Posts Tagged ‘Attorney General’

Las Vegas Firm Ordered To Pay $125,000 For Medicaid Fraud

By Nevada News Bureau Staff | 3:28 pm October 25th, 2012

CARSON CITY – A behavioral health company based in Las Vegas was fined $125,000 today in a Medicaid fraud case involving the failure to maintain adequate records to support Medicaid claims.

Rainbow Child and Family Services was sentenced for one gross misdemeanor offense of intentional failure to maintain adequate records by Clark County District Judge Valerie Adair and ordered to pay the $125,000 in restitution, penalties, and costs.

Persons convicted of Medicaid fraud may also be administratively excluded from future Medicaid and Medicare participation.

Nevada Attorney General Catherine Cortez Masto announced the sentencing.

“Businesses need to pay attention when processing Medicaid claims,” Masto said. “This office continues to investigate and prosecute Medicaid fraud cases.”

The AG’s office began an investigation after information was obtained that Rainbow was not providing services to Medicaid recipients. Interviews with Medicaid recipients showed that Rainbow was not providing the Basic Skills Training (BST) and Psychosocial Rehabilitation (PSR) services to the recipients as indicated on claims submitted to Medicaid. Furthermore, the documentation to substantiate the claims submitted to Medicaid was inadequate as the records did not note accurate or true dates or types of services provided.

The fraud occurred from August 2011 to April 2012.

The case was investigated and prosecuted by the Nevada Attorney General’s Medicaid Fraud Control Unit (MFCU), which investigates and prosecutes financial fraud by those providing healthcare services or goods to Medicaid patients. The MFCU also investigates and prosecutes instances of elder abuse or neglect.

Nevada Attorney General Announces Two Nationwide Settlements Over Anti-Psychotic Drugs, E-Books

By Nevada News Bureau Staff | 11:39 am August 30th, 2012

CARSON CITY – The Nevada Attorney General’s Office has reached two separate agreements this week, one with a pharmaceutical firm over the marketing of anti-psychotic drugs and another with three book publishers over e-book price-fixing allegations.

The $181 million nationwide settlement announced today with Janssen Pharmaceuticals, Inc., a subsidiary of Johnson & Johnson Pharmaceutical, will bring $3.3 million to Nevada. It is the largest multi-state consumer protection settlement of its kind reached with a pharmaceutical company.

Photo by Housed via Wikimedia Commons.

The $69 million agreement with Hachette Book Group, HarperCollins Publishers and Simon & Schuster will return up to $600,000 in total compensation to Nevada consumers who purchased e-books.

Attorney General Catherine Cortez Masto said she and 36 other attorneys general reached the agreement  with Janssen after a multi-state investigation found that the company improperly marketed the anti-psychotic drugs Risperdal, Risperdal Consta, Risperdal M-Tab and Invega.

After an extensive four-year investigation, Janssen agreed to change not only how it promotes and markets its atypical antipsychotics but also agreed to refrain from any false, misleading or deceptive promotion of the drugs. In addition to the record-setting payment, the settlement targets specific concerns identified in the investigation. The settlement agreement restricts Janssen from promoting its atypical anti-psychotic drugs for “off-label” uses that the U.S. Food and Drug Administration (FDA) has not approved.

Federal law prohibits pharmaceutical manufacturers from promoting their products for off-label uses, although physicians may prescribe drugs for those uses. The complaint alleges that Janssen promoted Risperdal for off-label uses to both geriatric and pediatric populations, targeting patients with Alzheimer’s disease, dementia, depression, and anxiety, when these uses were not FDA-approved and for which Janssen had not established that Risperdal was safe and effective.

“Nevadans have a right to know the risks presented by atypical anti-psychotic drugs,” Masto said. “The settlement will protect Nevadans from further promotion of Janssen’s atypical anti-psychotic drugs for ‘off-label’ uses.”

The antitrust settlement with the book publishers, announced Wednesday by Masto and 54 attorneys general in other states, districts and U.S. territories, will also result in changes to the way they price e-books going forward.

The settlement is occurring in conjunction with a civil antitrust lawsuit filed today in federal court against Hachette, HarperCollins, and Simon & Schuster. In the lawsuit the states allege that the three settling publishers and others, including non-settling publishers Macmillan and Penguin (collectively, the “Agency Five” publishers), “conspired and agreed to increase retail e-book prices for all consumers” and “agreed to eliminate e-book retail price competition between e-book outlets, such that retail prices to consumers would be the same regardless of the outlet patronized by the consumer.”

Under the proposed settlement agreement, which the court must approve, Hachette, HarperCollins and Simon & Schuster will compensate consumers who purchased e-books from any of the Agency Five during the period of April 1, 2010 through May 21, 2012. Payments will begin 30 days after court approval of the settlement becomes final.

“Today’s settlement restores e-book competition among retailers and paves the way for restitution for Nevadans harmed by the scheme,” Masto said. “This news comes at a welcome time, considering the Silver State’s sluggish economy and the fact that this is the first week back to school for many K-12 and college students in Nevada. Our legal action sends a strong message that competitors cannot get away with price-fixing.”

Attorney General Urges Nevadans To Apply For Free Foreclosure Review By New Sept. 30 Deadline

By Nevada News Bureau Staff | 12:01 pm July 6th, 2012

CARSON CITY – The deadline for a free, federal independent foreclosure review for Nevadans whose homes were in foreclosure in 2009 or 2010 has been extended to Sept. 30, 2012, Attorney General Catherine Cortez Masto said today.

The previous deadline was July 31.

Photo by respres via Wikimedia Commons.

Ordered by the Office of the Comptroller of the Currency (OCC) and the Board of Governors of the Federal Reserve, the independent foreclosure review will determine whether individuals suffered financial injury and should receive compensation or other remedy because of errors or other problems which occurred during the foreclosure process.

“Do not wait until the extended Sept. 30 deadline to submit your application for a free and independent foreclosure review,” Masto said.

According to the OCC’s recent report, as of May 31, 108,687 Nevadans who are eligible for the review received a mailing and 4,267 Nevadans submitted requests for review.

Information about Independent Foreclosure Review may appear in this format in advertisements and postcard notices that eligible borrowers recently received by mail.

More information, including edibility and online applications is available at or 888-952-9105 (between 8 am and 10 pm (Eastern), Monday through Friday, and between 8 am and 5 pm Saturday). All requests for Review Forms must be submitted online or postmarked no later than September 30, 2012. Not every finding will result in compensation or other remedy.

In first announcing the program on May 31, Masto said: “I encourage Nevadans hurt by foreclosure errors and who are eligible, to apply for a free review before the July 31 (now Sept. 30) deadline. In doing so, beware of anyone who asks you to pay a fee for any foreclosure review service and immediately report those persons or companies to my office.”

To be eligible, the foreclosure process must have been active between Jan. 1, 2009 and Dec. 31, 2010. The property securing the loan must have been a primary residence, and the mortgage must have been serviced by: America’s Servicing Co., Aurora Loan Services, BAC Home Loans Servicing, Bank of America, Beneficial, Chase, Citibank, CitiFinancial, CitiMortgage, Countrywide, EMC, EverBank/EverHome Mortgage Company, Financial Freedom, GMAC Mortgage, HFC, HSBC, IndyMac Mortgage Services, MetLife Bank, National City Mortgage, PNC Mortgage, Sovereign Bank, SunTrust Mortgage, U.S. Bank, Wachovia, Washington Mutual, Wells Fargo, or Wilshire Credit Corporation.

More than 4.3 million forms and letters explaining the process were sent to eligible homeowners in 2011. Nevada residents who received a letter should be aware it is a legitimate program.

Anyone who wants to report an independent foreclosure review scam can contact the Attorney General’s Bureau of Consumer Protection Hotline at 702-486-3132 or visit


Controversy Over State Use Of Outside Legal Counsel Expands To Robo-Signing Lawsuit

By Sean Whaley | 10:49 am February 2nd, 2012

CARSON CITY – When state Sen. Greg Brower asked the Attorney General’s office earlier this month about the $6 million in outside legal costs incurred so far in defending the state in a freeway construction dispute, he said his motives were purely fiscal in nature.

“We just don’t have money to waste,” said Brower, R-Reno. “At least this particular situation seems to suggest that maybe we are. Maybe there are good answers to all of these questions I raised in my letter but there is only one way to find out and that is to ask them.”

State Sen. Greg Brower, R-Reno. / Nevada News Bureau file photo.

But the use of outside counsel is being questioned in another case where Brower’s law firm, Snell & Wilmer, is representing a company being sued by Attorney General Catherine Cortez Masto, who is also using the services of a private law firm.

The lawsuit was filed on Dec. 16, 2011 in Clark County District Court against Lender Processing Services Inc. (LPS) alleging deceptive practices against Nevada consumers related to the default servicing of residential mortgages in Nevada, specifically loans in foreclosure.

“The robo-signing crisis in Nevada has been fueled by two main problems: Chaos and speed,” Masto said in announcing the filing of the lawsuit in December. “We will protect the integrity of the foreclosure process. This lawsuit is the next, logical step in holding the key players in the foreclosure fraud crisis accountable.”

Masto obtained approval from the state Board of Examiners and the Legislature’s Interim Finance Committee in 2009 to hire the law firm of Cohen, Milstein, Sellers & Toll to investigate and prosecute mortgage lending cases, including the current case against LPS. The firm works on a contingency basis, not getting paid unless the firm obtains settlements or court judgments.

Attorney General Catherine Cortez Masto. / Nevada News Bureau file photo.

In a statement in response to the lawsuit issued in December, LPS said the use of the Washington, DC law firm is apparently a violation of Nevada law.

“Unfortunately, the company’s efforts to engage in meaningful discussions with the Nevada Attorney General’s office have been frustrated by the Nevada Attorney General’s decision to outsource its investigation to Cohen Milstein Sellers & Toll PLLC, a plaintiff’s law firm located in Washington, DC in apparent violation of Nevada law,” the company said in a statement. “The complaint highlights misconceptions about LPS and seeks to sensationalize a variety of false allegations in a misleading manner.”

The firm on Tuesday filed a motion to dismiss the civil complaint.

In an interview Friday, Brower called the two legal matters “apples and oranges.”

Brower said the questions in his Jan. 12 letter to Masto asking about the use of the Washington, DC, firm of Watt, Tieder, Hoffar & Fitzgerald to handle the case filed by Ames Construction against the Nevada Department of Transportation over construction of the first phase of the Carson City bypass are strictly related to the $6 million in legal costs incurred by the state in the matter, which remains unresolved. He also asked why the state hired an out-of-state firm, and whether the Attorney General’s office could have handled the matter itself.

Gov. Brian Sandoval also raised concerns about the legal costs at a January meeting of the Board of Directors of the Transportation Department. So did board member Tom Fransway.

In the LPS dispute, Brower said he arranged a meeting between the Attorney General’s office and the company last year to discuss the matters of concern before the lawsuit was filed, but Brower said he will not be representing LPS in the dispute going forward.

The state has frequently employed outside legal firms for various matters over the years, including the successful pursuit of a settlement agreement by Nevada and other states against the nation’s big tobacco companies in the 1990s. Since the settlement was reached in 1998 under then-Attorney General Frankie Sue Del Papa, Nevada has collected $505 million for a variety of programs through 2011.

The state Agency for Nuclear Projects has also employed the Washington, DC, law firm of Egan, Fitzpatrick, Malsch & Lawrence since 2001 to represent it in its ongoing dispute over construction of the nuclear waste dump at Yucca Mountain. The contract was also approved while Del Papa was attorney general and the late Kenny Guinn was governor. Payments through 2012, including expert witnesses, are expected to total $33.4 million, most of which is federal funds.

State Sen. Ben Kieckhefer, R-Reno, said he also has questions about the legality of using Cohen, Milstein, Sellers & Toll to sue on behalf of the state, and has asked Masto in a letter to respond to his concerns. He first raised questions at a meeting of the Legislature’s Interim Finance Committee in December.

The statute is clear that the Attorney General’s office has the authority to hire outside counsel to defend the state or in the case of a conflict of interest, he said.

“But to hire counsel to then go out and prosecute or go after other private entities doesn’t seem legal within our current statutory framework,” Kieckhefer said.

Kieckhefer said he also asked for more information on the use of a contingency fee for the contract.

“When you’re trying to execute justice, you’re suddenly putting a monetary incentive into the execution of justice, and that seems inherently problematic to me so I’ve asked for a little bit more information on that as well,” he said.

There is a difference in the two contracts. The firm representing NDOT is being paid an hourly rate. The state Transportation Board approved an additional payment amount to get the case to an arbitration hearing next month. The legal costs including the new amount will total $6 million.

The contract with Cohen, Milstein is a contingency agreement, meaning Nevada will not have to pay unless the firm is successful against LPS. The firm is eligible to receive up to 15 percent of any settlement.

In yet another wrinkle in the use of outside legal counsel, Brower’s firm was also employed by the Department of Transportation in a construction dispute similar to the one he has raised questions about. Snell & Wilmer was paid nearly $2.9 million to represent the agency in a dispute that was settled with the firm Parsons Brinckerhoff in Feb. 2011.

The litigation involved the design and construction of the Interstate 515/215 interchange in Henderson.


Audio clips:

Sen. Greg Brower last week expressed concerns about the legal fees associated with an NDOT contract dispute:

020212Brower :31 to ask them.”

Sen. Ben Kieckhefer questions if the Attorney General has the legal authority hire a private law firm to sue a private business:

020212Kieckhefer1 :31 current statutory framework.”

Kieckhefer says he also has concerns with the use of contingency fees in such legal actions:

020212Kieckhefer2 :20 that as well.”


Nevada Cites Concerns With Transport Of Hazardous Waste In Response To Draft Plan For Former Test Site

By Sean Whaley | 2:00 am December 4th, 2011

CARSON CITY – A draft environmental statement addressing the future of the former Nevada Test Site appears to be setting the stage for the transportation of mixed hazardous and low-level radioactive waste to the site through heavily populated areas of Las Vegas, the state response to the document says.

The response, filed by Nevada Attorney General’s office after consultation with multiple state agencies, including Gov. Brian Sandoval, the Agency for Nuclear Projects and the Department of Transportation, says the draft document appears to be abandoning a long-standing agreement to use highway routes that avoid urban Las Vegas for the shipping of low-level radioactive waste. The agreement was made between then-Gov. Kenny Guinn and then-Secretary of Energy Bill Richardson.

The DOE has been using a portion of the site to bury low-level radioactive waste shipped to Nevada from other department sites from around the country for more than a decade.

Nevada officials also express concerns in their response that the discussion of groundwater contamination at what is now called the Nevada National Security Site is not adequate for assessing the loss of the resource due to underground nuclear testing at the site located about 65 miles northwest of Las Vegas.

The draft EIS also fails to identify any areas of the site that might be suitable for a return to public use, the state says in its 83-page response filed Friday with the U.S. Department of Energy.

The Draft Site Wide Environmental Impact Statement, (SWEIS), presents a 10-year plan with three options: continuing uses as they are now occurring; reducing the uses of the property; and increasing activity at the site formerly used for both above- and below-ground nuclear tests.

Subsidence craters from underground nuclear testing at what is now called the Nevada National Security Site. / Photo: U.S. Government via Wikimedia Commons.

Friday was the deadline to comment on the plan. A final report is expected to be issued by the DOE next year.

Joe Strolin, a consultant with the Nevada Agency for Nuclear Projects, said in an interview Friday that a major emphasis from the state in its response is to get the DOE to move away from the use of the site for the disposal of hazardous and low-level radioactive waste.

Alternative energy development and even mineral extraction are potential uses of the site, he said. A new approach could greatly improve relations between the state and the DOE, Strolin said.

“If Yucca Mountain is off the table, it makes it a lot easier for elected officials – the governor, the attorney general, public officials – to approach these kinds of issues much more cooperatively,” he said.

The transportation issue is the major concern identified in the state response.

Under what is called the “unconstrained routing scenario” evaluated in the draft EIS, the Department of Energy is proposing to abdicate this agreement and allow shipments of low-level radioactive waste directly through the Interstate 15-U.S. Hwy. 95 interchange known as the Spaghetti Bowl, the state says. It would also allow the waste to be shipped over the new Hoover Dam bypass bridge and funnel waste into the Las Vegas metro area from the south.

The state “strongly opposes” shipments of waste through the urban Las Vegas area and the Hoover Dam bypass bridge, “and will aggressively contest any decision to undertake such shipments using all means available,” the response says.

Sandoval has also sent a letter to Energy Secretary Steven Chu objecting to this change to the 12-year-old agreement.

Strolin said an accident involving low-level radioactive waste, while remote, could cause both economic and public safety consequences for Southern Nevada.

“Even the perception of a radiological incident in that area could cause major problems for everyone,” he said. “That was the motivation in 1999 for moving the waste out of the Las Vegas valley.”

The reason for the proposed change is likely to save money, but the state has never received a clear answer to the question, he said.

Groundwater contamination, and the loss of this resource to the state, is the other major concern expressed in Nevada’s response to the draft EIS. The document does not fully assess the cumulative loss of groundwater due to the testing, the response says.

“Nor does the information contained in the draft EIS provide an adequate basis for evaluating the value of that resource which has been – and will continue to be – lost to present and future generations as a result of past, present and future contamination,” the state says.

The state response notes that the 2011 Legislature passed a resolution asking the attorney general’s office and state agencies to report to lawmakers in 2013 on whether Nevada could potentially receive financial compensation from the federal government for the environmental contamination, including groundwater contamination, at the site.

The EIS needs to provide, “a full and complete picture of the groundwater resource that has been removed from the public domain and rendered unavailable for beneficial use, the level and distribution of contamination of that resource, and the potential, if any, for future beneficial uses of the resource,” the state response says.

Strolin said the state would like to see more research on the issue as part of the final environmental report.

“So we had hoped that the EIS would do a better job of helping us to scope that out and it appears that it did not,” he said.

The groundwater issue is also a major concern of Nye County officials. Gary Hollis, chairman of the Nye County Commission, testified at a September public hearing on the document, saying efforts to tap into the uncontaminated groundwater on the site have consistently been opposed by the DOE. He said there should be some consideration of compensation for the loss of the resource due to the nuclear testing and other uses of the property.

“Not allowing Nye County access to water on the Nevada National Security Site is a big deal to us,” he said at the hearing. “The ongoing impacts of denying access to the county is huge, and no compensation has been made for our loss of the access to that water.”

The state response also says the draft EIS should address the potential for the freeing up of areas of the 1,375-square-mile secured site that are not needed for national security or other purposes.

“The final EIS should contain a section dealing specifically with the potential relinquishment of any areas of NNSS that are potentially reasonable candidates for return to the public domain,” the state says in its response.


Audio clips:

Joe Strolin with the Nevada Agency for Nuclear Projects, says an incident in urban Las Vegas could cause major economic and public health problems:

120211Strolin1 :13 Las Vegas valley.”

Strolin says the state would like additional research and analysis in a variety of areas:

120211Strolin2 :20 will address them.”

Strolin says Nevada would like to see the DOE move away from the waste disposal mission:

120211Strolin3 :33 development out there.”

Strolin says with Yucca Mountain off the table, cooperation with the DOE will be much easier for Nevada officials:

120211Strolin4 :16 much more cooperatively.”


Las Vegas Attorney Readies Nevada For U.S. Supreme Court Review Of Federal Health Care Law

By Sean Whaley | 2:43 pm November 15th, 2011

CARSON CITY – The Las Vegas attorney representing Nevada in the 26-state challenge to the new federal health care law says the case is critically important because of the mandate for people to purchase health insurance.

“Never before in our nation’s history has the federal government required its citizens to purchase a product or service as a condition of citizenship in this country,” said Mark Hutchison, who is representing Nevada without charge in the case. “This case is of high importance to all Nevadans, because if the federal government can require us to purchase health insurance, then they can require us to purchase anything they choose.”

Hutchison, in a statement issued Monday when the U.S. Supreme Court agreed to hear the case, said the initial written briefs are due Dec. 29. Oral arguments are expected to be in March. The court will issue a decision in the case before its term expires at the end of June 2012.

U.S. Supreme Court.

First appointed by Gov. Jim Gibbons, and then re-affirmed by Gov. Brian Sandoval, Hutchison was named to serve as lead special counsel for the state when Attorney General Catherine Cortez Masto declined to represent the state in the federal litigation.

In addition to the 26 states, the National Federation of Independent Business (NFIB) is a party to the challenge.

Randi Thompson, Nevada state director for the NFIB, said in a statement Monday: “This act is already increasing the cost of health care on Nevadans, increasing costs to Nevada taxpayers for Medicaid and Medicare coverage, and causing business owners to even drop coverage for their employees. Health care needs to be more accessible and affordable, but this act is not the way to reach that goal.”

Others also weighed in on the decision.

White House Communications Director Dan Pfeiffer issued this statement: “Earlier this year, the Obama Administration asked the Supreme Court to consider legal challenges to the health reform law and we are pleased the court has agreed to hear this case.

“Thanks to the Affordable Care Act, one million more young Americans have health insurance, women are getting mammograms and preventive services without paying an extra penny out of their own pocket and insurance companies have to spend more of your premiums on health care instead of advertising and bonuses. We know the Affordable Care Act is constitutional and are confident the Supreme Court will agree,” he said.

U.S. Sen. Dean Heller, R-Nev., said in a statement: “Nevada families and businesses are already struggling in this current economic environment, and the president’s job killing health care law is making a difficult situation worse. The law’s excessive taxes, expensive regulations and questionable constitutionality are stripping businesses of the certainty they need to hire at a time when Nevadans and the rest of the country are desperate for jobs.

“While the Supreme Court considers this case, the president should work with Congress to find real solutions to health care reform so the excessive mandates in this law do not add to our national debt or hurt our struggling economy,” he said.

U.S. Senate Majority Leader Harry Reid, D-Nev., said in a statement: “Families, seniors and small businesses in Nevada and across the country are reaping the benefits of health insurance reform. Prescription drug costs for seniors are falling as the Medicare ‘donut hole’ closes, insurance companies can no longer deny coverage to children with pre-existing conditions, and business owners are taking advantage of tax breaks.

“Just last week, a conservative judge appointed by President Reagan ruled that this legislation is constitutional, and I am confident the high court will do the same,” he said.

Rep. Mark Amodei, R-Nev., said in a statement: “I believe that the individual mandate is unconstitutional and it is my hope that the Supreme Court will overturn it. Already, during my short time in Congress, I voted to repeal a provision of the president’s health care law that raised eligibility for Medicaid far beyond the intended poverty level. This correction is estimated to save taxpayers at least $13 billion over 10 years.

“I eagerly await the court’s decision and from there we’ll be able to assess the path for repealing what amounts to government control of 16 percent of our economy,” he said.

A number of federal courts have weighed in on the law with sometimes contradictory rulings on the constitutionality of the law and the individual mandate. President Obama signed the Patient Protection and Affordable Care Act into law in March 2010.

The U.S. Supreme Court decided to use the case filed by the states, including Nevada, and the NFIB, to determine the constitutionality of the law.

Nevada and the other states challenged the law in federal court in the Northern District of Florida. U.S. District Court Judge Roger Vinson ruled in the states’ favor and declared the individual mandate in the federal health care law unconstitutional. He declared the entire law unconstitutional without the mandate.

The 11th U.S. District Court Appeals then upheld Vinson’s ruling on the individual mandate but said the rest of the law could stand.

The U.S. Supreme Court will now take up the issues of whether the individual mandate is constitutional and whether the entire law is unconstitutional if the individual mandate is unlawful.

The individual mandate requires all U.S. citizens and residents to purchase health insurance from a private company or face government-imposed penalties enforced by the Internal Revenue Service.

“We are pleased that the highest court in the country will make a final decision about the constitutional fate of the healthcare legislation,” Hutchison said. “The states are confident that the U.S. Supreme Court will determine that the law is unconstitutional.”

Secretary of State Investigators Arrest Southern Nevada Man in Multi-State Ponzi Scheme

By Nevada News Bureau Staff | 9:28 am July 22nd, 2011

Investigators from the Secretary of State’s office today arrested Hans Seibt at his Las Vegas residence on 25 counts of securities fraud and six counts of theft. The criminal complaint filed by Attorney General Catherine Cortez Masto charges that Seibt was essentially operating a Ponzi scheme that victimized investors in Nevada and several other states.

Operating under the business names HSLV Development Corp. and Clark and Nye County Development Corp., Seibt successfully solicited investments of $10,000 or more from his victims, offering them trust deeds, joint venture agreements, and subscription agreements, all of which were supposedly secured by parcels of land Seibt was holding in Nye County.

Investigators say the land’s value was grossly exaggerated in order to support Seibt’s claims to his victims. The complaint also charges that Seibt and his representatives told victims they would receive a return of between 10 percent and 12 percent on their investment, but that Seibt, rather than actually purchasing the land, had used the money to pay off other investors and for personal use.

“Targeting senior citizens is particularly egregious,” Masto said. “I want to commend the Secretary of State’s office for bringing the evidence which resulted in the filing of this complaint.”

Attorney General Catherine Cortez Masto. / Nevada News Bureau file photo

Secretary of State Ross Miller said: “I can’t stress enough the importance of every investor conducting the most thorough due diligence possible when making an investment. Investing is a complicated and, to varying degrees, risky process. So-called interest payments or distributions that are paid to some investors aren’t a guarantee that an investment is legitimate. That’s the whole basis for a Ponzi scheme. Potential investors just can’t be careful enough, especially in the current economic environment.”

Seibt was booked in Clark County jail this morning, and was initially being held without bail pending an initial appearance in Justice Court.

As in all criminal matters, the Secretary of State’s office cautions that allegations are only accusations and individuals are presumed to be innocent until proven guilty in a court of law.

Nevada State Agency Posts Contract Information Following Release Of Audit

By Sean Whaley | 11:31 am January 7th, 2011

CARSON CITY – In the wake of a legislative audit critical of state agency contracting practices with current and former employees, the Nevada Department of Conservation and Natural Resources has posted its information online.

Bob Conrad, public information officer for the department, said the contract information was placed on the agency’s website on Dec. 29.

The audit of Nevada state agencies using current and former employees as contractors identified numerous potential concerns, including a case of one worker seeking payment for 25 hours of work in one 24-hour day and another where a former state worker is now earning $350 an hour as a contractor versus $65 an hour in his state job. This contract is still in effect and has been extended through June 30, 2011. As of September this year, the contractor has earned $472,493 from the state.

The audit information was turned over to the Nevada Attorney General for review for any potential abuses.

The Conservation and Natural Resources Department lists six current and former employees with contracts on its website, including one individual earning $150 an hour and another earning $200 an hour. An explanation for the need for each contract is included. All of the contracts have been approved by the Nevada Board of Examiners, made up of the governor, secretary of state and attorney general.

The agency’s website says the contracts fulfill specific needs that cannot be met by existing staffing levels or with current staff expertise. None of the contracts use the state general fund as a revenue source. The agency’s website also links to the actual contracts.

Conrad said the $350 an hour contract cited in the audit does not involve his agency. The information was posted to provide transparency to the public, he said.

“Our contracts are probably saving money for the state,” Conrad said. “We’re not using general funds and we think we have a good story to tell.”

The most significant contracts are for:

-          Christine Thiel, a former deputy state engineer with the Division of Water Resources who retired in 2004, is earning $150 an hour as a negotiator for the Truckee River Operating Agreement in northern Nevada. She earned $12,712 in fiscal year 2008 and $15,150 in fiscal year 2009.

-          Roland Westergard, a former state engineer with the Division of Water Resources who retired in 1990. He too is employed as a negotiator for the Truckee River Operating Agreement. He initially earned $150 an hour but saw an increase to $200 an hour starting in September 2009. He earned $19,233 in 2008 and $28,928 in 2009.

The legislative audit discussed Dec. 8 identified 14 state agencies contracting with 51 current or former employees who were performing similar duties to their current or former job descriptions at a total cost of $2.3 million in fiscal years 2008 and 2009. Two such contracts were identified for the Department of Conservation and Natural Resources.

Andrew Clinger, director of the Department of Administration, acknowledged the audit raised concerns about the use of the contracting process by state agencies. He is working with a group of administrators and others to bring forward reforms to the process to the Board of Examiners by February.

Challengers To Nevada Attorney General Claim Politics In Her Term, Incumbent Says She Makes Decisions On Legal Merits

By Sean Whaley | 9:09 pm October 19th, 2010

A debate today among the three candidates for Nevada attorney general focused on a disputed ad discussing a decades old criminal conviction of the Republican seeking the post and allegations of political favoritism by the incumbent, Democrat Catherine Cortez Masto.

An ad being run by Masto about Republican Travis Barrick citing his arrest and jail sentence for “harassing women” was the first topic of conversation for the three candidates appearing on Jon Ralston’s Face To Face television program.

Barrick said the criminal trespassing conviction, which happened two decades ago, was the result of his protesting a California clinic that was performing illegal late-term abortions.

Barrick said he would not back down from his actions, which he said came about because the “rule of law” was being ignored in California by the attorney general and other law enforcement officials.

“It’s a badge of honor for me,” he said.

Masto said Nevada voters deserve to know that Barrick, who is running for the top law enforcement position in the state, has a criminal record and served jail time.

Masto said she has principles and values she upholds every day without violating the law.

“You don’t get to make a decision on who you are going to protect and who you are not going to protect,” she said.

Joel Hansen, the Independent American Party candidate for the position, said Masto’s views on Barrick’s actions contradict her actions when she failed to follow Nevada law by filing a lawsuit against the federal health care reform law when asked to do so by Gov. Jim Gibbons.

“I think it is pretty hypocritical of General Masto to criticize Mr. Barrick when she committed a misdemeanor when she refused to sue on Obamacare after she’d been ordered to do so by the governor,” he said. “The Nevada statute says that she has to file suit if the governor tells her to and it is a misdemeanor if she doesn’t.”

Masto said that as attorney general, she has to evaluate whether to file legal actions, even if requested by the governor as her client. Masto said she evaluates whether to take action on a case based on merit, not politics.

“You have a professional responsibility based on the license as the attorney,” she said. “I’m the attorney in this particular instance. I was elected independently from the governor. You look at the legal merits, that’s what the attorney general does.”

Barrick said:  “The arrogance of her statement to say that that lawsuit has no merit is breathtaking.”

Hansen said he has filed a private class action lawsuit against the healthcare law that identifies numerous violations of the U.S. Constitution.

“It is not frivolous,” he said. “There is nothing frivolous about this. The only thing frivolous is her statement that it is frivolous.”

A federal judge in Florida ruled last week that the lawsuit against the healthcare law filed by 20 states, including Nevada, could proceed.

The debate also touched on Masto’s failed prosecution of Lt. Gov. Brian Krolicki for allegedly misusing college savings funds while serving as state Treasurer.

Hansen said the prosecution had the appearance of being politically motivated.

Masto denied any political motivation for the prosecution, which was dismissed by a Clark County district judge late last year.

Audio clips:

Attorney General Catherine Cortez Masto says voters deserve to know about her opponent’s criminal record:

101910Masto :10 next attorney general.”

GOP Attorney General candidate Travis Barrick says he served his time for trespassing and moved on:

101910Barrick :05 with my life.”

IAP Attorney General candidate Joel Hansen says Masto’s ad against Barrick is hypocritical:

101910Hansen :24 if she doesn’t.”

Nevada Attorney General Joins 49-State Mortgage Foreclosure Group

By Nevada News Bureau Staff | 4:30 pm October 13th, 2010

CARSON CITY – Attorney General Catherine Cortez Masto is joining a 49-state bipartisan mortgage foreclosure working group as part of a coordinated national effort by states to review the practice of so-called “robo-signing” within the mortgage servicing industry.

The Mortgage Foreclosure Multistate Group, comprised of state attorneys general in 49 states, and state banking and mortgage regulators in 30 states, will explore whether individual mortgage servicers have improperly submitted documents in support of foreclosures.

Specifically, the group will look into whether companies misrepresented on affidavits and other documents that they reviewed and verified supporting foreclosure documentation. The group will also attempt to determine whether companies also signed affidavits outside the presence of a notary public, along with other possible issues regarding servicing irregularities or abuses.

“This issue affects peoples’ homes as well as the economy,” Masto said. “This probe will be thorough, expeditious, and fair to both homeowners and lenders.”

Submitting foreclosure documents without verification, with false representation, and/or signing certain legal documents outside the presence of a notary public may constitute deceptive acts and/or unfair practices, and may otherwise violate state laws and court rules.

The multistate group, through an executive committee, will contact a comprehensive list of individual mortgage servicers. The group’s initial objectives include: putting an immediate stop to improper mortgage foreclosure practices; reviewing past and present practices by mortgage servicers subject to the inquiry; evaluating potential remedies for past practices and to deter future improper practices; and establishing a mechanism for more effective independent monitoring of future mortgage foreclosure practices.

“This is a cooperative and coordinated effort to address a serious problem,” Masto said. “The group may limit, expand or change its objectives, but it won’t stray from the goal of addressing a situation that has affected and continues to affect homeowners.”

Nevada Attorney General To Hold Statewide Domestic Violence Fatality Review Summit

By Nevada News Bureau Staff | 12:18 pm September 28th, 2010

Attorney General Catherine Cortez Masto will hold the first statewide Domestic Violence Fatality Review Summit in Las Vegas on Friday, bringing together over 120 people from around the state to address the issue of domestic violence deaths in Nevada.

The summit will take place at the Suncoast Hotel Casino, 9090 Alta Drive, from 8:30 a.m. to 4:30 p.m.

“I am sad to report that  this year, Nevada ranks No. 1 in the U.S. for women murdered by men,” Masto said. “Last year, Nevada ranked No. 5 according to the Violence Policy Center. We need to address these statistics and improve our system responses to domestic violence victims in order to save lives.”

Speakers at the summit will include Masto; Neil Websdale, director of the National Domestic Violence Fatality Review Initiative and a professor of criminology at Northern Arizona University;  Matthew Dale, executive director, Office of Victim Services, Department of Justice and a senior consultant to the National Domestic Violence Fatality Review Initiative; Chief Jerald Monahan, Apache Junction, Ariz., Police Department; and representatives from the Las Vegas Metropolitan Police Department, Reno Police Department, Department of Public Safety, Nevada Network Against Domestic Violence, Department of Health and Human Services, and the Clark County Coroner’s Office.

The summit will also launch the Attorney General’s Domestic Violence Awareness Month, created in 1987 to promote increased rights and services for domestic violence victims; to educate the public about the crisis of domestic violence and the prevalence of this epidemic in Nevada; and to encourage involvement and support from our community for domestic violence victims and those who serve them.

For more information on the summit, contact Kareen Prentice at 775.688.1872

Federal Appeals Court Upholds Nevada Laws Limiting Brothel Advertising

By Nevada News Bureau Staff | 5:48 pm July 29th, 2010

CARSON CITY – The 9th U.S. Circuit Court of Appeals today upheld Nevada state laws that limit brothel advertising, ruling to deny a petition for rehearing filed by the American Civil Liberties Union of Nevada.

“I am glad to see that, once again, common sense has prevailed,” said Attorney General Catherine Cortez Masto. “This state has had restrictions on brothel advertising for 40 years. Nevada should have the right to have reasonable limitations on this type of activity.”

The petition for rehearing was filed by the American Civil Liberties Union after a decision by the 9th Circuit Court in March to reverse a lower court’s decision. The laws had been challenged on free speech grounds.

The laws prohibit brothel advertising in counties where prostitution is illegal. The laws also prohibit brothel advertising in theaters and on streets and public highways.

In its March decision, the appeals court wrote: “Nevada has, uniquely for this country, delineated a more nuanced boundary [than total criminalization of prostitution], but still seeks to closely confine the sale of sex acts, geographically . . . and through the advertising restrictions.”

“We are pleased that the court has acknowledged our state’s policies and our laws were upheld,” Masto said.

George Flint, representing the Nevada Brothel Owners’ Association, said brothel owners generally have not sought to widely advertise even with the lower court ruling in their favor. Most owners did not push the issue, he said.

Only one brothel was part of the legal challenge, Flint said.

“The truth is I don’t have a real lot of heartburn about the issue one way or the other,” he said. “I’m rather proud of the fact that the members, except for one or two of them, have been very low key even during that period of time before the 9th circuit heard the issue and we had the freedom to go ahead and advertise.”

There won’t be a lot of disappointment in the industry with the ruling being upheld even though legalized prostitution is suffering from the recession just like all other businesses, he said.

Audio clip:

George Flint of Brothel Owner’s Association says the ruling isn’t a big disappointment:

072910Flint :19 ahead and advertise.”

Nevada Attorneys and Candidates for Attorney General Debate Legalities of Health Care Reform Lawsuit

By Elizabeth Crum | 4:59 pm April 7th, 2010

Four attorneys with ties to the issues and parties of Nevada’s health care reform lawsuit gave their perspectives to media and political bloggers during a Nevada News Bureau-hosted conference call this afternoon.

Mark Hutchison, lead counsel for Governor Gibbons’ newly retained pro-bono team, said he plans to participate in a conference with US District Court Judge Roger Vinson next week as part of the process to join Florida and other states in an amended complaint challenging the federal government on provisions in the recently passed health care legislation.

Hutchison said Indiana, North Carolina, Mississippi and Arizona have all now announced their intention to join the Florida lawsuit.

“The suit will be based primarily on 10th amendment challenges, unapportioned tax issues and the unconstitutionality of the individual mandate to purchase health insurance,” said Hutchison.

Jacob Hafter, an attorney and Republican candidate for state Attorney General, predicted a “long process” and speculated that Nevada will face additional legal issues and public outcry when taxes and penalties for not complying with health care reform mandates are levied and fully realized by citizens.

Hafter said he believes the Attorney General has been “derelict in her duties” and that her refusal to cooperate with the Executive Branch has created a liability that may be punishable as a misdemeanor under state law.

Hafter also said he today received confirmation from a reliable source inside the Nevada State Bar that a formal ethics complaint has been filed against the Attorney General for violations of attorney-client privilege when she disclosed certain pieces of information in her publicized response and explanation letters to Governor Gibbons.

Joel Hansen, an attorney and the Independent American Party candidate for Attorney General, disagreed with his colleagues and said he believes it is a violation of state law for the Governor to go outside the Attorney General’s office in order to pursue health care reform lawsuit.  Hansen said in his opinion, the correct legal avenue for the governor to take would be to call a special session of the legislature asking them to order the Attorney General to follow his instructions, just as the governor of Arizona did last week.

Hutchison disagreed with Hansen and said his interpretation of Nevada statues is that the Executive Branch is within its rights to retain outside, pro-bono counsel in certain instances.

“The Attorney General is not necessarily the chief legal officer for this kind of lawsuit,” Hutchison said, arguing this is so in part because the suit will be prosecuted against the federal government in a court in another state.

“And if the Attorney General can appoint subordinate counsel at her own discretion,” Hutchison added, “Surely the Executive Branch retains that same right.”

Attorney and former General Counsel and Chief of Staff to the Governor, Josh Hicks, said there are good arguments on both sides of the issue and said a question like this has never before “come to a head” for the state. Hicks said that among other things, the disqualifying language in the statues must be examined.

“Is a refusal to prosecute a disqualification of the Attorney General?” he asked.

Hicks added that “the implied authority for the Governor to have his own counsel, especially if coming out of his agency and budget” is also at issue.

“It will be very interesting to see what the Attorney General does next,” he said.

Hansen reiterated that in his opinion the language in the statues is clear and the Attorney General is within her rights to say the Governor has wrongfully “employed” counsel outside her office.

“However, if I were the governor, I would also look at statute 228.210 which says the Attorney General is obligated to pursue this matter because he has directed her to do so,” said Hansen.  “If she fails to perform that duty, she is guilty of a misdemeanor.”

Hafter agreed but added that, in his view, “There is a perhaps an ability for the Attorney General to commit malfeasance with no way of being called to task other than to be voted out in November.”

“Which at least two of us on this call are hoping happens,” he joked.

“I do think it would be appropriate for the legislature to address this matter of the Attorney General’s obligation to the Executive Branch,” Hafter said.

Hicks referred to a case in Georgia in which there has been some talk of impeachment of the Attorney General for refusing to follow the governor’s order.

“But that is all unchartered territory here in Nevada,” Hicks said. “And I think it’s an unlikely scenario.”

Hutchison said if the Attorney General brings a complaint and seeks injunctive relief and the governor pushes forward, the matter could “quickly” end up in the state Supreme Court.

Lt. Gov. Brian Krolicki “Heartened” By End to Year-Long Legal Ordeal With Attorney General

By Sean Whaley | 6:03 pm December 10th, 2009
(Updated at 9:16 a.m. on Dec. 11.)
CARSON CITY – Nevada Lt. Gov. Brian Krolicki said today he is heartened that a year-long legal ordeal involving criminal allegations he mismanaged a college savings program while serving as state treasurer is finally over.

“The attorney general’s announcement today was a long time in coming,” he said. “I’m certainly heartened that his ordeal, an absurd one at that, is now ended. We are going to savor these holidays and we are going to move on with our lives.”

Attorney General Catherine Cortez Masto said today she will not seek a new indictment, nor will she appeal a Clark County District Court decision dismissing the four felony charges against Krolicki for the alleged mismanagement of the program.

New charges against Kathryn Besser, who was Krolicki’s chief-of staff as treasurer, will not be pursued either. Besser now serves as Krolicki’s chief-of-staff in the lieutenant governor’s office.

Krolicki said he hopes inquiries are made with the attorney general’s office, “to account for this fiasco.”

“The power of a prosecutor is profound and there needs to be accountability,” he said.

Masto’s prosecution was rejected by two separate judges, and Krolicki said she had no facts to support her office’s ongoing actions.

“I hope she would apologize to Kathy Besser, who is an extraordinary public servant, and to my family,” Krolicki said.

Masto’s decision brings a close to the case against Krolicki and Besser, who were indicted in December 2008 following a 2007 audit of the $3 billion, college savings program run by the treasurer‘s office. No state funds were missing but Krolicki was accused of not following state budgeting rules.

The attorney general’s office failed to return repeated telephone calls seeking comment on the matter.

Krolicki, who is expected to run for re-election as lieutenant governor, said all along the charges were politically motivated. Krolicki is a Republican and Masto is a Democrat.

A trial on the charges was set to begin Dec. 14, but on Monday Clark County District Judge Valerie Adair dismissed the indictment.

Attorney General Reviewing Options After Charges Dismissed Against Lieutenant Governor

By Sean Whaley | 2:44 pm December 7th, 2009
CARSON CITY – Nevada Attorney General Catherine Cortez Masto said today she is reviewing the decision and considering her options in light of a ruling by a Clark County judge dismissing criminal charges against Lt. Gov. Brian Krolicki.

Masto spokeswoman Edie Cartwright had no other comment on the decision by Clark County District Judge Valerie Adair dismissing the indictment for Krolicki’s alleged mismanagement of a college savings program while serving as state Treasurer.

Krolicki, who is expected to run for reelection as lieutenant governor, issued a statement saying he can now put the awful experience behind him.

Ryan Erwin, a long-time campaign consultant to Krolicki, said Krolicki was very pleased with the decision and will now take some time to recuperate with his family over the holidays.

“It’s been a tough year,” he said. “They tried to wreck him politically and personally. Today is a good day.”

Krolicki can now run for reelection with a clean slate, Erwin said. Krolicki has announced he intends to run again but will probably evaluate that decision again with his family, he said.

“I fully expect him to run for reelection,” Erwin said.

Asked if Masto might pursue an appeal or some other legal action to keep the case going, Erwin said anything is possible.

“Most Nevadans believe this was a ridiculous partisan prosecution,” he said. “I can’t imagine anyone in good conscience spending additional tax resources on a crusade like this.”

Masto is a Democrat and Krolicki is a Republican.

The charges against Krolicki were filed in December 2008 after a 2007 audit of the $3 billion, state-run college savings program. He was charged with four felony counts, two for misappropriation and falsification of accounts by a public officer, and two for misappropriation by a treasurer.

No state funds were missing but Krolicki is accused of not following state budgeting rules.

A trial was to get under way on Dec. 14.

“I would not have been able to make it through this process without the support of many who have stood by me,” Krolicki said. “I am grateful for the outpouring of support and appreciate everyone who has been so encouraging throughout this awful process. I am proud to have my name cleared and that we can begin moving forward.”