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BANKING Convicted of bank fraud, defendants to pay $61M MIAMI-A Florida federal judge has ordered former Hamilton Bank Chairman and Chief Executive Eduardo A. Masferrer and his two co-defendants, Carlos Bernace and John Jacobs, to pay $61 million in restitution to defrauded investors and banks. Masferrer was convicted of bank fraud in May and sentenced to 30 years in prison. Bernace and Jacobs, who were cooperating witnesses, were sentenced to 28 months in prison. Masferrer must pay $17 million as restitution for his bank fraud conviction and $14.5 million to some 300 defrauded investors. Bernace and Jacobs were each ordered to pay $14.5 million to investors. -ALM MEDICAL MALPRACTICE Family of brain-damaged baby awarded $16.5M HONOLULU (AP)-A Hawaii federal judge has ruled that the federal government must pay $16.5 million to the family of a boy who, as a newborn, was accidentally administered carbon dioxide instead of oxygen. Izzy Peterson was born healthy on Jan. 14, 2005. To give his breathing a boost, the doctor accidentally administered carbon dioxide for 41 minutes. The infant suffers from severe brain damage; he breathes through a tube in his neck, eats through another connected to his stomach, requires around-the-clock nursing care and is expected to die before he turns 30. The accident took place in a Department of Defense hospital. PRODUCTS LIABILITY Toy maker to pay $13.5M to settle magnet claims MONTREAL (AP)-Toy maker Mega Brands Inc. has agreed to pay $13.5 million to settle lawsuits related to its Magnetix toys, including one that involved the death of a 22-month-old child in Redmond, Wash. Twenty-two-month-old Kenny Sweet died a year ago after he swallowed powerful magnets that reattached in his small intestine, twisting it and creating a blockage. Three other children, between the ages of 3 and 8, suffered intestinal perforations that required surgery and hospitalization in intensive care. A 5-year-old boy inhaled two magnets that had to be surgically removed from his lungs. SEX ABUSE $16M judgment against convicted sex abuser NICHOLASVILLE, KY. (AP)-A Kentucky state jury has awarded $16 million to a girl who was sexually abused three years ago. However, she may only collect a fraction of that amount. The girl’s mother had filed the civil suit, seeking damages on behalf of her daughter, against James T. Evans, 72, whose only income is Social Security and disability benefits. The jury awarded $7.5 million for past and future mental and physical suffering, future medical and counseling expenses and expenses for medicines in the future, plus $8.5 million in punitive damages. The sexual abuse occurred in December 2003 when the girl was 9 years old. Evans was convicted of first-degree sexual abuse and sentenced to five years in prison. TORTS Airline must pay $9M to wrongly arrested men PHOENIX (AP)-An Arizona state jury has ordered Southwest Airlines Co. to pay $9 million to two former bail agents, who say their lives and careers were threatened after they were mistakenly arrested on a flight in September 1999. Thomas Hudgins, 43, and Leroy DeVore, 45, both from Richmond, Va., made plans to fly to Arizona to arrest a fugitive. After showing identification and a letter explaining the circumstances of their jobs, both men were given permission by Southwest employees to bring loaded weapons in their carry-on luggage. However, Federal Aviation Administration policy only allowed federal or law enforcement employees to carry weapons. When the plane landed, the men were arrested and jailed for three days. The airline then refused to turn over documents from its own investigation to the men’s defense lawyers unless they signed a statement releasing Southwest of any liability. The charges were eventually dismissed. The men were each awarded $500,000 in compensatory damages and $4 million in punitive damages. WHISTLEBLOWER SUIT Prescription benefits firm pays $155M to settle case TRENTON, N.J. (AP)-Prescription benefits manager Medco Health Solutions Inc. has agreed to pay $155 million in fines to settle fraud, kickback and other charges brought in a Pennsylvania federal court in a whistleblower case. The agreement involves multiple cases of alleged wrongdoing by Medco, which handles prescription benefits for about 58 million Americans. The company was accused of paying health insurance plans kickbacks to obtain their business and of soliciting kickbacks from drug manufacturers to favor their drugs over competitors’ products, partly by illegally pressuring pharmacists and doctors to switch prescriptions. Those issues were brought to light by three whistleblowers, one of whom was a government informant and the other two were pharmacists employed at Medco’s Las Vegas pharmacy.

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