May 13, 2020 9:00 PM

🎥 Kan. lawmakers look to prevent lawsuits over coronavirus

Posted May 13, 2020 9:00 PM
Members of the House Judiciary committee meet online Wednesday
Members of the House Judiciary committee meet online Wednesday

By JOHN HANNA

TOPEKA, Kan. (AP) — Republican legislators in Kansas are joining a broader effort to shield doctors, hospitals and businesses from lawsuits stemming from the coronavirus, with business and medical groups pushing them to act quickly.

Click here to watch Wednesday's Kansas House judiciary committee hearing on the issue. It begins at 3:30p.m.

The effort faces strong opposition from labor unions, trial lawyers and some Democrats. They fear that such measures could be too broad and keep patients, consumers and employees from using the court system to hold businesses and medical providers accountable for negligence or misconduct.

Similar efforts are underway in Congress, with Derek Schmidt of Kansas joining other GOP state attorneys general in calling for legislation to head off “frivolous” lawsuits. Legislators in multiple states, including Mississippi, North Carolina and Utah, are considering their own laws.

In Kansas, the state House Judiciary Committee planned to have the first of three Zoom meetings on the issue on Wednesday.

Click here to watch and listen to the meeting that begins at 3:30p.m.

The Senate counterpart is expected to meet on the topic next week.

The full GOP-controlled Legislature plans to meet May 21 for its last remaining day in session this year.

“What about a company who re-purposes their facilities because they’re closed as nonessential but they have the equipment to manufacture masks?” said Eric Stafford, a Kansas Chamber of Commerce lobbyist. “Somebody who’s trying to do a good deed, should they be punished, for liability for failure to prevent someone from getting sick?”

Groups pushing for quick legislative action said they fear businesses that reopened after Democratic Gov. Laura Kelly lifted a statewide stay-at-home order on May 4 will face lawsuits if customers or employees get sick, or that customers or employees will sue businesses that were deemed essential and remained open while others closed.

Stafford said the chamber wants to ensure that businesses are protected if they followed health officials’ guidelines for operating safely.

The debate also comes after President Donald Trump directed meatpacking plants to stay open despite the spread of the coronavirus among workers. Kansas has seen seven large outbreaks at such plants, accounting for nearly 1,300 confirmed cases, or 18% of the state’s total, with two COVID-19-related deaths.

Dr. Beth Oller, a family physician in Rooks County in northwestern Kansas, said she thinks businesses should face legal liability if, for example, they won’t provide proper protective equipment for employees. But, she said, it could be “a bad precedent” to allow lawsuits when one customer of a business following health guidelines gets the virus from another customer.

She also said in nursing homes, even with aggressive steps to contain the virus if there’s one case, “It’s going to be exceptionally difficult to prevent the spread of any cases.”

Health care providers worry that they could face lawsuits if a patient’s health declined or a patient dies after providers delayed surgeries or other care because of concerns about spreading the virus.

Chad Austin, the Kansas Hospital Association’s executive vice president, said the group wants to protect medical providers “who did what they were asked to do” by focusing on combating the coronavirus.

“They were focused probably where they were instructed to be focused for sure, but you never know, there could be somebody forgoing care at that time who ended up having an issue,” added Cindy Samuelson, the association’s membership vice president.

David Morantz, a Leawood attorney and the Kansas Trial Lawyers’ Association president, said medical providers already aren’t subject to paying damages for injuries if they can show they followed generally accepted standards of care. He said adhering to government recommendations or directives to cancel elective surgeries because of the pandemic would qualify.

While Kelly has been open to proposals for protecting medical professionals, Senate Minority Leader Anthony Hensley, a Topeka Democrat and key ally of the governor’s, said the issue is too big, too complex and too contentious for lawmakers to tackle before adjourning May 21.

And labor unions have been quick to object to the proposals to prevent lawsuits, both in Kansas and nationally. The Working Kansas Alliance, a coalition of union groups, called it a “dangerous agenda” that would put workers at risk for “saving a buck on the corporate balance sheet.”

Morantz said he fears that any new law could be “pushed beyond what anybody ever intended” to cover actions or cases not directly involving the coronavirus. He also said shielding businesses from lawsuits will give them an incentive not to be as safe and would make consumers wary.

“If it’s safe reopen the economy, why is immunity needed?” Morantz said. “If immunity’s there, it’s going to make people scared and it’s going to delay rebooting the economy.”

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May 13, 2020 9:00 PM
Virus unleashes wave of fraud in US amid fear and scarcity
Counterfeit COVID-19 test kits-photo courtesy U.S. Immigration and Customs Enforcement

WASHINGTON (AP) — A 39-year-old former investment manager in Georgia was already facing federal charges that he robbed hundreds of retirees of their savings in a Ponzi scheme when the rapid spread of COVID-19 presented an opportunity.

Christopher A. Parris started pitching himself as a broker of surgical masks amid the nationwide scramble for protective equipment in the first desperate weeks of the outbreak, federal authorities said. He was soon taking in millions of dollars.

Except there were no masks.

Law enforcement officials say Parris is part of what they are calling a wave of fraud tied to the outbreak.

Homeland Security Investigations, an arm of the Department of Homeland Security, is leading a nationwide crackdown. It has opened over 370 cases and so far arrested 11 people, as part of “Operation Stolen Promise,” according to Matthew Albence, acting director of U.S. Immigration and Customs Enforcement.

“It’s incredibly rampant and it’s growing by the day,” Albence said. “We’re just scratching the surface of this criminal activity. ”

From a fake #COVID19 test kit photo courtesy U.S. Customs and Border Patrol

Parris was on pretrial release for the alleged Ponzi scheme when he was arrested last month in what authorities say was an attempt to secure an order for more than $750 million from the Department of Veterans Affairs for 125 million face masks and other equipment.

“He was trying to sell something he didn’t even have,” said Jere T. Miles, the special agent in charge of the New Orleans office of Homeland Security Investigations, which worked the case with the VA Office of Inspector General. “That’s just outright, blatant fraud.”

Parris has not yet entered a plea to fraud charges and his lawyers did not respond to requests for comment from The Associated Press.

Nationwide, investigators have turned up more than false purveyors of PPE. They have uncovered an array of counterfeit or adulterated products, from COVID-19 tests kits and treatments to masks and cleaning products.

Steve Francis, director of the National Intellectual Property Rights Coordination Center, which is overseen by Immigration and Customs Enforcement, says authorities have tracked counterfeits flowing into the U.S. from 20 countries and for sale through thousands of websites.

“There are people popping up who have never been in the business of securing equipment on a large scale,” Francis said.

Enter Parris.

From his home outside Atlanta, he claimed to represent a company with 3M respiratory masks and other protective equipment for sale. At the time, there was a mad scramble for supplies that pitted state and local governments against each other.

As outlined in court documents and interviews, his pitch reached a company in Baton Rouge, Louisiana, that was trying to help government agencies acquire PPE. In late March, it contacted the VA, which was dealing with a critical shortage of protective equipment.

The VA was suspicious of the price, about 15 times what it was paying amid the shortage, and alerted its inspector general, which brought in Homeland Security. That resulted in a sting that led to Parris.

“He had no means of producing any PPE,” Albence said. “It was just a scam.”

Coronavirus test kits that were not FDA approved-photo U.S. courtesy Customs and Border patrol

But it had some takers. Federal authorities say a Parris-controlled bank account received more than $7.4 million, with most appearing to come from unidentified entities trying to buy safety gear in March and April, according to court documents. He wired some of the money to accounts overseas, including more than $1.1 million to a Swiss company’s bank that authorities say may be a shell corporation.

The U.S. government seized more than $3.2 million from his accounts.

The Ponzi scheme was unrelated to the alleged attempt to defraud the VA but “is sufficiently similar to the conduct in this case that it is relevant to his plan, intent, and modus operandi,” according to a search warrant affidavit.

In the earlier case, Parris and his partners are accused of defrauding about 1,000 people out of at least $115 million from January 2012 to June 2018. They persuaded the victims to turn over their savings for what turned out to be nonexistent investments, according to the Securities and Exchange Commission.

Another member of the partnership, Perry Santillo, pleaded guilty to fraud in November.

As part of the alleged scheme, Parris and the others bought the businesses of investment advisers who were retiring and leveraged the trust those advisers had built up over the years to pitch the bogus investments, with relatively modest returns, to their newly acquired clients.

Florida attorney Scott Silver, who represented some investors who sought to get their money back after the SEC shut down the operation, said there was little to recover because Parris and the others spent most of it.

He wasn’t surprised that Parris had been arrested in the COVID fraud case. “He’s already facing 20 years in prison,” he said. “What’s he worried about?”

Parris, who was charged in the case in January, grew up in Rochester, New York, and worked as an insurance agent, owned a dry cleaner and got involved in local politics. He ran unsuccessfully for city council and said he was vice president of a local African American Republican committee.

“So many people that know me, you know, trust me,” Parris said in a 2015 hearing with the Financial Industry Regulatory Authority, which later suspended his broker license.

One of Parris’ alleged victims in the Ponzi scheme, Jane Naylon, said she took guitar lessons from Parris’ father, a reverend at a local church and lost $150,000 in the fraud.

Naylon was dismayed when Parris was released on his own recognizance in the Ponzi scheme. When she learned he had been charged for PPE fraud, she said she was in shock, but also pleased.

“I’m ecstatic,” she said. “I hope he goes to jail for life.”

Parris is now jailed in Atlanta and is expected to be transferred to Washington to face charges in the VA case.

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