ATTORNEY GENERAL JIM HOOD ANNOUNCES SETTLEMENT WITH WESTERN UNION

January 31, 2017

Western Union Admits Anti-Money Laundering and

Consumer Fraud Violations

 Attorney General Jim Hood announced today that popular money-transfer service Western Union will implement a comprehensive anti-fraud program in response to widespread claims of consumer fraud by third parties who use the service in their criminal schemes.

As part of a settlement with Mississippi and other states, Western Union has agreed to develop and put into action a plan intended to detect and prevent incidents where consumers become victims of fraud when they use Western Union to wire money to scammers.

In addition, Mississippi will receive $53,180 in the settlement.

“Criminals continue to craft all kinds of schemes to try to convince consumers to wire them money,” Attorney General Hood said. “Among these common scams are those where consumers have told they’ve won money or prizes, but first must wire money to pay required taxes or fees before they receive their winnings. These criminals try to exploit our instinct to protect our family members through scams saying a loved one is in immediate danger and needs money right away. Most importantly, consumers who receive solicitations from someone they’ve never met in person should be cautious about wiring money.”

The components of the anti-fraud program to be implemented by Western Union include:

·       Anti-fraud warnings on send forms that consumers use to wire money;

·       Mandatory and appropriate training and education for Western Union’s agents about fraud-induced wire transfers;

·       Heightened anti-fraud procedures when warranted by circumstances such as increased fraud complaints;

·       Due diligence checks on Western Union agents who process money transfers;

·       Monitoring of Western Union agent activity related to prevention of fraud-induced money transfers;

·       Prompt and appropriate disciplinary action against Western Union agents who fail to follow required protocols concerning anti-fraud measures;

In addition to this settlement with the states, Western Union also settled claims related to fraud-induced transfers with the Federal Trade Commission and U.S. Department of Justice. As part of that settlement, announced earlier this month, Western Union has agreed to pay $586 million to a fund that the U.S. Department of Justice will administer to provide refunds to victims of fraud induced wire transfers nationwide, including Mississippi victims. For more information about this settlement, visit https://www.justice.gov/criminal-mlars/remission.

Mississippi, 48 other states and the District of Columbia participated in the state settlement.

For more information about how to avoid wire-transfer scams and fraud, visit www.AGJimHood.com or call the Attorney General’s Consumer Hotline, (800) 281-4418.


Collins Registered Nurse Arrested on Medicaid Fraud Charges

January 27, 2017

Attorney General Jim Hood announced today the arrest of a Collins registered nurse who is accused of stealing prescription drugs intended for one of her patients.

Stefanie Cook, 35, was arrested today following an indictment by a Covington County grand jury on one count of Medicaid Fraud and one count of obtaining possession of a controlled substance by of fraud, misrepresentation or subterfuge.

At the time the crimes are alleged to have been committed, Cook worked as an RN at the Covington County Nursing Center in Collins. The indictment charges Cook with obtaining Norco containing Hydrocodone, a schedule two controlled substance, from a patient at the center.

Cook turned herself in to the Covington County jail. Her arraignment date is set for Feb. 3. If convicted of both counts, Cook faces a maximum of 10 years in prison and $2,000 in fines. As with all cases, a charge is merely an accusation, and a defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by Trey Rogers of the Attorney General’s Medicaid Fraud Control Unit.  Prosecution will be handled by Special Assistant Attorney General Kathy Parker.


ATTORNEY GENERAL JIM HOOD ISSUES STATEMENT ON HB 555

January 25, 2017

Attorney General Jim Hood issued the following statement today regarding House Bill 555:

“A legislator advised us that Entergy demanded another vote on the bill and that it be made retroactive. It’s no coincidence that the State’s case against Entergy is now active again in federal court, and this company fears having to pay more than $1 billion for its illegal acts.

 

“Obviously, House leadership and proponents of this bill bow down to their corporate masters, and it’s unfortunate that this bill’s supporters put such pressure on conscientious Republican legislators to change their vote. I am grateful for the bipartisan group of Democrats and Republicans that saw this bill for what it is: an unconstitutional, political power grab that puts the interests of corporations ahead of Mississippi citizens.”

 

-Attorney General Jim Hood, State of Mississippi


ATTORNEY GENERAL JIM HOOD REMINDS STORM VICTIMS OF POST-STORM RESOURCES AVAILABLE

January 23, 2017

As many consumers have started on the road to recovery following this weekend’s severe weather, Attorney General Jim Hood is reminding all Mississippians of the emergency preparedness and post-storm resources available through his office. These materials include tips for natural disaster recovery and how to avoid home-repair scams.

In addition to providing these materials to storm victims, the Mississippi Attorney General’s Office is sending a message to crooked contractors and other scam artists that disaster-related fraud won’t be tolerated in our state.

“My prayers and my condolences go out to the loved ones of those who lost their lives in Saturday morning’s storms,” Attorney General Hood said. “Hundreds of our friends and neighbors also sustained  property damage. We know from past experience that this type of storm damage in Mississippi attracts criminals looking for ways to take advantage of homeowners, and we’re getting the message out now so people can be aware of such quick-fix schemes and spread the word to neighbors and family members before they become victims. Within the next few weeks, home and business owners will want to repair storm damage quickly, but we caution them to be patient and make sure they are using a reputable home repair contractor.”

In order to avoid falling victim to scams or unscrupulous contractors in the aftermath of severe storms, Attorney General Hood offers these tips to protect you and your loved ones against home repair fraud:

·       Always get more than one estimate.  Ensure that all quotes are in writing for the full scope of the work.

·       Have a written home repair contract in place before allowing work to begin.  A contractor who won’t put pricing or warranty information in writing may be planning to defraud you.

·       Request references and follow up with these references.  Don’t assume that just because a reference is provided that it is a positive one.

·       Use Mississippi contractors if you can.  Verify that the contractor is licensed and insured.

·       Be wary of supposed contractors who come to your home soliciting business. Most reputable contractors will be busy and won’t need to solicit business.

“Con artists are creative and resourceful especially in the wake of severe weather, so we urge storm victims to remain alert, ask questions and be wary of the most common post-disaster fraud practices including bogus housing inspectors and fraudulent building contractors who follow storms across the country to profit from the misfortune of others,” Attorney General Hood said.

Attorney General Hood recommends that you take time to download a copy of the “model contract,” which will help you avoid becoming a victim of home repair fraud. More information can be found in “Consumer Tips for Storm Victims.” Both of these resources can be found by clicking here.

“We also encourage Mississippians to develop and practice their own family emergency plans,” Attorney General Hood said. “With spring storm season just around the corner, having necessary supplies on hand, a communications plan with your loved ones in place, and insurance and financial account information ready will assist consumers during and after a storm.”

In the aftermath of any storm or any other time, if you suspect home repair fraud or think you may have been conned by a scam artist, please contact the Office of the Attorney General, Consumer Protection Division at (601) 359-4230 or (800) 281-4418.


Lamar County Man Going to Prison for Sexual Battery of a Vulnerable Person

January 18, 2017

Attorney General Jim Hood announced today that a Lamar County man has been sentenced to prison after being convicted of sexual battery of a vulnerable person.

James Orell Smith, 50, of Purvis, pleaded guilty last week in Lamar County Circuit Court to two counts of sexual battery of a vulnerable person. Judge Anthony A. Mozingo sentenced Smith to 20 years in prison with 10 of those years suspended, followed by five years of post- release supervision on each count. The sentences are to run concurrently to each other, leaving Smith a total of 10 years to serve behind bars followed by five years of supervised probation. Smith must register as a sex offender upon his release.

Smith was arrested last February and accused of engaging in sexual penetration with a vulnerable person, an adult female, who was a resident of Shirley Hodges Personal Care Home. At the time of the crimes, Smith was employed as a maintenance worker at the home in Lamar County.

“I appreciate Judge Mozingo for his sentence and the investigators who worked on this case holding this man responsible for preying upon this vulnerable resident,” Attorney General Hood said. “Those who commit these types of heinous crimes should expect to be arrested and prosecuted to the fullest extent of the law.”

The case was investigated by Trey Rogers of the Attorney General’s Medicaid Fraud Control Unit and prosecuted by Special Assistant Attorney General Garland Lyell.


LUMBERTON MAN SENTENCED FOR POSSESSING CHILD PORNOGRAPHY

January 18, 2017

Attorney General Jim Hood announced today that a Pearl River County man was convicted and sentenced to prison for possessing numerous videos and images of child pornography.

Ronald Donovan, 55, pleaded guilty Tuesday to one count of possession of child pornography. Pearl River County Circuit Court Judge Claiborne McDonald sentenced Donovan to serve 40 years in prison with 30 of those years suspended, leaving 10 years to serve behind bars, followed by 30 years of supervised probation. Donovan was ordered to pay $1,000 to the Mississippi Children’s Trust Fund, $1,000 to the Mississippi Crime Victim Compensation Fund and all court costs. Additionally, he must register as a sex offender.

Donovan was arrested last March at his home by investigators with the Attorney General’s Cyber Crime Unit, with the assistance from the Picayune Police Department and Pearl River Sheriff’s Office. An investigation that revealed Donovan had been downloading an extensive amount of videos and images of child pornography.

“This defendant was in possession of a sickening amount of child pornography, which included hundreds of images and more than 70 hours of videos,” Attorney General Hood said. “It is our responsibility to secure justice for Mississippi’s children, our most vulnerable citizens, by prosecuting predators who exploit them. I am very pleased with the sentence rendered by Judge McDonald in this matter. Children who are exploited in this manner are victimized again and again, every time these images are shared.  We will continue to pursue offenders who commit these horrific crimes against our kids.

This case was prosecuted by Special Assistant Attorney General Brandon Ogburn of the Attorney General’s Cyber Crime Unit.

 


AG Hood Files Suit Against Google over Handling of Student Data

January 17, 2017
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Attorney General Jim Hood announced today that the state has filed suit against Google Inc., over how the internet giant maintains and uses data collected from Mississippi public school students who have Google’s G Suite For Education accounts.

Google is accused of collecting personal information and search history obtained from its users in order to advance its own business interests and increase its profit, in violation of the Mississippi Consumer Protection Act.

The free, web-based tools were previously known as Google Apps for Education and were marketed by Google as a safe way for students and teachers to seamlessly collaborate and communicate across multiple internet-connected devices. Among the “tools” offered in the suite of products were Gmail, Google Calendar, Google Drive and Google Docs.

In 2015, Google signed the K-12 School Service Provider Pledge to Safeguard Student PrivacyBy signing the pledge, Google promised, among other things, to “not collect, maintain, use or share student personal information beyond that needed for authorized educational/school purposes, or as authorized by the parent/student” and to “disclose clearly in contracts or privacy policies, including in a manner easy for parents to understand, what types of student personal information we collect, if any, and the purposes for which the information we maintain is used or shared with third parties.” The lawsuit alleges that Google fails to live up to its pledge and does not properly disclose the types of information it collects, maintains and uses, as well as whether and how that information is shared with third parties. Due to the multitude of unclear statements provided by Google, it is impossible to know exactly what student information Google is collecting and how Google is using that information. 

“It is disturbing to think that one of the world’s most profitable corporations would try to make even more money by deceiving parents and taking advantage of Mississippi school children,” Attorney General Hood said. “Through this lawsuit, we want to know the extent of Google’s data mining and marketing of student information to third parties. I don’t think there could be any motivation other than greed for a company to deliberately keep secret how it collects and uses student information.”

While it is believed that more than half of Mississippi schools currently use Google products, the lawsuit was filed on behalf of the state, and it does not seek compensation on behalf of any schools or students. The Attorney General encouraged school administrators to thoroughly research any technology services that may be used by students, and he said it would be up to schools to determine whether they continue to using G Suite For Education.

“I have a duty to protect the rights and interests of all Mississippians,” the Attorney General said in a letter to school superintendents. “This includes holding Google accountable for any misrepresentations it has made regarding GSFE users’ private information that it processes, collects stores and uses for its own financial gain, and seeking a court order requiring Google to cease any unlawful practices.”

Mississippi’s lawsuit was filed Friday in Lowndes County Chancery Court.

Click here for a copy of the FAQs, which address anticipated questions and concerns regarding the lawsuit.
Click here for a copy of the complaint.
Click here for a copy of the letter Attorney General Hood send to the Mississippi school superintendents.


AG HOOD SECURES $26 MILLION FOR MISSISSIPPI IN SETTLEMENT WITH MOODY’S

January 17, 2017
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Rating service to pay nearly $864 million to states, federal government over claims of deceptive conduct

Attorney General Jim Hood announced today that Moody’s will pay Mississippi more than $26 million to settle allegations that the credit rating agency engaged in deceptive conduct during the height of the financial crisis.

Moody’s Corporation, Moody’s Investors Service, Inc., and Moody’s Analytics, Inc. agreed to pay a total of $863,791,823 to 21 states, the District of Columbia and the federal government to resolve claims that Moody’s misrepresented its independence and objectivity when rating structured finance securities. Attorney General Hood’s lawsuit alleged that Moody’s ratings of structured finance securities were tainted by the company’s drive to win business and its concerns for market share. Structured finance securities, particularly those comprised of sub-prime mortgages, were at the center of the financial crisis.

In addition to the monetary settlement, Moody’s has agreed to take specific compliance measures intended to prevent the same problems from ever reoccurring.

Attorney General Hood and Connecticut Attorney General George Jepsen led the investigation in conjunction with the U.S. Department of Justice. The two AGs also led the multistate litigation against Standard & Poor’s, which culminated in a $1.375 billion settlement for 20 states and the federal government in 2015. Standard & Poor’s is a competitor of Moody’s. Mississippi received $33 million in the settlement with S&P.

“Moody’s reckless conduct went unchecked for years, feeding a subprime mortgage bubble,” Attorney General Hood said. “While Moody’s profited handsomely, the economy crumbled as people lost their homes.  Pension funds, retirement funds, and other investment vehicles in Mississippi and across the country lost billions of dollars as the value of securities with inflated ratings plummeted. This settlement is another important step toward holding accountable those responsible for our mortgage crisis.”

The settlement is the successful culmination of five years of hard-fought litigation for Mississippi, Attorney General Hood said.  In 2011, the Attorney General sued both Moody’s and Standard & Poor’s for violations of the Mississippi Consumer Protection Act. The lawsuit alleged that the companies misrepresented their independence and objectivity when rating structured finance securities, including residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOs), which derive their value from the monthly payments consumers make on their mortgages. 

Mississippi’s lawsuit alleged that Moody’s assigned inflated credit ratings to toxic assets packaged and sold by the Wall Street investment banks in an effort to curry favor, continue and grow business with these banks.  This alleged misconduct mainly occurred between 2004 and 2007, though it began as early as 2001.

Moody’s represented to consumers that its Aaa rating, its highest rating, carried a lower level of risk than other ratings. The Attorney General alleged that Moody’s manipulated its process so that, in reality, the Aaa rating represented a greater risk than Moody’s disclosed to investors.  The lawsuit asserts that Moody’s gave in to pressure from big banks, which were powerful, repeat customers that paid Moody’s millions of dollars to rate these securities.  The banks needed Aaa ratings in order to sell these securities to institutional investors, such as pension funds and retirement plans. 

“This was a complex case that involved reviewing hundreds of thousands of documents and interviewing dozens of former Moody’s executives in order to understand the full range of this misconduct,” Attorney General Hood said. “I appreciate Attorney General Jepsen and his office, as well as the U.S. Department of Justice, for their partnership. This was a successful federal-state collaboration that demonstrates our commitment to ensuring consumers have a level playing field against powerful corporate interests.”

As part of the settlement, Moody’s has agreed to a detailed statement of facts in connection with the way it rated RMBS and CDOs leading up to the financial crisis, and significant compliance terms – including an annual certification by the CEO of Moody’s Corporation, which will be provided to Mississippi every year for the next four years, certifying that Moody’s will follow certain compliance commitments. These compliance measures are designed to address conflicts of interest and to protect the integrity and transparency of rating methodologies in order to prevent the problems that created the 2008 financial crisis from occurring again. 

“The credit rating industry was essentially unregulated when we started this case,” Attorney General Hood said. “Since then, the SEC implemented rules in 2014 that came about largely as a result of our litigation against S&P.  In total, the credit ratings agencies have paid the states and federal government $2.2 billion to settle our claims of deceptive conduct and violations of federal law.  This is a substantial sum that will deter similar misconduct in the future.  Just as importantly, these settlements have shifted core policies and procedures in the credit rating industry such that Moody’s and S&P now operate in a way that is more transparent, independent and objective.  Consumers and the investing public have better protections as a result of our successes here.”

In addition to Mississippi, the states involved in the settlement are Arizona, California, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Massachusetts, Maryland, Missouri, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, South Carolina and Washington as well as the District of Columbia.