Friday, June 26, 2015

Private Investigator Hired Hackers To Obtain User Names Passwords for Emails of People He Was Investigating. Being Sentenced Today For One Count of Federal Conspiracy to Commit Computer Hacking

Anyone tempted to hire an investigator to obtain access to another’s emails or hacks into someone else’s email should know that it is a federal crime. 

In addition, just because you see hacking services “advertised” on the Internet or in email solicitations do not mean that they are legal. Today, June 26, 2015, federal prosecutors are expected to seek a prison sentence of up to six months for a licensed private investigator in New York City, Eric Saldarriaga, 41, who admitted to hacking into emails on behalf of his clients.

Mr. Saldarriaga, age 41, pleaded guilty on March 6 before U.S. District Judge Richard J. Sullivan to one count of conspiracy to commit computer hacking, paid an unidentified overseas firm to secure the login credentials and passwords for the email accounts he wanted access to without permission.

Like many federal cases, the facts occurred years ago. In the plea agreement, Mr. Saldarriaga admitted that over six years ago, beginning in 2009 he found services advertised on the Internet (the “Hacking Services”). He then paid the Hacking Services to provide him with login credentials, including usernames and passwords, for e-mail accounts of numerous individuals he was investigating on behalf of his clients as well as individuals in whom Mr. Saldarriaga was interested for personal reasons. Mr. Saldarriaga then admitted that he unlawfully accessed and reviewed victims’ e-mail communications. In total, Mr. Saldarriaga  admitted that he hired Hacking Services to hack into, and provide unauthorized access to, at least 60 different e-mail accounts. These individuals are the “victims” in this federal case.

Mr. Saldarriaga has been the only one charged with a crime, even though some of those who hired him appear to have been aware of what he was doing. Mr. Saldarriaga's clients are known to have included lawyers, wealthy people and even other private investigators.  Some of the victims of Mr. Saldarriaga's email hacking, like Tony Ortega, a former editor of The Village Voice who has written about Scientology, have been pressing the prosecutors in the U.S. Attorney’s Office to reveal the name of the clients.

The sentence is left up to Judge Sullivan and in sentencing memoranda, the defense seeks probation while the prosecutors seek six months of prison. The maximum sentence for this charge is 5 years in federal custody but that is not expected since this is Mr. Saldarriaga’s first offense and he only made $5,000 from these hacking assignments. The assigned Assistant U.S. Attorney argued in a pre-sentencing memorandum that Mr. Saldarriaga's invasion of privacy warranted a stronger punishment than the six months of home detention and three years of supervised probation recommended by the court's own probation department. "Unlike defendants in a gun or drug case, who often act without reflection, there is reason to believe that individuals who engage in hacking and other forms of cybercrime can be deterred by a substantial threat of penalties," he wrote. 

The lesson from this case is that while all attorneys and parties in a case would enjoy having an upper hand by knowing the private communications of others, any such temptation must be resisted. As I tell my clients when they ask me to do something that is not legal in order to gain advantage: “who will be representing you while I am in jail?” Litigation and business/family disputes can be incredibly frustrating especially when the other side is not fair or is incredibly unreasonable. However, ethics and following the law are required and everyone should use legal means to obtain information. There are a wide number of ways to obtain information legally and this should be exhausted in these cases.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Monday, June 15, 2015

Largest Health Insuance Companies Are Seeking to Merge in Order to Capture Medicare Managed Care Patients In a Multi Billion Dollar Industry

The Los Angeles Times reports today in an article entitled "Anthem, other health insurers are eyeing consolidation" by Chad Terhune that Anthem (the largest for profit insurer in California) is one of the potential bidders for Humana, Inc. The Los Angeles Times reports that Anthem had annual revenue of  $73 billion and profit last year of $2.6 billion. The consolidation of insurance companies is a trend that has been predicted for years in the health care industry. Humana is sought after due to its expertise in managed care plans for Medicare patients.

What does this mean for providers? There will be fewer carriers and it will be critical to have managed care and insurance contracts with the largest providers as the health care industry consolidates.

Posted by Tracy Green, Esq.

Monday, May 18, 2015

California Concierge Physician and Her Husband Arrested For Unlicensed Practice of Medicine and Conspiracy to Furnish Morphine After 88 Year Old Patient Dies at Her Home

Concierge medicine that involves Scheduled narcotics appears to be under greater scrutiny, especially where there are unlicensed people involved and bad medical results for elderly patients. 

Last week, Dr. Ellen Crowe (age 54) and her non-physician husband Paul McQuillan (age 61), were arrested and charged in Ventura County Superior Court with  felonies relating to the death last year of 88 year old Polly Duntley of after she was allegedly given morphine. An arrest contains allegations that a defendant has committed a crime. Every defendant, including these, is presumed to be innocent until proven guilty in court.

The case involves a concierge medical practice that makes home visits called “House Call Visits Thousand Oaks” and is allegedly owned by Dr. Crowe and is operated by both she and her husband Mr. McQuillan. A May 15, 2015, Los Angeles Times article on this case  by Matt Hamilton details the allegations in the case.

This case was investigated by the Ventura County Interagency Pharmaceutical Crimes Unit and the State of California Medical Board. The Ventura County Interagency Pharmaceutical Crimes Unit is a task force made up of members of the Ventura County Sheriff’s Office, Simi Valley Police Department, the District Attorney’s Office Bureau of Investigation and the California Highway Patrol.

Dr. Crowe and Mr. McQuillan are a married couple who own and operate a business known as House Call Doctor Thousand Oaks (“House Call DTO”), and Ms. Duntley was a patient, said Sgt. Victor Fazio, of the Ventura County Sheriff’s Office.  The allegations are that on July 30, 2014, a physician (other than Dr. Crowe) from House Call DTO made a visit to Ms. Duntley’s home. Ms. Duntley  had her first appointment at her home with the medical practice and she was complaining of pain in her leg, Sgt. Fazio said. A physician other than Dr. Crowe saw her. This physician ordered x-ray and ultrasounds tests to be performed the next day.   

The next on July 31, 2014, Mr. McQuillan, who has no official medical training, responded to the home of Ms. Duntley in Camarillo on the follow-up visit,  authorities said.
Authorities allege that Mr. McQuillan injected Ms. Duntley with morphine provided by Dr. Crowe and ordered by the other doctor, making the injection just before X-ray and ultrasound tests were to take place at the residence. Ms. Duntley fell into a deep sleep within minutes, authorities said.

After the injection, Mr. McQuillan left the residence to treat another patient in the neighborhood, and in his absence, a technician from another company arrived to perform the ultrasound, authorities said. 

Mr. McQuillan returned while the ultrasound was being conducted, realized Ms. Duntley no longer had a pulse, called 911 and tried to provide first aid, authorities said. Emergency responders resuscitated Ms. Duntley, but she never regained consciousness. She died in a hospital on August 2.

Mr. McQuillan was arrested at his home and a search warrant was served there, authorities said. Dr. Crowe was located in Bakersfield and arrested as well.

Mr. McQuillan was booked into county jail on (1) suspicion of practicing medicine without a license and (2) furnishing morphine, authorities said. 

Dr. Crowe was booked on (1) suspicion of conspiracy to practice medicine without a license and (2) conspiracy to furnish morphine. They were released on bail and are scheduled to be arraigned in Ventura County Superior Court on May 27.

Practitioners need to ensure that they are fully compliant in home visits and concierge medicine. Patients with serious medical conditions may not be appropriate for home care and all steps should be taken to ensure that no unlicensed personnel engage in the unlicensed practice of nursing or medicine.

Posted by Tracy Green, Esq.

Monday, May 11, 2015

Medical Marijuana Physicians & Businesses Are Attacked By The Feds (IRS) For Taxes Who Disallow Deductions Under Little Known Provision 280E. It's Hitting These Businesses Hard. Don't Let This Catch Your Business By Surprise.

The country’s rapidly growing marijuana industry (including physicians who write the recommendations) has a tax problem.

Even as more states embrace legal marijuana, shops and dispensaries say they are being forced to pay crippling federal income taxes because of a decades-old law (26 U.S.C. § 280E) aimed at preventing drug dealers from claiming their smuggling costs and couriers as business expenses on their tax returns.

The latest audits are not just aimed at dispensaries but at medical marijuana physicians.  Imagine being audited and finding out that all your deductions are being disallowed and you are to pay hefty taxes on gross revenue even if seventy-five percent of it went to pay employee wages, rent, supplies, costs of goods sold, etc. You get the picture of what the IRS is doing here.

Congress passed that 280E in 1982 after a cocaine and methamphetamine dealer in Minneapolis who had been jailed on drug charges went to tax court to argue that the money he spent on travel, phone calls, packaging and even a small scale should be considered tax write-offs. The provision, still enforced by the I.R.S., bans all tax credits and deductions from “the illegal trafficking in drugs.”

This has caught many in the medical marijuana business including physicians by surprise. Many people invested in dispensaries only to find out this fact after they invested millions of dollars.

Here is the text of 26 U.S.C. § 280E, Expenditures in connection with the illegal sale of drugs:

“No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances(within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is  conducted.”

This week’s New York Times article on this issue by Jack Healy highlights the issues. “Marijuana business owners say it prevents them from deducting their rent, employee salaries or utility bills, forcing them to pay taxes on a far larger amount of income than non-marijuana businesses with the same earnings and costs. They also say the taxes, which apply to medical and recreational sellers alike, are stunting their hiring, or even threatening to drive them out of business.”

The gap between the federal position on this issue and the states is hitting business owners hard. Remember that 23 states, plus the District of Columbia, allow medical or recreational marijuana. The federal government does not and this affects businesses in many ways.  For example, banks will not allow medical marijuana businesses to have accounts since marijuana possession is a federal crime in national parks (including those in California and Colorado).

As Jack Healy of the NYT writes, while “President Obama and top federal officials have allowed states to pursue legalization, marijuana advocates say the dissonance between increasingly permissive state laws and federal prohibitions is creating a morass of complications and uncertainty.” It is time for the federal government to not use this as a revenue generator but to engage in fairness and consistency. The tide is turning and this is nothing less than extortion on small to medium size businesses since they know that large companies have avoided this business for this exact reason. Either that or the medical marijuana business needs to get together and lobby Congress on a states’ rights issue which is certainly popular in the South and Southwest.

If you are in this business or are audited by the I.R.S., it is critical that you hire an accountant and lawyer familiar in this field. Do not go to any audits on your own. Be prepared for these issues and think ahead. In addition, get involved politically and make this madness stop.

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
800 West 6th Street, Suite 450
Los Angeles, California 90017

Office: 213-233-2260
Mobile: 310-710-6434

Friday, May 8, 2015

Movie Pic of Week. Go see "5 Flights Up." Feelgood Movie Made For Adults With Diane Keaton & Morgan Freeman. Support Indie Cinema!

LA Times
It is fun to see your friends' projects come to light. One of my friends Tracy Mercer (hard-working, funny as heck & sharp as a tack) is one of the producers of "5 Flights Up."  Go see it!

It's the perfect movie to take your mom to for Mother's Day or an afternoon out. Or if you want to see a movie made for adults (& not teens) - this is it.

The Los Angeles Times gave it a great review and said it "feels like a minor miracle." And you can be an insider and support me (or a friend of mine) since this is what is known in Hollywood as an
"Indie" project - which means it has NO money for a marketing budget.  So it's word of mouth. The old fashioned way. It opens this weekend. At 1 1/2 hour movie - it's the perfect length. I think you'll enjoy it and it's wonderful seeing aging actors get great roles. Support Indie cinema and great actors.

Posted by Tracy Green, Esq.


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