FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY:
Action Will Prevent Thousands of Accidental Exposures Among Children Each Year
WASHINGTON – The U.S. Environmental Protection Agency is moving to ban the sale of 12 D-Con mouse and rat poison products produced by Reckitt Benckiser Inc. because these products fail to comply with current EPA safety standards. Approximately 10,000 children a year are accidentally exposed to mouse and rat baits; EPA has worked cooperatively with companies to ensure that products are both safe to use around children and effective for consumers. Reckitt Benckiser Inc., maker of D-Con brand products, is the only rodenticide producer that has refused to adopt EPA’s safety standards for all of its consumer use products.
"Moving forward to ban these products will prevent completely avoidable risks to children, said James Jones, acting assistant administrator for EPA’s Office of Chemical Safety and Pollution Prevention. "With this action, EPA is ensuring that the products on the market are both safe and effective for consumers."
The agency has worked with a number of companies during the last five years to develop safer rodent control products that are effective, affordable, and widely available to meet the needs of consumers. Examples of products meeting EPA safety standards include Bell Laboratories’ Tomcat products, PM Resources’ Assault brand products and Chemsico’s products.
The EPA requires rodenticide products for consumer use to be contained in protective tamper-resistant bait stations and prohibits pellets and other bait forms that cannot be secured in bait stations. In addition, the EPA prohibits the sale to residential consumers of products containing brodifacoum, bromadiolone, difethialone, and difenacoum because of their toxicity to wildlife.
For companies that have complied with the new standards in 2011, EPA has received no reports of children being exposed to bait contained in bait stations. EPA expects to see a substantial reduction in exposures to children when the 12 D-Con products that do not comply with current standards are removed from the consumer market as millions of households use these products each year.
Saturday, February 2, 2013
Friday, February 1, 2013
INDIVIDUALS AND FIRMS CHARGED BY CFTC FOR ILLEGAL OFF-ECHANGE PRECIOUS METALS TRANSACTIONS
FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
January 28, 2013
CFTC Charges Four Florida-based Precious Metals Firms and Three Individuals for Engaging in Illegal Retail Off-Exchange Transactions in Precious Metals
CFTC Orders Bar Secured Precious Metals International, Inc., Secured Precious Metals Management, Inc., Barclay Metals, Inc., Universal Clearing, LLC, Linda Laramie, Sean Stropp, and Sylvia Williams from commodities industry for five-years
Washington DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued two Orders filing and settling charges against two Fort Lauderdale, Fla. companies, Secured Precious Metals International, Inc. and Secured Precious Metals Management, Inc., and their sole owner and principal, Linda Laramie (collectively SPM), as well as two West Palm Beach, Fla. companies, Barclay Metals, Inc. and Universal Clearing, LLC, and their owners and principals, Sean Stropp and Sylvia Williams (collectively Barclay), all for engaging in illegal off-exchange financed transactions in precious metals with retail customers.
The Illegal Transactions
The CFTC Orders find that from July 2011 through June 2012, SPM and Barclay solicited retail customers, generally by telephone or through their websites, to buy and sell physical precious metals, such as gold and silver, in off-exchange leverage transactions. According to the Orders, customers paid as little as 20 percent of the purchase price for the metals, and SPM and Barclay purportedly financed the remainder of the purchase price, while charging the customers interest on the amount borrowed. The CFTC Orders state that financed off-exchange transactions with retail customers have been illegal since July 16, 2011, when certain amendments of the Dodd-Frank Wall Street and Consumer Protection Act of 2010 became effective. As explained in the Orders, financed transactions in commodities with retail customers like those engaged in by SPM and Barclay must be executed on, or subject to, the rules of a board of trade that has been approved by the CFTC. Since SPM and Barclay’s transactions were done off-exchange with customers who were not eligible contract participants, they were illegal, the Orders find.
The CFTC Orders also state that SPM and Barclay acted as dealers for Hunter Wise Commodities, LLC (Hunter Wise), a metals merchant. The CFTC filed suit in federal court in Florida against Hunter Wise on December 5, 2012 (see CFTC Release 6447-12). However, as alleged in the CFTC complaint against Hunter Wise and according to the orders entered against SPM and Barclay, neither SPM, Barclay, nor Hunter Wise purchased physical commodities on the customers’ behalf, disbursed any funds to finance the remaining portion of the purchase price, or stored any physical commodities for customers. The Orders find that SPM and Barclay’s customers thus never owned, possessed, or received title to the physical commodities that they believed they purchased.
The CFTC Orders require SPM and Barclay to cease and desist from violating Section 4(a) of the Commodity Exchange Act, as charged, and prohibit them for a five-year period from trading on or pursuant to the rules of any registered entity. The Orders also require SPM and Barclay to comply with certain undertakings, including cooperating fully and expeditiously with the CFTC in related matters. The Orders, which do not impose civil monetary penalties, acknowledge the substantial cooperation of SPM and Barclay.
CFTC’s Precious Metals Fraud Advisory
In January 2012, the CFTC issued a Consumer Fraud Advisory regarding precious metals fraud, saying that it had seen an increase in the number of companies offering customers the opportunity to buy or invest in precious metals (see the Advisory). The CFTC’s Precious Metals Consumer Fraud Advisory specifically warns that frequently companies do not purchase any physical metals for the customer, instead simply keeping the customer’s funds. The Advisory further cautions consumers that leveraged commodity transactions are unlawful unless executed on a regulated exchange.
CFTC Division of Enforcement staff responsible for this matter: David Terrell, Joy McCormack, Jennifer Chapin, Steve Turley, Jeff Le Riche, Elizabeth M. Streit, Scott R. Williamson, Rosemary Hollinger, Rick Glaser, and Richard Wagner.
January 28, 2013
CFTC Charges Four Florida-based Precious Metals Firms and Three Individuals for Engaging in Illegal Retail Off-Exchange Transactions in Precious Metals
CFTC Orders Bar Secured Precious Metals International, Inc., Secured Precious Metals Management, Inc., Barclay Metals, Inc., Universal Clearing, LLC, Linda Laramie, Sean Stropp, and Sylvia Williams from commodities industry for five-years
Washington DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued two Orders filing and settling charges against two Fort Lauderdale, Fla. companies, Secured Precious Metals International, Inc. and Secured Precious Metals Management, Inc., and their sole owner and principal, Linda Laramie (collectively SPM), as well as two West Palm Beach, Fla. companies, Barclay Metals, Inc. and Universal Clearing, LLC, and their owners and principals, Sean Stropp and Sylvia Williams (collectively Barclay), all for engaging in illegal off-exchange financed transactions in precious metals with retail customers.
The Illegal Transactions
The CFTC Orders find that from July 2011 through June 2012, SPM and Barclay solicited retail customers, generally by telephone or through their websites, to buy and sell physical precious metals, such as gold and silver, in off-exchange leverage transactions. According to the Orders, customers paid as little as 20 percent of the purchase price for the metals, and SPM and Barclay purportedly financed the remainder of the purchase price, while charging the customers interest on the amount borrowed. The CFTC Orders state that financed off-exchange transactions with retail customers have been illegal since July 16, 2011, when certain amendments of the Dodd-Frank Wall Street and Consumer Protection Act of 2010 became effective. As explained in the Orders, financed transactions in commodities with retail customers like those engaged in by SPM and Barclay must be executed on, or subject to, the rules of a board of trade that has been approved by the CFTC. Since SPM and Barclay’s transactions were done off-exchange with customers who were not eligible contract participants, they were illegal, the Orders find.
The CFTC Orders also state that SPM and Barclay acted as dealers for Hunter Wise Commodities, LLC (Hunter Wise), a metals merchant. The CFTC filed suit in federal court in Florida against Hunter Wise on December 5, 2012 (see CFTC Release 6447-12). However, as alleged in the CFTC complaint against Hunter Wise and according to the orders entered against SPM and Barclay, neither SPM, Barclay, nor Hunter Wise purchased physical commodities on the customers’ behalf, disbursed any funds to finance the remaining portion of the purchase price, or stored any physical commodities for customers. The Orders find that SPM and Barclay’s customers thus never owned, possessed, or received title to the physical commodities that they believed they purchased.
The CFTC Orders require SPM and Barclay to cease and desist from violating Section 4(a) of the Commodity Exchange Act, as charged, and prohibit them for a five-year period from trading on or pursuant to the rules of any registered entity. The Orders also require SPM and Barclay to comply with certain undertakings, including cooperating fully and expeditiously with the CFTC in related matters. The Orders, which do not impose civil monetary penalties, acknowledge the substantial cooperation of SPM and Barclay.
CFTC’s Precious Metals Fraud Advisory
In January 2012, the CFTC issued a Consumer Fraud Advisory regarding precious metals fraud, saying that it had seen an increase in the number of companies offering customers the opportunity to buy or invest in precious metals (see the Advisory). The CFTC’s Precious Metals Consumer Fraud Advisory specifically warns that frequently companies do not purchase any physical metals for the customer, instead simply keeping the customer’s funds. The Advisory further cautions consumers that leveraged commodity transactions are unlawful unless executed on a regulated exchange.
CFTC Division of Enforcement staff responsible for this matter: David Terrell, Joy McCormack, Jennifer Chapin, Steve Turley, Jeff Le Riche, Elizabeth M. Streit, Scott R. Williamson, Rosemary Hollinger, Rick Glaser, and Richard Wagner.
Thursday, January 31, 2013
U.S. ASSISTANT ATTORNEY GENERAL BREUER LEAVES JUSTICE DEPARTMENT
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, January 30, 2013
Assistant Attorney General Lanny A. Breuer Announces Departure from Department of Justice
The Justice Department announced today that Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division will leave the department on March 1, 2013.
"Lanny has led one of the most successful and aggressive Criminal Divisions in the history of the Department of Justice, accomplishing record penalties in corruption cases at home and abroad and dismantling major organized crime and health care fraud networks around the country while also protecting the integrity of our banking systems and fighting financial fraud," said Attorney General Eric Holder. "Throughout his tenure, Lanny has demonstrated an unwavering commitment to the mission of this Department and I want to thank him for his dedication and exceptional service."
"Serving as Assistant Attorney General for the Criminal Division has been the greatest privilege of my professional life," said Assistant Attorney General Breuer. "From my first day on this job, nearly four years ago, I have loved it, and I am so proud of what the Criminal Division has accomplished over the past four years. I have had no higher honor than to work alongside the talented and dedicated men and women of the Criminal Division, and I will forever be grateful for the opportunity to serve the American people together with them."
Assistant Attorney General Breuer was unanimously confirmed by the U.S. Senate on April 20, 2009, and is the longest-serving head of the Criminal Division in recent history.
Under the leadership of Assistant Attorney General Breuer, the Criminal Division has taken significant steps to fight corruption at home and abroad, including by developing the innovative Kleptocracy Asset Recovery Initiative to identify and forfeit the proceeds of foreign official corruption – ensuring that corrupt officials from other countries are prevented from hiding their ill-gotten gains in the United States. The Criminal Division has also substantially increased enforcement of the Foreign Corrupt Practices Act (FCPA), convicting three dozen individuals for FCPA-related offenses – a record number – and entering into more than 40 corporate resolutions involving eight of the top 10 largest FCPA penalties in history. The Criminal Division also partnered with the Securities and Exchange Commission to publish groundbreaking guidance on FCPA enforcement.
Assistant Attorney General Breuer was asked by the Attorney General to oversee the Deepwater Horizon Task Force – created to investigate conduct leading up to, and following, the Deepwater Horizon explosion on April 20, 2010. The Task Force reached the largest criminal resolution in U.S. history with BP. On Jan. 29, 2013, BP was ordered to pay $4 billion in criminal fines and penalties after previously having agreed to plead guilty to 11 felony manslaughter charges, environmental crimes and obstruction of congress. The Criminal Division brought charges against four individuals in connection with the explosion and its aftermath as part of the ongoing investigation. Additionally, Assistant Attorney General Breuer has overseen efforts to combat fraud arising from the oil spill, as well as to detect and deter fraud in the wake of natural disasters such as Hurricane Sandy, through the Disaster Fraud Task Force.
Protecting the integrity of the banking system and fighting financial fraud have been hallmarks of the Criminal Division during Assistant Attorney General Breuer’s tenure. The division’s aggressive, ongoing investigation into manipulation of the London Interbank Offered Rate by global financial institutions has thus far led to nearly $2 billion in criminal penalties, as well as a guilty plea by a UBS subsidiary and charges against individuals. Assistant Attorney General Breuer also spearheaded the development of the division’s Money Laundering and Bank Integrity Unit to pursue financial institutions and individuals who violate money laundering statutes and the Bank Secrecy Act. Along with U.S. Attorney partners, the groundbreaking unit already has secured approximately $3.1 billion in criminal forfeitures from major financial institutions – including the largest forfeiture ever by a bank.
The Criminal Division has also prosecuted, together with U.S. Attorneys’ Offices, numerous significant perpetrators of financial fraud, including Lee Bentley Farkas, former chairman of Taylor, Bean & Whitaker, who perpetrated an approximately $3 billion bank fraud; and R. Allen Stanford, former chairman of Stanford International Bank, who perpetrated a $7 billion investment fraud scheme. Both were convicted at trial and are serving 30 and 110 years in prison, respectively.
Assistant Attorney General Breuer has also focused on combating healthcare fraud, helping to expand the Medicare Fraud Strike Force from two to nine cities and to carry out the two largest Medicare fraud takedowns in history, one involving 111 defendants charged and the other involving $452 million in alleged fraudulent billings.
The Criminal Division under Assistant Attorney General Breuer’s leadership, working alongside its partners at U.S. Attorneys’ Offices, has pursued innovative cybercrime and intellectual property crime prosecutions. Those prosecutions include the indictment of Megaupload and its leadership for intellectual property infringement in one of the largest criminal copyright cases brought by the United States.
During Assistant Attorney General Breuer’s tenure, the Criminal Division has made great strides in the fight against violent crime along the southwest border and across the country. Among other successes, the division, along with several U.S. Attorneys’ Offices, brought charges against 127 members and associates of La Cosa Nostra in the largest traditional organized crime takedown in U.S. history. The Criminal Division and U.S. Attorney partners also have brought prosecutions against 35 Barrio Azteca gang members and associates – including those allegedly responsible for the death of a U.S. Consular official and others in Juarez, Mexico, on March 13, 2010; individuals allegedly responsible for the murder of ICE Special Agent Jaime Zapata; and dozens of members and associates of the Aryan Brotherhood of Texas, including the gang’s top "generals." Assistant Attorney General Breuer has traveled frequently to Mexico to develop close relationships with Mexican counterparts and created new prosecutorial units dedicated to targeting Mexican cartels and seizing their assets. In 2012, the Criminal Division secured 115 extraditions from Mexico, a record for a calendar year.
Along with these new or expanded teams and initiatives, Assistant Attorney General Breuer has taken significant steps to reform the Criminal Division to meet the needs of the modern law enforcement climate, including creating the Organized Crime and Gang Section and the Human Rights and Special Prosecutions Section, and hiring hundreds of talented prosecutors and several new Section Chiefs into the division.
In his role as head of the Criminal Division, Assistant Attorney General Breuer has engaged on issues of criminal law policy throughout the United States and around the world, delivering dozens of keynote and special addresses across the country as well as in Russia, the Ukraine, the United Kingdom, Romania, Sweden, Liechtenstein, Spain and at the World Bank and United Nations.
Prior to joining the Justice Department, Assistant Attorney General Breuer was a partner in the law firm of Covington and Burling LLP. He earlier served as special counsel to President William Jefferson Clinton, and began his legal career as an Assistant District Attorney in Manhattan. He is a graduate of Columbia College and Columbia Law School.
Wednesday, January 30, 2013
Assistant Attorney General Lanny A. Breuer Announces Departure from Department of Justice
The Justice Department announced today that Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division will leave the department on March 1, 2013.
"Lanny has led one of the most successful and aggressive Criminal Divisions in the history of the Department of Justice, accomplishing record penalties in corruption cases at home and abroad and dismantling major organized crime and health care fraud networks around the country while also protecting the integrity of our banking systems and fighting financial fraud," said Attorney General Eric Holder. "Throughout his tenure, Lanny has demonstrated an unwavering commitment to the mission of this Department and I want to thank him for his dedication and exceptional service."
"Serving as Assistant Attorney General for the Criminal Division has been the greatest privilege of my professional life," said Assistant Attorney General Breuer. "From my first day on this job, nearly four years ago, I have loved it, and I am so proud of what the Criminal Division has accomplished over the past four years. I have had no higher honor than to work alongside the talented and dedicated men and women of the Criminal Division, and I will forever be grateful for the opportunity to serve the American people together with them."
Assistant Attorney General Breuer was unanimously confirmed by the U.S. Senate on April 20, 2009, and is the longest-serving head of the Criminal Division in recent history.
Under the leadership of Assistant Attorney General Breuer, the Criminal Division has taken significant steps to fight corruption at home and abroad, including by developing the innovative Kleptocracy Asset Recovery Initiative to identify and forfeit the proceeds of foreign official corruption – ensuring that corrupt officials from other countries are prevented from hiding their ill-gotten gains in the United States. The Criminal Division has also substantially increased enforcement of the Foreign Corrupt Practices Act (FCPA), convicting three dozen individuals for FCPA-related offenses – a record number – and entering into more than 40 corporate resolutions involving eight of the top 10 largest FCPA penalties in history. The Criminal Division also partnered with the Securities and Exchange Commission to publish groundbreaking guidance on FCPA enforcement.
Assistant Attorney General Breuer was asked by the Attorney General to oversee the Deepwater Horizon Task Force – created to investigate conduct leading up to, and following, the Deepwater Horizon explosion on April 20, 2010. The Task Force reached the largest criminal resolution in U.S. history with BP. On Jan. 29, 2013, BP was ordered to pay $4 billion in criminal fines and penalties after previously having agreed to plead guilty to 11 felony manslaughter charges, environmental crimes and obstruction of congress. The Criminal Division brought charges against four individuals in connection with the explosion and its aftermath as part of the ongoing investigation. Additionally, Assistant Attorney General Breuer has overseen efforts to combat fraud arising from the oil spill, as well as to detect and deter fraud in the wake of natural disasters such as Hurricane Sandy, through the Disaster Fraud Task Force.
Protecting the integrity of the banking system and fighting financial fraud have been hallmarks of the Criminal Division during Assistant Attorney General Breuer’s tenure. The division’s aggressive, ongoing investigation into manipulation of the London Interbank Offered Rate by global financial institutions has thus far led to nearly $2 billion in criminal penalties, as well as a guilty plea by a UBS subsidiary and charges against individuals. Assistant Attorney General Breuer also spearheaded the development of the division’s Money Laundering and Bank Integrity Unit to pursue financial institutions and individuals who violate money laundering statutes and the Bank Secrecy Act. Along with U.S. Attorney partners, the groundbreaking unit already has secured approximately $3.1 billion in criminal forfeitures from major financial institutions – including the largest forfeiture ever by a bank.
The Criminal Division has also prosecuted, together with U.S. Attorneys’ Offices, numerous significant perpetrators of financial fraud, including Lee Bentley Farkas, former chairman of Taylor, Bean & Whitaker, who perpetrated an approximately $3 billion bank fraud; and R. Allen Stanford, former chairman of Stanford International Bank, who perpetrated a $7 billion investment fraud scheme. Both were convicted at trial and are serving 30 and 110 years in prison, respectively.
Assistant Attorney General Breuer has also focused on combating healthcare fraud, helping to expand the Medicare Fraud Strike Force from two to nine cities and to carry out the two largest Medicare fraud takedowns in history, one involving 111 defendants charged and the other involving $452 million in alleged fraudulent billings.
The Criminal Division under Assistant Attorney General Breuer’s leadership, working alongside its partners at U.S. Attorneys’ Offices, has pursued innovative cybercrime and intellectual property crime prosecutions. Those prosecutions include the indictment of Megaupload and its leadership for intellectual property infringement in one of the largest criminal copyright cases brought by the United States.
During Assistant Attorney General Breuer’s tenure, the Criminal Division has made great strides in the fight against violent crime along the southwest border and across the country. Among other successes, the division, along with several U.S. Attorneys’ Offices, brought charges against 127 members and associates of La Cosa Nostra in the largest traditional organized crime takedown in U.S. history. The Criminal Division and U.S. Attorney partners also have brought prosecutions against 35 Barrio Azteca gang members and associates – including those allegedly responsible for the death of a U.S. Consular official and others in Juarez, Mexico, on March 13, 2010; individuals allegedly responsible for the murder of ICE Special Agent Jaime Zapata; and dozens of members and associates of the Aryan Brotherhood of Texas, including the gang’s top "generals." Assistant Attorney General Breuer has traveled frequently to Mexico to develop close relationships with Mexican counterparts and created new prosecutorial units dedicated to targeting Mexican cartels and seizing their assets. In 2012, the Criminal Division secured 115 extraditions from Mexico, a record for a calendar year.
Along with these new or expanded teams and initiatives, Assistant Attorney General Breuer has taken significant steps to reform the Criminal Division to meet the needs of the modern law enforcement climate, including creating the Organized Crime and Gang Section and the Human Rights and Special Prosecutions Section, and hiring hundreds of talented prosecutors and several new Section Chiefs into the division.
In his role as head of the Criminal Division, Assistant Attorney General Breuer has engaged on issues of criminal law policy throughout the United States and around the world, delivering dozens of keynote and special addresses across the country as well as in Russia, the Ukraine, the United Kingdom, Romania, Sweden, Liechtenstein, Spain and at the World Bank and United Nations.
Prior to joining the Justice Department, Assistant Attorney General Breuer was a partner in the law firm of Covington and Burling LLP. He earlier served as special counsel to President William Jefferson Clinton, and began his legal career as an Assistant District Attorney in Manhattan. He is a graduate of Columbia College and Columbia Law School.
Wednesday, January 30, 2013
RECORD $4 BILLION PAID FOR CRIMES RELATED TO DEEPWATER HORIZON DISASTER
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, January 29, 2013
BP Exploration and Production Inc. Pleads Guilty, Is Sentenced to Pay Record $4 Billon for Crimes Surrounding Deepwater Horizon Incident
Court Accepts Guilty Plea to Felony Manslaughter, Environmental Crimes and Obstruction of Congress Prior to Imposing Historic Sentence
BP Exploration and Production Inc. pleaded guilty today to 14 criminal counts for its illegal conduct leading to and after the 2010 Deepwater Horizon disaster, and was sentenced to pay $4 billion in criminal fines and penalties, the largest criminal resolution in U.S. history, Attorney General Holder announced today.
"Today’s guilty plea and sentencing represent a significant step forward in the Justice Department’s ongoing efforts to seek justice on behalf of those affected by one of the worst environmental disasters in American history," said Attorney General Holder. "I’m pleased to note that more than half of this landmark resolution – which totals $4 billion in penalties and fines, and represents the single largest criminal resolution ever – will help to provide direct support to Gulf Coast residents as communities throughout the region continue to recover and rebuild."
"The Deepwater Horizon explosion was a national tragedy that resulted in the senseless deaths of 11 people and immense environmental damage," said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. "Through the tenacious work of the Task Force, BP has received just punishment for its crimes leading up to and following the explosion. The Justice Department will keep a watchful eye on BP’s compliance with the plea agreement’s terms, including the requirements of full cooperation with the department’s ongoing criminal investigation, implementation of enhanced safety protocols and adherence to the recommendations of two newly installed monitors. Should BP fail to comply, we will act swiftly and firmly."
BP’s guilty plea was accepted, and the sentence was imposed, by U.S. District Judge Sarah S. Vance of the Eastern District of Louisiana. During the guilty plea and sentencing proceeding, Judge Vance found, among other things, that the consequential fines imposed under the plea agreement far exceed any imposed in U.S. history, and are structured so that BP will feel the full brunt of the penalties. She also noted that the agreement provides just punishment and significant deterrence, requiring detailed drilling safeguards, monitors and other stringent, special conditions of probation so that BP’s future conduct will be closely watched.
BP pleaded guilty to each count charged in an information filed in U.S. District Court in the Eastern District of Louisiana, including 11 counts of felony manslaughter, one count of felony obstruction of Congress and violations of the Clean Water and Migratory Bird Treaty Acts. In its guilty plea today, BP admitted that, on April 20, 2010, the two highest-ranking BP supervisors onboard the Deepwater Horizon, known as BP’s "Well Site Leaders" or "company men," negligently caused the deaths of 11 men and the resulting oil spill. The company also admitted that on that evening, the two well site leaders observed clear indications that the Macondo well was not secure and that oil and gas were flowing into the well, but chose not to take obvious and appropriate steps to prevent the blowout. Additionally, BP admitted that as a result of the Well Site Leaders’ conduct, control of the Macondo well was lost, resulting in catastrophe.
BP also admitted during its guilty plea that the company, through a senior executive, obstructed an inquiry by the U.S. Congress into the amount of oil being discharged into the Gulf while the spill was ongoing. BP also admitted that the senior executive withheld documents, provided false and misleading information in response to the U.S. House of Representatives’ request for flow-rate information, manipulated internal estimates to understate the amount of oil flowing from the well and withheld data that contradicted BP’s public estimate of 5,000 barrels of oil per day. At the same time that the senior executive was preparing his manipulated estimates, BP admitted, the company’s internal engineering response teams were using sophisticated methods that generated significantly higher estimates. The Flow Rate Technical Group, consisting of government and independent scientists, later concluded that more than 60,000 barrels per day were leaking into the Gulf during the relevant time, contrary to BP’s representations to Congress.
According to the sentence imposed by Judge Vance pursuant to the plea agreement, more than $2 billion dollars will directly benefit the Gulf region. By order of the court, approximately $2.4 billion of the $4.0 billion criminal recovery is dedicated to acquiring, restoring, preserving and conserving – in consultation with appropriate state and other resource managers – the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill. This portion of the criminal recovery is also to be directed to significant barrier island restoration and/or river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the oil spill. An additional $350 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.
BP was also sentenced to five years of probation – the maximum term of probation permitted under law. The company is also required, according to the order entered by the court pursuant to the plea agreement, to retain a process safety and risk management monitor and an independent auditor, who will oversee BP’s process safety, risk management and drilling equipment maintenance with respect to deepwater drilling in the Gulf of Mexico. BP is also required to retain an ethics monitor to improve its code of conduct to ensure BP’s future candor with the U.S. government.
The charges and allegations pending against individuals in related cases are merely accusations, and those individuals are considered innocent unless and until proven guilty.
The guilty plea and sentence announced today are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill. The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Breuer and led by Deputy Assistant Attorney General John D. Buretta, who serves as the director of the task force. The task force includes prosecutors from the Criminal Division and Environment and Natural Resources Division of the Department of Justice; the U.S. Attorney’s Office for the Eastern District of Louisiana, as well as other U.S. Attorneys’ Offices; and investigating agents from: the FBI; Environmental Protection Agency, Criminal Investigative Division; Environmental Protection Agency, Office of Inspector General; Department of Interior, Office of Inspector General; National Oceanic and Atmospheric Administration Office of Law Enforcement; U.S. Coast Guard; U.S. Fish and Wildlife Service; and the Louisiana Department of Environmental Quality.
This case was prosecuted by Deepwater Horizon Task Force Director John D. Buretta, Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black, and Rohan Virginkar.
Tuesday, January 29, 2013
BP Exploration and Production Inc. Pleads Guilty, Is Sentenced to Pay Record $4 Billon for Crimes Surrounding Deepwater Horizon Incident
Court Accepts Guilty Plea to Felony Manslaughter, Environmental Crimes and Obstruction of Congress Prior to Imposing Historic Sentence
BP Exploration and Production Inc. pleaded guilty today to 14 criminal counts for its illegal conduct leading to and after the 2010 Deepwater Horizon disaster, and was sentenced to pay $4 billion in criminal fines and penalties, the largest criminal resolution in U.S. history, Attorney General Holder announced today.
"Today’s guilty plea and sentencing represent a significant step forward in the Justice Department’s ongoing efforts to seek justice on behalf of those affected by one of the worst environmental disasters in American history," said Attorney General Holder. "I’m pleased to note that more than half of this landmark resolution – which totals $4 billion in penalties and fines, and represents the single largest criminal resolution ever – will help to provide direct support to Gulf Coast residents as communities throughout the region continue to recover and rebuild."
"The Deepwater Horizon explosion was a national tragedy that resulted in the senseless deaths of 11 people and immense environmental damage," said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. "Through the tenacious work of the Task Force, BP has received just punishment for its crimes leading up to and following the explosion. The Justice Department will keep a watchful eye on BP’s compliance with the plea agreement’s terms, including the requirements of full cooperation with the department’s ongoing criminal investigation, implementation of enhanced safety protocols and adherence to the recommendations of two newly installed monitors. Should BP fail to comply, we will act swiftly and firmly."
BP’s guilty plea was accepted, and the sentence was imposed, by U.S. District Judge Sarah S. Vance of the Eastern District of Louisiana. During the guilty plea and sentencing proceeding, Judge Vance found, among other things, that the consequential fines imposed under the plea agreement far exceed any imposed in U.S. history, and are structured so that BP will feel the full brunt of the penalties. She also noted that the agreement provides just punishment and significant deterrence, requiring detailed drilling safeguards, monitors and other stringent, special conditions of probation so that BP’s future conduct will be closely watched.
BP pleaded guilty to each count charged in an information filed in U.S. District Court in the Eastern District of Louisiana, including 11 counts of felony manslaughter, one count of felony obstruction of Congress and violations of the Clean Water and Migratory Bird Treaty Acts. In its guilty plea today, BP admitted that, on April 20, 2010, the two highest-ranking BP supervisors onboard the Deepwater Horizon, known as BP’s "Well Site Leaders" or "company men," negligently caused the deaths of 11 men and the resulting oil spill. The company also admitted that on that evening, the two well site leaders observed clear indications that the Macondo well was not secure and that oil and gas were flowing into the well, but chose not to take obvious and appropriate steps to prevent the blowout. Additionally, BP admitted that as a result of the Well Site Leaders’ conduct, control of the Macondo well was lost, resulting in catastrophe.
BP also admitted during its guilty plea that the company, through a senior executive, obstructed an inquiry by the U.S. Congress into the amount of oil being discharged into the Gulf while the spill was ongoing. BP also admitted that the senior executive withheld documents, provided false and misleading information in response to the U.S. House of Representatives’ request for flow-rate information, manipulated internal estimates to understate the amount of oil flowing from the well and withheld data that contradicted BP’s public estimate of 5,000 barrels of oil per day. At the same time that the senior executive was preparing his manipulated estimates, BP admitted, the company’s internal engineering response teams were using sophisticated methods that generated significantly higher estimates. The Flow Rate Technical Group, consisting of government and independent scientists, later concluded that more than 60,000 barrels per day were leaking into the Gulf during the relevant time, contrary to BP’s representations to Congress.
According to the sentence imposed by Judge Vance pursuant to the plea agreement, more than $2 billion dollars will directly benefit the Gulf region. By order of the court, approximately $2.4 billion of the $4.0 billion criminal recovery is dedicated to acquiring, restoring, preserving and conserving – in consultation with appropriate state and other resource managers – the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill. This portion of the criminal recovery is also to be directed to significant barrier island restoration and/or river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the oil spill. An additional $350 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.
BP was also sentenced to five years of probation – the maximum term of probation permitted under law. The company is also required, according to the order entered by the court pursuant to the plea agreement, to retain a process safety and risk management monitor and an independent auditor, who will oversee BP’s process safety, risk management and drilling equipment maintenance with respect to deepwater drilling in the Gulf of Mexico. BP is also required to retain an ethics monitor to improve its code of conduct to ensure BP’s future candor with the U.S. government.
The charges and allegations pending against individuals in related cases are merely accusations, and those individuals are considered innocent unless and until proven guilty.
The guilty plea and sentence announced today are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill. The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Breuer and led by Deputy Assistant Attorney General John D. Buretta, who serves as the director of the task force. The task force includes prosecutors from the Criminal Division and Environment and Natural Resources Division of the Department of Justice; the U.S. Attorney’s Office for the Eastern District of Louisiana, as well as other U.S. Attorneys’ Offices; and investigating agents from: the FBI; Environmental Protection Agency, Criminal Investigative Division; Environmental Protection Agency, Office of Inspector General; Department of Interior, Office of Inspector General; National Oceanic and Atmospheric Administration Office of Law Enforcement; U.S. Coast Guard; U.S. Fish and Wildlife Service; and the Louisiana Department of Environmental Quality.
This case was prosecuted by Deepwater Horizon Task Force Director John D. Buretta, Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black, and Rohan Virginkar.
Sunday, January 27, 2013
KENNETH A. DACHMAN SENTENCED TO 10 YEARS IN PRISON AND ORDERED TO PAY OVER $4 MILLION IN RESTITUTION
FROM: SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission (SEC) announced that on January 17, 2013, in a criminal action brought by the U.S. Attorney's Office for the Northern District of Illinois, the Honorable James B. Zagel in the Northern District of Illinois sentenced Kenneth A. Dachman (Dachman) to 120 months in prison on 11 counts of wire fraud and ordered Dachman to pay more than $4 million in restitution to his victims. Judge Zagel also ordered Dachman to be placed on three years of supervised released following his prison sentence. [USA v. Kenneth A. Dachman, Case No. 1:11-CR-00504, USDC, N.D. Ill.].
Dachman was criminally charged for raising more than $4 million from investors for his now-defunct sleep disorder businesses, Central Sleep Diagnostics, LLC and Advanced Sleep Devices, LLC, which were located in the northern suburbs of Chicago. Between June 2008 and September 2010, Dachman fraudulently obtained funds from investors by misrepresenting the use of investor funds, the expected investment returns and risks involved in the investments, his business and academic background and the financial condition of his companies. The government established that Dachman misappropriated more than $2 million of commingled investor funds which he used for the benefit of himself and his family.
In February 2012, the SEC filed a civil injunctive action against Dachman based on the same events. The SEC's action has been stayed pending the outcome of the criminal case.
The Securities and Exchange Commission (SEC) announced that on January 17, 2013, in a criminal action brought by the U.S. Attorney's Office for the Northern District of Illinois, the Honorable James B. Zagel in the Northern District of Illinois sentenced Kenneth A. Dachman (Dachman) to 120 months in prison on 11 counts of wire fraud and ordered Dachman to pay more than $4 million in restitution to his victims. Judge Zagel also ordered Dachman to be placed on three years of supervised released following his prison sentence. [USA v. Kenneth A. Dachman, Case No. 1:11-CR-00504, USDC, N.D. Ill.].
Dachman was criminally charged for raising more than $4 million from investors for his now-defunct sleep disorder businesses, Central Sleep Diagnostics, LLC and Advanced Sleep Devices, LLC, which were located in the northern suburbs of Chicago. Between June 2008 and September 2010, Dachman fraudulently obtained funds from investors by misrepresenting the use of investor funds, the expected investment returns and risks involved in the investments, his business and academic background and the financial condition of his companies. The government established that Dachman misappropriated more than $2 million of commingled investor funds which he used for the benefit of himself and his family.
In February 2012, the SEC filed a civil injunctive action against Dachman based on the same events. The SEC's action has been stayed pending the outcome of the criminal case.
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