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The Whistleblower blog was started in 2008. Look for posts by these contributors: James Eli Shiffer, Jane Friedmann, Brandon Stahl, Eric Roper and Alejandra Matos. | Check out the Whistleblower archive.

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Posts about Businesses in hot water

Umbilical-cord bank told to tighten data security.

Posted by: Jane Friedmann Updated: May 6, 2013 - 3:00 PM

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Cbr Systems, Inc., a California company that collects and stores umbilical cord blood and tissue for possible medical research, must implement better data security measures and submit to  security audits after a breach exposed 298,000 customers' personal information in 2010, the Federal Trade Commission announced Friday.

Names, addresses, Social Security numbers, medical histories, credit or debit information, drivers license and other data, primarily of pregnant donors, was copied onto unencrypted backup tapes, according to a complaint by the FTC.

While in transit from one facility to another, the tapes were stolen from a backpack left in an employee's car, the complaint said.

The settlement also requires Cbr to revise its privacy policy to accurately represent the level of security afforded personal data it collects.

Read more about the settlement and complaint on the FTC's website.

Bemidji lawyer gets disciplined for harboring fugitive

Posted by: Jane Friedmann Updated: May 1, 2013 - 10:38 AM

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A Bemidji lawyer who harbored a fugitive and lied to police about it had her license to practice law placed on administrative probation last week by the Minnesota Supreme Court.

According to a petition filed with the court by the Office of Lawyers Professional Responsibility, Amber Julie Ahola was contacted by a client after the client absconded from a court-ordered supervised release facility. The client, John Jerrod Jones, had been released from prison and was serving the final 90 days of a sentence for felony assault of a police officer causing bodily harm or throwing or transferring bodily fluids or feces, according to court records.
 
Ten days after entering the Brainerd Regional Human Services Center, where he was to serve his supervised release, he left and called to ask Ahola for a ride, the petition stated.
 
Ahola picked Jones up in Brainerd and dropped him off in Bemidji, though she "was aware of the length of his sentence and should have realized that he had absconded from Four Winds [Lodge Treatment Program]" at the Brainerd center.
 
Later Jones asked Ahola to help him turn himself in, the petition said.
 
Ahola failed to notify police that Jones had escaped, contacted her, wanted to turn himself in and would be arriving at her house, according to the petition.
 
Law enforcement got a tip that Jones could be found at Ahola's house and when a deputy knocked and asked, Ahola twice said Jones was not there. When the deputy threatened to get a search warrant and mentioned the possibility Ahola could be charged with a crime, she admitted Jones was there.
 
Ahola admitted the allegations of the petition. She is on probation for two years and must pay a $900 fine. While on probation she must cooperate with the office in its efforts to monitor her or investigation allegations. She must also follow the Minnesota Rules of Professional Conduct, the order stated.
 
Are you wondering whether a certain lawyer has ever been disciplined by the state? Click here.

 

Telemarketers barred, must pay $6.9M

Posted by: Jane Friedmann Updated: April 30, 2013 - 9:46 AM

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Five people, operating under a dozen business names, including NHS Systems Inc., were barred from telemarketing and ordered to forfeit the $6.9 million they made by defrauding customers, according to the Federal Trade Commission on Wednesday.
 
The defendants made sales calls claiming they were affiliated with the federal government, a U.S. District Judge in Pennsylvania found. Consumers were told they needed to provide bank or credit card information to receive a tax refund or to continue to receive Medicare benefits. Many found themselves enrolled in a “discount health care program,” the FTC said.
 
“All defendants have … demonstrated their continued ability, desire, and success in committing the same deceptive acts. The danger of recurrent violations is real,” said Judge Juan R. Sánchez.
 

Cow slaughtered for food had excess penicillin in tissue

Posted by: Jane Friedmann Updated: April 24, 2013 - 11:15 AM

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Meat from a dairy cow slaughtered for food was found to be "adulterated" after testing of the cow's kidney revealed the presence of 0.47 parts per million of penicillin, according to a warning letter from the U.S. Food and Drug Administration last month. The acceptable maximum is 0.05 parts per million.

 Kronebusch Farms, Inc., in Altura, Minn. also failed to keep complete treatment records for medicated animals, the FDA found.

A message has been left for president and owner Daniel Kronebusch.

Click here to browse all the agency's warning letters.

Lawyerless legal business told to cease and desist

Posted by: Jane Friedmann Updated: April 22, 2013 - 4:12 PM

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A Blaine man who counseled debtors and prepared legal documents is barred from those activities in Minnesota, the U.S. Bankruptcy Court for the District of Minnesota ruled last month.

The ruling follows cease-and-desist orders in Colorado, Missouri and the Eastern District of Wisconsin and an agreement to refrain from certain activities in St. Louis County in Minnesota.

Edward Jonak’s business, 3rd Millennium Systems, Inc., operated under a handful of different names including Affordable Law Center and Affordable Court Services, and had an office in four Minnesota cities.  He advertised bankruptcy, divorce and DWI “legal plans” for a flat fee and freely used terms such as “legal,” “court,” “law,” and “attorney.” But Jonak isn’t a lawyer and his businesses employed no lawyers.
 
In an interview with Whistleblower last year , Jonak said that he needed no license or permission to provide help to his customers. Despite the previous court rulings, Jonak maintained he wasn't breaking the law.
 
U.S. Bankruptcy Judge Gregory Kishel disagreed and called Jonak’s “flimsy structure of a self-styled ‘legal plan’ clear violations of federal law.
 
Jonak told customers how to fill out forms, gave advice, referred people to lawyers for an additional fee and contracted the typing of forms to a person in another state, according to the ruling. The typist signed the papers stating he was the bankruptcy petition preparer. Jonak’s name did not show up anywhere in the bankruptcy filings, as required by law.
 
One bankruptcy petitioner testified that Jonak advised him to list a four-wheeler under “tools” as exempt. Others said that Jonak advised them on which type of bankruptcy to file for, whether to list student loans and whether to file state or federal exemptions, among other advice. A number of customers named in the ruling were unsure whether Jonak’s business was a law firm or if Jonak was a lawyer.
 
Customers were required to initial disclaimers such as “I do not believe the advertizing [sic] responded to was misleading in anyway,” “I have not been directed by anyone to ask legal strategy questions” and “no one at Affordable Court Services can give legal advice," disclaimers that Kishel described as "grotesquely self-serving.”

Jonak was ordered to refund the fees paid by 18 former clients and pay each $2,000 in damages.

McDermott v Jonak

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