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Nursing Home Pharmacy Settles Kickback Charges

Thu, 05 Nov 2009 00:00:00 -0800

Drug giant Johnson & Johnson (J&J) continues to make news with a Justice Department investigation into accusations of Medicaid Fraud, announced Business Week. The Justice Department recently settled with Omnicare over kickback allegations to the tune of $112 million.

The massive settlement concerned kickbacks involving the United States’ biggest nursing home pharmacy, Omnicare and generic drug maker IVAX Pharmaceuticals and is just a part of a larger probe into potential Medicaid fraud by Big Pharma, said Business Week. Some feel the investigation focuses on industry paying consumer drug providers for special treatment, according to Business Week. The profits are believed to compromise patient care and increase costs.

The settlement that involves Omnicare and IVAX, a Teva Pharmaceutical Industries subsidiary, might drive criticism of the recent Obama Administration deal with Big Pharma hoped to help with health care reform, said Business Week. Opposing democrats feel larger cost savings should have been sought, Business Week added.

Omnicare will pay $98 million—and interest—to the federal government and some state Medicaid programs; IVAX will pay $14 million and interest. The agreement will settle claims that Omnicare, with IVAX, J&J, and two nursing home chains, were involved in kickbacks, said Business Week. The “Corporate Integrity Agreements” involve no admission of wrongdoing and include training and revised policies, reported Business Week.

The J&J probe continues, said Business Week. We wrote earlier this year that J&J was accused of defrauding Medicare and other federal health programs and that drug makers collected hundreds of millions of dollars in reimbursements for unapproved uses of the cardiac medication, Natrecor. According to J&J, it acknowledged receipt of a subpoena in 2005 in which the government sought paperwork on eight medications sold to Omnicare, said Business Week.

Taxpayers Against Fraud spokesman Patrick Burns, said the Justice Department is swamped with such fraud cases and drug manufacturers sell many similar medications; kickbacks are offer “a market edge,” reported Business Week. "In the pharmaceutical industry, the business isn't selling the best drug, it's the best scheme of kickbacks to the prescriber. Omnicare is just one of their sales points," quoted Business Week. "Patients have a right to depend on the integrity of the medical advice they're getting," said Tony West, assistant attorney general in the civil division at the Justice Department. "When kickbacks are involved, the medical judgment of the provider is corrupted," added West, quoted Business Week.

Omnicare has a long history of alleged fraud and civil fraud complaint settlements that include, for example, said Business Week, receiving $8 million in payments from IVAX (2000-04) to purchase $50 million in generic medications and recommending doctors prescribe the drugs to their nursing home patients; of accepting J&J payments (1999 to 2004) to forcefully urge the prescription of anti-psychotic, Risperdal, while discouraging other medications; purportedly paying $50 million to Mariner Health Care and SavaSeniorCare (2004) to continue to refer Medicaid and Medicare patients to for drug services; and allegedly offering nursing home discounts on drug consultations (2005-8) in exchange for more costly services. Omnicare paid $102 million (2006) to settle Medicaid fraud cases in 43 states, and was required to enter a five-year corporate integrity agreement, Business Week added.

Last December’s government filing named Omnicare and other key drug makers, said Business Week, and alleges that for a period of some eight years, executives at Omnicare pushed drug staffers to switch brand-name drugs in nursing homes for rebates, regardless of prescriptions written for other medications, without advising doctors of the switches, and by providing “misleading information” drug costs and benefits.

9/11 Ground Zero Responders More Likely To Have Asthma

Wed, 04 Nov 2009 00:00:00 -0800

Emergency responders who participated in Ground Zero rescue and recovery efforts following the 9/11 terrorist attacks tend to suffer from asthma at about a two-fold rate compared to the rest of the U.S. population, according to a new study detailed by Science Daily.

Mount Sinai School of Medicine researchers presented the new asthma data, said Science Daily, at CHEST 2009, which is the 75th annual international scientific assembly of the American College of Chest Physicians (ACCP), in San Diego, California.

The study revealed that about eight percent of those workers and volunteers who were part of the World Trade Center (WTC) “rescue and recovery, essential service restoration, and clean-up efforts” underwent what is being described as post-9/11 asthma attacks or episodes, said Science Daily. Asthma is usually only experienced by four percent of the population, half of that experienced by the terror attack workers.

In the hours and days after the 9/11 terrorist attacks, thousands of rescue workers descended on Ground Zero to help with recovery efforts. Sifting through dust and rubble, sometimes with their bare hands, many lacked the clothing and equipment that could have kept them safe from harm. Several studies have confirmed that Ground Zero first responders continue to suffer from ill health as a result of their exposure to toxic dust at the site, including lung diseases and post-traumatic stress disorder. It is also known that the chemicals they were exposed to included several carcinogens.

"Although previous WTC studies have shown significant respiratory problems, this is the first study to directly quantify the magnitude of asthma among WTC responders," said Hyun Kim, ScD, Instructor of Preventive Medicine at Mount Sinai School of Medicine (MSSM) and lead author of the analysis, quoted Science Daily. "Eight years after 9/11, the WTC Program is still observing responders affected by asthma episodes and attacks at rates more than twice that of people not exposed to WTC dust," added Kim.

The medical records of 20,843 responders who underwent screenings from July 2002 to December 2007, a component of the Mount Sinai School of Medicine-coordinated WTC Program, were reviewed, according to Science Daily. The information was compared against U.S. National Health Survey Interviews adult sample data for 2000 and 2002 to 2007, reported Science Daily. The results indicate that, among the general populace, episode of asthma or asthma attacks in the prior year were comparatively stable: Under four percent from 2000 to 2007, said Science Daily. Conversely, less than one percent of responders reported asthma episodes occurring during 2000; however, eight percent reported episodes from 2005 to 2007, noted Science Daily. WTC responders were 2.3 times likelier to report asthma episodes/attacks in the prior year versus the general U.S. population, said Science Daily. Of note, 86 percent of the workers were men and they worked an average of 80 days at the sites.

"The data show an increasing percentage of responders reporting asthmatic episodes, rising to double that seen in the general population. It is clearly vital that we continue to track responders' health and look further into the medical outcomes of this population," said Philip J. Landrigan, MD, Ethel H. Wise Professor and Chair of MSSM's Department of Preventive Medicine and Principal Investigator of the WTC Program Data and Coordination Center, quoted Science Daily. "Asthma and other chronic lung conditions remain a significant burden for rescue and recovery workers responding to the attacks on the World Trade Center," said Kalpalatha Guntupalli, MD, FCCP President of the American College of Chest Physicians.

To determine eligibility, to enroll, or for more information, WTC responders can call toll-free (888) 702-0630 or visit www.wtcexams.org.

iPhone Class Action Lawsuit Claims Consumers Were Deceived Over MMS Capability

Wed, 04 Nov 2009 00:00:00 -0800

An iPhone class action lawsuit has been filed in Alabama by a consumer who claims Apple Inc. and AT&T Mobility LLC misrepresented the iPhone's multimedia messaging service (MMS) capabilities. MMS capability is key for sending text messages accompanied by a photo, video or other form of media.

The complaint, which was filed in U.S. District Court for the Southern District of Alabama, alleges Apple and AT&T representatives have continually misrepresented, concealed, suppressed or omitted material facts to customers in their stores about the MMS functionality for the 3G and 3G-S iPhones.

The original iPhone and iPhone 3G lacked MMS capability. But by the time Apple planned to launch the iPhone 3G-S, such functionality was widely available on other smartphones. The complaint claims that Apple and AT&T advertised on its Web site and elsewhere that the 3G and 3G-S would allow the MMS functionality. Because of this advertising, many consumers chose to buy or upgrade to a 3G or 3G-S.

According to the complaint, when the 3G iPhone was launched in July 2008, consumers began to realize that it did not have the MMS functionality. The complaint claims that the defendant's response to consumer complaints “was essentially to say 'tough luck.'"

In early 2009, the lawsuit alleges that AT&T sales reps promised MMS functionality would become available for both 3G and 3G-S when the new iPhone OS Software Update free download would become available in June. But after downloading the new OS 3.0 Software Update application, MMS still did not work on either the 3G or 3G-S, the complaint says.

It wasn't until September 25, 2009 that the defendants allegedly activated MMS for iPhone 3G and 3G-S users in the U.S. through a software update to iPhone OS 3.1. According to the complaint, AT&T had never upgraded its towers so as to support the functionality necessary for MMS prior to September 25, 2009, and so the iPhone could not offer MMS as claimed. Even after the upgrade, results with MMS activation have been mixed, the complaint says.

The lawsuit alleges that consumers of the iPhone 3G and 3G-S were not informed that AT&T had not upgraded its towers to support MMS, and would not do so for many months. It further alleges that Apple's 3.0 and 3.1 software upgrade would not, by itself, solve the problem and make MMS available.

The plaintiff in the iPhone lawsuit is seeking class action status to benefit all Alabama residents who have purchased a 3G or 3G-S model iPhone since July 2008.

Drug Makers Fail To Disclose Event Sponsorship

Tue, 03 Nov 2009 00:00:00 -0800

We’ve long been saying so, and the issue has made headlines many times in recent months; now PLoS Medicine is writing that ties between Big Pharma and health professionals—are not sufficiently broad, reports Science Daily. In this case, the issue concerns Australian reporting standards; however, the problem has been noted in a variety of global sites, including the United States.

David Henry, from the Institute for Clinical Evaluative Sciences in Toronto, Canada, and colleagues, looked at information released by Medicines Australia, which is that country’s “pharmaceutical industry representative body,” said Science Daily. Since 2007, Medicines Australia has been mandated to report information from “industry-sponsored function and educational event for health professionals,” explained Science Daily. The information must also include the event’s venue, cost, attendees, and “hospitality” provided, but does not require disclosure regarding speaker names, finances transacted between industry and speakers, and the companies’ part in selecting a speaker, noted Science Daily.

According to the research, said Science Daily, during 2007 in Australia, there were approximately 600 industry-sponsored events each week, with more than one-third taking place in “restaurants, hotels, or function centres” and hospitality, which includes refreshments and accommodations costing $17 million of the $31 million (Australian dollars) spent on such functions. The research also revealed that the sub-specialties most frequently hosted were oncologists (17.8 percent) and psychiatrists (15.2 percent), with family practice physicians at one-third and nurses at one-quarter of all events, reported Science Daily. The two sub-specialties cost more per person than other groups.

The researchers concluded that reporting standards do not allow sufficient transparency nor do the standards permit sufficient “assessment of the educational content” of these events, an issue since physicians can receive continuing medical education points, said Science Daily. The team recommends the topic and speakers be released.

In the United States, the relationships and finances exchanged between Industry and researchers have long been making the news and point to a bias in which patients are often not the prime concern.

Conflicts of interests can result in fines, fund freezes, and future grant loss, said the Atlanta Journal-Constitution in an earlier report. To help ensure no conflict-of-interest opportunities present themselves, the U.S. government mandates all such conflicts be reported by clinical researchers responsible for reviewing medications in advance of drug companies applying for U.S. Food and Drug Administration (FDA) approval. But, earlier this year, the Inspector General’s Office said the FDA has not proven itself reliable when it comes to finding drug research conflicts, a huge issue these days between medical professionals and industry.

Earlier this year, the Institute of Medicine recommended that researchers, medical school faculty, and private-practice doctors to forego gifts of any amount from medical companies and to decline to publish or present material ghostwritten or otherwise controlled by industry. Consulting arrangements should be limited to legitimate expert services spelled out in formal contracts and paid for at a fair market rate. Physicians should limit their interactions with company sales representatives and use free drug samples only for patients who cannot afford medications, the Institute said.

Knauf Plasterboard Agrees to Accept Service of Chinese Drywall Claim

Mon, 02 Nov 2009 00:00:00 -0800

Chinese drywall victims who haven't yet filed a lawsuit for damages need to do so now. That's because a major drywall manufacturer - Knauf Plasterboard (Tianjin) Co., Ltd. - has agreed to accept service of lawsuits for one month. This agreement will allow claimants with Knauf drywall to consolidate their claims in one omnibus class action lawsuit against the company.

The lawsuit will be filed on December 9, 2009. Under the agreement, all claimants who wish to be included in this omnibus class action complaint must submit proof that their properties contain Knauf manufactured drywall to Plaintiffs’ Lead Counsel by December 2, 2009. Parker Waichman Alonso LLP, the first law firm to file a federal Chinese drywall lawsuit, is offering assistance to any homeowner interested in joining the Knauf lawsuit. Free consultations are available through the firm's website at www.yourlawyer.com, or by calling 1-800-LAW-INFO (1-800-529-4636).

The Consumer Products Safety Commission (CPSC) has received about 1,897 reports from residents in 30 states, the District of Columbia, and Puerto Rico concerning Chinese drywall. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases. The drywall problems have forced many people out of their homes, and some families are dealing with the heavy financial burden of paying both rent and mortgage payments. Those unable to afford additional rent have no choice but to stay in their smelly – and possibly hazardous – homes.

Hundreds of homeowners have filed suit against Chinese drywall manufacturers over this disaster. All federal litigation involving defective drywall products has been consolidated in the multidistrict litigation, MDL 2047, pending in the United States District Court for the Eastern District of Louisiana, before Judge Eldon E. Fallon.

Knauf is alleged to be a subsidiary of the German based Knauf Gips KG and is one of several Chinese companies that has been accused of manufacturing and importing defective drywall from China into the U.S. Until today, Knauf had required that service of process of any lawsuit be made through the Hague Convention, which sets forth the method for the service of process abroad. This had been a major obstacle to many Chinese drywall plaintiffs because The Hague Convention for the Service of Process Abroad requires claimants to pay approximately $15,000 per lawsuit, which allows for the translation of legal documents into Chinese and to have them presented to the appropriate authorities in China to obtain service on the Chinese drywall manufacturers.

Under an agreement announced by Judge Fallon today, Knauf has agreed to accept service of process and waive its express rights under the Hague Convention only for homeowner plaintiffs who are named in an omnibus class action complaint to be filed on December 9, 2009 in In re Chinese Drywall Products Liability Litigation, MDL No. 2047. Homeowners wishing to join this lawsuit must contact a lawyer now, and arrange to have appropriate home inspections completed prior to that date.

Slow Pace of Chinese Drywall Probe Frustrates Senator

Fri, 30 Oct 2009 00:00:00 -0700

U.S Sen. Bill Nelson, D-Florida, expressed frustration yesterday that preliminary results from Chinese drywall testing have failed to answer some pressing questions. According to The Miami Herald, Sen. Nelson was angered not only by the lack of answers, but by the slow pace of the Consumer Products Safety Commission's (CPSC) Chinese drywall investigation.

The CPSC has received about 1,897 reports from residents in 30 states, the District of Columbia, and Puerto Rico concerning Chinese drywall. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

The drywall problems have forced many people out of their homes, and some families are dealing with the heavy financial burden of paying both rent and mortgage payments. Those unable to afford additional rent have no choice but to stay in their smelly - and possibly hazardous - homes. Meanwhile, most experts are cautioning homeowners not to repair Chinese drywall homes until a remediation protocol is established. The results of the federal drywall investigation will play a large role in developing such a protocol.

According to a press statement released by the CPSC yesterday, initial results of three studies that compared Chinese and domestic wallboard revealed that samples from China emit volatile sulfur compounds at a higher rate, and contain higher levels of sulfur and strontium, than the American-made product. However, the CPSC still could not say if there was a direct link between the Chinese drywall and the health problems homeowners are reporting. Officials also could not say if fumes from the Chinese drywall were responsible for corrosion seen in homes built with the material.

According to The Miami Herald, it will be months before the CPSC will be able to reach conclusions on those issues. More test results on possible health effects will be released next month, but the agency won't know if corrosion of wire and metals is related to drywall until next summer.

At a briefing with members of Congress yesterday, Sen. Nelson asked CPSC staffers whether "it was typical that a study would take this long.'' "If you hear impatience in my voice, you are an accurate judge,'' Nelson said. ``What I am reflecting is people's concerns, their financial devastation, health effects.''

The CPSC said that the Chinese drywall probe is the largest in its history, and has so far cost $3.5 million. The CPSC investigation is being aided by other federal agencies, including the Environmental Protection Agency, the Centers for Disease Control and Prevention, the U.S. Department of Housing and Urban Development and the Florida Department of Health.

First Chinese Drywall Test Results Released, But CPSC Says More Study is Needed

Thu, 29 Oct 2009 00:00:00 -0700

Preliminary results from the first round of Chinese drywall tests conducted by the U.S. Consumer Products Safety Commission (CPSC) have revealed that the wallboard emits volatile sulfur compounds at a higher rate, and contains higher levels of sulfur and strontium, than domestically-made drywall samples.

But according to The Wall Street Journal, CPSC officials say they will need to conduct more studies before they can determine whether or not these differences are contributing to health problems or metal corrosion reported by Chinese drywall homeowners. The testing results are to be discussed at a news conference later today, and according to the Journal, officials are expected to caution that the results are early stage and could change.

The CPSC has received about 1,897 reports from residents in 30 states, the District of Columbia, and Puerto Rico concerning Chinese drywall. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

According to a press statement released by the CPSC, initial results of three studies that compared Chinese and domestic wallboard are as follows:

Elemental and chemical testing revealed the presence of elemental sulfur in Chinese but not in non-Chinese drywall, and it also shows higher concentrations of strontium in Chinese drywall than in non-Chinese drywall. Testing conducted over the summer by federal and state agency radiation laboratories found no radiation safety risk to families in homes built with manufactured drywall. According to the press statement, the strontium found in this drywall does not pose a radiological risk.
Chamber studies conducted by nationally-respected Lawrence Berkeley National Laboratory (LBL) show that Chinese drywall emits volatile sulfur compounds at a higher rate than the U.S. made drywall. More tests and analyses are underway at LBL to determine the specific chemical compounds that are being emitted, the CPSC said.
Indoor air studies of 10 homes in Florida and Louisiana found that sulfur gases were either not present or were present in only limited or occasional concentrations inside the homes, and only when outdoor levels of sulfur compounds in the air were elevated. The indoor air study did lead to a preliminary finding of detectable concentrations of two known irritant compounds, called acetaldehyde and formaldehyde. These irritant compounds were detected in homes both with and without Chinese drywall, and at concentrations that could worsen conditions such as asthma in sensitive populations, when air conditioners were not working or turned off.

According to the CPSC, the initial indoor air studies were conducted on a small and limited sample of homes in order identify and measure contaminants and to inform the development of a federal and state indoor air testing protocol.

Next month, the CPSC said it will release results of a 50-home indoor-air-testing study. The results of that study, together with those released today, will help to develop a final standard federal and state protocol for testing homes and to identify a nexus between the presence of Chinese drywall and the reported health and corrosive issues, the agency said.

In November, the CPSC also expects to release a preliminary engineering analysis of potential electrical and fire safety issues related to the corrosion seen in homes with Chinese drywall.

The CPSC investigation is being aided by other federal agencies, including the Environmental Protection Agency, the Centers for Disease Control and Prevention, the U.S. Department of Housing and Urban Development and the Florida Department of Health.

Some Answers on Chinese Drywall Expected This Week

Wed, 28 Oct 2009 00:00:00 -0700

Chinese drywall victims might finally get some answers this week. The U.S. Consumer Products Safety Commission (CPSC) is expected to release the results of initial testing on Chinese and domestically produced drywall any day now. An additional two reports should be ready next month.

According to a recent Wall Street Journal report, the CPSC has received over 1,700 complaints regarding Chinese drywall from homeowners across the country. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

Earlier this year, tests conducted by the U.S. Environmental Protection Agency found sulfur and two organic compounds associated with acrylic paint — compounds not found in samples of American-made drywall – in samples of Chinese drywall. The EPA report did not draw any conclusions about health risks or whether the drywall could be damaging wires in homes. The CPSC has been conducting its own investigation, and has postponed releasing testing results in the past.

Last week, the head of the CPSC attended a product safety summit in China. She met with her counterpart at China's General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ). At the end of the summit, both parties released a joint statement pledging to work together to improve product safety. They also promised to cooperate on "scientific and fact-based investigations" into Chinese drywall imports. "It is CPSC's and AQSIQ's intention to determine the cause of the reported problems, with the goal of ensuring that the problems do not recur," the statement said.

The Chinese drywall disaster is just the latest scandal involving imports from that country. In 2008, nearly 80 percent of all product recalls in the U.S. involved imports from China. Products like dog food, baby formula, toys with lead paint and even pharmaceuticals like heparin have been found to have been made with toxic materials and other counterfeit ingredients, putting U.S. consumers at risk.

Chinese Drywall Tests Revealed Bacteria, Fungus, Expert Says

Tue, 27 Oct 2009 00:00:00 -0700

A building inspections expert claims Chinese drywall is infested with bacteria, fungus and even fecal matter. According to a report on the Broward-Palm Beach New Times Web site, Spiderman S. Mulholland, owner of U.S. Building Consultants Inc. in Gainesville, Florida, says such contaminants are likely causing health problems for people living in homes built with the defective Chinese drywall.

According to a recent Wall Street Journal report, the Consumer Products Safety Commission (CPSC) has received over 1,700 complaints regarding Chinese drywall from homeowners across the country. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

Earlier this year, tests conducted by the U.S. Environmental Protection Agency found sulfur and two organic compounds associated with acrylic paint — compounds not found in samples of American-made drywall - in samples of Chinese drywall. Next week, the CPSC will release two reports detailing the initial results of its tests on Chinese- and American-made drywall, with another report to follow next month.

According to the New Times report, Spiderman Mulholland presented findings on his own tests of Chinese drywall at an Orlando conference for homeowners that was held over the weekend. At the conference, Mulholland said his team has spent 20,000 hours and about $500,000 testing Chinese drywall.

Mulholland told attendees that his tests of five samples of Chinese drywall found evidence of fungi and bacteria in all five. One sample also included fecal matter, but it is not clear if that contamination originated with the manufacturer or installer.

According to New Times, Mulholland said that the bacteria is feeding on organic matter in the Chinese drywall that is not present in domestically manufactured wallboard. This process could be responsible for the sulfur odors homeowners have reported. Mulholland also said the bacteria can become airborne, and homeowners could breath it in. In a phone interview with New Times, Mulholland said the bacteria present in the drywall could "lead to significant health issues."

Mulholland also said the presence of the bacteria was evidence the Chinese drywall was manufactured incorrectly.

Chinese Asked for "Fair and Just" Response to Drywll Crisis

Mon, 26 Oct 2009 00:00:00 -0700

A top U.S. regulator has called on the Chinese to do "what is fair and just" in its response to the crisis over Chinese drywall. According to The Wall Street Journal, the head of the Consumer Products Safety Commission (CPSC) made the appeal while attending the U.S.-China product safety summit that was held in Beijing beginning Thursday.

The CPSC has received over 1,700 complaints regarding Chinese drywall from homeowners across the country. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

The Beijing product safety summit was attended by Inez Tenenbaum, head of the CPSC, and her counterpart with the Chinese General Administration of Quality Supervision, Inspection and Quarantine (Aqsiq). According to The Wall Street Journal, Tenenbaum and Aqsiq vice-minister Wei Chuanzhong signed a joint statement in which the two sides agreed to continue to cooperate in their investigations into the drywall problems.

As we've reported previously, before the summit, Tenenbaum had said she wanted to discuss whether the Chinese firms were willing to help pay for the drywall-related damage. But according to the Journal, at the summit's end, Tenenbaum appeared to be warning that a resolution would take time. She promised that the U.S. and China would continue to cooperate "to complete the scientific examination, then trace it up the supply chain and then match it with individual homeowners….But there's a tremendous amount of work to be done before any of that occurs."

Next week, the CPSC will release two reports detailing the initial results of its tests on Chinese- and American-made drywall, with another report to follow next month, the Journal said. Previous tests of Chinese drywall by the U.S. Environmental Protection Agency have found sulfur and two organic compounds associated with acrylic paint — compounds not found in samples of American-made drywall.

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to an earlier Wall Street Journal report, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

According to The Wall Street Journal, consulting firm Towers Perrin estimates that the tab for Chinese drywall damage could range from $15 billion to $25 billion.

Louisiana Chinese Drywall Compensation Program Approved, But Launch Delayed

Thu, 22 Oct 2009 00:00:00 -0700

A plan to help Chinese drywall homeowners in Louisiana is a step closer to becoming a reality, but it could be some time before funds start flowing to drywall victims. While The Louisiana Recovery Authority (LRA) approved a $5 million compensation program mandated by the Louisiana legislature, it will not be launched until federal officials agree to spend funds allocated for hurricane recovery on the Chinese drywall program.

The Consumer Products Safety Commission (CPSC) has received over 1,500 complaints regarding Chinese drywall from homeowners across the country. According to the Commission's Web site, 249 such complaints have come from homeowners in Louisiana, making it the second hardest hit state after Florida. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

The LRA was established in 2005 following hurricanes Katrina and Rita, and provided funds to residents for rebuilding. Earlier this summer, the Louisiana legislature had mandated that the LRA create a $5 million initiative to help drywall victims. In September, the LRA set aside that amount of federal Community Development Block Grant disaster recovery money to compensate hurricane victims whose homes were built with Chinese drywall. Yesterday, the LRA approved Action Plan Amendment No. 37, which creates the initiative.

But according to the New Orleans Times-Picayune, the compensation program won't start until the LRA receives more answers from the U.S. Department of Housing and Urban Development (HUD), the CPSC and the Centers for Disease Control and Prevention. The use of Community Development Block Grant Funds requires HUD approval, and the LRA is awaiting the completion of the CPSC's drywall investigation before formulating standards of eligibility and implementation. No drywall compensation program will be launched in Louisiana until a "nationally recognized testing and remediation protocol is approved," the Times-Picayune said.

The drywall compensation program approved by the LRA yesterday limits eligibility to applicants to the Road Home program, which has provided grants to more than 125,000 households for Katrina and Hurricane Rita recovery, the Times-Picayune said. Many hurricane-damaged homes in the state were renovated with defective Chinese drywall.

Final approval of the Chinese drywall compensation program will occur at a later meeting. The LRA is posting the Action Plan Amendment to its Web Site, and according to the Times-Picayune, has invited public comment.

Florida Insurer Says its Unclear If Policies Cover Chinese Drywall Damage

Wed, 21 Oct 2009 00:00:00 -0700

Florida's largest insurer says it has received at least two dozen claims over damage caused by defective Chinese drywall. However, Citizens Property Insurance Corp. has not paid on any claims, and says it is unclear whether Chinese drywall damage will be covered by its policies.

According to HeraldTribune.com, an executive with Citizens said that because of the scope and complexity of the Chinese drywall problem, its attitude is that "as a state and as a nation is that we need to figure out what the cure is for this malady."

However, despite reports in the media, Citizens said it is not canceling or refusing to renew policies on homes with Chinese drywall. But if the Chinese drywall leads to other damage, such as corroded wiring or plumbing, that existing damage may not be covered by a new policy, HeraldTribune.com said.

Questions about insurance coverage are just one of the factors that has left many Chinese drywall homeowners in limbo. They are still awaiting word as to whether or not there will be a Chinese drywall recall. U.S. officials are attending the U.S.-China Product Safety Summit in Beijing today, and are expected to press Chinese officials on the drywall problem. Yesterday, we reported that a spokesperson for Inez Tenenbaum, head of the Consumer Product Safety Commission (CPSC), said she would appeal to Chinese drywall manufacturers to do “what is fair and just”. It was not clear whether that meant asking the Chinese firms to provide financial help to homeowners with the defective wallboard, or issuing a recall of the material.

So far the Chinese have been noncommittal regarding any type of solution to the drywall disaster. And some in the U.S. have expressed frustration with their stance. For instance, earlier this week, Senator Bill Nelson, D-Florida, told News-Press.com said his own visit this summer with the Chinese General Administration of Quality, Supervision, Inspection, and Quarantine resulted in nothing but “a bunch of bureaucratic gobbledygook.” Nelson found his interaction with the head of the Chinese agency frustrating, and told News-Press.com that he got “fed up” when it became obvious the agency was not going to respond. The summit that begins tomorrow involves the same Chinese agency that frustrated Sen. Nelson.

The CPSC has received over 1,500 complaints regarding Chinese drywall from homeowners across the country. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

Chinese Drywall To Be Addressed At Product Safety Summit

Tue, 20 Oct 2009 00:00:00 -0700

Chinese drywall will be a major topic of discussion at the U.S.-China product safety summit set to begin in Beijing tomorrow. But according to a report on News-Press.com, one U.S. Senator says he does not expect much to result from the talks.

The Consumer Products Safety Commission (CPSC) has received over 1,500 complaints regarding Chinese drywall from homeowners across the country. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

The U.S. delegation attending tomorrow's summit will be led by Inez Tenenbaum, head of the CPSC. As we reported last week, Tenenbaum has said she will ask Chinese officials if they are prepared to participate in providing funds for drywall homes, and what it would take for that to occur. According to News-Press.com, Tenenbaum's spokesperson said she would appeal to Chinese drywall manufacturers to do "what is fair and just", but did not say whether that meant asking the Chinese firms to provide financial help to homeowners with the defective wallboard, or issuing a recall of the material.

But Senator Bill Nelson, D-Florida, told News-Press.com that he does not expect much from the Chinese. He's speaking from experience, having traveled to China over the summer to discuss the drywall problem. According to News-Press.com, Sen. Nelson said his visit with the Chinese General Administration of Quality, Supervision, Inspection, and Quarantine resulted in nothing but "a bunch of bureaucratic gobbledygook." Nelson found his interaction with the head of the Chinese agency frustrating, and told News-Press.com that he got "fed up" when it became obvious the agency was not going to respond.

The summit that begins tomorrow involves the same Chinese agency that frustrated Sen. Nelson. The biennial event will focus on the safety of Chinese-made products sold in the U.S. The Chinese drywall disaster is just the latest scandal involving imports from that country. In 2008, nearly 80 percent of all product recalls in the U.S. involved imports from China. Products like dog food, baby formula, toys with lead paint and even pharmaceuticals like heparin have been found to have been made with toxic materials and other counterfeit ingredients putting U.S. consumers at risk.

Victims Sue SEC Over Madoff Scam

Tue, 20 Oct 2009 00:00:00 -0700

Two of Bernard Madoff’s victims have filed suit against the Securities and Exchange Commission (SEC) for alleged negligence, CNN reported.

Madoff is now spending 150 years in prison for orchestrating a massive Ponzi scam estimated to have cost duped investors an incomprehensible $65 billion. As for the SEC, the regulator has come under fire for apparently missing warnings that something was amiss with Madoff’s investment advisory business.

Since news broke of Madoff’s scheme, the SEC has been faulted for failing to detect the historic fraud since 1992 and for not fully going after tips, having inexperienced staff handle reviews, not looking into unbelievable and sustained profits, not pushing when Madoff was clearly caught in lies, and not pursuing trading records that would have pointed them to the scam.

Now, the two victims—Phyllis Molchatsky and Steven Schneider—are accusing the SEC of “failing to detect Madoff's long-running scam,” said CNN. "Through its negligent actions and inactions ... the SEC caused Madoff's scheme to continue, perpetuate and expand, eventually in billions in losses by investors, and directly caused [the two] plaintiffs to lose more than $2.4 million," read the lawsuit, quoted CNN. The lawsuit also noted that the agency had "countless opportunities" to stop Madoff's scheme "and botched all of them," said CNN.

"Instead of watching the backs of Ms. Molchatsky and Dr. Schneider and the backs of all the other investors, the SEC—through its negligence—was effectively watching Bernie Madoff's back," said one of the plaintiffs' lawyers, who is also a former SEC attorney, reported CNN. "Now it is time for the SEC to be held accountable and for the federal government to do what the law says it must do: Compensate the victims for its negligence," it added.

Also according to the lawsuit, the SEC received "at least eight complaints or submissions indicating that Madoff was operating a Ponzi scheme," between the years 1992 and 2008, reported CNN, citing the lawsuit.

According to the U.S. Attorney's office in New York—the prosecutor in the case—as of last month, 2,336 victims have reported losses in excess of 13 billion, said CNN. Madoff, who is 71 years old, is scheduled for release in late 2139.

Madoff’s scam moved money from new clients to pay bogus returns supposedly issued by a so-called split-strike conversion that is a type of stock and options trading approach, explained Bloomberg.com previously. Among other tactics, Madoff and his staff at Bernard L. Madoff Investment Securities LLC would fabricate records to cover the scam. His bogus investment firm was presented as legitimate, but was simply a front, said CNN. The scam continued because new investors’ funds were used to pay existing investors, appearing to be investment profits. Those false profits were nothing more that stolen money, noted CNN.

Meanwhile, the trustee charged with locating the stolen funds—Irving Picard—has sued Madoff’s wife, Ruth for $45 million and four of Madoff's other relatives for $198 million, according to CNN.

China Will Be Asked to Help Pay For Drywall Damage, CPSC Head Says

Fri, 16 Oct 2009 00:00:00 -0700

The U.S. will be asking China to help pay for the mess created by defective drywall imported from that country. According to The Wall Street Journal, Inez Tenenbaum, head of the U.S. Consumer Products Safety Commission (CPSC), said she will bring up Chinese drywall during her visit there next week for the biennial U.S.-China consumer product safety summit.

The CPSC has received over 1,500 complaints regarding Chinese drywall from homeowners across the country. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to an earlier Wall Street Journal report, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

According to The Wall Street Journal, consulting firm Towers Perrin estimates the tab for drywall damage could range from $15 billion to $25 billion. Tenenbaum told the Journal that next week, she will ask Chinese officials if they are prepared to participate in providing funds for drywall homes, and what it would take for that to occur. Tenenbaum also promised to tell Chinese authorities that the U.S. would strictly enforce its new laws on products ranging from toys and all-terrain vehicles to electrical products. She said she also wanted to create a partnership with China that includes educating its government and manufacturers about U.S. standards.

The Chinese drywall disaster is just the latest scandal involving imports from that country. In 2008, nearly 80 percent of all product recalls in the U.S. involved imports from China. Products like dog food, baby formula, toys with lead paint and even pharmaceuticals like heparin have been found to have been made with toxic materials and other counterfeit ingredients putting U.S. consumers at risk.

According to the Journal, the Chinese have not indicated one way or another whether they would be willing to foot any of the bill for Chinese Drywall damage. Calls to the Chinese Embassy seeking comment were not returned, the Journal said.

Tax Whistleblower Tips To IRS Skyrocket

Wed, 14 Oct 2009 00:00:00 -0700

Tax cheats beware! It looks like a 2006 law that increased monetary rewards for Federal tax whistleblowers is working. According to an Internal Revenue Service (IRS) report detailed by The New York Times, tips about suspected tax cheats owing at least $2 million have jumped more than tenfold.

According to the IRS Web site, its Whistleblower Office pays money to people who blow the whistle on persons who fail to pay the tax that they owe. If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts. Prior to 2006, whistleblower rewards were the sole discretion of the IRS, and could not exceed 15 percent of the money recovered.

The 2006 law provides for two types of awards. If the taxes, penalties, interest and other amounts in dispute exceed $2 million, and a few other qualifications are met, the IRS will pay 15 percent to 30 percent of the amount collected. If the case deals with an individual, his or her annual gross income must be more than $200,000, the IRS Web site says. Rewards are paid only after the taxes, penalties and interest are collected, which can take years.

According to The New York Times, in 2008 the IRS Whistleblower office received tips on 1,246 suspected tax dodgers who owed over $2 million each. In 2007, it only received 116 such tips. More than 200 tips involved over $10 million in unpaid taxes, while 64 involved amounts in excess of $100 million, the Times said. How much the IRS will actually collect is still up in the air however, as the agency is in the process of conducting audits and processing appeals.

Under the IRS Whistleblower law, informants are promised confidentiality, unless they are needed to testify in court. According to The New York Times, whistleblowers are not offered immunity and can also be prosecuted if they are party to a tax scam.

Chinese Drywall Victims Face Insurance Woes

Wed, 14 Oct 2009 00:00:00 -0700

Many Chinese drywall homeowners, already facing a long list of difficulties, are now having issues with insurance providers. According to The Wall Street Journal, insurance companies are canceling policies on homeowners who have filed claims for damage caused by Chinese drywall gases.

The Consumer Products Safety Commission has received over 1,500 complaints regarding Chinese drywall from homeowners across the country. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to an earlier Wall Street Journal report, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

As we've reported previously, insurance claims for Chinese drywall damage are usually denied because of pollution and builder defect exclusions written into most policies. But along with denying claims, some insurers are moving to drop customers once they know the homeowner has a Chinese drywall problem, The Wall Street Journal said. For instance, Citizens Property Insurance Corp., the largest home insurer in Florida, confirmed that it had informed some policyholders that it will not renew their policies unless needed repairs are made within six months of the notice.

Another insurer, Universal North America, sent a notice of cancellation, which is more serious than a nonrenewal, to at least one policyholder in Hallandale Beach, Fla. The letter cited the presence of Chinese drywall as an "unacceptable condition . . . which has been shown to have adverse long-term effects on the plumbing and other dwelling components," the Journal said. Universal has about 105,000 home-insurance policies in Florida.

According to The Wall Street Journal, insurers are trying to protect themselves from future losses by refusing to renew and canceling policies. A spokesperson from Citizens told the Journal that the corrosion caused by Chinese drywall could lead to "a likely future claim for a covered peril such as fire or a water leak," which the insurer would be responsible for covering.

New Agent Orange Policy Will Make Disability Benefits Available to More Vets

Tue, 13 Oct 2009 00:00:00 -0700

A new proposal on Agent Orange health claims issued this week by the Department of Veterans Affairs will make it much easier for veterans injured by the toxin to make claims for disability payments and health care services. Under the proposal, three illnesses - B cell leukemias, such as hairy cell leukemia; Parkinson's disease; and ischemic heart disease - will be added to the growing list of illnesses presumed to have been caused by Agent Orange.

Agent Orange was widely used during the Vietnam War as a defoliant to remove enemy hiding places. According to The New York Times, Agent Orange was the most common herbicide used in the war. It contained one of the most toxic forms of dioxin, which has since been linked to some cancers.

According to a VA press release, between January 1965 and April 1970, an estimated 2.6 million military personnel who served in Vietnam were potentially exposed to sprayed Agent Orange. Many of those exposed to the toxin continue to suffer health problems.

The decision to add B cell leukemias, Parkinson's disease and ischemic heart disease to the roster of presumed Agent Orange illnesses brings the total number of ailments on the list to 15. Other presumed Agent Orange illnesses include:

Acute and Subacute Transient Peripheral Neuropathy
AL Amyloidosis
Chloracne
Chronic Lymphocytic Leukemia
Diabetes Mellitus (Type 2)
Hodgkin's Disease
Multiple Myeloma
Non-Hodgkin's Lymphoma
Porphyria Cutanea Tarda
Prostate Cancer
Respiratory Cancers, and
Soft Tissue Sarcoma (other than Osteosarcoma, Chondrosarcoma, Kaposi's sarcoma, or Mesothelioma)

Veterans who served in Vietnam during the war and who have a "presumed" illness don't have to prove an association between their illnesses and their military service. This "presumption" simplifies and speeds up the application process for benefits. According to the Times, it is estimated that about 200,000 veterans might seek benefits under the proposed change in policy.

According to The New York Times, the new Agent Orange policy will apply to some 2.1 million veterans who set foot in Vietnam during the war, including those who came after the military stopped using Agent Orange in 1970. It will not apply to sailors on deep-water ships, though VA says it plans to study the effects of Agent Orange on the Navy.

The decision to expand the list of presumed Agent Orange illnesses was based on an independent study released in July by the Institute of Medicine, the VA press release said.

CPSC Head Goes on Virginia Chinese Drywall Tour

Tue, 13 Oct 2009 00:00:00 -0700

Millions of dollars will be needed to fix the Chinese drywall problem, a Virginia builder told the head of the Consumer Products Safety Commission (CPSC) during her visit to the state yesterday.   According to The Virginian-Pilot, CPSC Commissioner Inez Tenenbaum heard from the builder as she joined Sen. Mark Warner, R-Virginia and other lawmakers from the state on a tour of affected homes.

According to the CPSC, it has received about 1,501 reports from residents in 27 states, the District of Columbia, and Puerto Rico who believe their health symptoms or the corrosion of metal components in their homes are related to the presence of Chinese drywall. Many homes with Chinese drywall are unlivable, and some homeowners have been driven to the point of bankruptcy.   About 51 complaints have come from Virginia, making it the third hardest hit state behind Florida, which has over 1,100 complaints, and Louisiana, which has 249.

During yesterday's tour, Tenenbaum visited three homes at The Hampshires at Greenbrier in Chesapeake constructed by The Dragas Cos. The owner of the firm told Tenenbaum that it is spending about $70,000 on each of its 73 condos in Chesapeake and Virginia Beach built with tainted drywall. The company expects to spend around $5 million on remediation, The Virginian-Pilot said.

Tenenbaum said that the CPSC is spending $3 million to study the drywall problem.   When it is finally released, the commission's report will include an analysis of the elements and compounds found in Chinese drywall, and results from air-quality tests. It will also advise Congress on ways to handle the crisis, The Virginian-Pilot said. Because no federal agency has resources to remediate the Chinese drywall problem on its own, Tenenbaum said Congress will have to authorize funds and work with federal agencies to devise a national plan to help restore homes built with the drywall.

The Virginian-Pilot also noted that while Tenenbaum applauded Dragas for attempting to address the drywall problem, she did not endorse the firm's remediation procedures. "I'm not going to make any presumptions just on a tour," she said. "We're waiting for the science to inform us of what the issues are."

Tenenbaum's words echo what many legal experts have said about remediation efforts currently underway. Most have cautioned homeowners not to rush into remediation because remediation protocols have not been established, and cross-contamination could occur. Even after Chinese drywall has been torn out and replaced, out-gassing of sulfur compounds and other elements continues to occur. Remediation will only further jeopardize public health when it is done without adequate safeguards or by unqualified individuals. Most legal experts have said that it is in the best interests of homeowners to delay any Chinese drywall repairs until a remediation protocol has been formulated.

Madoff Trustee Seeks More From Cohmad Securities

Mon, 12 Oct 2009 00:00:00 -0700

The court-appointed trustee charged with liquidating Bernard Madoff’s business is seeking to recuperate $245 million from bogus profits in his lawsuit against Cohmad Securities Corporation, said Bloomberg.com. The figure represents an increase from $213 million, said Bloomberg.com, which noted that Cohmad Securities shared office space with Madoff.

Madoff, 71, was sentenced to 150 years in prison for running a massive Ponzi scheme that is estimated to be the largest in history and which has allegedly cost investors as much as $65 billion. Bernard L. Madoff Investment Securities is the investment firm that served as a ”front” for the scam, noted CNN previously. Irving Picard is the trustee spearheading the investigation and continues to work to determine how much Madoff stole because. Although the disgraced financier claimed to have $65 billion, the figure was based on false investment statements, said CNN in a prior report. The U.S. Attorney’s office in New York said the losses suffered by Madoff’s 2,336 victims exceeded $13 billion, at last count, said CNN recently.

According to Picard, the new figure was recently released and based on revised data he discovered as part of his ongoing investigation, said Bloomberg.com. The figure was released in an amended complaint with Manhattan’s U.S. Bankruptcy Court, according to Bloomberg.com.

It seems that Peter, Bernard’s brother and Bernard’s niece, Shana, worked for Cohmad, said Bloomberg.com and were part of what Picard described as a “vast network” involved in furthering the historic Ponzi scheme. Picard sued Cohmad this June, according to Bloomberg.com. “For over two decades, Cohmad’s primary business was recruiting an ever-expanding list of high-net-worth clients into Madoff’s Ponzi scheme,” Picard said, quoted Bloomberg.com.

Duped investors, investigators, and virtually anyone who has read about the massive financial swindle has long believed that Madoff’s family members were involved in the scam that stripped countless investors of their life savings. Recently, CNN reported that Picard planned on suing four more of Bernard’s family members for about $200 million, citing a CBS “60 Minutes” broadcast report. Picard's suits will include both of Madoff’s sons, Mark and Andrew; Bernard’s brother, Peter; and Bernard’s niece, Shana for a combined total of $198 million, said CNN previously.

Picard filed for $44.8 million against Ruth, Bernard’s wife, this July, said CNN. The amount correlates to the monies Ruth transferred from Bernard’s investment firm over six years, CNN added. According to Bloomberg.com, when Madoff’s scam finally fell apart, it was revealed that about 20 percent of Madoff’s active accounts were actually referred by Cohmad (52), said Picard. Madoff and Maurice “Sonny” Cohn, a friend and former native of Madoff, co-founded Cohmad, said Bloomberg.com.

According to Bloomberg.com, Cohn and about 24 other individuals and trusts have been sued due to allegations they received about 90 percent of their income as a result of client referrals to Madoff.

Earlier this year, the Washington Post said the Security and Exchange Commission’s (SEC) internal investigation was focusing, in part, on the relationship between Madoff’s niece, Shana Madoff, and her husband, Eric Swanson.

Chinese Drywall Victims Need FEMA Help, Senators Say

Fri, 09 Oct 2009 00:00:00 -0700

The Chinese drywall crisis has prompted a group of U.S. Senators to call on the Federal Emergency Management Agency (FEMA) to help homeowners. The group wants FEMA to provide rental assistance to people who have had to leave their homes because of tainted Chinese drywall.

According to the Consumer Products Safety Commission (CPSC), it has received about 1,501 reports from residents in 27 states, the District of Columbia, and Puerto Rico who believe their health symptoms or the corrosion of metal components in their homes are related to the presence of Chinese drywall. Many homes with Chinese drywall are unlivable, and some homeowners have been driven to the point of bankruptcy.

In a letter sent yesterday, U.S Senators Bill Nelson, D-Fl., Mary Landrieu, D-La., Mark Warner, D-Va., and Jim Webb, D-Va. asked FEMA Craig Fugate administrator for help on behalf of Chinese drywall victims. "Families in our states are ... watching their dream homes turn into nightmares," the Senators wrote. "We believe it is important to marshal all appropriate Federal resources that may assist these families."

The letter asks "Whether FEMA — following a written request from a governor who has declared a disaster or emergency — may offer rental assistance, if homes, businesses or a combination of the two, have sustained uninsured losses.”

FEMA generally provides such assistance following natural disasters, such as hurricanes and floods. But the Senators' letter cites two instances where the agency did provide such help in non-natural disasters:

1980: Relocation of families in Niagara Falls, N.Y., affected by The Love Canal toxic waste dump after an emergency declaration. This incident created the EPA’s federal Superfund.
1983: Relocation of families in Times Beach, Mo., due to dioxin contamination. Funds were transferred from the Superfund to FEMA to help the residents.

The Senators represent the three states hardest hit by the Chinese drywall crisis. According to the CPSC, it has received 1,103 complaints from Florida homeowners, 249 from Louisiana and 51 from Virginia. Some experts have estimated that as many as 100,000 homes in the U.S. may have been built with the defective wallboard

The Senators' letter asks that FEMA respond to their request by November 7.

Chinese Drywall Mess Has No Easy Fix

Thu, 08 Oct 2009 00:00:00 -0700

Thousands of homeowners across the country are blaming fumes from defective Chinese drywall for making them sick. According to a report in The New York Times, the Chinese drywall debacle has pushed many people out of their homes and to the brink of bankruptcy, but solutions to the problem have not been easy to find.

This blog has been reporting on the Chinese drywall issue for months. According to the Consumer Products Safety Commission (CPSC), it has received about 1,501 reports from residents in 27 states, the District of Columbia, and Puerto Rico who believe their health symptoms or the corrosion of metal components in their homes are related to the presence of Chinese drywall. Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to The Wall Street Journal, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

According to The New York Times, the cost to remediate a home with Chinese drywall hovers somewhere around $100,000 -$150,000. Most homeowners simply don't have that. Insurance companies won't pay for a fix, citing pollution exclusions in their policies. Even worse, according to a report in the Miami Herald, some insurance companies are refusing to renew policies on homes with Chinese drywall unless the problems are fixed.

The mess has led many homeowners to file lawsuits against the manufacturers of Chinese drywall. According to the Times, insurers, home builders and drywall suppliers have also filed lawsuits, and in some cases are suing each other. So far, about 300 Chinese drywall cases have been consolidated in a Multidistrict Litigation that is currently underway in Federal Court in New Orleans. The first bellwether trials are expected to start early next year.

Holding Chinese manufacturers accountable could prove difficult. According to the Times, only one - Knauf Plasterboard Tianjin- has come to the U.S. to address the problem. Some manufacturers have been difficult to find, and others simply ignore lawsuits. What's more, should plaintiffs win, there is no way of enforcing U.S. legal judgments against foreign firms.

According to the Times, the CPSC says its Chinese drywall investigation is the largest in its history. It has sent six investigators to Chinese gypsum mines and to meet with the government there, and China has sent investigators to the U.S. It is expected that sometime this month, the CPSC will release the results of a study to determine why the drywall is causing problems, and what kind of remediation programs might be effective, the Times said.

Florida Lawmakers Finally Take Up Chinese Drywall Issue

Wed, 07 Oct 2009 00:00:00 -0700

The Florida legislature is finally addressing the Chinese drywall problem.   According to the Sarasota Herald-Tribune, the Florida Senate's Community Affairs Committee held their first hearing on the issue in Tallahassee yesterday.

Florida has been the state hardest hit by the Chinese drywall debacle. According to the Consumer Products Safety Commission (CPSC), just over 1100 Florida homeowners have reported problems with Chinese-made wallboard. It is estimated that thousands of Florida homes were built with the defective materials. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

Though the first complaints about Chinese drywall came from Florida homeowners a year ago, the state legislature has done little to address the problem.   According to Herald-Tribune, lawmakers in other states have acted. Louisiana, for instance, has approved a measure intended to provide as much as $5 million to help homeowners affected by Chinese drywall.   Local officials in Virginia Beach and Norfolk, Virginia have banned use of Chinese drywall in their cities. Laws have also proposed on the federal level that would, among other things, establish tighter regulatory standards over wallboard and other construction materials.

Despite the slow response of the Florida legislature, the Herald-Tribune reported that lawmakers on the Community Affairs Committee said there was an urgency to get something done to help affected homeowners.   According to the Herald-Tribune, some actions the Florida legislature could consider include:

Providing relief on mortgage payments for homeowners trying to rehabilitate their homes at the same time they have had to move their families because of potential health threats from the drywall.
Developing a standard for remediating homes and certifying them as being free from the drywall problems.
Allowing homeowners to receive a tax break to offset their rehabilitation costs.
Providing help to homeowners trying to deal with insurance companies over the cost of the home rehabilitation.

Hard to Hold Chinese Drywall Makers Accountable, Thanks to Legal Barriers

Tue, 06 Oct 2009 00:00:00 -0700

The Chinese drywall debacle has highlighted some serious problems in the U.S. legal system. According to a report in the New Orleans Times-Picayune, those flaws make it likely that many Chinese drywall manufacturers will ignore the product liability litigation now underway in New Orleans.

According to the Time-Picayune article, international trade agreements treat health and safety regulations as barriers to commerce. This makes it possible for foreign firms to import products to the U.S. that don't meet safety standards. That can be a problem when products like drywall are coming from China, a country that has imposed few health and safety regulations on its manufacturers.

The failure to impose U.S. safety standards on imported products can have serious consequence. In fact, the Chinese drywall disaster is just the latest scandal involving imports from that country. In 2008, nearly 80% of all product recalls in the U.S. involved imports from China. Many Chinese products have been found to have been made with toxic materials, such as lead paint, and even counterfeit ingredients. In the past, dangerous toys, toxic foods and even tainted heparin have been among the scores of Chinese products that have put U.S. consumers at risk.

According to the Times-Picayune, it is also very difficult to hold foreign manufacturers accountable when their products cause harm to U.S. consumers. They don't even have to respond to lawsuits filed in the U.S., and there is no way of enforcing U.S. legal judgments against them.

Some Chinese drywall manufacturers are ignoring the lawsuits. We reported last month that Judge Eldon E. Fallon, who is presiding over the consolidated Chinese drywall litigation in New Orleans, hit Chinese drywall manufacturer Taishan Gypsum Co. Ltd. with a default judgment in favor of plaintiffs after it failed to respond to a class action lawsuit. Some other drywall manufacturers, such as the German company Knauf Gips, have argued that the proper venue for Chinese drywall lawsuits is the International Court of Justice in The Hague, the Times-Picayune said.

The Chinese drywall fiasco has prompted calls for reforms that would eliminate some roadblocks facing U.S. consumers who are injured by imported products. The Foreign Manufacturers Legal Accountability Act, which was introduced in the U.S. Senate earlier this year, would, among other things, require foreign manufacturers to agree to be held accountable by U.S. courts. However, according to the Times-Picayune, it would not require overseas companies to pay U.S. legal judgments.

The Consumer Federation of America has called for requiring overseas manufacturers to post bonds when they sell products here so consumers could collect against them in the event of problems. According to the Times-Picayune, such a provision is included in the Food and Product Responsibility Act of 2007 that is scheduled to be reintroduced in Congress this fall.

U.S. regulators are also trying to find a way to make Chinese manufacturers more accountable for the drywall mess, the Times-Picayune said. The Consumer Products Safety Commission, for example, is working with the Chinese government and its two sister agencies in China, and has added drywall to the agenda of a biannual safety conference with the Chinese government and manufacturers set for mid-October in Beijing.

Finally, the Times-Picayune is reporting that Rep. Anh "Joseph" Cao, R-New Orleans, plans to introduce legislation to create a fund to compensate homeowners and ultimately find a way to make the Chinese government reimburse U.S. taxpayers for the Chinese drywall bailout.

Chinese Drywall Timeline Questioned

Mon, 05 Oct 2009 00:00:00 -0700

A Florida home built in 2002 has raised concerns that at least one home builder was using Chinese drywall earlier than first thought.

General consensus says that builders began using Chinese drywall in the construction of new homes sometime around 2004. According to the Consumer Products Safety Commission (CPSC) Chinese drywall website, consumers making complaints about Chinese drywall largely report that their homes were built in 2006 to 2007.   Experts have said that the housing boom, coupled with the massive rebuilding efforts that followed devastating hurricanes in 2004 and 2005, were the catalyst for a drywall shortage that prompted home builders to turn to Chinese-made wallboard.

According the Sarasota Herald-Tribune, people living in a home located in WCI Communities' Waterlefe Golf & River Club have reported corrosion and other problems typically seen in those with defective Chinese drywall. While WCI has maintained it began using Chinese drywall in 2004, this home was built in 2002, the Herald-Tribune said. Earlier this year, the owners of the Manatee County home scheduled an inspection with WCI to ascertain whether or not the building contained Chinese-made drywall.   However WCI canceled the inspection, claiming it had no reason to believe the tainted material had been used in homes built prior to 2004.

An independent inspector hired by the homeowners told the Herald-Tribune his own research has revealed that WCI was the only Florida home builder that purchased Chinese drywall directly, and in bulk, for use in its homes.   The inspection he conducted of the home uncovered corroded copper air conditioning coils and pipes. Its copper ground wires had turned black, and the refrigerator components were also corroded, as were silver faucets, mirrors and other metals in the home, Herald-Tribune said. Samples of drywall taken from the home have no visible manufacturers' marks, the inspector said.

WCI Communities has acknowledged that 200 of its homes have been the subject of Chinese drywall complaints. The builder, which recently emerged from bankruptcy, has established a Chinese Drywall Trust, which WCI will fund with $900,000. That money will help to offset the cost of litigation against insurers and other companies involved in the Chinese drywall disaster.

Chinese Drywall Complaints Top 1,500

Thu, 01 Oct 2009 00:00:00 -0700

The Chinese drywall epidemic has hit a milestone. Complaints to the Consumer Products Safety Commission (CPSC) about the defective wallboard have now surpassed 1,500.

According to the CPSC, it has received about 1,501 reports from residents in 27 states, the District of Columbia, and Puerto Rico who believe their health symptoms or the corrosion of metal components in their homes are related to the presence of Chinese drywall. The majority of reports -1,103 - have come from Florida. Other states affected include Alabama, Arizona, California, Georgia, Indiana, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

According to the CPSC's Chinese drywall website, consumers making complaints largely report that their homes were built in 2006 to 2007. Common features of the reports submitted to the CPSC from homes believed to contain defective Chinese drywall have been:

Consumers have reported a "rotten egg" smell within their homes.
Consumers have reported health concerns such as irritated and itchy eyes and skin, difficulty in breathing, persistent cough, bloody noses, runny noses, recurrent headaches, sinus infection, and asthma attacks.
Consumers have reported blackened and corroded metal components in their homes and the frequent replacement of components in air conditioning units.

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to The Wall Street Journal, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

Thousands of homeowners have filed lawsuits over the defective wallboard. Chinese drywall lawsuits from around the country have been consolidated in a Multidistrict Litigation that is currently underway in U.S. District Court, Eastern District of Louisiana. The first bellwether trials in that litigation are expected to begin in January.

Life Insurance Company of North America Settles Charges it Mishandled Disability Claims

Wed, 30 Sep 2009 00:00:00 -0700

Life Insurance Company of North America has reached an agreement with the California Department of Insurance to settle charges of disability claims handling violations. Under the terms of the settlement, Life Insurance Company of North America will pay a $600,000 fine, make changes in its claims handling policies and procedures, and review previously closed claims to determine if additional benefits are due.

The settlement stems from an onsite examination of Life Insurance Company of North America's claims handling practices conducted by the California Department of Insurance. According to a press release issued by the Department, instances were found where Life Insurance Company of North America had made claims determinations prior to requesting medical records and examples of the company's adjusters ignoring substantial new information after a claim had initially been denied. As part of the settlement, Life Insurance Company of North America has agreed to make significant improvements to its claims handling practices in order to avoid future violations, the press release said.

In addition to the $600,00 penalty, the settlement calls for Life Insurance Company of North America to cease and desist from engaging in any acts or practices in violation of California law. Life Insurance Company of North America's revised claims handling practices are designed to avoid the type of violations alleged. The Department will provide oversight to assure that this goal is being met. Under the agreement, Life Insurance Company of North America will also review all California resident closed denied claims for the period January 2005 through December 2007 using the agreed upon quality standards outlined in the settlement.

"Individuals purchase long term disability insurance to protect themselves and their families in the event they become disabled and are unable to work," said California Insurance Commissioner Steve Poizner. "When insurance companies fail to follow the law in fairly and expeditiously adjusting these claims, it has a devastating impact on policyholders and their families. I am pleased that LINA (Life Insurance Company of North America) has taken responsibility for its actions and has implemented changes in its policies, procedures and practices. The Department will continue to monitor the actions of all insurers selling and marketing disability insurance in the state of California."

Chinese Drywall Manufacturers May Try to Evade Lawsuits

Tue, 29 Sep 2009 00:00:00 -0700

Lawyers for Chinese drywall victims are warning clients that some Chinese manufacturers may simply choose to ignore lawsuits filed in the U.S. According to an Associate Press report, attorneys for the thousands of homeowners who have filed lawsuits over Chinese drywall are already considering contingency plans should this occur.

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to The Wall Street Journal, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases. So far, the Consumer Products Safety Commission has received 1,501 Chinese drywall complaints from homeowners in 27 states, the District of Columbia and Puerto Rico.

Lawsuits involving Chinese drywall have been consolidated in Federal Court in New Orleans. We reported last week that Judge Eldon E. Fallon, who is presiding over the case, hit Chinese drywall manufacturer Taishan Gypsum Co. Ltd. with a default judgment in favor of plaintiffs after it failed to respond to a class action lawsuit filed against it. Taishan is also known as Taian Taishan Plasterboard and Shandong Taihe Dongxin Co. Ltd.. The firm is controlled by the Beijing New Building Materials Public Limited Co. (BNBM), a state-owned entity under control of the Chinese government.

According to the Associated Press, plaintiffs' attorneys are concerned other Chinese manufacturers will ignore lawsuits and judgments as well. They point out that Chinese firms have done so in other cases involving toxic toys, tainted heparin and contaminated foods. Suing firms in international courts is time consuming an expensive, and civil judgments rendered in U.S. courts are not enforced in China, the Associated Press said.

There are a number of options attorneys are considering should Chinese drywall manufacturers ignore lawsuits filed here, the Associated Press said. These include filing claims against U.S. investment bankers who financed the Chinese companies, and seizing ships that brought the drywall to U.S. ports. One attorney interviewed by the Associated Press said such moves could be a way of "getting the missing parties to the table." Another attorney told the Associated Press that considering the billions of dollars at stake, a way would be found to make Chinese manufacturers responsive.

The Chinese drywall debacle has prompted some lawmakers and consumer advocates to push for remedies that would make foreign companies more accountable in U.S. product liability cases. The Foreign Manufacturers Legal Accountability Act, which was introduced in the U.S. Senate earlier this year, would, among other things, require foreign manufacturers to agree to be held accountable by U.S. courts.

Chinese Drywall Affecting 140 Homes, Builder Says

Mon, 28 Sep 2009 00:00:00 -0700

KB Home says that about 140 homes it built have issues with Chinese drywall. The disclosure was made during a conference call conducted by KB Home last Friday to discuss earnings.

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to The Wall Street Journal, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases. So far, the Consumer Products Safety Commission has received 1,311 Chinese drywall complaints from homeowners in 26 states and the District of Columbia.

During Friday's conference call, KB Home executives said most of its homes reporting drywall problems were located in Florida, and were built between 2006 and 2007. The company said the allegedly defective drywall was installed in homes by subcontractors.

The homebuilder said it estimated that its Chinese drywall repair costs will total about $10 million. It has recorded a charge of $6 million in the third quarter to increase its warranty liability. KB Home said it intended to seek reimbursement from various sources for these costs, but has not yet recorded any amounts for potential recoveries because the matter is still in its early stages.

KB Home is just the latest builder to provide a tally of homes built with potentially defective Chinese drywall. Earlier this year, Miami-based Lennar Homes acknowledged that about 400 homes it built in Florida have issues that could be related to Chinese drywall. WCI Communities, which filed for Chapter 11 bankruptcy protection, has also said 200 of its homes were the subject of drywall complaints. The Florida builder's bankruptcy plan includes a Chinese Drywall Trust, which WCI will fund with $900,000. That money will help to offset the cost of litigation against insurers and other companies involved in the Chinese drywall disaster. The firm's reorganization plan was approved in August.

Chinese Drywall Manufacturer Hit with Default Judgment

Fri, 25 Sep 2009 00:00:00 -0700

A default judgment has been issued against Chinese drywall manufacturer Taishan Gypsum Co. Ltd. The judgment was handed down by U.S. District Court Judge Eldon E. Fallon after Taishan Gypsum failed to respond to a class-action lawsuit filed against it.

As we've reported previously, attorneys representing an Alabama builder asked Judge Fallon to issue a default judgment after Taishan failed to respond to the builder’s lawsuit. Judge Fallon agreed to issue a preliminary default judgment against the manufacturer if it did not file an appearance before Sept. 24. If the judgment stands, Taishan will not be able to present a defense to the numerous Chinese drywall suits filed against it.

Taishan is also known as Taian Taishan Plasterboard and Shandong Taihe Dongxin Co. Ltd.. The firm is controlled by the Beijing New Building Materials Public Limited Co.(BNBM), a state-owned entity under control of the Chinese government. According to a report in the Bradenton Herald, the firm imported at least 7.5 million pounds of drywall through Florida and New York in 2006 and 2007.

In issuing the default order, Judge Fallon ordered attorneys for the Alabama builder to compile evidence of damages. According to the Sarasota Herald-Tribune, a hearing will now be scheduled where the default can be confirmed and a financial judgment against the company ordered.

Though the Taishan default judgment is a victory for drywall plaintiffs, it could prove difficult for them to collect against the firm, as American consumers face many roadblocks when suing foreign companies. As we reported earlier this summer, the Chinese drywall debacle has prompted some U.S. Senators to propose a law that would eliminate those obstacles. The Foreign Manufacturers Legal Accountability Act would, among other things, require foreign manufacturers to agree to be held accountable by U.S. courts.

The Taishan lawsuit is among the many Chinese drywall lawsuits from around the country that have been consolidated in a Multidistrict Litigation currently underway in U.S. District Court, Eastern District of Louisiana. The first bellwether trials in that litigation are expected to begin in January.

So far, the Consumer Products Safety Commission has received 1,311 Chinese drywall complaints from homeowners in 26 states and the District of Columbia. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

Chinese Drywall Discussed at Capitol Hill Meeting

Thu, 24 Sep 2009 00:00:00 -0700

Lawmakers yesterday pressed for a speedier Chinese drywall investigation during a closed-door meeting with officials from the Consumer Products Safety Commission (CPSC). According to the Sarasota Herald-Tribune, lawmakers from Florida and other affected states are frustrated that the agency has postponed the release of Chinese drywall testing results.

Over the summer, the CPSC had promised that the results from indoor air testing of 50 homes with Chinese drywall would be available in September, but that deadline was pushed back to October. Then, just this week, the CPSC moved the release date to November. According to the Herald-Tribune, there is no release date specified for studies on electrical and fire safety concerns.

The Capitol Hill meeting was attended by Inez Tenenbaum, head of the CPSC. According to the Herald-Tribune, Tenenbaum told attendees that the Chinese drywall investigation is "extremely complex and that there probably will not be a quick fix."

The meeting came just two days after Tenenbaum visited a home with defective drywall in Florida. As we reported at the time, she indicated that the CPSC would likely not issue a Chinese drywall recall because of logistical consideration. According to The Herald-Tribune, an aide to Tenenbaum has since clarified those statements, and said nothing is off the table. However, because of scope of a drywall problem, it is likely that the CPSC will consider a national remediation program rather than a recall. Such a program could entail some funding for homeowners from the federal government.

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to The Wall Street Journal, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

So far, the CPSC has received 1,311 Chinese drywall complaints from homeowners in 26 states and the District of Columbia. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

Thousands of homeowners have filed lawsuits over the defective wall board. Chinese drywall lawsuits from around the country have been consolidated in a Multidistrict Litigation that is currently underway in U.S. District Court, Eastern District of Louisiana. The first bellwether trials in that litigation are expected to begin in January.

Plans in Louisiana to Help Chinese Drywall Victims

Wed, 23 Sep 2009 00:00:00 -0700

Louisiana residents whose homes have been ruined by defective Chinese drywall are getting a bit of relief from the state. According to the New Orleans Times-Picayune, the Louisiana Recovery Authority (LRA) today set aside $5 million of federal Community Development Block Grant disaster recovery money to compensate hurricane victims whose homes were built with Chinese drywall. Separately, the State Tax Commission will allow reduced tax assessments on affected homes.

Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory an sinus problems that may be linked to the gases.

Louisiana is among the states hardest hit by the Chinese drywall crisis. According to the Consumer Products Safety Commission, 184 homeowners there have filed complaints with the agency. However, it is likely that thousands of homes in the state contain the defective material. Many of the Chinese drywall homes in Louisiana were among those rebuilt following the devastation wrought by Hurricane Katrina.

The LRA was established in 2005 following hurricanes Katrina and Rita, and provided funds to residents for rebuilding. According to the Times-Picayune, earlier this summer, the Louisiana legislature had mandated that the LRA create a $5 million initiative to help drywall victims. Now that funding has been set aside, the authority’s staff will now design a program and make it available for public comment. The program's application process and eligibility requirements are still being developed, the Times-Picayune said. Once the details are set, the LRA, legislative budget committee and the federal Urban Redevelopment Authority would have to approve the plan.

Meanwhile, WWLTV is reporting that the Louisiana State Tax Commission has given all tax assessors permission to reduce assessments on homes damaged by drywall. In St. Tammany Parish, affected homeowners will need to show proof that the there is Chinese drywall in their house. The tax assessor there told WWLTV that a letter from a contractor would suffice.

FDA Bans Flavored Cigarettes

Wed, 23 Sep 2009 00:00:00 -0700

The U.S. Food and Drug Administration (FDA) just announced a ban on cigarettes that contain fruit, candy, or clove flavoring. The ban, authorized by the new Family Smoking Prevention and Tobacco Control Act, is part of a national effort by the FDA to reduce smoking in America. Smoking is the leading preventable cause of death in America.

The FDA's ban on candy and fruit-flavored cigarettes highlights the importance of reducing the number of children who start to smoke, and who become addicted to dangerous tobacco products. The FDA is also examining options for regulating both menthol cigarettes and flavored tobacco products other than cigarettes.

"Almost 90 percent of adult smokers start smoking as teenagers. These flavored cigarettes are a gateway for many children and young adults to become regular smokers," said FDA Commissioner Margaret A. Hamburg, M.D. "The FDA will utilize regulatory authority to reduce the burden of illness and death caused by tobacco products to enhance our Nation's public health."

Flavors make cigarettes and other tobacco products more appealing to youth. Studies have shown that 17-year-old smokers are three times likelier to use flavored cigarettes as smokers over the age of 25.1. "Flavored cigarettes attract and allure kids into lifetime addiction," said U.S. Department of Health and Human Services Assistant Secretary for Health Howard K. Koh, M.D., M.P.H. "FDA's ban on these cigarettes will break that cycle for the more than 3,600 young people who start smoking daily."

The FDA is taking several steps to enforce the ban. A letter recently sent to the tobacco industry provided information about the law, and explained that any company who continues to make, ship, or sell such products may be subject to FDA enforcement actions. The FDA has also made an advisory available to parents on the risks associated with flavored tobacco products. "Youth are twice as likely to report seeing advertising for these flavored products as adults are," said Dr. Joshua Sharfstein, a pediatrician and the FDA Principal Deputy Commissioner. "Marketing campaigns for products with sweet candy and fruit flavors can mislead young people into thinking that these products are less addictive and less harmful."

The FDA encourages consumers to report continuing sales of flavored cigarettes through a special tobacco hotline (1-877-CTP-1373) and Web site (www.fda.gov/flavoredtobacco). Parents and consumers can learn more about the risks of flavored tobacco products at www.fda.gov/

President Barack Obama signed The Family Smoking Prevention and Tobacco Control Act into law in late June to allow the federal government broad authority over tobacco products and regulators to control cigarette packaging and marketing and how much nicotine—the addictive component in cigarettes—is added to such products, explained the Washington Post previously. There are about 443,000 deaths and $100 billion in healthcare costs linked to tobacco use in the United States every year. According to an earlier USA Today piece, President Obama said he is hoping to cut down the number of teens each day—estimated at about 1,000—who take up smoking. "I was one of these teenagers. And so I know how difficult it can be to break this habit when it's been with you for a long time," said Obama, quoted USA Today.

According to the LA Times previously, citing the National Institutes of Health (NIH), about one-third—30 percent—of “youth” smokers will die prematurely from a “smoking-related disease” and those who begin smoking before they are 21 years of age have the most difficult time quitting. The NIH reports that about 25 percent of all U.S. high school students smoke, said the LA Times.

CPSC Commissioner Sees Chinese Drywall Damage First Hand, Says Recall Won't be Issued

Tue, 22 Sep 2009 00:00:00 -0700

There will be no recall of defective Chinese drywall. According to a report on News-Press.com, Inez Tenenbaum, head of the Consumer Products Safety Commission (CPSC) said that instead, her agency will establish a uniform protocol to remediate the Chinese drywall, and push Congress for a funding source to help homeowners.

Tenenbaum was in Florida yesterday to get a first-hand look at the damage done by the Chinese drywall. According to News-Press.com, she visited the Cape Coral home of Richard and Patti Kampf, where she saw damage to plumbing fixtures and other items. It was the first time Tenenbaum had personally viewed drywall damage, the report said.

According to NBC-News2.com, Tenenbaum's visit followed criticism from Sen. Bill Nelson (D-Florida), who has said the CPSC has not acted quickly enough to address the Chinese drywall disaster. Yesterday, Tenenbaum appeared to agree, saying that when she took over at the CPSC, "there was not a sense of urgency." Tenenbaum was confirmed over the summer.

The Kampf home was included in a study of 50 homes that tested the gases emitted from the drywall, as well as air quality in the homes. According to News-Press.com, the results of those studies will be released in October. At that time the remediation protocol will be established, Tenenbaum said.

Tenenbaum said there will be no drywall recall because the material is not all the same, News-Press reported. Tenenbaum pointed out that the wallboard comes from several Chinese manufacturers, the drywall is not all made the same way and some Chinese drywall does not cause problems.

So far, the CPSC has received 1,311 Chinese drywall complaints from homeowners in 26 states and the District of Columbia. Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory an sinus problems that may be linked to the gases.

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to The Wall Street Journal, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

Thousands of homeowners have filed lawsuits over the defective wall board. Chinese drywall lawsuits from around the country have been consolidated in a Multidistrict Litigation that is currently underway in U.S. District Court, Eastern District of Louisiana. The first bellwether trials in that litigation are expected to begin in January.

"Jimmy Nolan's Law" Gives Injured 9/11 Heroes More Time to File Claims

Tue, 22 Sep 2009 00:00:00 -0700

New York's 9/11 emergency workers now have more time to file compensation claims. Earlier this month, New York Governor David Paterson signed “Jimmy Nolan's Law” which extends the time that 9/11 workers can file claims against the City of New York and private contractors for injuries resulting from their participation in the World Trade Center rescue, recovery or cleanup operations.

In the hours and days after the 9/11 terrorist attacks, thousands of rescue workers descended on Ground Zero to help with recovery efforts. Sifting through dust and rubble, sometimes with their bare hands, many lacked the clothing and equipment that could have kept them safe from harm. Several studies have confirmed that Ground Zero first responders are suffering from ill health as a result of their exposure to toxic dust at the site.

Under current law, injured 9/11 rescue and recovery workers had only 90 days to file claims. However, thousands of “second wave” 9/11 workers developed health problems long after the 90-day limitations period had expired. “Jimmy Nolan’s Law” allows eligible workers an additional one-year period to file claims.

The legislation is named after 9/11 victim Jimmy Nolan, a carpenter from Yonkers and father of three. Following the terrorist attacks, Mr. Nolan slept at the World Trade Center site for three weeks, assisting in the rescue and recovery efforts. He now suffers from wood and skin allergies, as well as respiratory problems, because of his exposure to toxic dust and debris at Ground Zero.

"Governor Paterson's decision to sign 'Jimmy Nolan's Law' is a significant legislative victory for all Ground Zero rescue and recovery workers," David B. Krangle, an attorney with Parker Waichman Alonso LLP, a Great Neck, NY law firm that has represented injured 9/11 emergency workers, said in a statement. "This law ensures that these injured heroes will have access to the compensation they deserve."

Dannon Settles Activia Lawsuit

Mon, 21 Sep 2009 00:00:00 -0700

Last year we wrote that Dannon Co. was being sued for claiming that some of its yogurts provide a health benefit that other yogurts do not. A class action suit filed in California’s Los Angeles federal court accused Dannon of falsely advertising its Activia, Activia Lite, and DanActive products and claimed Dannon initiated a massive false advertising campaign to convince consumers to pay more for yogurt containing probiotic bacteria.

Now, reports the LA Times, Dannon just settled the false-advertising lawsuit. The yogurt giant also agreed to create a $35-million fund meant to reimburse those consumers who bought Dannon’s Activia and DanActive yogurts. Dannon denied the claims and did not admit to any wrongdoing, said the LA Times, but stated that it settled because it wished "to avoid the distraction and expense of litigation," quoting spokesman Michael Neuwirth.

Probiotic is a term that means “for life.” The human intestinal tract is filled with a huge amount of helpful, probiotic bacteria, which is a good thing since the human body is designed to have symbiotic relationships with probiotic bacteria that assist in digestion and destroy harmful microorganisms. Science indicates that as the body ages, the intestinal tract becomes more rigid at only accepting intestinal flora it recognizes; it is difficult for the body to recognize or tolerate new good bacteria. Also, good bacteria decrease; therefore, it is important to supplement with probiotics, initiating this process early on in life.

Anecdotal evidence suggests friendly bacteria help a variety of digestive problems; however, in the United States, no health claims for probiotics have been approved. The United Nation’s Food and Agriculture Organization defines probiotics as live microorganisms … which confer a beneficial health effect on the host. In other words, for bacteria to be considered a probiotic, it must be beneficial to humans. As a result, if food manufacturers label a food as containing probiotics, the benefits must be proven by research.

Dannon has agreed to amend its labeling and claims of Activia and DanActive, making the scientific names of the so-called probiotics more visible; Dannon will also remove the word “immunity” from DanActive, said the LA Times. Currently, labeling for DanActive states it has "a positive effect on your digestive tract's immune system," reported the LA Times. That statement will be changed to state that DanActive will "interact with your digestive tract's immune system."

According to the LA Times, the refund will apply to consumers who purchased Activia and DanActive yogurts up to $100 per customer, citing court papers. Consumers will be required to complete a claim form, said the LA Times that will be accessible once the U.S. District Court for the Northern District of Ohio has approved the settlement.

Dannon Co, a unit of France’s Groupe Danone and has relied on Activia and DanActive to help boost its U.S. yogurt business. Activia was launched in the U.S. in 2006; DanActive, in 2007. Both are expected to account for at least 40 percent of the company’s U.S. yogurt business in 2008, Juan Carlo Dalto, Dannon chief executive, told Reuters last year.

Lennar Says Chinese Drywall Not to Blame for Problems in California Homes

Fri, 18 Sep 2009 00:00:00 -0700

Some homeowners in the California desert town of Indio are experiencing the foul odors and corrosion problems seen in homes built with Chinese drywall. But according to the Sarasota Herald-Tribune, their builder - Miami-based Lennar Homes - is insisting that defective Chinese drywall is not to blame.

According to the Consumer Products Safety Commission (CPSC), homeowners in 26 states and the District of Columbia have filed 1,311 complaints with the agency over Chinese drywall. While the majority - 997 - have come from Florida, a few have come from California homeowners. Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory an sinus problems that may be linked to the gases.

As we've reported previously, Lennar Homes has acknowledged that about 400 homes it built in Florida have issues that could be related to Chinese drywall. But the company has maintained that the material has not been found in its homes outside of the state.

But according to the Herald-Tribune, owners of some Lennar Homes in Indio are experiencing problems similar to what has been seen in Florida. These problems include odors and corrosion, as well as respiratory and sinus symptoms.

Lennar says it has ruled out Chinese drywall as the source, following two rounds of testing at one home, and inspection of several others in the Indian Palms Country Club. But according to the Herald-Tribune, Lennar's tests did not actually involve testing any drywall. The owner of the home tested said Environ International, a company hired by Lennar, used equipment to test for formaldehyde and took wood samples from the home. Lennar would not share its test results, and would only say that no chemicals were detected at levels high enough to cause concern.

While Lennar has ruled out Chinese drywall as a cause of the problems seen in Indio, others have not. Recently, tests conducted by a construction consulting firm found that corrosion did occur when copper wire was sealed in a jar with a sample of drywall from Indio.

According to the Herald-Tribune, formaldehyde can cause the type of corrosion seen in the test. If formaldehyde was the culprit, it would need to be determined if the drywall itself was made with the chemical, or whether the drywall was cross-contaminated by another material in the home that was emitting formaldehyde fumes, the Herald-Tribune said.

It wouldn't be unusual to find that other Chinese-manufactured construction products - particularly fiberboard and particleboard - contained formaldehyde. According to the Herald-Tribune, imports of construction materials made with the chemical spiked about a decade ago when other countries began setting tough standards for such products, but the U.S. did not.

According to the Herald-Tribune, Lennar would not answer questions about the use of imported wood products in the Indio home it tested, and would not comment on formaldehyde. However, the company now plans to test drywall in that home.

Louisiana Chinese Drywall Meeting Draws Overflow Crowd

Thu, 17 Sep 2009 00:00:00 -0700

Anxious Louisiana homeowners packed a Chinese drywall town hall meeting in Mandeville last night. According to the New Orleans Times-Picayune, the event attracted people from as far away as Baton Rouge.

The town hall was hosted by state Sens. Julie Quinn, R-Metairie, and A.G. Crowe, R-Slidell. The crowd - estimated at around 500 - was too large for the Mandeville City Hall, so Sen. Quinn held a second meeting right after the first in an attempt to accommodate all who wanted to attend, the Times-Picayune said. Sen. Quinn promised to hold other Chinese drywall meetings in the future.

At the meeting, Sen. Quinn urged attendees to report their Chinese drywall problems to the state's attorney general, who is trying to ascertain how many homes in Louisiana might be affected. An attorney at the meeting also urged homeowners to make complaints with the Consumer Products Safety Commission (CPSC).

According to the Times-Picayune, St. Tammany Parish Assessor Patricia Schwarz Core also promised homeowners help. She said her office would reduce assessments for homes with Chinese drywall, providing homeowners submit a reevaluation form and proof that their residence contains the material. Proof could include photos or a note from a contract, the Times-Picayune said.

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to The Wall Street Journal, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory an sinus problems that may be linked to the gases.

Louisiana is among the states hardest hit by the Chinese drywall crisis. According to the CPSC, 184 homeowners there have filed complaints with the agency. However, it is likely that thousands of homes in the state contain the defective material. Many of the Chinese drywall homes in Louisiana were among those rebuilt following the devastation wrought by Hurricane Katrina.

Louisiana Senators to Host Chinese Drywall Town Hall Meeting

Wed, 16 Sep 2009 00:00:00 -0700

A Chinese drywall town hall meeting will be held this evening in Mandeville, Louisiana. State Senators Julie Quinn and A.G. Crowe will host the meeting, which is slated to begin at 6:30 p.m. at Mandeville City Hall.

Louisiana is among the states hardest hit by the Chinese drywall crisis. According to the Consumer Products Safety Commission (CPSC), 167 homeowners there have filed complaints with the agency. However, it is likely that thousands of homes in the state contain the defective material. Many of the Chinese drywall homes in Louisiana were among those rebuilt following the devastation wrought by Hurricane Katrina.

Senator Quinn told WWLTV.com that at tonight's town hall, she will urge homeowners to contact other legislators and let them know how serious the Chinese drywall problem really is. The Senator said that current laws offer too little protection for homeowners.

'I'm trying to educate the public and encourage them to shout to the Governor's Office, to the fellow legislators and even to the federal government," Quinn said. "Help us so we don't lose our home."

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to The Wall Street Journal, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode.

Thousands of homeowners have filed lawsuits over the defective wall board. Chinese drywall lawsuits from around the country have been consolidated in a Multidistrict Litigation that is currently underway in U.S. District Court, Eastern District of Louisiana. The first bellwether trials in that litigation are expected to begin in January.

Chinese Drywall Raises Concerns in Newport News, VA Subdivision

Tue, 15 Sep 2009 00:00:00 -0700

Another Virginia subdivision, Hollymeade in Newport News, may have a Chinese drywall problem. According to a report on WVEC.com, Chinese drywall has been confirmed in one Hollymeade home, and scores more will be inspected because of the discovery.

Last week, the head of the Consumer Products Safety Commission (CPSC) said the agency had received 1,192 incident reports about drywall from 24 states, including the District of Colombia. The majority of those reports have come from Florida, followed by Louisiana and Virginia. Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode.

Earlier this summer, tests conducted by the Environmental Protection Agency (EPA) found that Chinese-manufactured drywall contained elevated levels of strontium sulfide, as well as the presence of several organic compounds associated with the production of acrylic paint that were not present in samples of U.S.-made drywall. Results from more testing that could shed light on the possible health risk posed by exposure drywall gases could be available in October.

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to The Wall Street Journal, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

According to WVEC, 10 homeowners in Hollymeade are concerned that they may have a Chinese drywall problem. The Virginia -Pilot is reporting that the builder of the subdivision, Atlantic Homes LLC, hired an affiliate of Norfolk-based Venture Supply to hang drywall in the development's homes. As we've reported previously, Venture Supply, which has since gone out of business, confirmed that it imported some drywall from China.

According to The Virginia-Pilot, Atlantic Homes has begun sending letters to homeowners in the subdivision informing them of the possible Chinese drywall issue. The firm has plans to inspect homes in the community to determine which, if any, have the wallboard.

Lawmakers Briefed on Chinese Drywall Probe

Fri, 11 Sep 2009 00:00:00 -0700

Lawmakers were promised a vigorous investigation of the Chinese drywall problem currently plaguing homeowners across the nation. According to a Miami Herald report, Consumer Product Safety Commission (CPSC) head Inez Tenenbaum also told lawmakers from affected states that her agency was "pouring a record amount of money and manpower" into its drywall investigation.

At a briefing yesterday, Tenenbaum said the CPSC had received d 1,192 incident reports about drywall from 24 states, including the District of Colombia. The majority of those reports have come from Florida, followed by Louisiana and Virginia, the Miami Herald said. Tenenbaum also said the CPSC's internal drywall task force, which is working with other federal and state agencies, had been in China last month as part of its investigation. She said the task force met with Chinese government and industry officials, and collected samples and other information to aid their investigation.

According to Tenenbaum, the task force has also conducted testing of 50 homes with Chinese drywall. She said she hoped that initial results of air sampling and a health assessment would be released by the end of October, the Herald reported.

According to a UPI report, Sen. Bill Nelson (D-FL) was critical of the CPSC's efforts following Tenenbaum's briefing. He said the probe is moving too slowly. "I asked how harmful is it, and they said, 'We've got to wait till the end of our study,'" said Nelson. "But when are you going to have some definitive information?"

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to The Wall Street Journal, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. Earlier this summer, tests conducted by the Environmental Protection Agency (EPA) found that Chinese-manufactured drywall contained elevated levels of strontium sulfide, as well as the presence of several organic compounds associated with the production of acrylic paint that were not present in samples of U.S.-made drywall.

Home Inspections in Chinese Drywall Lawsuits Underway

Thu, 10 Sep 2009 00:00:00 -0700

Court ordered home inspections have begun in the Chinese drywall litigation. According to News-Press.com, the first 30 such inspections will be completed by September 14.

The home inspections were ordered by U.S. District Court Judge Eldon E. Fallon, who is overseeing the massive Chinese Drywall Multidistrict Litigation in New Orleans. According to News-Press.com, around 2,000 lawsuits are pending in that litigation, but plaintiffs' attorneys say more than 50,000 homes could ultimately be involved.

Judge Fallon has ordered that 15 Florida homes, eight Louisiana homes and a total of seven homes in Virginia, the Carolinas and Mississippi undergo inspection, News-Press.com said. These inspections are being conducted by Crawford & Company of Atlanta.

Jordan Chaikin, an attorney with the Bonita Springs, Florida law firm of Parker Waichman Alonso LLP, told Naplesnews.com that these initial inspections will determine if a home has Chinese drywall, document property damage, and ascertain the builders, manufacturers, installers and others who were involved. Chaikin's firm, along with another Florida law firm, Morgan and Morgan, filed the first Chinese drywall lawsuit in federal court earlier this year.

Following the first 30 home inspections, a uniform protocol for inspections will be established. Once the protocol is established, inspections on other homes will commence. As we've reported previously, Judge Fallon has said he wants the first trials in the Chinese drywall litigation to begin in January.

One of the first home inspections conducted under this plan took place yesterday in the gated community of Bella Lago in Estero, Florida. According to Naplesnews.com, 64-year-old Winifred Gill used her entire life savings to purchase the home she now calls a "mausoleum". She has been suffering from the same types of sinus and eye problems reported by other people living with Chinese drywall. Because of gases from Chinese drywall, Gill says her home is unlivable. She has had to move out, and has taken a loan to cover rent payments.

According to Naplesnews.com, Gill first asked her builder, Toll Brothers of Pennsylvania, if her home was built with Chinese drywall after she had to replace a 2-year-old air conditioning system. The first answer was no, but in July, the builder confirmed Gill's drywall problem, Naplesnews.com said. Before it would do anything to remediate her home, Toll Brothers wanted Gill to sign a release of responsibility. She was not comfortable with that condition, which is why she is now a party in the Chinese drywall litigation.

Gill is not alone. According to the Consumer Products Safety Commission, consumers in 24 states have filed a total of 1,174 Chinese drywall complaints. Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode.

Earlier this summer, tests conducted by the Environmental Protection Agency (EPA) found that Chinese-manufactured drywall contained elevated levels of strontium sulfide, as well as the presence of several organic compounds associated with the production of acrylic paint that were not present in samples of U.S.-made drywall. The Florida health department is expected to release further test results that could shed more light on potential health hazards posed by the drywall sometime this month.

More Chinese Drywall Manufacturers Identified, Could be Added to Lawsuits

Tue, 08 Sep 2009 00:00:00 -0700

More Chinese drywall manufacturers could soon be added as defendants in the Chinese drywall multidistrict litigation currently underway in federal court in New Orleans. According to a report in the Sarasota Herald Tribune, last Thursday lawyers involved in the litigation revealed that 36 separate variations of tainted drywall have been found - far more than had originally been expected.

The variations were found after lawyers in the cases were told to document identifying marks on Chinese drywall found in affected homes, the Herald Tribune said. Photographs filed with the court last week show names such as Crescent City Gypsum Inc., International Materials Trading, ProWall and Dragon Brand Drywall.

The Sarasota Herald Tribune also reported that Judge Eldon E. Fallon, the federal judge overseeing the Chinese drywall litigation, appears to be growing impatient with some Chinese drywall manufacturers who have yet to respond to lawsuits. According to the report, the judge has actually threatened to issue default judgments against companies who do not respond.

One such company is Taishan Gypsum Co. Ltd. On Thursday, attorneys representing an Alabama builder asked Judge Fallon to issue a default judgment because Taishan has not responded to the builder's lawsuit. According to the Herald Tribune, the judge agreed to issue a preliminary default judgment against the manufacturer if it did not file an appearance before Sept. 24. That would be followed by a hearing to determine a final judgment against Taishan.

According to the Herald Tribune, Taishan is also known as Taian Taishan Plasterboard and Shandong Taihe Dongxin Co. Ltd.. The firm is controlled by the Beijing New Building Materials Public Limited Co.(BNBM), a state-owned entity under control of the Chinese government.

So far, consumers in 24 states have filed a total of 1,174 Chinese drywall complaints with the Consumer Products Safety Commission (CPSC). Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode.

Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to The Wall Street Journal, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.

Progress in Chinese Drywall Litigation

Fri, 04 Sep 2009 00:00:00 -0700

The Chinese drywall litigation is moving along, with the first bellwether trials expected to begin in January. Court-ordered inspections of about thirty homes alleged to have been built with Chinese drywall are slated to begin in the coming days.

Consumers in 24 states have filed a total of 1,174 Chinese drywall complaints with the Consumer Products Safety Commission (CPSC). Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode.

Hundreds of Chinese drywall cases from around the country have been consolidated in a Multidistrict Litigation (MDL) in U.S. District Court, Eastern District of Louisiana. According to the Associated Press, Judge Eldon E. Fallon, a veteran of such mass litigation, said Thursday that he wants attorneys to pick six plaintiffs whose cases could be tried in early 2010, with the first trial starting in January. The first trials will be limited to damage claims, and will not include personal injury suits involving the drywall's possible health affects, the Associated Press said.

A lead defense attorney involved in the litigation said that side might need more time to prepare. However, the lead plaintiffs' lawyer said he supports the Judge's scheduling plan, the Associated Press said.

Of the thirty properties scheduled for inspection, 15 are in Florida, eight are in Louisiana, four are in Mississippi, and one each are in Alabama, North Carolina and Virginia, the Associated Press said. Judge Fallon said yesterday that protocols could be "tweaked" following these inspections. Once the initial 30 are done, another 1000 home inspections will be conducted.

Can Renters with Chinese Drywall Break Their Lease?

Thu, 03 Sep 2009 00:00:00 -0700

Homeowner are not the only victims of Chinese drywall. The defective material is turning up in rental homes, apartments and condos as well. Many renters plagued by the odors, corrosion and health problems linked to Chinese drywall are asking questions about their legal rights.

Consumers in 24 states have filed a total of 1,174 Chinese drywall complaints with the Consumer Products Safety Commission (CPSC). Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode.

Much of the reporting surround the Chinese drywall debacle has centered on homeowners, but renters are affected as well. A recent report in the St. Petersburg Times highlighted some of the legal questions faced by these Chinese drywall victims.

According to the Times, one of the most common questions posed by renters living with Chinese drywall is whether or not they can break their lease. In Florida, landlords are required by law to provide renters with a "healthy, properly maintained" residence. But renters have obligations too. The mere presence of Chinese drywall in a rental property may not be enough to justify breaking a lease. A spokesperson for Florida's Department of Agriculture and Consumer Services told The St. Petersburg Times that if the drywall does not pose a definite health hazard, a landlord might be able to take legal action against a tenant who breaks a lease.

According to the Times, the spokesperson recommended that renters with Chinese drywall problems take certain steps to protect themselves before they break their lease. These steps include consulting a lawyer, and contacting their local health department to review their situation to confirm if a health hazard exists that might justify breaking a lease.

Chinese Drywall Lawsuit Filed by Florida Lt. Governor

Wed, 02 Sep 2009 00:00:00 -0700

The Lieutenant Governor of Florida can be added to the ever-growing list of homeowners who have filed Chinese drywall lawsuits. According to News-Press.com, the federal lawsuit filed by Jeffrey Kottkamp and his wife claims that Knauf Gips KG and Knauf Plasterboard Tianjin Co. LTD "manufactured, processed, distributed, delivered, supplied, inspected, marketed and/or sold" defective Chinese drywall in their North Fort Meyers home.

Consumers in 24 states have filed a total of 1,174 Chinese drywall complaints with the Consumer Products Safety Commission (CPSC). Hundreds of homeowners have filed lawsuits against the manufacturers, distributors, builders and others in the Chinese drywall supply chain. Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode.

In their lawsuit, the Kottkamp's allege that Chinese drywall has corroded air conditioning coils and other interior fixtures and has caused family members to have allergic reactions, coughing, infections, irritation and breathing problems. According to News-Press.com, the lawsuit seeks $75,000 in damages.

The Kottkamp's lawsuit will join hundreds of other Chinese drywall cases that have been consolidated in a Multidistrict Litigation (MDL) in U.S. District Court, Eastern District of Louisiana. Judge Eldon E. Fallon, a veteran of such mass litigation, has put the Chinese drywall MDL on a "fast-track", and plans to start trying bellwether cases in January.

To determine which cases will go to trial first, lawyers for plaintiffs and defendants will select a pool of about 20. From the pool, each side will select 5 for possible trial. Ultimately, Judge Fallon will schedule 6 cases from those 10 for trial.

Discovery in the litigation began in August. To aid discovery, Judge Fallon has also directed every plaintiff to fill out a profile sheet that will provide information about their claim. A home inspection protocol has also been established, and the Court will be appointing an independent firm to conduct home inspections.

Some legal observers have noted that Judge Fallon's efforts to expedite the Chinese drywall litigation could encourage the sides to consider settlements.

Madoff Report Said to Slam SEC

Mon, 31 Aug 2009 00:00:00 -0700

Issues surrounding the Securities and Exchange Commission’s (SEC) oversight of Bernard Madoff—now spending 150 years in prison for orchestrating an historic Ponzi scam—have raised serious questions for months now. According to FOX Business, the SEC’s inspector general, H. David Kotz, will be delivering a scathing report to the agency discussing its part in failing to notice or prevent Madoff’s Ponzi scheme estimated to have cost duped investors an incomprehensible $65 billion.

In December, following the now-famous arrest of the disgraced financier, Kotz initiated an investigation into how the SEC handled its dealings with Madoff, said FOX Business. Christopher Cox, former SEC chairman, requested the investigation, asking, for example, why the agency believed allegations made through the years about Madoff to be “not credible,” reported FOX Business. The SEC has come under fire for apparently missing warnings that something was amiss with Madoff’s investment advisory business.

Kotz wrote to FOX Business, via email, yesterday, saying he intends to send his report to Mary Schapiro, current SEC chairman, today. FOX Business reported that Kotz said that it is up to the agency to determine when and how it releases the report publicly; however, that should come later this week following review by Schapiro and her team.

Although Kotz would not discuss his findings, FOX Business noted that in his
January testimony to a House committee he said, “I can assure you that our investigation and review will be independent and as hard-hitting as necessary… The matters that have been brought to our attention require careful scrutiny and review… If we find that criticism of the SEC is warranted and supported by the facts, we will not hesitate to report the facts and conclusions as we find them,” quoted FOX Business.

In July, Kotz also said—in testimony before a different House Committee—that the eight-month investigation focused on the SEC’s Office of Compliance Inspections and Examinations and its Division of Enforcement, said FOX Business.

Last month we wrote that the scandal might have played a role in the departure of a key SEC official. According to Bloomberg.com, Lori Richards, director of the SEC’s Office of Compliance Inspections and Examinations, was widely criticized for missing warning signals about Madoff. Richards, who held her post since 1995, was scheduled to vacate August 7. According to Bloomberg.com, Pennsylvania Democratic Representative Ron Kanjorski, who leads the House Financial Services capital markets subcommittee, had been especially critical of Richards’ unit and its performance in regards to Madoff, accusing the SEC of ignoring Madoff red flags, such as the inability of investors to duplicate Madoff’s returns and his unusual choice of an outside auditor.

Earlier this year, former Enforcement Director Linda Thomsen resigned in February. Her resignation followed a pretty severe drubbing at the hands of a Congressional committee investigating the Madoff debacle.

Also, money manager Harry Markopolos has long claimed that he tried to warn the SEC numerous times over several years about Madoff. According to Bloomberg, Markopolos has said that SEC inspectors lack knowledge about products such as derivatives and have inadequate understanding of the businesses they are supposed to review.

WCI Communities' Bankruptcy Plan, Chinese Drywall Trust OK'd

Fri, 28 Aug 2009 00:00:00 -0700

A bankruptcy judge has approved WCI Communities Inc.'s plan to set up a Chinese Drywall Trust. The funds in the trust will be used to help homeowners living in WCI-built developments pursue claims against the parties responsible for the tainted drywall in their homes.

Consumers in 24 states have filed a total of 1046 Chinese drywall complaints with the Consumer Products Safety Commission (CPSC). Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor, similar to fireworks or rotten eggs, that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode.

Earlier this summer, tests conducted by the Environmental Protection Agency (EPA) found that Chinese-manufactured drywall contained elevated levels of strontium sulfide, as well as the presence of several organic compounds associated with the production of acrylic paint that were not present in samples of U.S.-made drywall. The Florida health department is expected to release further test results that could shed more light on potential health hazards posed by the drywall in September. The EPA and other government agencies are also conducting additional health testing, and those results should also be available soon.

WCI, which filed for Chapter 11 bankruptcy in August, is one of the Florida homebuilders that has acknowledged using Chinese drywall in homes it built. The company has said it believes it built at least 200 homes using the material. Just a month prior to its bankruptcy filing, the company said it was setting aside $11 million for homes that needed air conditioning coil replacement.

Earlier this week, Judge Kevin J. Carey approved the firm's reorganization plan, paving the way for WCI to emerge from bankruptcy. Included in the plan is the Chinese Drywall Trust, which WCI will fund with $900,000. That money will help to offset the cost of litigation against insurers and other companies involved in Chinese drywall disaster.

Chinese Drywall Lawsuit Claims Material Used in Las Vegas Homes

Tue, 25 Aug 2009 00:00:00 -0700

A Chinese drywall class action lawsuit has been filed in Las Vegas, Nevada. According to the Las Vegas Sun, the lawsuit alleges that Chinese drywall is causing health problems for occupants of homes in two Las Vegas neighborhoods

The lawsuit was filed on behalf of four homeowners, the Sun said. Three of the homes are located in a neighborhood near Jones Boulevard and Grand Teton Drive; and the fourth is near Hollywood Boulevard and Desert Inn Road. The lawsuit, which seeks class action status for all residents of the state suffering health problems because of Chinese drywall, names subsidiaries of Miami-based homebuilder Lennar Corp. and drywall manufacturer Georgia-Pacific Corp. of Atlanta as defendants.

Defendants named in the suit claim that they did not use Chinese drywall in Las Vegas homes, and the Sun notes that domestic wallboard is made in the Las Vegas area. However, Georgia Pacific has been named in a Florida lawsuit that alleges its American-made synthetic drywall products are also causing corrosion in home components and health problems. The suit alleges that those products emit sulfur, methane and other volatile organic chemical compounds, the Sun said.

As we've reported previously, Lennar has acknowledged that Chinese drywall was used in about 400 of its Florida homes. The company has filed its own lawsuit against the makers and distributors of Chinese drywall.

Consumers in 24 states have filed a total of 1046 Chinese drywall complaints with the Consumer Products Safety Commission (CPSC). Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor, similar to fireworks or rotten eggs, that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode.

Earlier this summer, tests conducted by the Environmental Protection Agency (EPA) found that Chinese-manufactured drywall contained elevated levels of strontium sulfide, as well as the presence of several organic compounds associated with the production of acrylic paint that were not present in samples of U.S.-made drywall. The Florida health department is expected to release further test results that could shed more light on potential health hazards posed by the drywall in September. The EPA and other government agencies are also conducting additional health testing, and those results should also be available soon.

Chinese Drywall Not Radioactive, CPSC Says

Mon, 24 Aug 2009 00:00:00 -0700

Testing on Chinese drywall for the presence of radioactive phosphogypsum is complete. According to the Consumer Products Safety Commission (CPSC), a radiation risk was not found in 21 samples of Chinese drywall that were tested.

Earlier this summer, we reported that a Los Angeles Times investigation had found that Chinese drywall manufacturers regularly use phosphogypsum - a byproduct of fertilizer production - in their wallboard. Though phosphogypsum has been banned from use in construction in the U.S. since the 1980s because of its radioactive properties, several Chinese drywall manufacturers told the Times that they had shipped wallboard made with phosphogypsum to the U.S. in 2006. The LA Times report raised fears that Chinese drywall could be radioactive.

The reports of phosphogypsum use by Chinese drywall manufacturers prompted the CPSC to order radiation testing. Those tests were conducted by the Florida Department of Health Radiation Laboratory and the U.S. Environmental Protection Agency (EPA) National Air and Radiation Environmental Laboratory. Of the 21 samples tested, 17 were obtained by the CPSC from manufacturers and suppliers in multiple states, and four were obtained by the Florida health department from homes exhibiting copper corrosion, odors and occupant complaints.

According to a CPSC statement, an evaluation of those tests by a federal and state technical team of scientists from CPSC, EPA, the Florida Health Department, Centers for Disease Control and Prevention (CDC)/Agency for Toxic Substances and Disease Registry (ATSDR), Louisiana Department of Health and Hospitals, and Virginia Department of Health has concluded that the samples had no elevated levels of radioactivity. The levels were comparable to “background” levels found in soil, brick and concrete, the CPSC said.

That's some good news for people living with Chinese drywall. But as anyone who visits this blog regularly knows, there are still many questions about Chinese drywall left to be answered. Consumers in 24 states have filed a total of 1046 Chinese drywall complaints with the CPSC. Gases emitted from the drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor, similar to fireworks or rotten eggs, that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode.

Earlier this summer, other tests conducted by the EPA found that Chinese-manufactured drywall contained elevated levels of strontium sulfide, as well as the presence of several organic compounds associated with the production of acrylic paint that were not present in samples of U.S.-made drywall. The Florida health department is expected to release further test results that could shed more light on potential health hazards posed by the drywall in September. The EPA and other government agencies are also conducting additional health testing, and those results should also be available soon.

Mon, 24 Aug 2009 00:00:00 -0700

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