Lesser Law Group

San Rafael California Insurance Law Firm

California lawsuits accuse online tax preparers of fraud

Lawsuits filed in California on May 6 allege that two of the nation's largest tax preparation companies defrauded low-income filers by using deceptive and misleading practices. The companies supposedly made it difficult for taxpayers to access the Internal Revenue Service's Free File program. In the lawsuits, the Los Angeles City Attorney accuses H&R Block and Inuit of violating California's unfair competition law. The litigation asks for injunctions to put an end to the alleged deceptive practices and seeks restitution for filers who paid for tax preparation services even though they qualified for the Free File program.

Free File is a program created by the IRS in partnership with online tax preparation companies that allows individuals with an annual income of $66,000 or less to complete and submit their tax returns for free. According to the lawsuits, H&R Block and Inuit made finding information about their free options extremely difficult and instead tried to upsell low-income filers with costly services.

Ad agency fined for deceptive weight-loss promotions

While diet products are popular in California for people seeking to lose weight, many supplements and other items are backed by little to no meaningful evidence. Now, one advertising agency has settled a joint complaint brought by the Federal Trade Commission and the Maine state government for deceptive advertising. The firm, Marketing Architects, agreed to pay $2 million to the plaintiffs, representing the largest fine imposed on an ad agency. The plaintiffs had accused the company of using false and misleading claims to promote dubious weight-loss regimens.

The complaint noted that the ad agency had previously been warned about presenting advertisements without competent or reliable evidence to back up its health claims. It noted that Marketing Architects had even received information from its own client that further scientific support would be necessary in order to make certain claims. However, the company continued to make unproven health claims. In addition, it also sought to present its advertising materials as if they were legitimate news reports and promoted entirely false customer testimonials written by the agency itself.

Lab-grown diamond companies warned over advertising

California-born celebrity Leonardo DiCaprio is one of the investors in a diamond company that recently received a warning letter from the Federal Trade Commission over advertising practices. Diamond Foundry, which counts the actor among its backers, is a purveyor of laboratory-created diamonds. These man-made diamonds have chemical properties equivalent to those of natural, or mined, diamonds. However, rather than being mined from the earth, these diamonds are grown entirely inside a laboratory, typically through the use of a small plasma reactor that allows chemical elements to form a final stone.

Several lab-grown diamond companies received these warnings in April 2019. The statements noted that these companies must make clear that the diamonds they sell are lab-grown rather than "natural." The FTC letter said that it was concerned that consumers could believe that they are buying mined diamonds instead of man-made versions because of the terminology in the advertisements, especially on social media. For example, some ads called the stones "aboveground forged" or "real diamonds created in America" without using the term "laboratory-grown."

Lawsuit draws attention to problems with cyberinsurance

Dark clouds hover over the booming cyberinsurance industry. Cyber policies currently value an estimated $5.2 billion and should reach $7.5 billion by the end of the decade. However, a recent lawsuit shows that these policies might not protect insurance holders as well as they had believed.

Frequent Bay Area flooding puts business owners in a bind

From San Rafael’s flash floods in late February to an “atmospheric river” flooding the North Bay, Northern California has seen our share of rough waters in the last few months. And according to the Insurance Institute for Business and Home Safety, more than a quarter of businesses that close because of a disaster like a flood never re-open.

As local business owners assess the recent damage, here are a few things to keep in mind:

Court dismisses complaint due to late reporting

Insurance policies are notoriously dull to talk about but crucial to the operation, and even the survival, of a business. Every business needs to effectively communicate with insurance companies to protect their employees and their company. A recent decision by the U.S. District Court in Los Angeles, PAMC, Ltd. v. National Union Fire Ins. Co., Case No. 2:18-cv-06001-SVW-AS (C.D. Cal. Feb. 12, 2019), serves as the perfect example of how ignoring this "dull task" can turn into a potentially devastating liability.

PAMC, LTD, an insured hospital, recently learned this lesson after it settled a $42 million whistleblower lawsuit without consulting its insurance company first. Now, the hospital will pay a hefty price tag due to "late reporting."

Former California insurance agent facing fraud charges

Prosecutors in California say that a former licensed insurance agent stole more than $100,000 from small business owners and general contractors by selling them bogus workers' compensation policies. The 31-year-old man faces a raft of felony counts, including insurance fraud, forgery and grand theft. Prosecutors say the man used the money to cover gambling debts and buy luxury items such as designer clothing and sporting equipment. He was released from custody after posting bail in the amount of $100,000.

The man allegedly told small business owners that their workers' compensation policies would be backed by major insurance providers. However, prosecutors from the Orange County District Attorney's Office claim he pocketed the money instead and provided his clients with no coverage whatsoever. Prosecutors say that he was able to avoid suspicion by issuing his clients with fake certificates of insurance.

Google and Oracle take dispute to high court

One of California's largest tech companies is asking the Supreme Court to intervene in a copyright dispute. Google and Oracle have been locked for years in a battle over 37 APIs, or application programming interfaces, for the Java language. These APIs are used by software programmers to allow different pieces of code to communicate with one another. It is fairly common for programmers to copy other developers' APIs when writing new software, something that Google did with Java APIs when developing code for its Android mobile operating system.

After Oracle acquired Sun Microsystems, the developer of the Java APIs, it filed a copyright complaint against Google, asserting that the APIs were copyrighted and that their usage was unauthorized infringement. On the other hand, Google argues that its use of the APIs are fair use and that snippets of code of this type cannot be subject to copyright. While a district court agreed with Google, an appellate court on the Federal Circuit sided with Oracle in a controversial opinion that has been widely debated in the tech industry.

Patent dispute between clashing tech giants

A patent dispute is moving forward in the Southern District of California between two major technology corporations. The litigation between Apple and Qualcomm hinges on whether the latter's alleged monopoly on chipset technologies for mobile phones led to overpayments by Apple and other equipment manufacturers. Qualcomm has previously faced investigations by the European Union and Korean regulators as well as the Federal Trade Commission, paying billions of dollars in antitrust fines over its licensing process for its patents for mobile chipsets.

Qualcomm said that its patent license complies with government regulations that require it to be "fair, reasonable and non-discriminatory," or FRAND. While the chipset company said its licenses were FRAND, Apple lawyers argued that the federal judge overseeing the case should not declare that Qualcomm's licenses meet the standard. They also accused Qualcomm of using the litigation as a tool in potential future negotiations with Apple over including the chipsets in its iPhones and other mobile devices. Apple attorneys argued that the company refuses licenses to companies that manufacture their own chipsets as well as charging exorbitant fees for its licenses that far exceed the competition. As a result, Apple argued that Qualcomm's licenses do not meet the FRAND standard.

Former lawyer jailed in fraud case

A former California lawyer was sentenced on Jan. 11 to four years in prison after being convicted of insurance fraud and felony elder fiscal abuse. The 83-year-old man's conviction came over three years after allegations were first raised regarding his failure to pay for long-term care for a 92-year-old mother and her disabled dependent 63-year-old son. The man had served as mother and son's fiscal and medical power of attorney.

The judge who issued the sentence noted the poor situation of the son, in his 60s and living in the Burlingame Long Term Care Center, after the offender squandered the assets his mother had saved to provide for his care. The mother is living with dementia at a retirement center in Millbrae. According to testimony, the man embezzled almost $460,000 from the woman's accounts between 2010 and 2014. The lawyer was supposed to assist the son, but he instead duped the son into signing over his assets. The man then used the money to fund personal trips to Canada and the Philippines and pay off credit card bills.

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