Summary: CHS TX filed for Chapter 11 bankruptcy in Florida Federal jury awarded $307.5 million to Kohchise Jackson Jackson alleges colostomy reversal denied as cost-cutting A prison healthcare contractor, hit with a $307.5 million verdict by a federal jury in Detroit in April, has filed for bankruptcy, casting doubt on whether a former Michigan inmate will ever collect on the massive award. CHS TX, Inc., doing business as YesCare, notified the U.S. District Court in Detroit May 11 that the company and its affiliates had filed for Chapter 11 bankruptcy, on May 8 in Florida, records show. CHS TX was born out of the 2023 bankruptcy of former Michigan prison health care contractor Corizon Health, Inc. and assumed certain Corizon liabilities, becoming the main defendant in a federal lawsuit brought against Corizon in 2019 by former Michigan Department of Corrections inmate Kohchise Jackson. Now, CHS TX has followed Corizon's lead and also sought bankruptcy protection. On April 2, a federal jury awarded Jackson a $307.5 million judgment against CHS TX and $100,000 in punitive damages against Dr. Keith Papendick, who was Corizon's "director of utilization management" while Jackson was in prison from 2017 to 2019. Jackson alleged Corizon refused to reverse his colostomy, as a cost-cutting measure, leaving him to suffer with a leaky and stinky plastic bag attached to his side during his time in prison on assault and weapons charges. Jackson was by far the largest unsecured creditor in a list of the 30 largest unsecured creditors, with claims totaling $407.5 million, that the company filed with the bankruptcy court. "He's disappointed," Ann Arbor attorney Ian Cross, one of the lead attorneys on the case, said of Jackson. "He's been waiting a long time," but "Mr. Jackson is in it for the long haul, as are we." It's too early to say what the bankruptcy means for collecting on the verdict, because CHS TX has not yet filed a list of assets and it's not yet known how much value there is and where the money has gone, Cross said. In many cases after a significant jury verdict, defendants will negotiate a smaller settlement in lieu of an appeal. But the bankruptcy filing results in an automatic halt to the case until the bankruptcy is resolved. Records show that since the bankruptcy filing, several counties around the U.S. that had jail health care contracts with CHS TX and affiliates have moved to terminate those contracts. It's possible CHS TX will have no underlying assets, but even if that's the case, attorneys are exploring options that could involve related companies and/or owners, Cross said. On April 29, Cross filed a federal lawsuit on behalf of Jackson and another plaintiff against former Corizon official Isaac Lefkowitz of New York City and other former Corizon officials and investors, alleging violations of the Racketeering Influenced and Corrupt Organizations Act. The suit alleges the defendants remove cash and other assets from companies in advance of bankruptcies and prevent creditors from recovering assets. An answer to the lawsuit had not been filed as of May 20. Lefkowitz was subpoenaed to testify during Jackson's civil lawsuit that began March 24 in federal court in Detroit. He refused to answer questions when he was called to the witness stand, citing his Fifth Amendment rights against self-incrimination, court records show. Adam Masin, a New York attorney representing CHS TX, told jurors Lefkowitz had nothing to do with Jackson's lawsuit because he didn't become a Corizon official until 2021, long after Jackson was released from prison and the same year the MDOC's five-year, $716 million contract with Corizon ended. Lefkowitz was also not a director of CHS TX as of April 2 and had no role with the company at that time, Masin told jurors.

Summary: Australian federal court upholds eSafety fine against X Corp Judge Michael Wheelahan increases fine to A$650,000 plus A$100,000 legal costs X Corp admits contravening Australia's Online Safety Act for 38 days     An Australian court upheld a regulator's fine against Elon Musk's social media company X Corp after it admitted violating the law by failing to supply information about its online child protection measures, ending a nearly three-year dispute. After the eSafety regulator, a frequent target of online attacks by Musk, fined the company in October 2023 for what it called an inadequate response to a standard request for information about anti-child exploitation processes, the company resolved the dispute on May 21 by admitting wrongdoing. "The respondent admits that it contravened the Act," said Christopher Tran, a lawyer for the eSafety Commissioner, referring to Australia's Online Safety Act, in a Federal Court hearing. "There was ongoing noncompliance for some 38 days." The resolution ends a legal battle which began when the regulator fined the company formerly called Twitter A$610,500 ($437,000) over its answers to some 25 questions. X Corp initially sought to overturn the penalty on grounds that the company had changed its name since being acquired by Musk for $44 billion in 2022. The regulator later took a separate legal action to recover the fine. On May 21, Judge Michael Wheelahan raised the payout to A$650,000 and ordered X to pay another A$100,000 to cover some of the regulator's legal costs. The resolution ties up a loose end for the company which earlier this year was folded into Musk's sprawling technology conglomerate SpaceX ahead of a planned trillion-dollar initial public offering within weeks. X's lawyer Perry Herzfeld said the dispute boiled down to "historic issues relating to the timeliness of provision of information". The contravening conduct took place during a "period of change and transition for the company", he told the court. Tran, for eSafety, acknowledged there was no loss resulting from X's actions but said that "not providing information when requested by a regulator impedes a regulator when doing her work". ($1 = 1.3986 Australian dollars) (Reporting by Byron Kaye; Editing by Kim Coghill and Lincoln Feast.)

Summary: Trump order directs treasury to advise banks on red flags Focus on payroll tax evasion and off-the-books wage payments Use of ITIN without verified legal presence flagged Non-citizens in the U.S. will face greater scrutiny on their banking activities following an executive order by President Donald Trump on May 19, but the directive was less extensive than a previous proposal floated by Treasury requiring banks to collect clients’ citizenship information. The Trump administration has proposed a number of policies that have sideswiped banks, including the idea floated earlier in the year to collect citizenship data. In January, Trump also blindsided the industry by calling for credit card providers to cap interest rates in a bid to address cost-of-living concerns, and he has targeted Wall Street banks for discriminating against conservatives, a claim they deny. The latest order, issued May 19, however, fell short of calling for citizenship data. Instead it directs the Treasury secretary to issue an advisory to banks to identify red flags tied to payroll tax evasion, concealment of true account ownership, off-the-books wage payments, labor trafficking and the use of individual taxpayer identification numbers to open accounts or obtain credit without verified legal presence in the U.S. The proposal was seen as an example of the administration listening to industry, an executive in a large bank that asked for anonymity said, adding it showed the administration was open to change. Senior industry executives had warned that requiring banks to collect data on their customers’ citizenship or immigration status would be costly and disruptive. “Obviously, the administration wants greater controls on immigration, but the bank regulators have always wanted as many financial transactions to go through the traditional financial systems,” said Ed Mills, a Washington policy analyst with Raymond James. “This would have removed a lot of individuals from the financial system, which could create a national security risk as well,” he added. Banks considered that checking the immigration status and citizenship of all current clients would be very burdensome and nearly impossible, Reuters reported last month. Trade groups have explained that such an order could lead to debanking of millions of customers and reduce financial access to Americans. Among the examples of red flags cited by the latest order are accounts in the names of shell companies and use of specific platforms to disguise wage payments, and repetitive cash withdrawals. The use of Individual Taxpayer Identification Numbers (ITIN) should also be flagged when not accompanied by a Social Security number or a work visa. The White House also said Treasury and regulators should propose changes to the Bank Secrecy Act to make it easier to obtain information about clients, singling out documents issued by foreign consulates as risky. (Reporting by Nupur Anand and Tatiana Bautzer in New York and Chandni Shah in Bengaluru; Editing by Megan Davies, Mark Porter and Lincoln Feast.)