Friday, November 23, 2012
U.S. SUES KBR FOR FALSE CLAIMS ON CONTRACTS TO HOUSE TROOPS IN IRAQ
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, November 19, 2012
United States Sues Houston-based KBR and Kuwaiti Subcontractor for False Claims on Contracts to House American Troops in Iraq
The government’s complaint arises from the Bed Down Mission, a push to replace the tents used to house soldiers during the early days of the war with trailers, also called living containers. KBR performed many of the services required under LOGCAP III, including the Bed Down Mission, through foreign and domestic subcontractors. According to the complaint, KBR awarded a subcontract to First Kuwaiti on Oct. 16, 2003, to supply, transport and install 2,252 living containers at Camp Anaconda in Iraq for about $80 million. The government alleges that First Kuwaiti was required to complete delivery and installation of the trailers at Camp Anaconda by Dec. 15, 2003. The government further alleges that in July 2004, First Kuwaiti presented two claims to KBR contending that government-caused delays in providing military escorts for convoys into Iraq entitled the company to an increase in the contract price to cover its increased costs. According to the complaint, KBR agreed to pay First Kuwaiti an additional $48.8 million and passed that cost on to the United States.
The government’s complaint alleges that First Kuwaiti knowingly inflated its crane and truck costs, among other items, and misrepresented the cause of its delays. The complaint further alleges that KBR charged these costs to the United States knowing they were improper.
"We depend on companies like KBR to provide valuable noncombat services to our military such as housing and feeding our troops," said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. "We will en sure that contractors live up to their promises, and are not permitted to profit at the expense of the taxpayers at home who are supporting our men and women in uniform."
"When dealing with the government, just like dealing with anyone else, it’s important to give an honest account," said Jim Lewis, U.S. Attorney for the Central District of Illinois. "The facts alleged in the complaint indicate that KBR and First Kuwaiti did not provide an honest accounting."
The United States is suing KBR and First Kuwaiti under the False Claims Act. The act holds persons responsible for presenting, or causing to be presented, claims for gov ernment money or property they know are false. The statute entitles the government to recover three times its damages, plus a $5,500 to $11,000 civil penalty for each false claim.
The United States is also suing KBR under the antifraud section of the Contract Disputes Act and for breach of contract. The Contract Disputes Act establishes liability for contractors who certify that they are entitled to money under a contract, if any part of their claim is unsupported due to a misrepresentation of fact or fraud. Under the Contract Disputes Act, the government may recover the false and unsupported part of the claim, plus its costs of review.
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Central District of Illinois; and the Defense Contract Audit Agency, the Defense Criminal Investigative Service, and the Defense Contract Management Agency of the Department of Defense. The claims asserted against KBR and First Kuwaiti in the United States’ complaint are allegations only and there has been no determination of liability.
The lawsuit was filed in the Central District of Illinois and is captioned United States v. Kellogg, Brown & Root Services, Inc., et al.
The United States has filed a civil complaint against Kellogg, Brown & Root Services Inc. (KBR) and First Kuwaiti Trading Company for submitting inflated claims for the delivery and installation of trailers to house troops in Iraq, the Justice Department announced today. KBR is headquartered in Houston. First Kuwaiti, a KBR subcontractor, is based in Kuwait.
KBR is the Army’s primary contractor for logistical support in Iraq. On Dec. 14, 2001, t he Army awarded KBR the LOGCAP III contract, the third generation of contracts under the Army’s Logistics Civil Augmentation Program (LOGCAP) since the program’s inception in the 1980s. LOGCAP III required KBR to provide logistical support in the military theater whenever and wherever it was needed. Support included services such as transportation, dining services, facilities management, maintenance and living accommodations for United States and coalition forces. LOGCAP III was originally awarded to Brown and Root Services, a division of KBR. The United States has paid KBR tens of billions of dollars for logistical support services since awarding the contract.
Monday, November 19, 2012
United States Sues Houston-based KBR and Kuwaiti Subcontractor for False Claims on Contracts to House American Troops in Iraq
The government’s complaint arises from the Bed Down Mission, a push to replace the tents used to house soldiers during the early days of the war with trailers, also called living containers. KBR performed many of the services required under LOGCAP III, including the Bed Down Mission, through foreign and domestic subcontractors. According to the complaint, KBR awarded a subcontract to First Kuwaiti on Oct. 16, 2003, to supply, transport and install 2,252 living containers at Camp Anaconda in Iraq for about $80 million. The government alleges that First Kuwaiti was required to complete delivery and installation of the trailers at Camp Anaconda by Dec. 15, 2003. The government further alleges that in July 2004, First Kuwaiti presented two claims to KBR contending that government-caused delays in providing military escorts for convoys into Iraq entitled the company to an increase in the contract price to cover its increased costs. According to the complaint, KBR agreed to pay First Kuwaiti an additional $48.8 million and passed that cost on to the United States.
The government’s complaint alleges that First Kuwaiti knowingly inflated its crane and truck costs, among other items, and misrepresented the cause of its delays. The complaint further alleges that KBR charged these costs to the United States knowing they were improper.
"We depend on companies like KBR to provide valuable noncombat services to our military such as housing and feeding our troops," said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. "We will en sure that contractors live up to their promises, and are not permitted to profit at the expense of the taxpayers at home who are supporting our men and women in uniform."
"When dealing with the government, just like dealing with anyone else, it’s important to give an honest account," said Jim Lewis, U.S. Attorney for the Central District of Illinois. "The facts alleged in the complaint indicate that KBR and First Kuwaiti did not provide an honest accounting."
The United States is suing KBR and First Kuwaiti under the False Claims Act. The act holds persons responsible for presenting, or causing to be presented, claims for gov ernment money or property they know are false. The statute entitles the government to recover three times its damages, plus a $5,500 to $11,000 civil penalty for each false claim.
The United States is also suing KBR under the antifraud section of the Contract Disputes Act and for breach of contract. The Contract Disputes Act establishes liability for contractors who certify that they are entitled to money under a contract, if any part of their claim is unsupported due to a misrepresentation of fact or fraud. Under the Contract Disputes Act, the government may recover the false and unsupported part of the claim, plus its costs of review.
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Central District of Illinois; and the Defense Contract Audit Agency, the Defense Criminal Investigative Service, and the Defense Contract Management Agency of the Department of Defense. The claims asserted against KBR and First Kuwaiti in the United States’ complaint are allegations only and there has been no determination of liability.
The lawsuit was filed in the Central District of Illinois and is captioned United States v. Kellogg, Brown & Root Services, Inc., et al.
The United States has filed a civil complaint against Kellogg, Brown & Root Services Inc. (KBR) and First Kuwaiti Trading Company for submitting inflated claims for the delivery and installation of trailers to house troops in Iraq, the Justice Department announced today. KBR is headquartered in Houston. First Kuwaiti, a KBR subcontractor, is based in Kuwait.
KBR is the Army’s primary contractor for logistical support in Iraq. On Dec. 14, 2001, t he Army awarded KBR the LOGCAP III contract, the third generation of contracts under the Army’s Logistics Civil Augmentation Program (LOGCAP) since the program’s inception in the 1980s. LOGCAP III required KBR to provide logistical support in the military theater whenever and wherever it was needed. Support included services such as transportation, dining services, facilities management, maintenance and living accommodations for United States and coalition forces. LOGCAP III was originally awarded to Brown and Root Services, a division of KBR. The United States has paid KBR tens of billions of dollars for logistical support services since awarding the contract.
Thursday, November 22, 2012
FORMER EXECUTIVES OF STANFORD FINANCIAL GROUP ENTITIES CONVICTED FOR ROLES IN FRUAD SCHEME
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, November 19, 2012
Former Executives of Stanford Financial Group Entities Convicted for Roles in Fraud Scheme
WASHINGTON – A Houston federal jury has convicted Gilbert T. Lopez Jr., the former chief accounting officer of Stanford Financial Group Company, and Mark J. Kuhrt, the former global controller of Stanford Financial Group Global Management, for their roles in helping Robert Allen Stanford perpetrate a fraud scheme involving Stanford International Bank (SIB).
The guilty verdict was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; FBI Assistant Director Kevin Perkins of the Criminal Investigative Division; Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis C. Borzi; Chief Postal Inspector Guy J. Cottrell; and Special Agent in Charge Lucy Cruz of IRS-Criminal Investigation.
Stanford, who was convicted in a separate trial held earlier this year, illegally used billions of dollars of SIB’s assets to fund his personal business ventures, to live a lavish lifestyle, and for other improper purposes.
The evidence presented at the trial of Lopez and Kuhrt established that they were aware of and tracked Stanford’s misuse of SIB’s assets, kept the misuse hidden from the public and from almost all of Stanford’s other employees, and worked behind the scenes to prevent the misuse from being discovered.
The trial against Lopez and Kuhrt spanned five weeks. After approximately three days of deliberations, the jury found both Lopez, 70, and Kuhrt, 40, both of Houston, guilty of 10 of 11 counts in the indictment. Each defendant was convicted of one count of conspiracy to commit wire fraud and nine counts of wire fraud. Each was found not guilty on one wire fraud count.
Both defendants were immediately remanded into custody.
U.S. District Judge David Hittner, who presided over the trial, has set sentencing for Feb. 14, 2013. At sentencing, Lopez and Kuhrt will each face a maximum of 20 years in prison on each count of conviction.
The investigation was conducted by the FBI, U.S. Postal Inspection Service, IRS-CI and the U.S. Department of Labor, Employee Benefits Security Administration. The case was prosecuted by Deputy Chief Jeffrey Goldberg and Trial Attorney Andrew Warren of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorney Jason Varnado of the Southern District of Texas.
Monday, November 19, 2012
Former Executives of Stanford Financial Group Entities Convicted for Roles in Fraud Scheme
WASHINGTON – A Houston federal jury has convicted Gilbert T. Lopez Jr., the former chief accounting officer of Stanford Financial Group Company, and Mark J. Kuhrt, the former global controller of Stanford Financial Group Global Management, for their roles in helping Robert Allen Stanford perpetrate a fraud scheme involving Stanford International Bank (SIB).
The guilty verdict was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; FBI Assistant Director Kevin Perkins of the Criminal Investigative Division; Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis C. Borzi; Chief Postal Inspector Guy J. Cottrell; and Special Agent in Charge Lucy Cruz of IRS-Criminal Investigation.
Stanford, who was convicted in a separate trial held earlier this year, illegally used billions of dollars of SIB’s assets to fund his personal business ventures, to live a lavish lifestyle, and for other improper purposes.
The evidence presented at the trial of Lopez and Kuhrt established that they were aware of and tracked Stanford’s misuse of SIB’s assets, kept the misuse hidden from the public and from almost all of Stanford’s other employees, and worked behind the scenes to prevent the misuse from being discovered.
The trial against Lopez and Kuhrt spanned five weeks. After approximately three days of deliberations, the jury found both Lopez, 70, and Kuhrt, 40, both of Houston, guilty of 10 of 11 counts in the indictment. Each defendant was convicted of one count of conspiracy to commit wire fraud and nine counts of wire fraud. Each was found not guilty on one wire fraud count.
Both defendants were immediately remanded into custody.
U.S. District Judge David Hittner, who presided over the trial, has set sentencing for Feb. 14, 2013. At sentencing, Lopez and Kuhrt will each face a maximum of 20 years in prison on each count of conviction.
The investigation was conducted by the FBI, U.S. Postal Inspection Service, IRS-CI and the U.S. Department of Labor, Employee Benefits Security Administration. The case was prosecuted by Deputy Chief Jeffrey Goldberg and Trial Attorney Andrew Warren of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorney Jason Varnado of the Southern District of Texas.
Wednesday, November 21, 2012
COMPANY TO PAY $4.1 MILLION PENALTY TO SETTLE CLEAN WATER ACT VIOLATIONS
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, November 13, 2012
Roquette America Inc., to Pay $4.1 Million Penalty to Settle Violations of Clean Water Act at Its Keokuk, Iowa, Facility
Roquette America, Inc., has agreed to pay a $4.1 million civil penalty to settle alleged violations of the Clean Water Act and its National Pollutant Discharge Elimination System (NPDES) permit at its grain processing facility in Keokuk, Iowa, the Department of Justice and the Environmental Protection Agency (EPA) announced today.
As early as 2008, Roquette was aware that its waste water treatment plant was marginally adequate and that it could not handle spills or surges in loading. Instead of constructing additional containment structures for waste water surges, or routing spills to the waste water treatment plant, Roquette allowed the industrial waste to be discharged directly into the Mississippi River and Soap Creek.
"Roquette’s actions resulted in over a thousand permit violations and allowed the discharge of untreated industrial waste into the Mississippi River and another Iowa waterway even after it was informed on numerous occasions it was violating its state permit and federal law," said Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. "This settlement holds Roquette accountable for its multiple violations of the nation’s Clean Water Act and requires sewer improvements, wastewater treatment upgrades, enhanced monitoring and independent compliance audits that will benefit public health and the environment for the people of Iowa for years to come."
"The magnitude of these violations warrants the magnitude of the penalty," said EPA Region 7 Administrator Karl Brooks. "The Mississippi River is a vital waterway, used by millions of Americans for commerce, recreation and drinking water. It is imperative that industrial facilities abide by their discharge permits to protect our valuable water resources."
The Iowa Department of Natural Resources has issued three administrative orders and eight notices of violation to Roquette since 2000. Despite these orders and notices, Roquette continued to overload its waste water treatment plant and failed to address the deficiencies at other portions of its facility, resulting in permit violations and illegal discharges of untreated industrial waste.
The Keokuk facility violated its NPDES permit at least 1,174 times, and on at least 30 occasions illegally discharged via storm drains resulting in at least 250,000 gallons of industrial waste being released into the Mississippi River and Soap Creek. In addition to these permit violations and illegal discharges, Roquette discharged partially treated industrial waste from its waste water treatment plant, and discharged steam condensate into Soap Creek through an unpermitted outfall.
In addition to paying the penalty, Roquette will complete other requirements valued at more than $17 million to further protect the Mississippi River and Soap Creek. Among these requirements are the completion of a sewer survey to identify possible discharge locations, the implementation of sewer modifications, the construction of upgrades to the wastewater treatment plant, and the performance of enhanced effluent monitoring. In addition, Roquette will obtain annual third party audits of its compliance with the operations and maintenance program, the Storm Water Pollution Prevention Program, the company’s NPDES permits, and the compliance requirements set out in the consent decree.
The consent decree is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html
Tuesday, November 13, 2012
Roquette America Inc., to Pay $4.1 Million Penalty to Settle Violations of Clean Water Act at Its Keokuk, Iowa, Facility
Roquette America, Inc., has agreed to pay a $4.1 million civil penalty to settle alleged violations of the Clean Water Act and its National Pollutant Discharge Elimination System (NPDES) permit at its grain processing facility in Keokuk, Iowa, the Department of Justice and the Environmental Protection Agency (EPA) announced today.
As early as 2008, Roquette was aware that its waste water treatment plant was marginally adequate and that it could not handle spills or surges in loading. Instead of constructing additional containment structures for waste water surges, or routing spills to the waste water treatment plant, Roquette allowed the industrial waste to be discharged directly into the Mississippi River and Soap Creek.
"Roquette’s actions resulted in over a thousand permit violations and allowed the discharge of untreated industrial waste into the Mississippi River and another Iowa waterway even after it was informed on numerous occasions it was violating its state permit and federal law," said Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. "This settlement holds Roquette accountable for its multiple violations of the nation’s Clean Water Act and requires sewer improvements, wastewater treatment upgrades, enhanced monitoring and independent compliance audits that will benefit public health and the environment for the people of Iowa for years to come."
"The magnitude of these violations warrants the magnitude of the penalty," said EPA Region 7 Administrator Karl Brooks. "The Mississippi River is a vital waterway, used by millions of Americans for commerce, recreation and drinking water. It is imperative that industrial facilities abide by their discharge permits to protect our valuable water resources."
The Iowa Department of Natural Resources has issued three administrative orders and eight notices of violation to Roquette since 2000. Despite these orders and notices, Roquette continued to overload its waste water treatment plant and failed to address the deficiencies at other portions of its facility, resulting in permit violations and illegal discharges of untreated industrial waste.
The Keokuk facility violated its NPDES permit at least 1,174 times, and on at least 30 occasions illegally discharged via storm drains resulting in at least 250,000 gallons of industrial waste being released into the Mississippi River and Soap Creek. In addition to these permit violations and illegal discharges, Roquette discharged partially treated industrial waste from its waste water treatment plant, and discharged steam condensate into Soap Creek through an unpermitted outfall.
In addition to paying the penalty, Roquette will complete other requirements valued at more than $17 million to further protect the Mississippi River and Soap Creek. Among these requirements are the completion of a sewer survey to identify possible discharge locations, the implementation of sewer modifications, the construction of upgrades to the wastewater treatment plant, and the performance of enhanced effluent monitoring. In addition, Roquette will obtain annual third party audits of its compliance with the operations and maintenance program, the Storm Water Pollution Prevention Program, the company’s NPDES permits, and the compliance requirements set out in the consent decree.
The consent decree is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html
Tuesday, November 20, 2012
U.S. JUSTICE DEPARTMENT REQUIRES DIVESTITURES IN COMMERCIAL WASTE COLLECTION INDUSTRY
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, November 15, 2012
Justice Department Requires Divestitures in Star Atlantic’s Acquisition of Veolia
Settlement Preserves Competition in Northern New Jersey, Central Georgia and the Macon, Ga., Metropolitan Area
WASHINGTON — The Department of Justice announced today that it has reached a settlement that will require Star Atlantic Waste Holdings L.P. and Veolia ES Solid Waste Inc. to divest commercial waste collection or disposal assets in northern New Jersey, central Georgia, and the Macon, Ga., metropolitan area in order to proceed with Star Atlantic’s proposed $1.9 billion acquisition of Veolia. The department said that the transaction, as originally proposed, would have resulted in higher prices for the collection of municipal solid waste from commercial businesses or the disposal of waste in these areas.
The Department of Justice’s Antitrust Division filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, will resolve the lawsuit and the competitive concerns.
"Without the divestitures required by the department, consumers in northern New Jersey, central Georgia and the Macon metropolitan area would have been harmed by a reduction in competition for commercial solid waste collection or disposal," said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "This remedy ensures that the benefits of competition–namely, lower prices and better service–will be preserved in these areas."
According to the complaint, the transaction, as originally proposed, would have substantially lessened competition in commercial waste collection or disposal services in the geographic areas of northern New Jersey, central Georgia and Macon. In each of these areas, Star Atlantic and Veolia are two of only a few significant firms providing commercial waste collection or municipal solid waste disposal services. The acquisition would have eliminated a major competitor in each of these areas and resulted in higher prices and poorer service for consumers.
Under the terms of the proposed settlement, Star Atlantic and Veolia will divest three specified transfer stations in northern New Jersey; a landfill and two transfer stations in central Georgia; and three commercial waste collection routes in the Macon metropolitan area. Each asset to be divested is currently owned by Veolia. To maximize the potential operational effectiveness of each purchaser of the divestiture assets, Star Atlantic and Veolia must divest to a single buyer the three transfer stations in northern New Jersey. Likewise, they must divest to a single purchaser the designated Georgia transfer stations and landfill and the specified commercial waste routes in the Macon metropolitan area.
Star Atlantic is a privately owned Delaware limited partnership with its headquarters in New York City. Star Atlantic provides small container commercial waste collection and/or municipal solid waste disposal services in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee through its subsidiary, Advanced Disposal Services Inc., and in Massachusetts, Vermont, New York, New Jersey, Pennsylvania, Maryland and West Virginia through its subsidiary, Interstate Waste Services Inc. Star Atlantic is one of the nation’s largest municipal solid waste hauling and disposal companies by revenue, and had estimated total revenues of $563 million in 2011.
Veolia Environnement S.A. is a French corporation headquartered in Paris. Its wholly owned U.S. subsidiary, Veolia ES Solid Waste Inc., provides small container commercial waste collection and/or municipal solid waste disposal services in Florida, Georgia, Alabama, Kentucky, Missouri, Illinois, Minnesota, Wisconsin, Michigan, Indiana, Pennsylvania and New Jersey. Veolia ES Solid Waste Inc. is also one of the nation’s largest solid waste hauling and disposal companies by revenue, and had estimated total revenues of $818 million in 2011.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Thursday, November 15, 2012
Justice Department Requires Divestitures in Star Atlantic’s Acquisition of Veolia
Settlement Preserves Competition in Northern New Jersey, Central Georgia and the Macon, Ga., Metropolitan Area
WASHINGTON — The Department of Justice announced today that it has reached a settlement that will require Star Atlantic Waste Holdings L.P. and Veolia ES Solid Waste Inc. to divest commercial waste collection or disposal assets in northern New Jersey, central Georgia, and the Macon, Ga., metropolitan area in order to proceed with Star Atlantic’s proposed $1.9 billion acquisition of Veolia. The department said that the transaction, as originally proposed, would have resulted in higher prices for the collection of municipal solid waste from commercial businesses or the disposal of waste in these areas.
The Department of Justice’s Antitrust Division filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, will resolve the lawsuit and the competitive concerns.
"Without the divestitures required by the department, consumers in northern New Jersey, central Georgia and the Macon metropolitan area would have been harmed by a reduction in competition for commercial solid waste collection or disposal," said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "This remedy ensures that the benefits of competition–namely, lower prices and better service–will be preserved in these areas."
According to the complaint, the transaction, as originally proposed, would have substantially lessened competition in commercial waste collection or disposal services in the geographic areas of northern New Jersey, central Georgia and Macon. In each of these areas, Star Atlantic and Veolia are two of only a few significant firms providing commercial waste collection or municipal solid waste disposal services. The acquisition would have eliminated a major competitor in each of these areas and resulted in higher prices and poorer service for consumers.
Under the terms of the proposed settlement, Star Atlantic and Veolia will divest three specified transfer stations in northern New Jersey; a landfill and two transfer stations in central Georgia; and three commercial waste collection routes in the Macon metropolitan area. Each asset to be divested is currently owned by Veolia. To maximize the potential operational effectiveness of each purchaser of the divestiture assets, Star Atlantic and Veolia must divest to a single buyer the three transfer stations in northern New Jersey. Likewise, they must divest to a single purchaser the designated Georgia transfer stations and landfill and the specified commercial waste routes in the Macon metropolitan area.
Star Atlantic is a privately owned Delaware limited partnership with its headquarters in New York City. Star Atlantic provides small container commercial waste collection and/or municipal solid waste disposal services in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee through its subsidiary, Advanced Disposal Services Inc., and in Massachusetts, Vermont, New York, New Jersey, Pennsylvania, Maryland and West Virginia through its subsidiary, Interstate Waste Services Inc. Star Atlantic is one of the nation’s largest municipal solid waste hauling and disposal companies by revenue, and had estimated total revenues of $563 million in 2011.
Veolia Environnement S.A. is a French corporation headquartered in Paris. Its wholly owned U.S. subsidiary, Veolia ES Solid Waste Inc., provides small container commercial waste collection and/or municipal solid waste disposal services in Florida, Georgia, Alabama, Kentucky, Missouri, Illinois, Minnesota, Wisconsin, Michigan, Indiana, Pennsylvania and New Jersey. Veolia ES Solid Waste Inc. is also one of the nation’s largest solid waste hauling and disposal companies by revenue, and had estimated total revenues of $818 million in 2011.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Monday, November 19, 2012
SEC CHARGES J.P. MORGAN SECURITIES LLC WITH MISLEADING INVESTORS IN RMBS OFFERINGS
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
In coordination with the federal-state Residential Mortgage-Backed Securities Working Group, the Securities and Exchange Commission today charged J.P. Morgan Securities LLC and affiliated entities with misleading investors in offerings of residential mortgage-backed securities (RMBS). The firm agreed to a settlement in which it will pay $296.9 million. The SEC plans to distribute the money to harmed investors.
The SEC alleges that JP Morgan misstated information about the delinquency status of mortgage loans that provided collateral for an RMBS offering in which it was the underwriter. JP Morgan received fees of more than $2.7 million, and investors sustained losses of at least $37 million on undisclosed delinquent loans. JP Morgan also is charged for Bear Stearns' failure to disclose its practice of obtaining and keeping cash settlements from mortgage loan originators on problem loans that Bear Stearns had sold into RMBS trusts. The proceeds from this bulk settlement practice were at least $137.8 million.
According to the SEC's complaint against JP Morgan filed in federal court in Washington D.C., federal regulations under the securities laws require the disclosure of delinquency information related to assets that provide collateral for an asset-backed securities offering. Information about the delinquency status of mortgage loans in an RMBS transaction is important to investors because those loans are the primary source of funds by which investors can earn interest and obtain repayment of their principal.
The SEC alleges that in the prospectus supplement for the $1.8 billion RMBS offering that occurred in December 2006, JP Morgan made materially false and misleading statements about the loans that provided collateral for the transaction. The firm represented that only four loans (.04 percent of the total loans collateralizing the transaction) were delinquent by 30 to 59 days, and that those four were the only loans that had had an instance of delinquency of 30 or more days in the 12 months prior to the "cut-off date" for the transaction. However, at the time JP Morgan made these representations, the firm actually had information showing that more than 620 loans (above 7 percent of the total loans collateralizing the transaction) were, and had been, 30 to 59 days delinquent, and the four loans represented as being 30 to 59 days delinquent were in fact 60 to 89 days delinquent.
The SEC's complaint also alleges that Bear Stearns' bulk settlements covered loans collateralizing 156 different RMBS transactions issued from 2005 to 2007. Loan originators were usually required by contract to buy back loans that suffered early payment defaults or had other defects. However, Bear Stearns frequently negotiated discounted cash settlements with these loan originators in lieu of a buy-back on loans that were owned by the RMBS trusts. The firm - both before and after the merger with JP Morgan - then kept most of the bulk settlement proceeds. The firm failed to disclose the practice to investors who owned the loans. Bear Stearns repurchased only about 13 percent of these defective bulk settlement loans from the trusts, compared to a nearly 100 percent repurchase rate when loan originators agreed to buy back the defective loans. For most loans covered by bulk settlements, the firm collected money from originators without paying anything to the trusts.
JP Morgan and J.P. Morgan Acceptance Corporation I settled the SEC's charges by consenting to pay disgorgement of $39,900,000, prejudgment interest of $10,600,000, and a penalty of $24,000,000 for the delinquency misstatements, which the SEC will seek to distribute to harmed investors in the transaction through a Fair Fund. JP Morgan; EMC Mortgage, LLC; Bear Stearns Asset Backed Securities I, LLC; Structured Asset Mortgage Investments II, Inc.; and SACO I, Inc. agreed to pay disgorgement of $137,800,000, prejudgment interest of $24,265,536, and a penalty of $60,350,000 for the bulk settlement practice misconduct, and the SEC will seek to distribute these funds to harmed investors through a separate Fair Fund. JP Morgan and each of the other defendants consented, without admitting or denying the allegations, to the entry of a final judgment permanently enjoining them from violating Section 17(a)(2) and (3) of the Securities Act of 1933. The settlement is subject to court approval.
In coordination with the federal-state Residential Mortgage-Backed Securities Working Group, the Securities and Exchange Commission today charged J.P. Morgan Securities LLC and affiliated entities with misleading investors in offerings of residential mortgage-backed securities (RMBS). The firm agreed to a settlement in which it will pay $296.9 million. The SEC plans to distribute the money to harmed investors.
The SEC alleges that JP Morgan misstated information about the delinquency status of mortgage loans that provided collateral for an RMBS offering in which it was the underwriter. JP Morgan received fees of more than $2.7 million, and investors sustained losses of at least $37 million on undisclosed delinquent loans. JP Morgan also is charged for Bear Stearns' failure to disclose its practice of obtaining and keeping cash settlements from mortgage loan originators on problem loans that Bear Stearns had sold into RMBS trusts. The proceeds from this bulk settlement practice were at least $137.8 million.
According to the SEC's complaint against JP Morgan filed in federal court in Washington D.C., federal regulations under the securities laws require the disclosure of delinquency information related to assets that provide collateral for an asset-backed securities offering. Information about the delinquency status of mortgage loans in an RMBS transaction is important to investors because those loans are the primary source of funds by which investors can earn interest and obtain repayment of their principal.
The SEC alleges that in the prospectus supplement for the $1.8 billion RMBS offering that occurred in December 2006, JP Morgan made materially false and misleading statements about the loans that provided collateral for the transaction. The firm represented that only four loans (.04 percent of the total loans collateralizing the transaction) were delinquent by 30 to 59 days, and that those four were the only loans that had had an instance of delinquency of 30 or more days in the 12 months prior to the "cut-off date" for the transaction. However, at the time JP Morgan made these representations, the firm actually had information showing that more than 620 loans (above 7 percent of the total loans collateralizing the transaction) were, and had been, 30 to 59 days delinquent, and the four loans represented as being 30 to 59 days delinquent were in fact 60 to 89 days delinquent.
The SEC's complaint also alleges that Bear Stearns' bulk settlements covered loans collateralizing 156 different RMBS transactions issued from 2005 to 2007. Loan originators were usually required by contract to buy back loans that suffered early payment defaults or had other defects. However, Bear Stearns frequently negotiated discounted cash settlements with these loan originators in lieu of a buy-back on loans that were owned by the RMBS trusts. The firm - both before and after the merger with JP Morgan - then kept most of the bulk settlement proceeds. The firm failed to disclose the practice to investors who owned the loans. Bear Stearns repurchased only about 13 percent of these defective bulk settlement loans from the trusts, compared to a nearly 100 percent repurchase rate when loan originators agreed to buy back the defective loans. For most loans covered by bulk settlements, the firm collected money from originators without paying anything to the trusts.
JP Morgan and J.P. Morgan Acceptance Corporation I settled the SEC's charges by consenting to pay disgorgement of $39,900,000, prejudgment interest of $10,600,000, and a penalty of $24,000,000 for the delinquency misstatements, which the SEC will seek to distribute to harmed investors in the transaction through a Fair Fund. JP Morgan; EMC Mortgage, LLC; Bear Stearns Asset Backed Securities I, LLC; Structured Asset Mortgage Investments II, Inc.; and SACO I, Inc. agreed to pay disgorgement of $137,800,000, prejudgment interest of $24,265,536, and a penalty of $60,350,000 for the bulk settlement practice misconduct, and the SEC will seek to distribute these funds to harmed investors through a separate Fair Fund. JP Morgan and each of the other defendants consented, without admitting or denying the allegations, to the entry of a final judgment permanently enjoining them from violating Section 17(a)(2) and (3) of the Securities Act of 1933. The settlement is subject to court approval.
Sunday, November 18, 2012
EXELON CORPORTATION SETTLES WITH JUSTICE REGARDING VIOLATIONS OF COURT ORDERS
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, November 15, 2012
Justice Department Settles Civil Contempt Claim Against Exelon Corporation
Exelon Agrees to Pay $400,000WASHINGTON — Exelon Corporation has agreed to pay $400,000 as part of a civil settlement with the Department of Justice that resolves Exelon’s alleged violations of two court orders entered in connection with Exelon’s acquisition of Constellation Energy Group.
The Department of Justice’s Antitrust Division yesterday filed a petition in the U.S. District Court for the District of Columbia asking it to find Exelon in civil contempt of a consent decree and a related order. At the same time, the department filed a settlement agreement and order, subject to court approval, that would resolve the department’s concerns. The payment to the United States represents disgorgement of profits gained through Exelon’s alleged violations and reimbursement to the department for the cost of its investigation.
"In order for the Antitrust Division’s settlements to be effective in preserving competition and protecting consumers, companies must fully adhere to the terms of their court-ordered agreements," said Joseph F. Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "The Antitrust Division will vigorously prosecute those who enter into agreements with the department and do not comply with their legal obligations."
Under the consent decree filed in December 2011, Exelon was required to sell three electricity plants in Maryland—Brandon Shores and H.A. Wagner in Anne Arundel County, Md. and C.P. Crane in Baltimore County, Md.— in order to proceed with its $7.9 billion merger with Constellation. Exelon was required to abide by a hold separate stipulation and order that placed restrictions on Exelon’s conduct between the time Exelon closed its acquisition of Constellation and the time it completed the plant divestitures required by the consent decree. The hold separate required Exelon, during this period, to bid certain of its electricity generating plants at or below cost to ensure that Exelon would not be able to raise market prices for electricity. In consenting to entry of the hold separate and the consent decree, Exelon specifically agreed to "take all steps necessary to comply" with its legal obligations.
According to the petition filed by the department, Exelon failed to fulfill its obligations under the two court orders. The petition alleges that Exelon submitted certain offers for sales of electricity during this period at above-cost prices and that Exelon failed to take all necessary steps to ensure that its offers would comply with the hold separate’s requirements. Exelon claims, and the United States does not dispute, that Exelon’s above-cost offers were inadvertent.
In determining the disgorgement amount, the United States took into account that Exelon, upon recognizing that it had made above-cost offers, took appropriate remedial steps, including notifying the United States and market regulators (i.e. the Federal Energy Regulatory Commission and the Maryland Public Service Commission, both of which also approved Exelon’s acquisition of Constellation), implementing measures to ensure that no additional above cost-offers occurred, and agreeing with the market regulators to return any incremental revenues Exelon earned from, and to redress any market harm caused by, its above-cost offers. The $400,000 payment is separate and above the payments Exelon is making to the market regulators.
Exelon is incorporated in Pennsylvania and has its headquarters in Chicago. Exelon owns the PECO utility of Philadelphia and the Commonwealth Edison utility of Chicago. With its acquisition of Constellation Energy Group Inc., Exelon now owns the BG&E utility of Baltimore. Exelon had $18.9 billion of revenues in 2011.
Thursday, November 15, 2012
Justice Department Settles Civil Contempt Claim Against Exelon Corporation
Exelon Agrees to Pay $400,000WASHINGTON — Exelon Corporation has agreed to pay $400,000 as part of a civil settlement with the Department of Justice that resolves Exelon’s alleged violations of two court orders entered in connection with Exelon’s acquisition of Constellation Energy Group.
The Department of Justice’s Antitrust Division yesterday filed a petition in the U.S. District Court for the District of Columbia asking it to find Exelon in civil contempt of a consent decree and a related order. At the same time, the department filed a settlement agreement and order, subject to court approval, that would resolve the department’s concerns. The payment to the United States represents disgorgement of profits gained through Exelon’s alleged violations and reimbursement to the department for the cost of its investigation.
"In order for the Antitrust Division’s settlements to be effective in preserving competition and protecting consumers, companies must fully adhere to the terms of their court-ordered agreements," said Joseph F. Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "The Antitrust Division will vigorously prosecute those who enter into agreements with the department and do not comply with their legal obligations."
Under the consent decree filed in December 2011, Exelon was required to sell three electricity plants in Maryland—Brandon Shores and H.A. Wagner in Anne Arundel County, Md. and C.P. Crane in Baltimore County, Md.— in order to proceed with its $7.9 billion merger with Constellation. Exelon was required to abide by a hold separate stipulation and order that placed restrictions on Exelon’s conduct between the time Exelon closed its acquisition of Constellation and the time it completed the plant divestitures required by the consent decree. The hold separate required Exelon, during this period, to bid certain of its electricity generating plants at or below cost to ensure that Exelon would not be able to raise market prices for electricity. In consenting to entry of the hold separate and the consent decree, Exelon specifically agreed to "take all steps necessary to comply" with its legal obligations.
According to the petition filed by the department, Exelon failed to fulfill its obligations under the two court orders. The petition alleges that Exelon submitted certain offers for sales of electricity during this period at above-cost prices and that Exelon failed to take all necessary steps to ensure that its offers would comply with the hold separate’s requirements. Exelon claims, and the United States does not dispute, that Exelon’s above-cost offers were inadvertent.
In determining the disgorgement amount, the United States took into account that Exelon, upon recognizing that it had made above-cost offers, took appropriate remedial steps, including notifying the United States and market regulators (i.e. the Federal Energy Regulatory Commission and the Maryland Public Service Commission, both of which also approved Exelon’s acquisition of Constellation), implementing measures to ensure that no additional above cost-offers occurred, and agreeing with the market regulators to return any incremental revenues Exelon earned from, and to redress any market harm caused by, its above-cost offers. The $400,000 payment is separate and above the payments Exelon is making to the market regulators.
Exelon is incorporated in Pennsylvania and has its headquarters in Chicago. Exelon owns the PECO utility of Philadelphia and the Commonwealth Edison utility of Chicago. With its acquisition of Constellation Energy Group Inc., Exelon now owns the BG&E utility of Baltimore. Exelon had $18.9 billion of revenues in 2011.
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