Risk Update

Conflicts Cleared and Conflicts Alleged — $1B Fraud Case, NRA Drama

Greenberg Traurig Clears Conflict Inquiry In $1B Fraud Case” —

  • “A Tennessee federal judge on Friday found that potential conflicts of interest do exist between several attorneys representing a pharmacy owner and pharmacies accused of a $1 billion insurance scheme, but waived the conflicts pertaining to a pair of Greenberg Traurig LLP lawyers.”
  • “In the suit, the government alleges that pharmacy owner Larry Smith, seven pharmacies and several other individuals conspired to deceive tens of thousands of patients and more than 100 doctors across the country in an elaborate scheme that attempted to bilk private health care insurers out of $931 million.”
  • “Prosecutors raised concerns about possible conflicts of interest in the case in March, asking the court to further probe the matter. Specifically, they said Greenberg Traurig shareholder Gregory Kehoe, who represents Smith and two associated companies, previously represented a pair of potential witnesses in the case when they were deposed in a related civil suit in Florida.”
  • “U.S. District Judge J. Ronnie Greer on Friday granted the government’s motion for judicial inquiry into possible conflicts of interest but found that the potential conflicts involving Kehoe and fellow Greenberg Traurig shareholder Danielle Kemp were waivable.”
  • “‘Kehoe and Kemp properly obtained waivers from Smith and the two potential witnesses,’ the judge said. ‘The court has hereby accepted the waivers… [T]he content of the waivers reasonably ensure Smith made an informed decision to accept their continued representation'”
  • “Specifically, the waivers Kehoe and Kemp obtained contained explanations and disclosures that adequately informed their client and former clients of the material advantages and disadvantages of the proposed course of action, according to the order.”

Ex-NRA Execs Fear Attorney Is Shielding LaPierre at the Group’s Expense” —

  • “In early 2018, the National Rifle Association, alarmed by growing scrutiny from oversight agencies in New York State, hired attorney William A. Brewer III and his firm to fend off the threat. Rather than compromise, Brewer attacked. Today, the NRA — once considered the most powerful interest group in American politics — faces the prospect of extinction.”
  • “Some NRA members and a handful of the gun group’s former leaders have long charged that Brewer has imperiled the organization by prioritizing the interests of chief executive Wayne LaPierre. Only recently has LaPierre gotten his own attorney in cases that involved both the NRA boss and the organization. LaPierre’s new attorney and Brewer share history: Both have worked for a development group behind a proposed ice skating complex in the Bronx that has been described as the largest in the world.”
  • “In Brewer’s first year of service, the NRA paid his firm $19 million, or roughly $1.6 million a month, according to court filings and internal correspondence. If that monthly average has held, the firm has collected upward of $50 million to date — a conservative estimate given how the firm’s NRA workload has grown.’
  • “In 2018, the NRA’s audit committee, at Brewer’s direction, started to retroactively approve financial transactions that had benefited insiders. Committee chairman Charles Cotton has defended the approvals, telling The Wall Street Journal that the committee had ‘confirmed that the services were rendered at fair market value and worked in the best interests of the Association.’ According to James’s complaint, however, the committee did not review any relevant records, such as contracts, so it failed to meet a state requirement that nonprofits approve only insider transactions that are determined to be ‘fair, reasonable and in the corporation’s best interest.'”
  • “Arulanandam [NRA Public Affairs Director] said the firm has ‘helped the NRA prevail in a wide range of matters’ and pointed to the legal bills dispute, a recent settlement with a New York regulator, and a lawsuit that the NRA filed in 2019 against the city of San Francisco. (The NRA withdrew the San Francisco suit, which was not handled by Brewer’s firm.) ‘We are proud of the firm’s track record for the NRA,” Arulanandam said. “The firm’s scorecard is phenomenal.'”