Mortgage broker ordered to cease deceptive ads—DISB sent an order on Sept. 20 to a District-licensed mortgage broker to stop distribution of deceptive advertising to District residents. The firm solicited business from DC homeowners who have current mortgage loans with a bank in the District by suggesting they refinance their existing mortgages at a lower rate with lower monthly payments. The advertisement gave the impression that the firm represented the bank, which notified DISB of the deception. The firm was instructed to stop its activity and acknowledge its willingness to do so, or face possible suspension of its license.

DC dental clinic owner indicted of health care fraud after joint investigation—DISB joined the US Attorney for the District of Columbia, the Federal Bureau of Investigation (FBI)’s Washington Field Office and the DC Department of Health (DOH) early August in a joint investigation leading the federal grand jury to indict a dental clinic owner with health care fraud and making false statements. According to the indictment, an individual was charged with allegedly executing a scheme to obtain money by submitting false insurance claims from 1997 to 2005. Claims were made for procedures not performed, for identical claims to two insurance companies for dental work, and for identical claims to two insurance companies for work not performed at the clinic, which the person owned and operated. The indicted allegedly falsified dates when procedures were done and altered or destroyed patient records, as well as claimed a water leak damaged patient records. The accused is facing more than 50 years in prison if convicted. The next hearing has been scheduled for the end of October. Because of his work on this bill-padding fraud case, DISB’s senior fraud investigator, Carl Ditchey, received a certificate of appreciation from FBI director, Robert S. Mueller III, on Sept. 22.

DISB and FBI form Securities Financial Fraud Working Group—Members of DISB’s Enforcement and Investigation Bureau and examiners in the Securities Bureau convened their first meeting on Sept. 28 with federal law enforcement officials to establish a joint effort to fight securities scams in the District and Virginia. There will be periodic meetings to discuss fraud and other local issues.

WashingtonFirst Bank’s acquisition of First Liberty National Bank consummated without a hitch—After DISB’s Aug. 16 approval of the application for WashingtonFirst Bank, Washington D.C., to acquire First Liberty National Bank, Washington, DC, WashingtonFirst consummated its acquisition without any disruption of customer services. First Liberty was merged into WashingtonFirst, a District-chartered bank, and its four offices were converted to branches of WashingtonFirst. The merger was consummated Friday, Sept. 15 and the newly converted branches opened for business on Monday, Sept. 18. Before the merger, WashingtonFirst had about $127 million in assets, and First Liberty, a national bank, had about $80 million. The acquisition would enhance WashingtonFirst’s ability to provide better deposit and lending services to the city and the surrounding area, according to DISB Commissioner Thomas E. Hampton. DISB reviewed the proposed merger transaction for conformity with the District of Columbia banking code, and applicable regulations and policies. DISB considered WashingtonFirst’s financial resources and future prospects, its managerial resources, its community development program and the public interest.

DISB joint investigation leads to conviction—A joint investigation between the US Department of Labor (DOL)’s Office of the Inspector General and DISB’s Enforcement and Investigation Bureau ended July 24 with the guilty plea and sentencing of an individual in D.C. Superior Court. The person pleaded guilty to attempted second-degree insurance fraud after filing false claims with an insurance company. The convicted was helped in the scheme by an accomplice, an employee of DOL in the Worker’s Compensation office, who created a fictitious medical provider and fabricated documents from the provider to support a false worker’s compensation claim for the convicted person, who accepted and cashed insurance payments for personal use. The offender was sentenced to 120 days jail, suspended plus two years of probation with special conditions, and ordered to pay nearly $3,000 in restitution, which represented half of the amount stolen. The other half is being paid by the co-conspirator who was also convicted and sentenced for the crime on Jan. 5.