The following is from the Department of Justice website:
Tuesday, December 6, 2011
“WASHINGTON – A federal grand jury in Washington, D.C., has returned a seven-count indictment charging Sanford Ltd. with violating the Act to Prevent Pollution from Ships (APPS), conspiracy and obstruction of justice, announced Assistant Attorney General Ignacia S. Moreno and United States Attorney Ronald C. Machen Jr.
Sanford Ltd. is a New Zealand based company that operates the Fishing Vessel (F/V) San Nikunau, a vessel that routinely delivers tuna to a cannery in American Samoa. The indictment describes a conspiracy where the crew of the vessel routinely discharged oily bilge waste from the vessel directly into the sea during its fishing voyages since at least 2007. Sanford Ltd. was also charged with violating the APPS for failing to accurately maintain an oil record book for the vessel and with obstruction of justice for presenting false documents and deceiving the Coast Guard during an inspection.
If convicted, Sanford Ltd. could be fined up to $500,000 per count or twice the gross gain or loss that resulted from the criminal conduct. The indictment also seeks criminal forfeiture from Sanford Ltd. of more than $24 million for proceeds derived by Sanford Ltd. as a result of the criminal conduct.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until and unless proven guilty.
This case was investigated by the U.S. Coast Guard. The case is being prosecuted by the U.S. Attorney's Office for the District of Columbia and by the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice.”
Saturday, December 10, 2011
TWO INTERNATIONAL AIRLINE EXECUTIVES TO SERVE 13 MONTHS FOR FIXING CARGO RATES
The following excerpt is from the Department of Justice website:
DECEMBER 8, 2011
“WASHINGTON — Two executives of Luxembourg-based Cargolux Airlines International S.A. have each pleaded guilty and agreed to serve 13 months in prison for participating in a conspiracy to fix cargo rates for international air shipments, the Department of Justice announced.
Ulrich Ogiermann, the former president and CEO, and current employee of Cargolux, and Robert Van de Weg, the senior vice president of sales and marketing for Cargolux, pleaded guilty today to the charges contained in an indictment filed on Oct. 28, 2010, in U.S. District Court in West Palm Beach, Fla. Ogiermann and Van de Weg pleaded guilty to conspiring with others to suppress and eliminate competition by fixing and coordinating certain surcharges, including security and fuel surcharges, charged to customers located in the United States and elsewhere for air cargo shipments including shipments to and from the United States. According to the indictment, Ogiermann participated in the conspiracy from at least as early as October 2001 until at least February 2006, and Van de Weg participated in the conspiracy from at least as early December 2003 until at least February 2006. Under the plea agreements, Ogiermann and Van de Weg have also each agreed to pay a $20,000 criminal fine and to cooperate with the department's ongoing investigation.
Air cargo carriers transport a variety of cargo shipments, such as heavy equipment, perishable commodities and consumer goods, on scheduled international flights.
Including Ogiermann and Van de Weg, a total of 22 airlines and 21 executives have been charged in the Justice Department's ongoing investigation into price fixing in the air transportation industry. To date, more than $1.8 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time.
Ogiermann and Van de Weg are charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $1 million and up to 10 years in prison. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.”
DECEMBER 8, 2011
“WASHINGTON — Two executives of Luxembourg-based Cargolux Airlines International S.A. have each pleaded guilty and agreed to serve 13 months in prison for participating in a conspiracy to fix cargo rates for international air shipments, the Department of Justice announced.
Ulrich Ogiermann, the former president and CEO, and current employee of Cargolux, and Robert Van de Weg, the senior vice president of sales and marketing for Cargolux, pleaded guilty today to the charges contained in an indictment filed on Oct. 28, 2010, in U.S. District Court in West Palm Beach, Fla. Ogiermann and Van de Weg pleaded guilty to conspiring with others to suppress and eliminate competition by fixing and coordinating certain surcharges, including security and fuel surcharges, charged to customers located in the United States and elsewhere for air cargo shipments including shipments to and from the United States. According to the indictment, Ogiermann participated in the conspiracy from at least as early as October 2001 until at least February 2006, and Van de Weg participated in the conspiracy from at least as early December 2003 until at least February 2006. Under the plea agreements, Ogiermann and Van de Weg have also each agreed to pay a $20,000 criminal fine and to cooperate with the department's ongoing investigation.
Air cargo carriers transport a variety of cargo shipments, such as heavy equipment, perishable commodities and consumer goods, on scheduled international flights.
Including Ogiermann and Van de Weg, a total of 22 airlines and 21 executives have been charged in the Justice Department's ongoing investigation into price fixing in the air transportation industry. To date, more than $1.8 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time.
Ogiermann and Van de Weg are charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $1 million and up to 10 years in prison. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.”
BIG CORPORATION TO PAY FOR CLEAN WATER VIOLATIONS COVERING 5 STATES
The following is an excerpt from the SEC website:
Tuesday, November 29, 2011
“Lafarge North America Inc. Agrees to Pay $740,000 Penalty to Resolve Clean Water Act Violations in Five States
Ready-Mix Concrete Producer Agrees to Invest an Estimated $8 Million to Improve Environmental Compliance at 189 Similar Facilities in the U.S.
WASHINGTON – Lafarge North America Inc., one of the largest suppliers of construction materials in the United States and Canada, and four of its U.S. subsidiaries have agreed to resolve alleged Clean Water Act violations. The violations include unpermitted discharges of stormwater and failure to comply with stormwater permits at 21 stone, gravel, sand, asphalt and ready-mix concrete facilities in Alabama, Colorado, Georgia, Maryland and New York. Stormwater flowing over concrete manufacturing facilities can carry debris, sediment and pollutants including pesticides, petroleum products, chemicals and solvents, which can have a significant impact on water quality.
Lafarge will implement a nationwide evaluation and compliance program at 189 of its similar facilities in the United States to ensure they meet Clean Water Act requirements. Lafarge will also pay a penalty of $740,000 and implement two supplemental environmental projects, in which the company will complete conservation easements to protect approximately 166 acres in Maryland and Colorado. The value of the land has been appraised at $2.95 million. Lafarge will also implement one state environmentally beneficial project to support environmental training for state inspectors. The state project is valued at $10,000.
The comprehensive evaluation will include a compliance review of each facility’s permit, an inventory of all discharges to U.S. waters and identification of all best management practices in place. In addition, Lafarge must identify an environmental vice president responsible for coordinating oversight of compliance with stormwater requirements, at least two environmental directors and several environmental managers to oversee stormwater compliance at each operation, and an onsite operations manager at each facility. The U.S. estimates that Lafarge will spend approximately $8 million over five years to develop and maintain this compliance program.
The company will also develop and implement an extensive management, training, inspection and reporting system to increase oversight of its operations and compliance with stormwater requirements at all facilities that it owns and/or operates .
“Owners and operators of industrial facilities must take the necessary measures to comply with stormwater regulations under the Clean Water Act, which protects America’s rivers, lakes and sources of drinking water from harmful contamination,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The system-wide management controls and training that this settlement requires from Lafarge and its subsidiaries will result in better management practices and a robust compliance program at hundreds of facilities throughout the nation that will prevent harmful stormwater runoff.”
“EPA is committed to protecting America’s waters from polluted stormwater runoff,” said Cynthia Giles, Assistant Administrator for the Environmental Protection Agency’s Office of Enforcement and Compliance Assurance. “Today’s settlement will improve stormwater management at facilities across the nation, preventing harmful pollutants from being swept into local waterways.”
The complaint, filed in federal court with the settlement, alleges a pattern of violations since 2006 that were discovered after several federal inspections at the company’s facilities. The alleged violations included unpermitted discharges, violations of effluent limitations, inadequate management practices, inadequate or missing records and practices regarding stormwater compliance and monitoring, inadequate discharge monitoring and reporting, inadequate stormwater pollution prevention plans and inadequate stormwater training.
The Clean Water Act requires that industrial facilities, such as ready-mix concrete plants, sand and gravel facilities and asphalt batching plants, have controls in place to prevent pollution from being discharged with stormwater into nearby waterways. Each site must have a stormwater pollution prevention plan that sets guidelines and best management practices that the company will follow to prevent runoff from being contaminated by pollutants.
Since being notified of the violations by EPA, the company has made significant improvements to its stormwater management systems.
The settlement is the latest in a series of federal enforcement actions to address stormwater violations from industrial facilities and construction sites around the country. The states of Maryland and Colorado are co-plaintiffs and have joined the proposed settlement.
Lafarge is required to pay the penalty within 30 days of the court’s approval of the settlement.”
Tuesday, November 29, 2011
“Lafarge North America Inc. Agrees to Pay $740,000 Penalty to Resolve Clean Water Act Violations in Five States
Ready-Mix Concrete Producer Agrees to Invest an Estimated $8 Million to Improve Environmental Compliance at 189 Similar Facilities in the U.S.
WASHINGTON – Lafarge North America Inc., one of the largest suppliers of construction materials in the United States and Canada, and four of its U.S. subsidiaries have agreed to resolve alleged Clean Water Act violations. The violations include unpermitted discharges of stormwater and failure to comply with stormwater permits at 21 stone, gravel, sand, asphalt and ready-mix concrete facilities in Alabama, Colorado, Georgia, Maryland and New York. Stormwater flowing over concrete manufacturing facilities can carry debris, sediment and pollutants including pesticides, petroleum products, chemicals and solvents, which can have a significant impact on water quality.
Lafarge will implement a nationwide evaluation and compliance program at 189 of its similar facilities in the United States to ensure they meet Clean Water Act requirements. Lafarge will also pay a penalty of $740,000 and implement two supplemental environmental projects, in which the company will complete conservation easements to protect approximately 166 acres in Maryland and Colorado. The value of the land has been appraised at $2.95 million. Lafarge will also implement one state environmentally beneficial project to support environmental training for state inspectors. The state project is valued at $10,000.
The comprehensive evaluation will include a compliance review of each facility’s permit, an inventory of all discharges to U.S. waters and identification of all best management practices in place. In addition, Lafarge must identify an environmental vice president responsible for coordinating oversight of compliance with stormwater requirements, at least two environmental directors and several environmental managers to oversee stormwater compliance at each operation, and an onsite operations manager at each facility. The U.S. estimates that Lafarge will spend approximately $8 million over five years to develop and maintain this compliance program.
The company will also develop and implement an extensive management, training, inspection and reporting system to increase oversight of its operations and compliance with stormwater requirements at all facilities that it owns and/or operates .
“Owners and operators of industrial facilities must take the necessary measures to comply with stormwater regulations under the Clean Water Act, which protects America’s rivers, lakes and sources of drinking water from harmful contamination,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The system-wide management controls and training that this settlement requires from Lafarge and its subsidiaries will result in better management practices and a robust compliance program at hundreds of facilities throughout the nation that will prevent harmful stormwater runoff.”
“EPA is committed to protecting America’s waters from polluted stormwater runoff,” said Cynthia Giles, Assistant Administrator for the Environmental Protection Agency’s Office of Enforcement and Compliance Assurance. “Today’s settlement will improve stormwater management at facilities across the nation, preventing harmful pollutants from being swept into local waterways.”
The complaint, filed in federal court with the settlement, alleges a pattern of violations since 2006 that were discovered after several federal inspections at the company’s facilities. The alleged violations included unpermitted discharges, violations of effluent limitations, inadequate management practices, inadequate or missing records and practices regarding stormwater compliance and monitoring, inadequate discharge monitoring and reporting, inadequate stormwater pollution prevention plans and inadequate stormwater training.
The Clean Water Act requires that industrial facilities, such as ready-mix concrete plants, sand and gravel facilities and asphalt batching plants, have controls in place to prevent pollution from being discharged with stormwater into nearby waterways. Each site must have a stormwater pollution prevention plan that sets guidelines and best management practices that the company will follow to prevent runoff from being contaminated by pollutants.
Since being notified of the violations by EPA, the company has made significant improvements to its stormwater management systems.
The settlement is the latest in a series of federal enforcement actions to address stormwater violations from industrial facilities and construction sites around the country. The states of Maryland and Colorado are co-plaintiffs and have joined the proposed settlement.
Lafarge is required to pay the penalty within 30 days of the court’s approval of the settlement.”
Friday, December 9, 2011
DETROIT CLINIC OWNER GOES TO PRISON FOR MEDICARE FRAUD
The following is from the Department of Justice website:
Friday, December 2, 2011
“Detroit-Area Clinic Owner Sentenced to 78 Months in Prison for Role in $9.1 Million Medicare Fraud Scheme
WASHINGTON – Joaquin Tasis was sentenced today to 78 months in prison for his role in a $9.1 million Detroit-area Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Tasis was sentenced by U.S. District Judge Arthur Tarnow in the Eastern District of Michigan. In addition to his prison term, Tasis was sentenced to three years of supervised release and was ordered to pay $6 million in restitution, jointly and severally with his co-defendants.
Joaquin Tasis and co-defendants Martin Tasis and Leoncio Alayon were convicted by a jury in May 2011 after a five-day trial. Evidence presented at trial showed that the Tasis brothers and their co-conspirators helped relocate a highly lucrative infusion therapy fraud scheme to Michigan from South Florida after increased law enforcement scrutiny there, and that Alayon helped the conspirators launder proceeds from the scheme. Martin Tasis was sentenced in October 2011 to 10 years in prison and two years of supervised release for his role in the scheme.
According to evidence presented at trial, Martin and Joaquin Tasis were partners in a Detroit-area clinic called Dearborn Medical Rehabilitation Center (DMRC). Evidence at trial showed that Medicare beneficiaries were not referred to DMRC by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of cash kickbacks. DMRC then billed Medicare for expensive and exotic medications, purportedly administered to treat HIV and Hepatitis-C. However, the medications were never administered.
Once Medicare started paying the co-conspirators, Martin Tasis enlisted Alayon, a family friend, to help him launder the proceeds of the fraud through a shell corporation in Florida called Infinity Research Corp. Evidence at trial showed that Infinity Research Corp. had no employees, did no research and was based at Alayon’s residence. Alayon, after taking a commission for himself, distributed the laundered proceeds to Martin and Joaquin Tasis and their co-conspirators.
Between November 2005 and March 2007, DMRC billed approximately $9.1 million in claims to Medicare for injection therapy services that were never provided and/or were not medically necessary. Medicare paid approximately $6 million of those claims. Evidence at trial showed that DMRC purchased only $36,000 in medication and medical supplies.
Joaquin Tasis was convicted of one count of conspiracy to commit health care fraud, one count of conspiracy to pay health care kickbacks and three counts of health care fraud.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
The case was prosecuted by Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section and Assistant U.S. Attorney for the Eastern District of Michigan Philip A. Ross. The FBI and HHS-OIG conducted the investigation.
Since its inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 individuals and organizations that collectively have billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”
Friday, December 2, 2011
“Detroit-Area Clinic Owner Sentenced to 78 Months in Prison for Role in $9.1 Million Medicare Fraud Scheme
WASHINGTON – Joaquin Tasis was sentenced today to 78 months in prison for his role in a $9.1 million Detroit-area Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Tasis was sentenced by U.S. District Judge Arthur Tarnow in the Eastern District of Michigan. In addition to his prison term, Tasis was sentenced to three years of supervised release and was ordered to pay $6 million in restitution, jointly and severally with his co-defendants.
Joaquin Tasis and co-defendants Martin Tasis and Leoncio Alayon were convicted by a jury in May 2011 after a five-day trial. Evidence presented at trial showed that the Tasis brothers and their co-conspirators helped relocate a highly lucrative infusion therapy fraud scheme to Michigan from South Florida after increased law enforcement scrutiny there, and that Alayon helped the conspirators launder proceeds from the scheme. Martin Tasis was sentenced in October 2011 to 10 years in prison and two years of supervised release for his role in the scheme.
According to evidence presented at trial, Martin and Joaquin Tasis were partners in a Detroit-area clinic called Dearborn Medical Rehabilitation Center (DMRC). Evidence at trial showed that Medicare beneficiaries were not referred to DMRC by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of cash kickbacks. DMRC then billed Medicare for expensive and exotic medications, purportedly administered to treat HIV and Hepatitis-C. However, the medications were never administered.
Once Medicare started paying the co-conspirators, Martin Tasis enlisted Alayon, a family friend, to help him launder the proceeds of the fraud through a shell corporation in Florida called Infinity Research Corp. Evidence at trial showed that Infinity Research Corp. had no employees, did no research and was based at Alayon’s residence. Alayon, after taking a commission for himself, distributed the laundered proceeds to Martin and Joaquin Tasis and their co-conspirators.
Between November 2005 and March 2007, DMRC billed approximately $9.1 million in claims to Medicare for injection therapy services that were never provided and/or were not medically necessary. Medicare paid approximately $6 million of those claims. Evidence at trial showed that DMRC purchased only $36,000 in medication and medical supplies.
Joaquin Tasis was convicted of one count of conspiracy to commit health care fraud, one count of conspiracy to pay health care kickbacks and three counts of health care fraud.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
The case was prosecuted by Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section and Assistant U.S. Attorney for the Eastern District of Michigan Philip A. Ross. The FBI and HHS-OIG conducted the investigation.
Since its inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 individuals and organizations that collectively have billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”
Wednesday, December 7, 2011
FORMER EXECS AT VIABLE COMMUNICATIONS SENTENCED FOR FRAUD SCHEME
The following excerpt is from the Department of Justice website:
Thursday, December 1, 2011
“Maryland-Based Viable Communications, Its Owner and a Former Executive Sentenced for Roles in $20 Million Fraud Scheme
WASHINGTON – The owner and the former vice president for corporate strategy of Viable Communications Inc. were each sentenced yesterday to 108 months and 55 months in prison, respectively, for their roles in a scheme that defrauded the Federal Communications Commission (FCC) of at least $20 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and FBI Assistant Director in Charge James W. McJunkin of the Washington Field Office.
John T. C. Yeh, the owner of Viable, a Rockville, Md., company, and his brother, Joseph Yeh, the former vice president for corporate strategy, were also ordered to pay $20 million in restitution to the FCC. Viable pleaded guilty to conspiracy to commit mail fraud and was ordered to forfeit $20 million and pay $20 million in restitution to the FCC.
John Yeh, 64, Joseph Yeh, 66, and Viable were sentenced by U.S. District Judge Joel A. Pisano in Trenton, N.J. Both executives were indicted on Nov. 19, 2009, along with Viable and other employees of Viable, and pleaded guilty to conspiring to commit mail fraud in October 2010. In connection with their sentencings, both men admitted to defrauding at least $20 million from the FCC’s Video Relay Service (VRS), a program designed to pay for services for the hearing disabled.
John Yeh and Joseph Yeh admitted that beginning in approximately fall 2007, they conspired with others to pay individuals to make fraudulent VRS phone calls using Viable’s VRS service. According to court documents, both men paid employees of Viable, who then paid others to make the fraudulent phone calls. Viable then submitted the fraudulent call minutes to the FCC and was paid approximately $390 per hour for all VRS calls that Viable processed.
VRS is an online video translation service that allows people with hearing disabilities to communicate with hearing individuals through the use of interpreters and Web cameras. A person with a hearing disability who wants to communicate with a hearing person can do so by contacting a VRS provider through an audio and video Internet connection. The VRS provider, in turn, employs a video interpreter to view and interpret the hearing disabled person’s signed conversation and relay the signed conversation orally to a hearing person. VRS is funded by fees assessed by telecommunications providers to telephone customers, and is provided at no cost to the VRS user.
These cases are being prosecuted by Deputy Chief Hank Bond Walther and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Brigham Cannon, former Trial Attorney in the Fraud Section. The cases were investigated by the FBI’s Washington Field Office, the U.S. Postal Inspection Service and the FCC Office of Inspector General.”
Thursday, December 1, 2011
“Maryland-Based Viable Communications, Its Owner and a Former Executive Sentenced for Roles in $20 Million Fraud Scheme
WASHINGTON – The owner and the former vice president for corporate strategy of Viable Communications Inc. were each sentenced yesterday to 108 months and 55 months in prison, respectively, for their roles in a scheme that defrauded the Federal Communications Commission (FCC) of at least $20 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and FBI Assistant Director in Charge James W. McJunkin of the Washington Field Office.
John T. C. Yeh, the owner of Viable, a Rockville, Md., company, and his brother, Joseph Yeh, the former vice president for corporate strategy, were also ordered to pay $20 million in restitution to the FCC. Viable pleaded guilty to conspiracy to commit mail fraud and was ordered to forfeit $20 million and pay $20 million in restitution to the FCC.
John Yeh, 64, Joseph Yeh, 66, and Viable were sentenced by U.S. District Judge Joel A. Pisano in Trenton, N.J. Both executives were indicted on Nov. 19, 2009, along with Viable and other employees of Viable, and pleaded guilty to conspiring to commit mail fraud in October 2010. In connection with their sentencings, both men admitted to defrauding at least $20 million from the FCC’s Video Relay Service (VRS), a program designed to pay for services for the hearing disabled.
John Yeh and Joseph Yeh admitted that beginning in approximately fall 2007, they conspired with others to pay individuals to make fraudulent VRS phone calls using Viable’s VRS service. According to court documents, both men paid employees of Viable, who then paid others to make the fraudulent phone calls. Viable then submitted the fraudulent call minutes to the FCC and was paid approximately $390 per hour for all VRS calls that Viable processed.
VRS is an online video translation service that allows people with hearing disabilities to communicate with hearing individuals through the use of interpreters and Web cameras. A person with a hearing disability who wants to communicate with a hearing person can do so by contacting a VRS provider through an audio and video Internet connection. The VRS provider, in turn, employs a video interpreter to view and interpret the hearing disabled person’s signed conversation and relay the signed conversation orally to a hearing person. VRS is funded by fees assessed by telecommunications providers to telephone customers, and is provided at no cost to the VRS user.
These cases are being prosecuted by Deputy Chief Hank Bond Walther and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Brigham Cannon, former Trial Attorney in the Fraud Section. The cases were investigated by the FBI’s Washington Field Office, the U.S. Postal Inspection Service and the FCC Office of Inspector General.”
Tuesday, December 6, 2011
COMPANY THAT ALLEGEDLY WENT AFTER FRAUD VICTIMS, GETS CONTEMPT SANCTIONS
The following excerpt is from the Department of Justice website:
Tuesday, November 22, 2011
“Civil Contempt Sanctions Assessed Against Arizona Company That Allegedly Targeted Fraud Victims
WASHINGTON – A federal judge in Arizona has held Mesa, Ariz.-based Business Recovery Services (BRS) and its owner, Brian Hessler, in civil contempt of court for violating the terms of a preliminary injunction, the Department of Justice announced today. BRS sells kits that the company purports help individuals who purchased so-called “ill-fated” business opportunities recover their money. The injunction required the defendants to stop charging consumers for recovery goods and services without waiting until seven business days after the customer successfully recovered money lost in a previous transaction.
U.S. District Court Judge James A. Teiborg found that the defendants, and their affiliate, Home-Based Business Consulting LLC, violated the preliminary injunction. The court ordered BRS and Hessler to refund money paid by consumers who were shown to have been sold recovery kits in violation of the order, ordered defendants to pay the government’s attorneys’ fees, and gave the defendants 30 days to change their business practices to follow the preliminary injunction before fines and coercive sanctions would be assessed.
“This is a case of adding insult to injury,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “These defendants preyed on consumers who had already lost money in scams and collected fees regardless of whether they were successful in getting back a single dime for these victims.”
The action was filed by the Justice Department’s Consumer Protection Branch on March 1, 2011, at the request of the Federal Trade Commission (FTC). In its complaint, the government alleged that BRS and Hessler telemarketed products and services they claimed would help consumers recover money they had lost to business opportunity and work-at-home operations, and sold hundreds of variations of do-it-yourself kits tailored to particular schemes and priced up to $499. The complaint asserted that the defendants violated the Telemarketing Sales Rule by misrepresenting the nature and effectiveness of their services, and by accepting payments from consumers for recovery goods and services without waiting until seven business days after the consumers received recovered money, as required by the Telemarketing Sales Rule.
At the time the suit was filed, the Department of Justice sought, and the court issued, a preliminary injunction requiring the defendants to stop charging customers for recovery goods and services in violation of the Telemarketing Sales Rule. At the hearing on the preliminary injunction, the United States established that the defendants collected money from their customers immediately upon sale of the recovery kits, without regard to when or whether the customer ever recovered any funds lost earlier. The court later held the defendants in contempt for continuing their practices in violation of the preliminary injunction.
Consumers who have been victims of telemarketing fraud should attempt to get their money back, and alert law enforcement about the violation. Steps to take that may be helpful include the following:https://help.consumerfinance.gov/app/ask_cc_complaint ; www.ftccomplaintassistant.gov/ .
Write your credit card company and dispute the amount paid that was based on fraud, if you paid with a credit card, whether or not you already paid the bill;
Write a letter to your state’s attorney general and to your local Better Business Bureau complaining about the scam, and send a copy to the person who obtained your money;
Write a letter or complain online to the Consumer Financial Protection Bureau, which supervises banks, credit unions, and other financial companies. Complaints may be filed online at:
File a complaint with the FTC. This can be done online at:
Tuesday, November 22, 2011
“Civil Contempt Sanctions Assessed Against Arizona Company That Allegedly Targeted Fraud Victims
WASHINGTON – A federal judge in Arizona has held Mesa, Ariz.-based Business Recovery Services (BRS) and its owner, Brian Hessler, in civil contempt of court for violating the terms of a preliminary injunction, the Department of Justice announced today. BRS sells kits that the company purports help individuals who purchased so-called “ill-fated” business opportunities recover their money. The injunction required the defendants to stop charging consumers for recovery goods and services without waiting until seven business days after the customer successfully recovered money lost in a previous transaction.
U.S. District Court Judge James A. Teiborg found that the defendants, and their affiliate, Home-Based Business Consulting LLC, violated the preliminary injunction. The court ordered BRS and Hessler to refund money paid by consumers who were shown to have been sold recovery kits in violation of the order, ordered defendants to pay the government’s attorneys’ fees, and gave the defendants 30 days to change their business practices to follow the preliminary injunction before fines and coercive sanctions would be assessed.
“This is a case of adding insult to injury,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “These defendants preyed on consumers who had already lost money in scams and collected fees regardless of whether they were successful in getting back a single dime for these victims.”
The action was filed by the Justice Department’s Consumer Protection Branch on March 1, 2011, at the request of the Federal Trade Commission (FTC). In its complaint, the government alleged that BRS and Hessler telemarketed products and services they claimed would help consumers recover money they had lost to business opportunity and work-at-home operations, and sold hundreds of variations of do-it-yourself kits tailored to particular schemes and priced up to $499. The complaint asserted that the defendants violated the Telemarketing Sales Rule by misrepresenting the nature and effectiveness of their services, and by accepting payments from consumers for recovery goods and services without waiting until seven business days after the consumers received recovered money, as required by the Telemarketing Sales Rule.
At the time the suit was filed, the Department of Justice sought, and the court issued, a preliminary injunction requiring the defendants to stop charging customers for recovery goods and services in violation of the Telemarketing Sales Rule. At the hearing on the preliminary injunction, the United States established that the defendants collected money from their customers immediately upon sale of the recovery kits, without regard to when or whether the customer ever recovered any funds lost earlier. The court later held the defendants in contempt for continuing their practices in violation of the preliminary injunction.
Consumers who have been victims of telemarketing fraud should attempt to get their money back, and alert law enforcement about the violation. Steps to take that may be helpful include the following:https://help.consumerfinance.gov/app/ask_cc_complaint ; www.ftccomplaintassistant.gov/ .
Write a letter to your state’s attorney general and to your local Better Business Bureau complaining about the scam, and send a copy to the person who obtained your money;
Write a letter or complain online to the Consumer Financial Protection Bureau, which supervises banks, credit unions, and other financial companies. Complaints may be filed online at:
File a complaint with the FTC. This can be done online at:
Monday, December 5, 2011
OWNER OF VIABLE COMMUNICATIONS SENTENCED FOR ROLE IN $20 MILLION FRAUD
The following excerpt is from the Department of Justice website:
Thursday, December 1, 2011
“Maryland-Based Viable Communications, Its Owner and a Former Executive Sentenced for Roles in $20 Million Fraud Scheme
WASHINGTON – The owner and the former vice president for corporate strategy of Viable Communications Inc. were each sentenced yesterday to 108 months and 55 months in prison, respectively, for their roles in a scheme that defrauded the Federal Communications Commission (FCC) of at least $20 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and FBI Assistant Director in Charge James W. McJunkin of the Washington Field Office.
John T. C. Yeh, the owner of Viable, a Rockville, Md., company, and his brother, Joseph Yeh, the former vice president for corporate strategy, were also ordered to pay $20 million in restitution to the FCC. Viable pleaded guilty to conspiracy to commit mail fraud and was ordered to forfeit $20 million and pay $20 million in restitution to the FCC.
John Yeh, 64, Joseph Yeh, 66, and Viable were sentenced by U.S. District Judge Joel A. Pisano in Trenton, N.J. Both executives were indicted on Nov. 19, 2009, along with Viable and other employees of Viable, and pleaded guilty to conspiring to commit mail fraud in October 2010. In connection with their sentencings, both men admitted to defrauding at least $20 million from the FCC’s Video Relay Service (VRS), a program designed to pay for services for the hearing disabled.
John Yeh and Joseph Yeh admitted that beginning in approximately fall 2007, they conspired with others to pay individuals to make fraudulent VRS phone calls using Viable’s VRS service. According to court documents, both men paid employees of Viable, who then paid others to make the fraudulent phone calls. Viable then submitted the fraudulent call minutes to the FCC and was paid approximately $390 per hour for all VRS calls that Viable processed.
VRS is an online video translation service that allows people with hearing disabilities to communicate with hearing individuals through the use of interpreters and Web cameras. A person with a hearing disability who wants to communicate with a hearing person can do so by contacting a VRS provider through an audio and video Internet connection. The VRS provider, in turn, employs a video interpreter to view and interpret the hearing disabled person’s signed conversation and relay the signed conversation orally to a hearing person. VRS is funded by fees assessed by telecommunications providers to telephone customers, and is provided at no cost to the VRS user.
These cases are being prosecuted by Deputy Chief Hank Bond Walther and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Brigham Cannon, former Trial Attorney in the Fraud Section. The cases were investigated by the FBI’s Washington Field Office, the U.S. Postal Inspection Service and the FCC Office of Inspector General.”
Thursday, December 1, 2011
“Maryland-Based Viable Communications, Its Owner and a Former Executive Sentenced for Roles in $20 Million Fraud Scheme
WASHINGTON – The owner and the former vice president for corporate strategy of Viable Communications Inc. were each sentenced yesterday to 108 months and 55 months in prison, respectively, for their roles in a scheme that defrauded the Federal Communications Commission (FCC) of at least $20 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and FBI Assistant Director in Charge James W. McJunkin of the Washington Field Office.
John T. C. Yeh, the owner of Viable, a Rockville, Md., company, and his brother, Joseph Yeh, the former vice president for corporate strategy, were also ordered to pay $20 million in restitution to the FCC. Viable pleaded guilty to conspiracy to commit mail fraud and was ordered to forfeit $20 million and pay $20 million in restitution to the FCC.
John Yeh, 64, Joseph Yeh, 66, and Viable were sentenced by U.S. District Judge Joel A. Pisano in Trenton, N.J. Both executives were indicted on Nov. 19, 2009, along with Viable and other employees of Viable, and pleaded guilty to conspiring to commit mail fraud in October 2010. In connection with their sentencings, both men admitted to defrauding at least $20 million from the FCC’s Video Relay Service (VRS), a program designed to pay for services for the hearing disabled.
John Yeh and Joseph Yeh admitted that beginning in approximately fall 2007, they conspired with others to pay individuals to make fraudulent VRS phone calls using Viable’s VRS service. According to court documents, both men paid employees of Viable, who then paid others to make the fraudulent phone calls. Viable then submitted the fraudulent call minutes to the FCC and was paid approximately $390 per hour for all VRS calls that Viable processed.
VRS is an online video translation service that allows people with hearing disabilities to communicate with hearing individuals through the use of interpreters and Web cameras. A person with a hearing disability who wants to communicate with a hearing person can do so by contacting a VRS provider through an audio and video Internet connection. The VRS provider, in turn, employs a video interpreter to view and interpret the hearing disabled person’s signed conversation and relay the signed conversation orally to a hearing person. VRS is funded by fees assessed by telecommunications providers to telephone customers, and is provided at no cost to the VRS user.
These cases are being prosecuted by Deputy Chief Hank Bond Walther and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Brigham Cannon, former Trial Attorney in the Fraud Section. The cases were investigated by the FBI’s Washington Field Office, the U.S. Postal Inspection Service and the FCC Office of Inspector General.”
Sunday, December 4, 2011
SEC CHARGES MORGAN STANLEY WITH VIOLATION OF SECURITIES LAWS
The following is an excerpt from the SEC website:
“Washington, D.C., Nov. 16, 2011 — The Securities and Exchange Commission today charged Morgan Stanley Investment Management (MSIM) with violating securities laws in a fee arrangement that repeatedly charged a fund and its investors for advisory services they weren’t actually receiving from a third party.
The SEC’s Enforcement Division Asset Management Unit has been focused on fee arrangements with registered funds. The SEC’s investigation found that MSIM — the primary investment adviser to The Malaysia Fund — represented to investors and the fund’s board of directors that it contracted a Malaysian-based sub-adviser to provide advice, research and assistance to MSIM for the benefit of the fund, which invests in equity securities of Malaysian companies. The sub-adviser did not provide these purported advisory services, yet the fund’s board annually renewed the contract based on MSIM’s representations for more than a decade at a total cost of $1.845 million to investors.
MSIM agreed to pay more than $3.3 million to settle the SEC’s charges.
The SEC’s Asset Management Unit has an initiative inquiring into the investment advisory contract renewal process and fee arrangements in the fund industry.
“We want to take the advisory fee setting process out of the shadows by scrutinizing the role of investment advisers and fund board members in vetting fee arrangements with registered funds,” said Robert Khuzami, Director of the SEC’s Division of Enforcement.
According to the SEC’s order instituting the settled administrative proceedings, The Malaysia Fund’s board of directors evaluated and approved the sub-adviser fees each year from 1996 to 2007 based on MSIM’s representations during what’s known as the “15(c) process.” Section 15(c) of the Investment Company Act requires an investment adviser to provide a fund’s board with information that is reasonably necessary to evaluate the terms of any contract whereby a person undertakes regularly to serve as an investment adviser of a registered investment company.
“MSIM failed in its duty to provide the fund’s board members with the information they needed to fulfill their significant responsibility of reviewing and approving the sub-adviser’s contract,” said Bruce Karpati, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “MSIM’s failure undermined the integrity of the board’s oversight process.”
According to the SEC’s order, MSIM arranged The Malaysia Fund’s sub-advisory agreement with a subsidiary of AM Bank Group, one of the largest banking groups in Malaysia. Despite the research and advisory agreement stating that the AM Bank Group subsidiary (AMMB) would provide MSIM with “investment advice, research and assistance, as [MSIM] shall from time to time reasonably request,” the SEC found that AMMB merely provided two monthly reports based on publicly available information that MSIM neither requested nor used in its management of the fund. Furthermore, MSIM’s oversight and involvement with AMMB during the relevant time period were wholly inadequate. MSIM had no written procedures specifically governing its oversight of sub-advisers, and did not have a procedure in place for reviewing work done by AMMB.
According to the SEC’s order, MSIM also was responsible for preparing and filing the fund’s annual and semi-annual reports to shareholders. The fund’s filings stated that for an advisory fee, AMMB provided MSIM with “investment advice, research and assistance.” Since AMMB was not providing any advisory services, MSIM prepared and filed false information in the annual and semi-annual reports.
“Not only did MSIM’s internal controls fail in allowing this purported services arrangement to go on, but the firm repeatedly issued reports to investors that inaccurately represented those services,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “MSIM clearly lost sight of this sub-adviser.”
According to the SEC’s order, the fund’s sub-adviser contract with AMMB was terminated in early 2008 after the SEC’s examination staff inquired into the fund’s relationship with the sub-adviser.
The SEC’s order finds that MSIM willfully violated Sections 15(c) and 34(b) of the Investment Company Act and Sections 206(2) and (4) of the Investment Advisers Act of 1940, and Rule 206(4)-7 thereunder. Without admitting or denying the SEC’s findings, MSIM agreed to a censure and to cease and desist from committing or causing any violations and any future violations of those provisions. MSIM agreed to repay the fund $1.845 million for the sub-adviser’s fees and pay a $1.5 million penalty. MSIM also agreed to implement policies and procedures specifically governing the Section 15(c) process and its oversight of service providers.
The SEC’s case was handled by Chad Alan Earnst, Christine Lynch, and Jessica Weiner, members of the Asset Management Unit in the Miami Regional Office, and Tonya Tullis, staff accountant. Karen Stevenson, Susan Schneider, and Dennis Delaney from the SEC’s Washington D.C. office conducted the related examinations. The SEC acknowledges the assistance of the Securities Commission of Malaysia and the Monetary Authority of Singapore.
The SEC’s investigation is continuing.”
“Washington, D.C., Nov. 16, 2011 — The Securities and Exchange Commission today charged Morgan Stanley Investment Management (MSIM) with violating securities laws in a fee arrangement that repeatedly charged a fund and its investors for advisory services they weren’t actually receiving from a third party.
The SEC’s Enforcement Division Asset Management Unit has been focused on fee arrangements with registered funds. The SEC’s investigation found that MSIM — the primary investment adviser to The Malaysia Fund — represented to investors and the fund’s board of directors that it contracted a Malaysian-based sub-adviser to provide advice, research and assistance to MSIM for the benefit of the fund, which invests in equity securities of Malaysian companies. The sub-adviser did not provide these purported advisory services, yet the fund’s board annually renewed the contract based on MSIM’s representations for more than a decade at a total cost of $1.845 million to investors.
MSIM agreed to pay more than $3.3 million to settle the SEC’s charges.
The SEC’s Asset Management Unit has an initiative inquiring into the investment advisory contract renewal process and fee arrangements in the fund industry.
“We want to take the advisory fee setting process out of the shadows by scrutinizing the role of investment advisers and fund board members in vetting fee arrangements with registered funds,” said Robert Khuzami, Director of the SEC’s Division of Enforcement.
According to the SEC’s order instituting the settled administrative proceedings, The Malaysia Fund’s board of directors evaluated and approved the sub-adviser fees each year from 1996 to 2007 based on MSIM’s representations during what’s known as the “15(c) process.” Section 15(c) of the Investment Company Act requires an investment adviser to provide a fund’s board with information that is reasonably necessary to evaluate the terms of any contract whereby a person undertakes regularly to serve as an investment adviser of a registered investment company.
“MSIM failed in its duty to provide the fund’s board members with the information they needed to fulfill their significant responsibility of reviewing and approving the sub-adviser’s contract,” said Bruce Karpati, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “MSIM’s failure undermined the integrity of the board’s oversight process.”
According to the SEC’s order, MSIM arranged The Malaysia Fund’s sub-advisory agreement with a subsidiary of AM Bank Group, one of the largest banking groups in Malaysia. Despite the research and advisory agreement stating that the AM Bank Group subsidiary (AMMB) would provide MSIM with “investment advice, research and assistance, as [MSIM] shall from time to time reasonably request,” the SEC found that AMMB merely provided two monthly reports based on publicly available information that MSIM neither requested nor used in its management of the fund. Furthermore, MSIM’s oversight and involvement with AMMB during the relevant time period were wholly inadequate. MSIM had no written procedures specifically governing its oversight of sub-advisers, and did not have a procedure in place for reviewing work done by AMMB.
According to the SEC’s order, MSIM also was responsible for preparing and filing the fund’s annual and semi-annual reports to shareholders. The fund’s filings stated that for an advisory fee, AMMB provided MSIM with “investment advice, research and assistance.” Since AMMB was not providing any advisory services, MSIM prepared and filed false information in the annual and semi-annual reports.
“Not only did MSIM’s internal controls fail in allowing this purported services arrangement to go on, but the firm repeatedly issued reports to investors that inaccurately represented those services,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “MSIM clearly lost sight of this sub-adviser.”
According to the SEC’s order, the fund’s sub-adviser contract with AMMB was terminated in early 2008 after the SEC’s examination staff inquired into the fund’s relationship with the sub-adviser.
The SEC’s order finds that MSIM willfully violated Sections 15(c) and 34(b) of the Investment Company Act and Sections 206(2) and (4) of the Investment Advisers Act of 1940, and Rule 206(4)-7 thereunder. Without admitting or denying the SEC’s findings, MSIM agreed to a censure and to cease and desist from committing or causing any violations and any future violations of those provisions. MSIM agreed to repay the fund $1.845 million for the sub-adviser’s fees and pay a $1.5 million penalty. MSIM also agreed to implement policies and procedures specifically governing the Section 15(c) process and its oversight of service providers.
The SEC’s case was handled by Chad Alan Earnst, Christine Lynch, and Jessica Weiner, members of the Asset Management Unit in the Miami Regional Office, and Tonya Tullis, staff accountant. Karen Stevenson, Susan Schneider, and Dennis Delaney from the SEC’s Washington D.C. office conducted the related examinations. The SEC acknowledges the assistance of the Securities Commission of Malaysia and the Monetary Authority of Singapore.
The SEC’s investigation is continuing.”
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