Violation Tracker

Back Pedaling on Kickbacks?

It’s hard not to be suspicious when the Secretary of Health and Human Services promotes a supposed reform by stating that “President Trump has promised American patients a healthcare system with affordable, personalized care, a system that puts you in control, provides peace of mind, and treats you like a human being, not a number. But too often, government regulations have stood in the way of delivering that kind of care.”

Secretary Alex Azar used those dubious statements in a press release about his department’s plan to “modernize and clarify” the regulations that interpret the Physician Self-Referral Law (known as the Stark Law) and the Federal Anti-Kickback Statute.

Azar claims that the rule changes would promote new methods of delivering healthcare based on greater coordination among providers, including those with financial relationships with one another.

The changes are technical in nature, but I cannot help but worry that the scheme would serve to legitimize dubious dealings and enable providers to avoid prosecution under laws that have been in place for several decades.

I have become more familiar with these laws in the course of collecting data for Violation Tracker. The database currently contains more than 360 cases in which kickbacks and bribery are involved as the primary or secondary offense. These cases have resulted in more than $14 billion in fines and settlements involving many of the largest names in pharmaceuticals (Merck, Amgen, Bristol-Myers Squibb, Pfizer, et al.), hospitals (Tenet, HCA, among others) and pharmacies (such as CVS).

The biggest penalty is a $2.2 billion agreement signed by Johnson & Johnson in 2013 to resolve civil and criminal charges of paying kickbacks to physicians to encourage them to prescribe several of its drugs for uses not approved by the Food and Drug Administration.

One of those drugs was the anti-psychotic medication Risperdal, which was only approved for schizophrenia but which J&J was allegedly promoting for other less serious conditions among elderly patients through financial inducements to providers.

In an interesting coincidence, the announcement of the new HHS proposal came at almost exactly the same time that a jury in Philadelphia hit J&J with an $8 billion verdict over its marketing of Risperdal for use by children.

It will be interesting to see whether the new HHS rules on kickbacks, if they go through, manage to distinguish between more innocent financial dealings among providers and the corrupt practices that have been so common among the larger players. Given this administration’s track record on healthcare and so many other issues, we cannot give it the benefit of the doubt.

Capital Punishment

Some corporate critics have argued that the only way to deter egregious misconduct by companies may be to give prosecutors the option to seek the “death penalty”—revocation of the firm’s charter and the closing of the business.

Ever since the dismantling of Arthur Andersen after its conviction on criminal charges relating to its auditing of Enron, prosecutors at the federal level have avoided seeking that harsh remedy. In fact, they moved sharply in the other direction by adopting dubious arrangements known as deferred prosecution and non-prosecution agreements that allow companies essentially to buy their way out of criminal jeopardy. A recent report from Public Citizen found that these arrangements have been a failure in deterring corporate wrongdoing.

Yet what has received less attention is the fact that the corporate death penalty is alive and well at the state level. Numerous state AGs have been using this method to deal with those firms considered unredeemable bad actors.

For example, the Delaware AG Kathy Jennings recently announced that she had filed actions in the state Court of Chancery to dissolve 15 Delaware business entities for involvement in criminal activities. Her press release stated: “State law allows the Attorney General to petition for cancellation of an entity’s Delaware formation document when its powers, privileges, or existence have been abused or misused.”

Among the firms she moved to dissolve were LOAV Ltd., Davis Manafort International LLC, DMP International LLC, BADE LLC, Jupiter Holdings Management, LLC, and Davis, Manafort & Stone, Inc. The principals of these companies, the AG noted, were Paul Manafort and Richard Gates, who pleaded guilty in 2018 to charges involving money laundering, failing to register as a foreign agent, failure to report bank transactions, and making false statements. Manafort was also convicted in 2018 by a jury of tax and bank fraud charges. The charges against the two men included allegations that they used the named businesses to illegally conceal from the United States government millions of dollars in income received from the Ukrainian government as well as evading roughly $1.4 million in personal income taxes owed to the IRS while funding lavish personal expenditures.

The AG also proposed to dissolve Essential Consultants LLC, which was used by former Trump fixer Michael Cohen to facilitate a hush-money payment of $130,000 to Stormy Daniels.

Previously, the Delaware AG was successful in forcing four LLCs linked to the now defunct website Backpage.com to relinquish their state certificates of formation in the wake of allegations that the site promoted prostitution and human trafficking.

Not all the companies forced to dissolve are quite so well known. In the course of collecting data for our recent report on state AGs, my colleagues and I came across numerous cases in which obscure firms such as home contractors or used-car dealers were forced out of business.

For example, in July 2011 the Oregon AG announced that a company called S&S Drywall Assemblies was ordered dissolved as part of the resolution of criminal racketeering and antitrust charges brought against the company and its owner.

In some cases a state AG would carry out what amounted to a partial death sentence by banning an out-of-state company from continuing to operate in the AG’s state while it may continue to function elsewhere. We found numerous cases of this in North Dakota, which rarely penalized in-state companies but did not hesitate to ban misbehaving out-of-state ones. One of these targets was a traveling asphalt paving company.

We did not include these cases in our report or the state AG data we added to Violation Tracker because the dissolutions or state bans usually did not include monetary penalties, the common denominator among the varied cases contained in our database.

Clearly, it’s much easier for state AGs to dissolve smaller firms than it would be for federal prosecutors to do the same to large corporations with thousands of employees and shareholders. States also have the advantage that corporate chartering is a function that they, not the feds, control.

There is a feeling of satisfaction that comes from seeing a rogue company shut down that does not go along with a deferred prosecution agreement and a far-from-confiscatory monetary penalty. There has to be some way to bridge the gap.

Bipartisan Corporate Crime Fighting by the States

A new report from the Corporate Research Project of Good Jobs First on lawsuits filed by state attorneys general shows that the current cases against the drug companies and the tech sector are part of a long-standing practice of bipartisan cooperation in fighting corporate misconduct.

The report focuses on 644 cases in which AGs from multiple states took on companies over issues ranging from mortgage abuses to illicit marketing of prescription drugs and collected more than $100 billion in settlements over the past two decades.

These multistate cases are a subset of more than 7,000 state AG actions compiled for the latest expansion of Violation Tracker and now available for searching on the database.

In at least 260 multistate cases, a majority of the states signed on as plaintiffs. In 172 of the cases, 40 or more states participated. State AGs are split almost evenly between Democrats and Republicans, meaning that the cases with large numbers of state participants are necessarily bipartisan.

In 362 of the cases, the defendants were giant companies included in the Fortune 500 or the Fortune Global 500. The parent company with the most cumulative multistate AG penalties is, by far, Bank of America, with more than $26 billion in settlements over issues such as mortgage abuses and the sale of toxic securities. It is followed by the Swiss bank UBS ($11 billion), Citigroup ($8 billion), JPMorgan Chase ($6 billion) and BP ($4.9 billion).

The most frequent defendant has been CVS Health, which has paid out more than $215 million in 14 settlements, most of them involving the alleged submission of false claims to state Medicaid programs and the payment of illicit kickbacks to healthcare providers. Another 47 parent companies have been involved in three or more multistate AG cases.

In 118 multistate AG cases, corporations have paid penalties of $100 million or more; in 19 of these the amount exceeded $1 billion. The biggest individual settlement was an agreement by UBS to repurchase $11 billion in investments known as auction-rate securities whose safety it allegedly misrepresented to investors. The second largest was an $8.7 billion agreement by Bank of America to resolve claims relating to predatory home mortgage practices by its Countrywide Financial subsidiary. (The recently announced multistate settlement with Purdue Pharma is not included because it is still tentative.)

Banks and other financial services companies account for far and away the largest monetary share of penalties paid in multistate AG cases — $70 billion from 122 settlements involving 65 different parent companies. In second place is the pharmaceutical industry with $10.4 billion in penalties from 137 settlements.

Consumer protection and price-fixing cases are the most numerous kinds of multistate AG lawsuits, but investor protection and mortgage abuse lawsuits against the big banks have generated the greatest monetary penalties.

In 243 of the multistate cases, the U.S. Department of Justice or another federal agency was also involved in the settlement and often led the negotiations. These actions, which accounted for $31 billion of the $105 billion in total penalties, include cases in which the federal entity, usually DOJ, initiated the investigation and brought in the states — as well as ones in which federal and state prosecutors were involved from the start.

Multistate AG lawsuits originated in the 1980s, when state prosecutors grew concerned at rollbacks in federal enforcement by the Reagan Administration and decided they needed to fill the gap. They scored a big win with the master tobacco settlement of the late 1990s and continued their actions through both Republican and Democratic presidential administrations.

There is every reason to believe that the number of multistate AG settlements will continue to grow. The pending cases against opioid and generic drug producers, as well as emerging antitrust investigations of the tech sector, could add billions more to the penalty totals.

Crossing Party Lines to Fight Corporate Crime

The state attorneys general seem to be divided on how big a settlement they should extract from the Sackler family and Purdue Pharma to resolve a lawsuit concerning their involvement in the opioid crisis. According to one report, the split is largely on party lines, with Democratic AGs calling for a bigger payout and Republican prosecutors settling for less.

More on the diverging negotiating positions will probably come to light in the days ahead. This disagreement should not, however, obscure the bigger story: states with very different partisan orientations have been cooperating for years on cases involving corporate misconduct.

On policy issues, state AGs exhibit strong ideological tendencies. Democratic AGs have been suing the Trump Administration repeatedly over issues such as the travel ban and migrant family separation. In the same way, Republican AGs went to court to try to undermine Obama Administration initiatives such as the Affordable Care Act.

Yet in the area of corporate crime-fighting, bipartisanship is the norm.

My colleagues and I at the Corporate Research Project of Good Jobs First have been documenting this fact in the course of collecting data for the latest expansion of our Violation Tracker database. We’ve compiled more than 600 cases in which two or more state AGs successfully sued a corporation and collected monetary penalties, usually in the form of a settlement in which the company did not admit guilt.

Next week we will post the data on Violation Tracker and publish a report that analyzes the multistate AG cases. I can’t give away the main findings until then, but I can say that the new entries will make a major addition to penalty totals in the database.

Currently, there are 61 parent companies with $1 billion or more in cumulative penalties (our entries go back to the beginning of 2000). With the AG cases, that number increases to 84.

The penalty totals for many of the individual corporations, especially the big banks, will rise dramatically. The combined state and federal penalty total for Bank of America, for instance, will be in excess of $80 billion.

Although the report will focus mainly on the multistate AG cases, we also collected data on 7,000 single-state AG cases from across the country that will be added to Violation Tracker. These include lots of relatively minor consumer protection cases (crooked used car dealers and the like), but there are also plenty of major settlements, including 70 cases with corporate payouts of $100 million or more.

There have been a few state AGs who have shown less enthusiasm about pursuing corporate miscreants. One example was Scott Pruitt, when he held that post in Oklahoma before being chosen as the Trump Administration’s first administrator of the EPA.

As state AG, Pruitt brought few actions against companies on his own and did not sign on to many of the multistate cases. Fortunately, he was far from typical, even among the reddest states.

High Standards, Poor Behavior

It is amazing how much attention is being paid to the Statement on the Purpose of a Corporation just issued by 181 chief executives of large corporations under the auspices of the Business Roundtable. We are supposed to think it is a major breakthrough that big business is claiming to do more than maximize returns for shareholders.

In fact, Corporate America has long given lip service to the notion that it has an obligation to other stakeholders such as employees, communities and suppliers and that it needs to promote sustainability in its operations. The language of the Roundtable statement could have been taken from similar pronouncements that have been made by the vast majority of large companies under the rubric of corporate social responsibility or a similar phrase. The website of Exxon Mobil, for instance, contains a page on its Guiding Principles, which are said to include adherence to “high ethical standards.”

The question, of course, is whether these high-minded statements have any real meaning—whether they result in more responsible practices or are designed mainly to let corporate executives pretend to be moral exemplars.

The answer seems clear. If large corporations truly had a commitment to their employees, they would not engage in so many exploitative practices and fight so hard against unionization. If they truly cared about the environment, they would take more aggressive steps to reduce pollution and address the climate crisis. If they truly cared about ethical supply chains, they would stop sourcing from low-road producers.

Not only are most large corporations far from ethical leaders—in many cases they cannot bring themselves to adhere to their most basic responsibility: obeying the law and complying with regulations.

For the past few years, I’ve spent most of my time documenting corporate lawlessness by building the Violation Tracker database, which now contains more than 360,000 examples of misconduct that have resulted in $470 billion in penalties since 2000.

I ran the names of the 181 companies whose CEOs signed the Roundtable statement through Violation Tracker and, not surprisingly, the results were eye-popping. The signatories and their subsidiaries together account for more than $197 billion in cumulative penalties, or more than 40 percent of the total penalties from tens of thousands of companies.

Twenty-one of the signatories have penalty totals of $1 billion or more, and three with $25 billion or more. At the top of the list is Bank of America, with more than $58 billion in penalties from 128 cases largely involving mortgage abuses and toxic securities. JPMorgan Chase comes in at $30 billion from similar cases. As a consequence of its role in the Deepwater Horizon oil spill and other disasters, BP ranks third with $27 billion in penalties.

The list continues with other big banks (Citigroup, Goldman Sachs, etc.), big utilities (American Electric Power, Duke Energy, etc.), big pharmaceutical manufacturers (Pfizer, Abbott Laboratories, etc.), other big oil companies (Marathon Petroleum, Exxon Mobil, etc.), and others such as Boeing and Walmart.

It is significant that two of the worst corporate miscreants of recent years, Wells Fargo and Volkswagen, are missing from the list of signatories. Perhaps they or the Roundtable realized that their inclusion would have detracted from the message.

Yet the track records of many of the other signatories are not much better. Large corporations that repeatedly break the rules concerning consumer protection, environmental protection, workplace protection, investor protection and every other kind of protection cannot profess that they are committed to serving the well-being of all their stakeholders. Until they change their behavior, their purported principles mean little.

Targeting Migrants in the Workplace

Perhaps to avoid giving the impression that the Trump Administration was getting soft on immigrants by having the president go to El Paso to console the victims of a mass shooting aimed at Latinos, Immigrations and Customs Enforcement chose the same day to carry out the largest workplace raid in more than a decade.

The more than 600 people taken into custody at several sites in Mississippi were not apprehended while engaged in criminal activity, but rather in the course of supporting their families by performing some of the most unpleasant and dangerous work in the U.S. economy: poultry processing.

There were no arrests of managers at the companies involved – which included Koch Foods and Peco Foods, whose spokespeople insisted they carefully screened new hires using the E-Verify system. This came as no surprise, as employers are rarely prosecuted for immigration offenses, whether or not they use E-Verify, or if they are lax in applying the system.

Among the more than 300,000 entries in Violation Tracker there are fewer than 50 cases of immigration-related employer penalties, and only 18 with fines of $1 million or more. Countless other companies have gotten away with employing undocumented workers, among them the Trump Organization.

They also often get away with other workplace violations, though sometimes they are caught in the job safety or wage & hour enforcement net. Koch Foods (not part of Koch Industries), for instance, has been penalized more than $4 million for its Mississippi operation, including three OSHA violations, one wage & hour violation, two environmental violations and a $3.75 million settlement with the EEOC concerning sexual harassment and national origin and race discrimination.

Peco Foods has had five violations at its Mississippi plants, including two from OSHA and three from the EPA.

Mike Elk, writing in Payday Report, notes that some advocates have speculated that workers are targeted for raids after their facilities get cited for workplace violations. He cites several examples in which that happened.

Since companies face little risk of being prosecuted for immigration offenses, it is possible that they may be the ones tipping off ICE, seeing the raids as a way of discouraging whistleblowing by workers about abusive conditions. While the raids cause temporary disruption to their production, these employers hope to discourage replacement workers from being outspoken on the job.

Trump and other immigration hardliners often claim that their aim is to help native-born workers by eliminating the supposed job competition created by migrants. If that were the case, then they would crack down on employers who hire the undocumented.

Instead, they enable those employers to maintain a business model based on worker intimidation.

Facebook Joins the Multi-Billion-Dollar Penalty Club

It is a sign of how jaded we have become to corporate misconduct that the $5 billion fine imposed on Facebook by the Federal Trade Commission for privacy violations is being shrugged off by the company, by the market and by the public. Many are describing it as a slap on the wrist.

It’s true that a ten-figure penalty is no longer such a rarity. According to Violation Tracker, 35 parent companies have had to pay that amount in at least one case in the United States. Eleven corporations have been hit with billion-dollar-plus penalties more than once. Of these, nine are big banks: Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Royal Bank of Scotland and Wells Fargo. The other two are BP and Volkswagen.

Bank of America, whose penalty total is far greater than that of any other corporation, has racked up seven ten-figure cases, including three in excess of $10 billion.

BofA’s rap sheet is perhaps the most persuasive evidence that escalating penalties are not having the desired effect of deterring corporate wrongdoing. Even at the higher levels, the fines are seen by large companies as a tolerable cost to pay for continuing to do business more or less as before.

The Justice Department and the regulatory agencies seem to be aware of this and are at least making noises about taking other steps to deter and punish miscreants.

In the case of Facebook that includes provisions in the FTC settlement that will put more responsibility on the company’s board to make sure that privacy protections are enforced. It also enhances external oversight by an independent third-party monitor.

All of this might be more impressive if Facebook had not already signed a previous settlement with the FTC in 2012 that was supposed to establish strong privacy protections—provisions that the company has clearly evaded.

Also contained in the Facebook settlement is a provision that will require Facebook CEO Mark Zuckerberg to personally certify that the company is adhering to privacy protections. This would only have an impact if it is rigorously enforced, with non-compliance putting him behind bars rather than just triggering another big payout.

There is also renewed discussion of stepped up antitrust enforcement, especially against the big tech companies. This would be more effective if federal authorities were willing to try breaking up the likes of Facebook, Alphabet/Google and Amazon rather than seeking limited restrictions on their market power. That approach has largely been shunned for the past two decades, ever since the effort to split up Microsoft collapsed and the DOJ had to settle for more modest remedies.

Prosecutors and policymakers continue to struggle with the issue of how to deal with large companies. Often it seems they are mainly concerned with little more than giving the appearance of getting tough. Only when faced with sustained public pressure will they come up with effective ways to rein in rogue corporations.

The Tainted Corporations Dominating the Opioid Industry

The release of a previously confidential database is providing insights into the opioid industry analogous to what would be contained in the secret accounts of all the Mexican drug cartels. The database, known as the Automation of Reports and Consolidated Order System, or ARCOS, is compiled by the U.S. Drug Enforcement Administration. It was made public by the federal judge in Cleveland overseeing a massive lawsuit brought by nearly 2,000 localities against opioid manufacturers and distributors.

A detailed analysis of the database by the Washington Post shows that the industry has been heavily concentrated in the hands of fewer than a dozen large corporations. These companies are among the defendants in the Cleveland case and are increasingly being targeted for their role in generating an epidemic that has caused hundreds of thousands of deaths.

The claims by the corporations that they are not to blame for the crisis is made harder to swallow by the fact that they each have a history of involvement in other types of corporate misconduct. That history, taken from their entries in Violation Tracker, is summarized below.

The Post analysis of ARCOS shows that just six companies distributed three-quarters of the 76 billion oxycodone and hydrocodone pills that saturated the country in the period from 2006 to 2012.

McKesson Corporation, which accounted for 18.4 percent of the pills, has accumulated more than $400 million in total penalties, more than half of which comes from False Claims Act cases. For example, in 2012 it paid $190 million to settle federal allegations that it reported inflated drug pricing information for a large number of prescription drugs, causing Medicaid to overpay for those medications. The company paid another $151 million to settle related allegations brought by 28 state attorneys general in a case not yet in Violation Tracker (but will be added in an expansion later this year).

Walgreens (16.5 percent) is now part of Walgreens Boots Alliance, which has total penalties of $589 million. Nearly half of that comes from a $269 million settlement of False Claims Act allegations of improper billing for insulin pens. In 2013 Walgreens paid $80 million in a Controlled Substances Act case.

Cardinal Health (14 percent) has more than $195 million in penalties, the largest portion of which includes four cases involving violations of the Controlled Substances Act. Among its other controversies: a $35 million settlement with the SEC of allegations it engaged in fraudulent accounting and a $26.8 million settlement with the Federal Trade Commission concerning anti-competitive practices.

AmerisourceBergen (11.7 percent) has accumulated $899 million in penalties, including a $625 million False Claims Act settlement and a $260 million criminal penalty for distributing misbranded oncology drugs.

CVS (7.7 percent) has $850 million in penalties, more than half of which comes from 15 False Claims Act cases. Another $183 million resulted from Controlled Substances Act matters.

Rounding out the list of major distributors is Walmart (6.9 percent), which has accumulated $1.6 billion in penalties, 90 percent of which resulted from wage and hour cases.

According to the Post analysis, three companies accounted for 88 percent of opioid production during the 2006-2012 period.

SpecGx, a subsidiary of Mallinckrodt, accounted for the largest portion, 37.7 percent. Mallinckrodt has $139 million in penalties, including a $100 million antitrust settlement and a $35 million Controlled Substances Act settlement.

Actavis Pharma (34.6 percent) is now owned by Teva Pharmaceuticals, which has more than $2 billion in penalties, most of which comes from cases involving allegations that another subsidiary, Cephalon, engaged in anti-competitive practices and marketed drugs for purposes not approved by the Food and Drug Administration.

The last big manufacturer is Par Pharmaceutical (15.7 percent), a subsidiary of Endo International, which has total penalties of $287 million, including a $192 million settlement for marketing of drugs for unapproved purposes.

Purdue Pharma, which is often the leading target of criticism for the opioid crisis, showed up in the ARCOS database as producing only 3 percent of output.

Given the involvement of these companies in all kinds of corporate misconduct, it is highly unlikely that they were blameless in bringing about the opioid epidemic. Chances are that the lawsuit in Cleveland will result in substantial increases in their penalty totals.

One Less Wheeler Dealer

It’s unfortunate that 18,000 people will lose their jobs in the process, but it is good news that Deutsche Bank is leaving the investment banking business. The world is better off with one less wheeling and dealing financial player that has repeatedly flouted all kinds of laws and regulations.

That tarnished record dates back to the late 1990s, when Deutsche Bank acquired New York-based Bankers Trust, which was testing the limits of what a commercial bank could do while getting embroiled in a series of scandals.

Just a few months after the acquisition was announced, Bankers Trust pleaded guilty to criminal charges that its employees had diverted $19 million in unclaimed checks and other credits owed to customers over to the bank’s own books to enhance its financial results. The bank paid a $60 million fine to the federal government and another $3.5 million to New York State.

Deutsche Bank was also having its own legal problems during this period. In 1998 its offices were raided by German criminal investigators looking for evidence that the bank helped wealthy customers engage in tax evasion. In 2004 investors who purchased what turned out to be abusive tax shelters from DB sued the company in U.S. federal court, alleging that they had been misled (the dispute was later settled for an undisclosed amount). That litigation as well as a U.S. Senate investigation brought to light extensive documentation of DB’s role in tax avoidance.

In the 2000s, DB was penalized repeatedly by financial regulators, including a 2004 settlement with the Securities and Exchange Commission in which it had to pay $87.5 million to settle charges of conflicts of interest between its investment banking and its research operations, and a $208 million settlement with federal and state agencies in 2006 to settle charges of market timing violations.

In 2009 the SEC announced that DB would provide $1.3 billion in liquidity to investors that the agency had alleged were misled by the bank about the risks associated with auction rate securities.

In 2010 the U.S. Attorney for the Southern District of New York announced that DB would pay $553 million and admit to criminal wrongdoing to resolve charges that it participated in transactions that promoted fraudulent tax shelters and generated billions of dollars in U.S. tax losses.

In 2011, the Federal Housing Finance Agency sued DB and other firms for abuses in the sale of mortgage-backed securities to Fannie Mae and Freddie Mac (the case was settled for $1.9 billion in late 2013).

In 2012 the Southern District of New York announced that DB would pay $202 million to settle charges that its MortgageIT unit had repeatedly made false certifications to the Federal Housing Administration about the quality of mortgages to qualify them for FHA insurance coverage.

In 2013 DB agreed to pay a $1.5 million fine to the Federal Energy Regulatory Commission to settle charges that it had manipulated energy markets in California in 2010.

In 2013 Massachusetts fined Deutsche Bank $17.5 million for failing to inform investors of conflicts of interest during the sale of collateralized debt obligations. That same year, DB was fined $983 million by the European Commission for manipulation of the LIBOR interest rate index. (Later, in 2015, it had to agree to pay $2.5 billion to settle LIBOR allegations brought by U.S. and UK regulators.)

In 2015 the SEC announced that DB would pay $55 million to settle allegations that it overstated the value of its derivatives portfolio during the height of the financial meltdown. Later that year, DB agreed to pay $200 million to New York State regulators and $58 million to the Federal Reserve to settle allegations that it violated U.S. economic sanctions against countries such as Iran.

In January 2017 the bank reached a $7.2 billion settlement of a Justice Department case involving the sale of toxic mortgage securities during the financial crisis. That same month, it was fined $425 million by New York State regulators to settle allegations that it helped Russian investors launder as much as $10 billion through its branches in Moscow, New York and London.

In March 2017 Deutsche Bank subsidiary DB Group Services (UK) Limited was ordered by the U.S. Justice Department to pay a $150 million criminal fine in connection with LIBOR manipulation. The following month, the Federal Reserve fined DB $136 million for interest rate manipulation and $19 million for failing to maintain an adequate Volcker rule compliance program. Shortly thereafter, the Fed imposed another fine, $41 million, for anti-money-laundering deficiencies. In October 2017 DB paid $220 million to settle multistate litigation relating to LIBOR.

In 2018 DB paid a total of $100 million to the Commodity Futures Trading Commission–$70 million for interest-rate manipulation and $30 million for manipulation of metals futures contracts.

As a result of all these and other cases, Deutsche Bank ranks seventh among parent companies in Violation Tracker, with more than $12 billion in total penalties.

Not all these cases arose out of DB’s investment banking business. Its commercial banking operation, which will continue, was responsible for keeping the Trump Organization afloat when other banks shunned the shaky company. And it has just come to light that DB provided loans to the notorious Jeffrey Epstein.

Deutsche Bank’s history of controversies may not be over.

Battles Over Background Reports

The Ban the Box movement seeks to remove barriers to employment for job applicants with a prior arrest or conviction. The goal is to have all candidates considered on their merits and to give those with criminal records a chance to explain their specific circumstances.

Yet there is another problem relating to employer use of criminal records and other personal background information: sometimes the information they obtain on a candidate is inaccurate or may refer to someone else with a similar name.

Employers who use such faulty information in their hiring decisions can find themselves the target of a class action lawsuit. These suits are based on provisions of the federal Fair Credit Reporting Act (FCRA), which requires employers to get written consent from a job candidate before obtaining background-check reports containing criminal records as well as credit history and other personal information. Before making an adverse decision based on data in the report, the employer must give the applicant a copy and allow time for the person to challenge any inaccuracies in the document.

You will not be surprised to learn that employers often break these rules.

I’ve been compiling information on employment-related FCRA lawsuits as part of the latest expansion of Violation Tracker. I found that over the past decade employers have paid out $174 million to resolve such cases, while companies providing those reports have paid out another $152 million when they have been sued directly.

The dollar totals derive from 146 successful class actions brought against a variety of employers in sectors such as retail, banking, logistics, security services and private prisons.

Since 2011 more than 40 employers have paid out FCRA employment settlements of $1 million or more. In one of the largest cases, Wells Fargo paid $12 million in 2016 to thousands of applicants whose FCRA rights were allegedly violated. Other large payouts by well-known companies include: Target ($8.5 million), Uber Technologies ($7.5 million), Amazon.com ($5 million), Home Depot ($3 million), and Domino’s Pizza ($2.5 million).

More cases are pending. A $2.3 million settlement involving Delta Air Lines is awaiting final court approval. In January a federal judge in California certified a class of five million Walmart job applicants.

Suits have also been brought against staffing services such as Aerotek (which paid a $15 million settlement) and temp agencies such as Kelly Services ($6.7 million).

Providers of background-check reports also have obligations under the FCRA, including a duty to employ reasonable procedures to ensure the accuracy of the information they report. The Violation Tracker compilation includes 30 provider class actions with settlements amounts as high as $28 million.

The FCRA cases are the fourth compilation of employment-related class actions to be added to Violation Tracker, following ones covering wage theft, workplace discrimination, and retirement-plan abuses. With the addition of the FCRA cases and the updating of data from more than 40 federal regulatory agencies and the Justice Department, Violation Tracker now contains 369,000 civil and criminal entries with total penalties of $470 billion.