathalie Gougeon revealed in December that the scheme allegedly resulted in the city paying inflated rents — up to 63 per cent above market rates — to the landlord through a housing allowance program. In exchange for directing clients to the landlord, the former case worker allegedly got about $22,000 in payments, according to the auditor general's report. The payments allegedly took place from November 2023 to October 2024. The city accepted Gougeon's recommendations in relation to the case and confirmed that the case worker in question is no longer employed with the city.
CBC
06-05-2025
- CBC
Police lay fraud charges in kickback scheme involving city housing worker
Ottawa police have charged two people in connection with a kickback scheme involving a City of Ottawa housing program. Police revealed on Tuesday that they have charged a former City of Ottawa case worker with breach of trust, fraud over $5,000 and receiving a bribe while working as a municipal employee. They have also charged a landlord with bribing a municipal employee, as well as breach of trust and fraud over $5,000. Police are not releasing the names of the former case worker or the landlord. They said both accused were released on an undertaking and will appear in court at a later date. None of the charges have been proven in court. Police said the charges followed an extensive investigation by the organized fraud section triggered by a report from the City of Ottawa's auditor general. Auditor General Nathalie Gougeon revealed in December that the scheme allegedly resulted in the city paying inflated rents — up to 63 per cent above market rates — to the landlord through a housing allowance program. In exchange for directing clients to the landlord, the former case worker allegedly got about $22,000 in payments, according to the auditor general's report. The payments allegedly took place from November 2023 to October 2024. The city accepted Gougeon's recommendations in relation to the case and confirmed that the case worker in question is no longer employed with the city.
