FROM: COMMODITY FUTURES TRADING COMMISSION
April 18, 2013
CFTC Orders The Linn Group, Inc., a Registered Futures Commission Merchant, to Pay $400,000 Civil Monetary Penalty for Customer Account Deficiencies and Supervision Failures
Firm failed to diligently supervise its officers, employees, and agents and to properly handle, monitor and report customer funds
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it entered an Order requiring The Linn Group, Inc. (TLG), a Chicago-based Futures Commission Merchant (FCM), to pay a $400,000 civil monetary penalty for failing to properly handle, monitor, and report the customer funds that it maintained, as required by the Commodity Exchange Act (CEA) and CFTC Regulations, and for supervision failures. The CFTC Order also requires TLG to retain a consultant to review and improve TLG’s procedures as necessary to comply with the CEA and Regulations and to cease and desist from violating the provisions of the CEA and Regulations, as charged.
Specifically, the CFTC Order finds that TLG on 23 days failed to maintain a separate account to cover its obligation to U.S. customers trading futures and/or options on foreign exchanges and failed to timely notify the CFTC of such violations. The Order finds that TLG improperly deposited and held non-customer and proprietary funds in the same trading account from 2007 to 2011. TLG failed to timely obtain letters from banks acknowledging that the funds deposited into certain TLG accounts were customer funds prior to funding these accounts, as required on at least eight occasions between November 2007 and June 2012, according to the Order.
The Order also finds that TLG failed to timely notify the CFTC of material inadequacies brought to TLG’s attention by its certified public accountant (CPA) in March 2008 and March 2011 and failed to properly maintain and produce certain records requested by the CFTC relating to its business of dealing in commodity futures from 2007 to 2012.
In addition, the Order finds that TLG failed to diligently supervise its officers, employees, and agents as required. As a result of these supervision failures, TLG failed to comply with various reporting and notification requirements, as well as requirements related to audits and financial statements for FCMs, as set forth in the CFTC’s Regulations, the Order finds. For example, according to the Order, TLG engaged a CPA who: (1) had not provided audit services to any company for at least the preceding 20 years; (2) had never previously audited any other FCMs or entities required to hold segregated accounts for customers; and (3) did not have any understanding of the CFTC rules and Regulations prior to preparation for TLG’s 2011 audit. Moreover, the Order finds that TLG failed to take action when deficiencies with its CPA’s performance were brought to its attention.
The CFTC appreciates the assistance of the Division of Swap Dealer and Intermediary Oversight. The CFTC also appreciates the assistance of the National Futures Association.
CFTC Division of Enforcement staff members responsible for this matter are Allison Passman, Joseph Patrick, Susan Gradman, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Saturday, April 20, 2013
Friday, April 19, 2013
CEMENT MAKER AGREES TO REDUCE HARMFUL AIR EMISSIONS AT COLORADO PLANT
FROM: ENVIRONMENTAL PROTECTION AGENCY
Cement Manufacturer Agrees to Reduce Harmful Air Emissions at Colorado Plant
WASHINGTON— The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice (DOJ) announced today that CEMEX, Inc., the owner and operator of a Portland cement manufacturing facility in Lyons, Colo., has agreed to operate advanced pollution controls on its kiln and pay a $1 million civil penalty to resolve alleged violations of the Clean Air Act (CAA).
"Today’s settlement will reduce harmful emissions of nitrogen oxides, which can have serious impacts on respiratory health for communities along Colorado’s Front Range," said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. "Cutting these emissions will also help improve environmental quality and visibility in places like Rocky Mountain National Park."
"This agreement will mean cleaner air for Colorado residents downwind of the CEMEX facility and will contribute to improved air quality in the Rocky Mountain National Park, which is one of our nation’s most cherished public spaces," said Ignacia S. Moreno, assistant attorney general for the Justice Department’s Environment and Natural Resources Division. "The settlement is part of the Justice Department’s continuing efforts, along with the EPA, to bring significant sources of air pollution within the cement manufacturing sector into compliance with the Clean Air Act."
The Department of Justice , on behalf of EPA, filed a complaint against CEMEX alleging that between 1997—2000, the company unlawfully made modifications at its Lyons plant that resulted in significant net increases of nitrogen oxide and particulate matter (PM) emissions. The complaint further alleges that these increased emissions violated the CAA’s Prevention of Significant Deterioration and Non-Attainment New Source Review requirements, which state that companies must obtain the necessary permits prior to making modifications at a facility and install and operate required pollution control equipment if modifications will result in increases of certain pollutants.
As part of the settlement, CEMEX will install "Selective Non-Catalytic Reduction" (SNCR) technology at their Lyons facility, which is an advanced pollution control technology designed to reduce nitrogen oxide emissions. This will reduce their nitrogen oxide emissions by approximately 870 to 1,200 tons of nitrigen oxide per year. The initial capital cost for installing SNCR is approximately $600,000 and the cost of injecting ammonia into the stack emissions stream, a necessary part of the process, is anticipated to be about $1.5 million per year.
The settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including Portland cement manufacturing facilities.
Nitrogen Oxide emissions may cause severe respiratory problems and contribute to childhood asthma. These emissions also contribute to acid rain, smog, and haze which impair visibility in national parks. CEMEX’s facility is located within 20 miles of Rocky Mountain National Park, and its emissions may contribute to visibility impairment and to the nitrogen pollution problem that is affecting the park’s vegetation, water quality, and trout populations. Air pollution from Portland cement manufacturing facilities can also travel significant distances downwind, crossing state lines and creating region-wide health problems.
The proposed consent decree will be lodged with the Federal District Court for the District of Colorado, and will be subject to a 30-day public comment period.
Cement Manufacturer Agrees to Reduce Harmful Air Emissions at Colorado Plant
WASHINGTON— The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice (DOJ) announced today that CEMEX, Inc., the owner and operator of a Portland cement manufacturing facility in Lyons, Colo., has agreed to operate advanced pollution controls on its kiln and pay a $1 million civil penalty to resolve alleged violations of the Clean Air Act (CAA).
"Today’s settlement will reduce harmful emissions of nitrogen oxides, which can have serious impacts on respiratory health for communities along Colorado’s Front Range," said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. "Cutting these emissions will also help improve environmental quality and visibility in places like Rocky Mountain National Park."
"This agreement will mean cleaner air for Colorado residents downwind of the CEMEX facility and will contribute to improved air quality in the Rocky Mountain National Park, which is one of our nation’s most cherished public spaces," said Ignacia S. Moreno, assistant attorney general for the Justice Department’s Environment and Natural Resources Division. "The settlement is part of the Justice Department’s continuing efforts, along with the EPA, to bring significant sources of air pollution within the cement manufacturing sector into compliance with the Clean Air Act."
The Department of Justice , on behalf of EPA, filed a complaint against CEMEX alleging that between 1997—2000, the company unlawfully made modifications at its Lyons plant that resulted in significant net increases of nitrogen oxide and particulate matter (PM) emissions. The complaint further alleges that these increased emissions violated the CAA’s Prevention of Significant Deterioration and Non-Attainment New Source Review requirements, which state that companies must obtain the necessary permits prior to making modifications at a facility and install and operate required pollution control equipment if modifications will result in increases of certain pollutants.
As part of the settlement, CEMEX will install "Selective Non-Catalytic Reduction" (SNCR) technology at their Lyons facility, which is an advanced pollution control technology designed to reduce nitrogen oxide emissions. This will reduce their nitrogen oxide emissions by approximately 870 to 1,200 tons of nitrigen oxide per year. The initial capital cost for installing SNCR is approximately $600,000 and the cost of injecting ammonia into the stack emissions stream, a necessary part of the process, is anticipated to be about $1.5 million per year.
The settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including Portland cement manufacturing facilities.
Nitrogen Oxide emissions may cause severe respiratory problems and contribute to childhood asthma. These emissions also contribute to acid rain, smog, and haze which impair visibility in national parks. CEMEX’s facility is located within 20 miles of Rocky Mountain National Park, and its emissions may contribute to visibility impairment and to the nitrogen pollution problem that is affecting the park’s vegetation, water quality, and trout populations. Air pollution from Portland cement manufacturing facilities can also travel significant distances downwind, crossing state lines and creating region-wide health problems.
The proposed consent decree will be lodged with the Federal District Court for the District of Colorado, and will be subject to a 30-day public comment period.
DEFENDANTS TO PAY OVER $3.6 MILLION TO SETTLE COMMODITY FUTURES CONTRACT FRAUD CHARGES
FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
April 15, 2013
Federal Court in California Orders National Equity Holdings, Inc. and Its Principal, Robert J. Cannone, to Pay over $3.6 Million to Settle Fraud Charges in CFTC Action
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a federal court Order against Defendants National Equity Holdings, Inc. (National Equity) and its Principal, Robert J. Cannone, both of Orange County, California, requiring them to pay restitution to defrauded customers in accordance with restitution set in a related criminal action at $1,059,096 (U.S. v. Cannone, SACR 11-263). The Consent Order of Permanent Injunction also imposes civil monetary penalties of $2.8 million on National Equity and $800,000 on Cannone. The Order also imposes permanent trading and registration bans against the Defendants and prohibits them from violating the anti-fraud provisions of the Commodity Exchange Act (CEA), as charged.
The Order, entered on April 11, 2013, by the Honorable James Selna of the U.S. District Court for the Central District of California, stems from a CFTC Complaint filed on November 8, 2011, charging National Equity, Cannone, Francis Franco, and Thomas B. Breen with fraudulent solicitation, misappropriation, and registration violations.
The Order finds that between June 2009 to April 2010, Cannone, by and through National Equity, fraudulently solicited and accepted over $1.4 million to trade commodity futures contracts through a pool. In their solicitations, Cannone, by and through National Equity, (1) falsely claimed to have a successful and experienced trader (Franco) for the pool, (2) misrepresented the likelihood of profits and the risks associated with trading commodity futures, (3) failed to disclose that they were not properly registered with the CFTC to operate a pool, and (4) failed to disclose their intended uses of pool participant funds.
The Order further finds that Cannone and National Equity traded only a portion of the pool participant funds in proprietary accounts and sustained overall and significant losses. Cannone misappropriated the majority of the pool participant funds to make so-called returns to participants in monthly payments that Cannone, through National Equity, claimed were the profitable proceeds of their trading, the Order finds. Cannone also misappropriated pool participant funds for personal use, according to the Order.
Cannone and National Equity concealed their fraud and trading losses from the pool participants by issuing false account statements reflecting profits, the Order finds. A year after commencing their fraudulent scheme, their trading losses and misappropriation had depleted pool participant funds, but at meetings with several pool participants, the Defendants made promises and sometimes gave written guarantees to return the funds invested, according to the Order.
The Order also finds that National Equity failed to register with the CFTC as a Commodity Pool Operator and Cannone failed to register as an Associated Person of National Equity, as required.
The CFTC’s litigation continues against the remaining Defendant Breen. On July 12, 2012, the court entered a permanent injunction Order against Defendant Franco, barring him from further violations of the CEA, as charged, and from engaging in certain commodity-related activities, including trading for others and registration; however, the litigation continues to determine the appropriate amount of a civil monetary penalty to be imposed and the whether a personal trading ban should be imposed on Franco.
In related criminal actions, Cannone, as well as Breen and Franco, pled guilty to criminal violations of the CEA, as amended. Cannone was sentenced to 27 months in federal prison and ordered to pay the $1,059,096 million in restitution jointly with Breen and Franco.
The CFTC thanks the Federal Bureau of Investigation (Orange County Office) and the U.S. Attorney’s Office for the Central District of California (Santa Ana Office) for their assistance.
CFTC Division of Enforcement staff members responsible for this case are Michelle S. Bougas, Heather Johnson, James H. Holl, III, Gretchen L. Lowe, and Vincent McGonagle.
April 15, 2013
Federal Court in California Orders National Equity Holdings, Inc. and Its Principal, Robert J. Cannone, to Pay over $3.6 Million to Settle Fraud Charges in CFTC Action
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a federal court Order against Defendants National Equity Holdings, Inc. (National Equity) and its Principal, Robert J. Cannone, both of Orange County, California, requiring them to pay restitution to defrauded customers in accordance with restitution set in a related criminal action at $1,059,096 (U.S. v. Cannone, SACR 11-263). The Consent Order of Permanent Injunction also imposes civil monetary penalties of $2.8 million on National Equity and $800,000 on Cannone. The Order also imposes permanent trading and registration bans against the Defendants and prohibits them from violating the anti-fraud provisions of the Commodity Exchange Act (CEA), as charged.
The Order, entered on April 11, 2013, by the Honorable James Selna of the U.S. District Court for the Central District of California, stems from a CFTC Complaint filed on November 8, 2011, charging National Equity, Cannone, Francis Franco, and Thomas B. Breen with fraudulent solicitation, misappropriation, and registration violations.
The Order finds that between June 2009 to April 2010, Cannone, by and through National Equity, fraudulently solicited and accepted over $1.4 million to trade commodity futures contracts through a pool. In their solicitations, Cannone, by and through National Equity, (1) falsely claimed to have a successful and experienced trader (Franco) for the pool, (2) misrepresented the likelihood of profits and the risks associated with trading commodity futures, (3) failed to disclose that they were not properly registered with the CFTC to operate a pool, and (4) failed to disclose their intended uses of pool participant funds.
The Order further finds that Cannone and National Equity traded only a portion of the pool participant funds in proprietary accounts and sustained overall and significant losses. Cannone misappropriated the majority of the pool participant funds to make so-called returns to participants in monthly payments that Cannone, through National Equity, claimed were the profitable proceeds of their trading, the Order finds. Cannone also misappropriated pool participant funds for personal use, according to the Order.
Cannone and National Equity concealed their fraud and trading losses from the pool participants by issuing false account statements reflecting profits, the Order finds. A year after commencing their fraudulent scheme, their trading losses and misappropriation had depleted pool participant funds, but at meetings with several pool participants, the Defendants made promises and sometimes gave written guarantees to return the funds invested, according to the Order.
The Order also finds that National Equity failed to register with the CFTC as a Commodity Pool Operator and Cannone failed to register as an Associated Person of National Equity, as required.
The CFTC’s litigation continues against the remaining Defendant Breen. On July 12, 2012, the court entered a permanent injunction Order against Defendant Franco, barring him from further violations of the CEA, as charged, and from engaging in certain commodity-related activities, including trading for others and registration; however, the litigation continues to determine the appropriate amount of a civil monetary penalty to be imposed and the whether a personal trading ban should be imposed on Franco.
In related criminal actions, Cannone, as well as Breen and Franco, pled guilty to criminal violations of the CEA, as amended. Cannone was sentenced to 27 months in federal prison and ordered to pay the $1,059,096 million in restitution jointly with Breen and Franco.
The CFTC thanks the Federal Bureau of Investigation (Orange County Office) and the U.S. Attorney’s Office for the Central District of California (Santa Ana Office) for their assistance.
CFTC Division of Enforcement staff members responsible for this case are Michelle S. Bougas, Heather Johnson, James H. Holl, III, Gretchen L. Lowe, and Vincent McGonagle.
Thursday, April 18, 2013
FORMER SIEMENS EXECUTIVE SETTLES CHARGES OF BRIBERY
FROM: U.S. SECURITIES EXCHANGE COMMISSION
Former Siemens Executive Uriel Sharef Settles Bribery Charges
The Securities and Exchange Commission announced today that on April 15, 2013, the U.S. District Court for the Southern District of New York entered a final judgment against Uriel Sharef, a former officer and board member of Siemens Aktiengesellschaft (Siemens). The settlement resolves the Commission's civil action against Sharef for his role in Siemens' decade-long bribery scheme to retain a $1 billion government contract to produce national identity cards for Argentine citizens. The final judgment, to which Sharef consented, enjoins him from violating the anti-bribery and related internal controls provisions of the FCPA and orders him to pay a $275,000 civil penalty, the second highest penalty assessed against an individual in an FCPA case.
On December 13, 2011, the Commission filed a civil action against Uriel Sharef and six other defendants, alleging that between 2001 and 2007, Sharef, along with other Siemens executives, paid bribes to senior government officials in Argentina in connection with a government contract to provide national identity cards to all Argentine citizens. The officials included two Argentine presidents and cabinet ministers in two presidential administrations. During this period, Sharef was a member of Siemens Managing Board, or "Vorstand," and was the most senior officer charged in connection with the scheme. Sharef met with payment intermediaries in the United States and agreed to pay $27 million in bribes to Argentine officials. Sharef also enlisted subordinates to conceal the payments by circumventing Siemens' internal accounting controls.
According to the SEC's complaint, approximately $31.3 million of the $100 million in bribes paid were made after March 12, 2001, when Siemens became a U.S. issuer subject to U.S. securities laws. As a result of the bribe payments it made, Siemens received an arbitration award in 2007 against the government of Argentina of more than $217 million plus interest for the contract. In August 2009, after settling bribery charges with the U.S. and Germany, Siemens waived the arbitration award.
The final judgment permanently enjoins Sharef from violating Sections 30A and 13(b)(5) of the Securities Exchange Act of 1934, and Rule 13b2-1 thereunder, and from aiding and abetting Siemens' violations of Exchange Act Sections 13(b)(2)(A) and13(b)(2)(B). The judgment also orders Sharef to pay a civil penalty of $275,000. Sharef settled the SEC charges without either admitting or denying the allegations in the SEC's complaint.
The SEC appreciates the assistance of the U.S. Department of Justice, Fraud Section, the Federal Bureau of Investigation, and the Office of the Prosecutor General in Munich, Germany in this matter.
Former Siemens Executive Uriel Sharef Settles Bribery Charges
The Securities and Exchange Commission announced today that on April 15, 2013, the U.S. District Court for the Southern District of New York entered a final judgment against Uriel Sharef, a former officer and board member of Siemens Aktiengesellschaft (Siemens). The settlement resolves the Commission's civil action against Sharef for his role in Siemens' decade-long bribery scheme to retain a $1 billion government contract to produce national identity cards for Argentine citizens. The final judgment, to which Sharef consented, enjoins him from violating the anti-bribery and related internal controls provisions of the FCPA and orders him to pay a $275,000 civil penalty, the second highest penalty assessed against an individual in an FCPA case.
On December 13, 2011, the Commission filed a civil action against Uriel Sharef and six other defendants, alleging that between 2001 and 2007, Sharef, along with other Siemens executives, paid bribes to senior government officials in Argentina in connection with a government contract to provide national identity cards to all Argentine citizens. The officials included two Argentine presidents and cabinet ministers in two presidential administrations. During this period, Sharef was a member of Siemens Managing Board, or "Vorstand," and was the most senior officer charged in connection with the scheme. Sharef met with payment intermediaries in the United States and agreed to pay $27 million in bribes to Argentine officials. Sharef also enlisted subordinates to conceal the payments by circumventing Siemens' internal accounting controls.
According to the SEC's complaint, approximately $31.3 million of the $100 million in bribes paid were made after March 12, 2001, when Siemens became a U.S. issuer subject to U.S. securities laws. As a result of the bribe payments it made, Siemens received an arbitration award in 2007 against the government of Argentina of more than $217 million plus interest for the contract. In August 2009, after settling bribery charges with the U.S. and Germany, Siemens waived the arbitration award.
The final judgment permanently enjoins Sharef from violating Sections 30A and 13(b)(5) of the Securities Exchange Act of 1934, and Rule 13b2-1 thereunder, and from aiding and abetting Siemens' violations of Exchange Act Sections 13(b)(2)(A) and13(b)(2)(B). The judgment also orders Sharef to pay a civil penalty of $275,000. Sharef settled the SEC charges without either admitting or denying the allegations in the SEC's complaint.
The SEC appreciates the assistance of the U.S. Department of Justice, Fraud Section, the Federal Bureau of Investigation, and the Office of the Prosecutor General in Munich, Germany in this matter.
Wednesday, April 17, 2013
PARKER DRILLING CHARGED BY SEC WITH VIOLATING FORIEGN CORRUPT PRACTICES ACT
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
SEC Charges Parker Drilling Company with Violating the Foreign Corrupt Practices Act
The Securities and Exchange Commission today charged Parker Drilling Company, a worldwide drilling services and project management firm, with violating the Foreign Corrupt Practices Act (FCPA) by authorizing improper payments to a third-party intermediary retained to assist the company in resolving customs disputes.
The SEC's complaint, filed in federal district court in Alexandria, Virginia, alleges that in 2004 Parker Drilling authorized payments to a Nigerian agent totaling $1.25 million. The company did so despite former senior executives knowing that the agent intended to use the funds to "entertain" Nigerian officials involved in resolving Parker Drilling's ongoing customs problems. Following the Nigerian agent's work, the company received an unexplained $3,050,000 reduction of a previously assessed customs fine, and the company was permitted to nationalize and sell its Nigerian rigs.
To settle the SEC's charges, Parker Drilling will pay disgorgement of $3,050,000 plus pre-judgment interest of $1,040,818. Parker Drilling consented to the entry of a final judgment permanently enjoining it from violating Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act. The proposed settlement is subject to court approval.
In the parallel criminal proceedings, the Department of Justice entered into a Deferred Prosecution Agreement with Parker Drilling in which the company will pay an $11,760,000 penalty.
The SEC acknowledges the assistance of the Department of Justice's Fraud Section, the Federal Bureau of Investigation, and the United Kingdom's Crown Prosecution Service and Metropolitan Police Service.
SEC Charges Parker Drilling Company with Violating the Foreign Corrupt Practices Act
The Securities and Exchange Commission today charged Parker Drilling Company, a worldwide drilling services and project management firm, with violating the Foreign Corrupt Practices Act (FCPA) by authorizing improper payments to a third-party intermediary retained to assist the company in resolving customs disputes.
The SEC's complaint, filed in federal district court in Alexandria, Virginia, alleges that in 2004 Parker Drilling authorized payments to a Nigerian agent totaling $1.25 million. The company did so despite former senior executives knowing that the agent intended to use the funds to "entertain" Nigerian officials involved in resolving Parker Drilling's ongoing customs problems. Following the Nigerian agent's work, the company received an unexplained $3,050,000 reduction of a previously assessed customs fine, and the company was permitted to nationalize and sell its Nigerian rigs.
To settle the SEC's charges, Parker Drilling will pay disgorgement of $3,050,000 plus pre-judgment interest of $1,040,818. Parker Drilling consented to the entry of a final judgment permanently enjoining it from violating Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act. The proposed settlement is subject to court approval.
In the parallel criminal proceedings, the Department of Justice entered into a Deferred Prosecution Agreement with Parker Drilling in which the company will pay an $11,760,000 penalty.
The SEC acknowledges the assistance of the Department of Justice's Fraud Section, the Federal Bureau of Investigation, and the United Kingdom's Crown Prosecution Service and Metropolitan Police Service.
IRAN SANCTIONS ACT VIOLATORS DELISTED
FROM: U.S. STATE DEPARTMENT
Delisting Companies Sanctioned under the Iran Sanctions Act
Press Statement
Patrick Ventrell
Acting Deputy Spokesperson, Office of the Spokesperson
Washington, DC
April 12, 2013
Today, the United States is lifting sanctions applied almost two years ago to Tanker Pacific Management (TPM), Société Anonyme Monégasque D’Administration Maritime Et Aérienne (SAMAMA), and Allvale Maritime Inc. (AMI), under the Iran Sanctions Act (ISA). All three companies have been engaged in extensive consultations with the State Department and have provided reliable assurances that they will not knowingly engage in such sanctionable activity in the future.
The three companies were sanctioned in May 2011 for their respective roles in a September 2010 transaction that provided a tanker valued at $8.65 million to the Islamic Republic of Iran Shipping Lines (IRISL), an entity that has been designated by the United States and the European Union for its role in supporting Iran's proliferation activities. Since sanctions were applied, these companies have taken significant steps to ensure that their operations are in compliance with U.S. sanctions law and policy, and have provided reliable assurances that they will not knowingly engage in such sanctionable activity in the future. As a result, the Secretary of State has decided to lift sanctions at this time.
Sanctions are essential to changing the Iranian regime’s calculus on its nuclear program and have had a powerful impact on Iran’s economy. By making significant changes to their operations and adjusting their behavior, TPM, SAMAMA, and AMI have demonstrated the success that sanctions can have at deterring irresponsible conduct.
Delisting Companies Sanctioned under the Iran Sanctions Act
Press Statement
Patrick Ventrell
Acting Deputy Spokesperson, Office of the Spokesperson
Washington, DC
April 12, 2013
Today, the United States is lifting sanctions applied almost two years ago to Tanker Pacific Management (TPM), Société Anonyme Monégasque D’Administration Maritime Et Aérienne (SAMAMA), and Allvale Maritime Inc. (AMI), under the Iran Sanctions Act (ISA). All three companies have been engaged in extensive consultations with the State Department and have provided reliable assurances that they will not knowingly engage in such sanctionable activity in the future.
The three companies were sanctioned in May 2011 for their respective roles in a September 2010 transaction that provided a tanker valued at $8.65 million to the Islamic Republic of Iran Shipping Lines (IRISL), an entity that has been designated by the United States and the European Union for its role in supporting Iran's proliferation activities. Since sanctions were applied, these companies have taken significant steps to ensure that their operations are in compliance with U.S. sanctions law and policy, and have provided reliable assurances that they will not knowingly engage in such sanctionable activity in the future. As a result, the Secretary of State has decided to lift sanctions at this time.
Sanctions are essential to changing the Iranian regime’s calculus on its nuclear program and have had a powerful impact on Iran’s economy. By making significant changes to their operations and adjusting their behavior, TPM, SAMAMA, and AMI have demonstrated the success that sanctions can have at deterring irresponsible conduct.
Tuesday, April 16, 2013
ASSISTANT ATTORNEY GENERAL BAER COMMENTS ON ANTITRUST CARVE-OUT CHANGE
FROM: U.S. DEPARTMENT OF JUSTIE
STATEMENT OF ASSISTANT ATTORNEY GENERAL BILL BAER ON
CHANGES TO ANTITRUST DIVISION'S CARVE-OUT PRACTICE REGARDING CORPORATE PLEA AGREEMENTS
WASHINGTON — Assistant Attorney General Bill Baer in charge of the Department of Justice's Antitrust Division issued the following statement today on changes to the division's carve-out practice regarding corporate plea agreements:
"Over the years, the Antitrust Division's efforts to investigate and prosecute price fixing and other cartel conduct have produced outstanding results in holding both corporations and individuals accountable for their wrongdoing. We are committed to continuing these efforts and to build on the division's past successes.
"Going forward, we are making certain changes to the Antitrust Division's approach to corporate plea agreements. In the past, the division's corporate plea agreements have, in appropriate circumstances, included a provision offering non-prosecution protection to those employees of the corporation who cooperate with the investigation and whose conduct does not warrant prosecution. The division excluded, or carved out, employees who were believed to be culpable. In certain circumstances, it also carved out employees who refused to cooperate with the division's investigation, employees against whom the division was still developing evidence and employees with potentially relevant information who could not be located. The names of all carved-out employees were included in the corporate plea agreements, which were publicly filed in the district courts where the charges were brought.
"As part of a thorough review of the division's approach to corporate dispositions, we have decided to implement two changes. The division will continue to carve out employees who we have reason to believe were involved in criminal wrongdoing and who are potential targets of our investigation. However, we will no longer carve out employees for reasons unrelated to culpability.
"The division will not include the names of carved-out employees in the plea agreement itself. Those names will instead be listed in an appendix, and we will ask the court for leave to file the appendix under seal. Absent some significant justification, it is ordinarily not appropriate to publicly identify uncharged third-party wrongdoers.
"The Antitrust Division will continue to exclude from the non-prosecution protections of corporate plea agreements any employees whose conduct may warrant prosecution. The division will continue to make these decisions on an employee-by-employee basis consistent with the evidence and the Principles of Federal Prosecution. We will continue to demand the full cooperation of anyone who seeks to benefit from the non-prosecution protection of a corporate plea agreement, and will revoke that protection for anyone who does not fully and truthfully cooperate with division investigations."
STATEMENT OF ASSISTANT ATTORNEY GENERAL BILL BAER ON
CHANGES TO ANTITRUST DIVISION'S CARVE-OUT PRACTICE REGARDING CORPORATE PLEA AGREEMENTS
WASHINGTON — Assistant Attorney General Bill Baer in charge of the Department of Justice's Antitrust Division issued the following statement today on changes to the division's carve-out practice regarding corporate plea agreements:
"Over the years, the Antitrust Division's efforts to investigate and prosecute price fixing and other cartel conduct have produced outstanding results in holding both corporations and individuals accountable for their wrongdoing. We are committed to continuing these efforts and to build on the division's past successes.
"Going forward, we are making certain changes to the Antitrust Division's approach to corporate plea agreements. In the past, the division's corporate plea agreements have, in appropriate circumstances, included a provision offering non-prosecution protection to those employees of the corporation who cooperate with the investigation and whose conduct does not warrant prosecution. The division excluded, or carved out, employees who were believed to be culpable. In certain circumstances, it also carved out employees who refused to cooperate with the division's investigation, employees against whom the division was still developing evidence and employees with potentially relevant information who could not be located. The names of all carved-out employees were included in the corporate plea agreements, which were publicly filed in the district courts where the charges were brought.
"As part of a thorough review of the division's approach to corporate dispositions, we have decided to implement two changes. The division will continue to carve out employees who we have reason to believe were involved in criminal wrongdoing and who are potential targets of our investigation. However, we will no longer carve out employees for reasons unrelated to culpability.
"The division will not include the names of carved-out employees in the plea agreement itself. Those names will instead be listed in an appendix, and we will ask the court for leave to file the appendix under seal. Absent some significant justification, it is ordinarily not appropriate to publicly identify uncharged third-party wrongdoers.
"The Antitrust Division will continue to exclude from the non-prosecution protections of corporate plea agreements any employees whose conduct may warrant prosecution. The division will continue to make these decisions on an employee-by-employee basis consistent with the evidence and the Principles of Federal Prosecution. We will continue to demand the full cooperation of anyone who seeks to benefit from the non-prosecution protection of a corporate plea agreement, and will revoke that protection for anyone who does not fully and truthfully cooperate with division investigations."
ANTITRUST CARVE-OUT PROVISIONS CHANGED TO PROTECT SUSPECTED WRONGDOERS
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, April 12, 2013
Statement of Assistant Attorney General Bill Baer on Changes to Antitrust Division’s Carve-Out Practice Regarding Corporate Plea Agreements
Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division issued the following statement today on changes to the division’s carve-out practice regarding corporate plea agreements:
"Over the years, the Antitrust Division’s efforts to investigate and prosecute price fixing and other cartel conduct have produced outstanding results in holding both corporations and individuals accountable for their wrongdoing. We are committed to continuing these efforts and to build on the division’s past successes.
"Going forward, we are making certain changes to the Antitrust Division’s approach to corporate plea agreements. In the past, the division’s corporate plea agreements have, in appropriate circumstances, included a provision offering non-prosecution protection to those employees of the corporation who cooperate with the investigation and whose conduct does not warrant prosecution. The division excluded, or carved out, employees who were believed to be culpable. In certain circumstances, it also carved out employees who refused to cooperate with the division’s investigation, employees against whom the division was still developing evidence and employees with potentially relevant information who could not be located. The names of all carved-out employees were included in the corporate plea agreements, which were publicly filed in the district courts where the charges were brought.
"As part of a thorough review of the division’s approach to corporate dispositions, we have decided to implement two changes. The division will continue to carve out employees who we have reason to believe were involved in criminal wrongdoing and who are potential targets of our investigation. However, we will no longer carve out employees for reasons unrelated to culpability.
"The division will not include the names of carved-out employees in the plea agreement itself. Those names will instead be listed in an appendix, and we will ask the court for leave to file the appendix under seal. Absent some significant justification, it is ordinarily not appropriate to publicly identify uncharged third-party wrongdoers.
"The Antitrust Division will continue to exclude from the non-prosecution protections of corporate plea agreements any employees whose conduct may warrant prosecution. The division will continue to make these decisions on an employee-by-employee basis consistent with the evidence and the Principles of Federal Prosecution. We will continue to demand the full cooperation of anyone who seeks to benefit from the non-prosecution protection of a corporate plea agreement, and will revoke that protection for anyone who does not fully and truthfully cooperate with division investigations."
Friday, April 12, 2013
Statement of Assistant Attorney General Bill Baer on Changes to Antitrust Division’s Carve-Out Practice Regarding Corporate Plea Agreements
Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division issued the following statement today on changes to the division’s carve-out practice regarding corporate plea agreements:
"Over the years, the Antitrust Division’s efforts to investigate and prosecute price fixing and other cartel conduct have produced outstanding results in holding both corporations and individuals accountable for their wrongdoing. We are committed to continuing these efforts and to build on the division’s past successes.
"Going forward, we are making certain changes to the Antitrust Division’s approach to corporate plea agreements. In the past, the division’s corporate plea agreements have, in appropriate circumstances, included a provision offering non-prosecution protection to those employees of the corporation who cooperate with the investigation and whose conduct does not warrant prosecution. The division excluded, or carved out, employees who were believed to be culpable. In certain circumstances, it also carved out employees who refused to cooperate with the division’s investigation, employees against whom the division was still developing evidence and employees with potentially relevant information who could not be located. The names of all carved-out employees were included in the corporate plea agreements, which were publicly filed in the district courts where the charges were brought.
"As part of a thorough review of the division’s approach to corporate dispositions, we have decided to implement two changes. The division will continue to carve out employees who we have reason to believe were involved in criminal wrongdoing and who are potential targets of our investigation. However, we will no longer carve out employees for reasons unrelated to culpability.
"The division will not include the names of carved-out employees in the plea agreement itself. Those names will instead be listed in an appendix, and we will ask the court for leave to file the appendix under seal. Absent some significant justification, it is ordinarily not appropriate to publicly identify uncharged third-party wrongdoers.
"The Antitrust Division will continue to exclude from the non-prosecution protections of corporate plea agreements any employees whose conduct may warrant prosecution. The division will continue to make these decisions on an employee-by-employee basis consistent with the evidence and the Principles of Federal Prosecution. We will continue to demand the full cooperation of anyone who seeks to benefit from the non-prosecution protection of a corporate plea agreement, and will revoke that protection for anyone who does not fully and truthfully cooperate with division investigations."
Monday, April 15, 2013
MAN INDICTED FOR PART IN BUSINESS OPPORTUNITY FRAUD CASE
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, April 11, 2013
Canadian Citizen Pleads Guilty in Connection with Costa Rica-Based Business Opportunity Fraud Ventures
Kerry Michael Deevy pleaded guilty in U.S. District Court for the Southern District of Florida in Miami to 13 counts of an indictment pending against him, including one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, and nine counts of wire fraud, the Justice Department and the U.S. Postal Inspection Service announced today.
Deevy, a Canadian citizen, was charged in connection with the operation of a series of fraudulent business opportunities. Deevy was arrested in Costa Rica in February 2012 following his indictment by a federal grand jury in Miami on Nov. 29, 2011. Following his arrest in Costa Rica, Deevy was extradited to the United States for prosecution. Deevy was arrested based on charges that he and his co-conspirators purported to sell vending machine and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses. The indictment is part of the government’s continued nationwide crackdown on business opportunity fraud.
In addition to Deevy, 11 other individuals have been charged in connection with business opportunity fraud ventures based in Costa Rica. Deevy is the ninth of those individuals to be convicted in the United States.
"The Department of Justice is committed to cracking down on financial fraud, including international telemarketing schemes," said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. "That is why we will continue to prosecute those who would deprive innocent, hardworking Americans of their hard-earned money by offering phony business opportunities."
Beginning in 2006, Deevy and his coconspirators fraudulently induced purchasers in the United States to buy business opportunities in Cards-R-Us Inc., Premier Cards Inc. and Nation West Distribution Company. The business opportunities cost thousands of dollars each, and most purchasers paid at least $10,000.
Deevy participated in a conspiracy that used various means to make it appear to potential purchasers that the businesses were located entirely in the United States. In reality, Deevy operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities.
The companies made numerous false statements to potential purchasers of the business opportunities, including that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands.
The companies employed various types of sales representatives, including fronters, closers and references. A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement. A closer subsequently spoke to potential purchasers to finalize deals. References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities. The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser's merchandise display racks.
Deevy, using aliases, was a fronter and reference for Cards-R-Us, Premier Cards and Nation West.
Each of the companies was registered as a corporation and rented office space to make it appear to potential purchasers that its operations were fully in the United States. Cards-R-Us was registered as a Nevada corporation and rented office space in Reno, Nev. Premier Cards was registered as a Colorado and Pennsylvania corporation and rented office space in Philadelphia. Nation West was a Colorado corporation and rented office space in Denver.
"Fraudsters must realize that financial fraud victimizing Americans will be prosecuted vigorously, even if the schemers conduct their fraudulent operations from abroad," said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. "Increased international law enforcement cooperation eliminates safe havens for those who cheat American citizens from overseas."
"The success of this investigation shows that the U.S. Postal Inspection Service continues to work closely with the Department of Justice and our law enforcement partners, both foreign and domestically, to protect the American consumer from the predatory nature of business opportunity and telemarketing schemes," said Tony Gomez, Acting U.S. Postal Inspector in Charge in Miami.
Acting Assistant Attorney General Delery commended the investigative efforts of the Postal Inspection Service. The case is being prosecuted by Assistant Director Jeffrey Steger and trial attorney Alan Phelps with the U.S. Department of Justice Consumer Protection Branch.
Thursday, April 11, 2013
Canadian Citizen Pleads Guilty in Connection with Costa Rica-Based Business Opportunity Fraud Ventures
Kerry Michael Deevy pleaded guilty in U.S. District Court for the Southern District of Florida in Miami to 13 counts of an indictment pending against him, including one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, and nine counts of wire fraud, the Justice Department and the U.S. Postal Inspection Service announced today.
Deevy, a Canadian citizen, was charged in connection with the operation of a series of fraudulent business opportunities. Deevy was arrested in Costa Rica in February 2012 following his indictment by a federal grand jury in Miami on Nov. 29, 2011. Following his arrest in Costa Rica, Deevy was extradited to the United States for prosecution. Deevy was arrested based on charges that he and his co-conspirators purported to sell vending machine and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses. The indictment is part of the government’s continued nationwide crackdown on business opportunity fraud.
In addition to Deevy, 11 other individuals have been charged in connection with business opportunity fraud ventures based in Costa Rica. Deevy is the ninth of those individuals to be convicted in the United States.
"The Department of Justice is committed to cracking down on financial fraud, including international telemarketing schemes," said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. "That is why we will continue to prosecute those who would deprive innocent, hardworking Americans of their hard-earned money by offering phony business opportunities."
Beginning in 2006, Deevy and his coconspirators fraudulently induced purchasers in the United States to buy business opportunities in Cards-R-Us Inc., Premier Cards Inc. and Nation West Distribution Company. The business opportunities cost thousands of dollars each, and most purchasers paid at least $10,000.
Deevy participated in a conspiracy that used various means to make it appear to potential purchasers that the businesses were located entirely in the United States. In reality, Deevy operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities.
The companies made numerous false statements to potential purchasers of the business opportunities, including that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands.
The companies employed various types of sales representatives, including fronters, closers and references. A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement. A closer subsequently spoke to potential purchasers to finalize deals. References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities. The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser's merchandise display racks.
Deevy, using aliases, was a fronter and reference for Cards-R-Us, Premier Cards and Nation West.
Each of the companies was registered as a corporation and rented office space to make it appear to potential purchasers that its operations were fully in the United States. Cards-R-Us was registered as a Nevada corporation and rented office space in Reno, Nev. Premier Cards was registered as a Colorado and Pennsylvania corporation and rented office space in Philadelphia. Nation West was a Colorado corporation and rented office space in Denver.
"Fraudsters must realize that financial fraud victimizing Americans will be prosecuted vigorously, even if the schemers conduct their fraudulent operations from abroad," said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. "Increased international law enforcement cooperation eliminates safe havens for those who cheat American citizens from overseas."
"The success of this investigation shows that the U.S. Postal Inspection Service continues to work closely with the Department of Justice and our law enforcement partners, both foreign and domestically, to protect the American consumer from the predatory nature of business opportunity and telemarketing schemes," said Tony Gomez, Acting U.S. Postal Inspector in Charge in Miami.
Acting Assistant Attorney General Delery commended the investigative efforts of the Postal Inspection Service. The case is being prosecuted by Assistant Director Jeffrey Steger and trial attorney Alan Phelps with the U.S. Department of Justice Consumer Protection Branch.
Sunday, April 14, 2013
DIETARY SUPPLEMENT COMPANY ORDERED TO NO LONGER VIOLATE THE FEDERAL FOOD, DRUG AND COSMETIC ACT
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, April 8, 2013
U.S. Obtains Permanent Injunction Against New York Dietary Supplement Firm’s Operations
U.S. District Court Judge Joseph F. Bianco entered a consent decree of permanent injunction between the United States, Kabco Pharmaceuticals Inc. and its CEO and President Abu Kabir, the Justice Department announced today. The consent decree entered by the court enjoins the defendants from violating the Federal Food, Drug and Cosmetic Act (FDCA) in connection with their manufacturing, packing and distributing of dietary supplements.
In a complaint filed with the court, the United States alleged that Food and Drug Administration (FDA) inspections found that Kabco distributed dietary supplements, including Brewers Yeast Tablets, Dandelion Root Capsules, Night-Time Herb Capsules, Inositol Calcium & Magnesium Capsules, Vitamin C-500 with Rose Hips Time Released Tablets and Joint All Capsules, that did not meet product specifications. As alleged in the complaint, during inspections of the defendants’ manufacturing facilities, FDA investigators found numerous current good manufacturing practice (cGMP) violations. Among other violations, Kabco did not review and investigate product complaints, failed to hold dietary supplements under conditions designed to prevent product mix-ups and included unlabeled raw ingredients in their dietary supplements, including whey polio, an undeclared allergen. Individuals who are allergic to milk could have a serious adverse health reaction from consuming any product with an undeclared milk allergen like whey polio.
"When consumers purchase dietary supplements, they are entitled to know that they got what they paid for," said Stuart F. Delery, Acting Assistant Attorney General of the Justice Department’s Civil Division. "When supplement manufacturers fail to ensure that their products contain their labeled ingredients – especially when the labels do not warn consumers that the products may contain allergens dangerous to them – they put consumers at risk. We stand ready to take appropriate enforcement steps against the manufacturers who cannot comply with their good manufacturing practice obligations."
According to the government’s complaint, the FDA previously inspected the defendants’ facility and noted a history of violations and warnings. As a result of the defendants’ most recent violations, as well as a history of unheeded warnings, the Justice Department filed this injunction. Under the consent decree, the defendants agreed to stop manufacturing and distributing dietary supplements until, among other corrective actions, the company demonstrates to the FDA that it is meeting the quality, safety and labeling standards required by law. The consent decree further requires the defendants to engage in appropriate, independent outside oversight to ensure compliance.
Acting Assistant Attorney General Delery thanked the FDA for referring this matter for litigation. Lauren Bell, Trial Attorney at the Consumer Protection Branch of the Justice Department, in conjunction with Melissa Mendoza, Associate Chief Counsel at FDA’s Office of the Chief Counsel, brought this case on behalf of the United States.
Monday, April 8, 2013
U.S. Obtains Permanent Injunction Against New York Dietary Supplement Firm’s Operations
U.S. District Court Judge Joseph F. Bianco entered a consent decree of permanent injunction between the United States, Kabco Pharmaceuticals Inc. and its CEO and President Abu Kabir, the Justice Department announced today. The consent decree entered by the court enjoins the defendants from violating the Federal Food, Drug and Cosmetic Act (FDCA) in connection with their manufacturing, packing and distributing of dietary supplements.
In a complaint filed with the court, the United States alleged that Food and Drug Administration (FDA) inspections found that Kabco distributed dietary supplements, including Brewers Yeast Tablets, Dandelion Root Capsules, Night-Time Herb Capsules, Inositol Calcium & Magnesium Capsules, Vitamin C-500 with Rose Hips Time Released Tablets and Joint All Capsules, that did not meet product specifications. As alleged in the complaint, during inspections of the defendants’ manufacturing facilities, FDA investigators found numerous current good manufacturing practice (cGMP) violations. Among other violations, Kabco did not review and investigate product complaints, failed to hold dietary supplements under conditions designed to prevent product mix-ups and included unlabeled raw ingredients in their dietary supplements, including whey polio, an undeclared allergen. Individuals who are allergic to milk could have a serious adverse health reaction from consuming any product with an undeclared milk allergen like whey polio.
"When consumers purchase dietary supplements, they are entitled to know that they got what they paid for," said Stuart F. Delery, Acting Assistant Attorney General of the Justice Department’s Civil Division. "When supplement manufacturers fail to ensure that their products contain their labeled ingredients – especially when the labels do not warn consumers that the products may contain allergens dangerous to them – they put consumers at risk. We stand ready to take appropriate enforcement steps against the manufacturers who cannot comply with their good manufacturing practice obligations."
According to the government’s complaint, the FDA previously inspected the defendants’ facility and noted a history of violations and warnings. As a result of the defendants’ most recent violations, as well as a history of unheeded warnings, the Justice Department filed this injunction. Under the consent decree, the defendants agreed to stop manufacturing and distributing dietary supplements until, among other corrective actions, the company demonstrates to the FDA that it is meeting the quality, safety and labeling standards required by law. The consent decree further requires the defendants to engage in appropriate, independent outside oversight to ensure compliance.
Acting Assistant Attorney General Delery thanked the FDA for referring this matter for litigation. Lauren Bell, Trial Attorney at the Consumer Protection Branch of the Justice Department, in conjunction with Melissa Mendoza, Associate Chief Counsel at FDA’s Office of the Chief Counsel, brought this case on behalf of the United States.
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