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BILLING Four firms pay $25.5M to settle overcharge suits Los Angeles (AP)-Accounting firm Ernst & Young LLP and three other consulting firms have paid more than $25.5 million to settle lawsuits that claimed they had overcharged for travel expenses on federal government work. The government alleged that Ernst & Young and consulting firms BearingPoint Inc., Booz Allen Hamilton Inc. and KPMG LLP had, while doing work for the government, made travel reimbursement claims that didn’t include rebates on the expenses provided by credit card companies, airlines, hotels, rental car agencies and travel service providers. BearingPoint has paid $15 million, Booz Allen about $3.4 million, Ernst & Young paid nearly $4.5 million and KPMG paid nearly $2.8 million to settle the claims. FRAUD Mortgage underwriter settles with U.S. for $41M Grand Rapids, Mich. (AP)-ABN AMRO Mortgage Group Inc. has agreed to a $41 million-plus settlement with the federal government for falsifying documents in tens of thousands of loans insured by the Federal Housing Administration (FHA). In 2003, the U.S. Department of Housing and Urban Development (HUD) discovered underwriting deficiencies and improper conduct by an ABN employee. ABN then found that, in direct violation of FHA rules, a number of its employees had falsely certified that two ABN underwriters had reviewed more than 28,000 loans prior to FHA endorsement when they had not. Ann Arbor, Mich.-based ABN will pay $16.85 million to the U.S. government and won’t submit 783 defaulted loans to HUD, saving the FHA insurance fund $24.35 million in losses. NEGLIGENCE Accounting firm settles auditing suit for $8.5M Milwaukee (AP)-Accounting firm PricewaterhouseCoopers LLP agreed to settle a class action over how it audited two collapsed mutual funds. PricewaterhouseCoopers was Milwaukee-based Heartland Advisors Inc.’s accounting firm in 2000 when the investment firm marked down the value of two funds. The U.S. Securities and Exchange Commission has estimated fund shareholders lost about $80 million. Heartland already settled the case for $14 million. PRICE-FIXING Calif. energy crisis class actions settle for $377M San Diego (AP)-Sempra Energy has agreed to pay $377 million and change its business practices to settle class actions accusing the company of conspiring to limit supplies and drive up prices during California’s energy crisis in 2000 and 2001. The settlement came during a jury trial in a California state court that threatened to bankrupt the company with potential damages as high as $23 billion. It calls on San Diego-based Sempra to reduce by $300 million the amount it charges the state under long-term power contracts reached during the height of the energy crisis. The plaintiffs included the city and county of Los Angeles and the city of Long Beach, Calif. REGULATORY ACTION McAfee will pay $50M to settle SEC charges San Jose, Calif. (AP)-McAfee Inc., a maker of anti-virus and security software, has agreed to pay $50 million to settle accounting fraud charges filed by the Securities and Exchange Commission (SEC). The Santa Clara, Calif.-based company was accused of overstating revenue and profit by hundreds of millions of dollars between 1998 and 2000. During that period, McAfee inflated its cumulative net revenue by $622 million, with sales for 1998 alone being misrepresented by $562 million, according to the SEC. McAfee misrepresented to investors that it had exceeded its revenue forecasts and analyst estimates for profit during the two-year period, the SEC charged. The company used a variety of ploys to oversell products to distributors. Pharmacy to pay $2M to N.Y. in Medicaid probe Tonawanda, N.Y. (AP)-A western New York pharmacy has agreed to pay $2 million to settle allegations of Medicaid billing irregularities. New York Attorney General Eliot Spitzer’s office said that Parkview Health Services Inc. of Tonawanda regularly delivered 30 days’ worth of medications every 28 days to 5,000 Medicaid recipients in adult and group homes in Chautauqua, Erie, Genesee, Monroe and Niagara counties from 2000 to 2004. The drug store then accepted returns of accumulated excess drugs without crediting Medicaid. SHAREHOLDER SUIT HealthSouth CEO must repay bonuses of $47.8M Birmingham, Ala. (AP)-An Alabama state judge has ruled that fired HealthSouth Corp. CEO Richard Scrushy must repay $47.8 million in bonuses that he received while running the medical rehabilitation chain amid a huge fraud despite his being acquitted in the scheme. The judge ruled that, while HealthSouth had initially reported profits from 1997 to 2000, the company really lost money, making Scrushy ineligible for bonuses.

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