FROM: U.S. LABOR DEPARTMENT
Medtronic to pay $290,000 in wage discrimination lawsuit settlement
78 Hispanic workers will receive back wages under agreement with US Labor Department
BOSTON — The U.S. Department of Labor's Office of Federal Contract Compliance Programs has resolved claims of pay discrimination affecting 78 Hispanic workers employed at the Medtronic Interventional Vascular Inc. manufacturing facility in Danvers, Mass.
In court filings, OFCCP alleged that Medtronic, a federal contractor, discriminated against 78 entry-level Hispanic senior production associates by paying them less than their white counterparts, in violation of Executive Order 11246. OFCCP also filed a consent decree memorializing the settlement with the Labor Department's Office of Administrative Law Judges after the company agreed to resolve the claims.
"Pay discrimination robs workers of the wages they deserve and takes from their families countless opportunities they might have had," said OFCCP Director Patricia A. Shiu. "Because pay discrimination is often hidden from workers, OFCCP's enforcement in this area is essential. I am pleased that we were able to work with Medtronic to finally resolve this case, provide compensation to the affected workers and fix the pay practices that led to this disparity in the first place."
Under the terms of the consent decree, Medtronic will pay the affected workers $290,000 in back wages and interest for pay disparities dating back to April 2008. Furthermore, the company will conduct training on its equal employment opportunity programs for all people involved in making decisions about compensation at the Danvers facility, and ensure that all of their pay practices fully comply with the law.
Medtronic Interventional Vascular Inc. is a wholly-owned subsidiary of Medtronic Inc., based in Minneapolis, Minn. In FY 2012, Medtronic Inc. was awarded more than $33 million in federal contracts to supply medical and surgical equipment as well as laboratory supplies to numerous government agencies, including hospitals associated with the U.S. Department of Veterans Affairs.
In addition to Executive Order 11246, OFCCP enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans' Readjustment Assistance Act of 1974. These three laws require those who do business with the federal government, both contractors and subcontractors, to follow the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran.
Saturday, September 28, 2013
Friday, September 27, 2013
SEC CHARGES COMPANY AND SEVERAL EXECS WITH RUNNING A COMPANY BASED ON ILLEGAL ACTIVITY
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today charged a company in Evansville, Ind., and several executives and suppliers for posing to investors as a legitimate biodiesel production business while concealing the extensive illegal activity that accounted for 99 percent of its revenues.
The SEC alleges that when Imperial Petroleum purchased Middletown, Ind.-based E-Biofuels LLC as a subsidiary in 2010, E-Biofuels’ owners falsely represented that they were producing renewable fuel from raw agricultural products such as soybean oil and chicken fat. E-Biofuels received significant government incentives based on its biodiesel production representations. But E-Biofuels actually used middlemen to buy finished biodiesel and portrayed those purchases in fake invoices as the raw “feedstock” needed to produce biodiesel. E-Biofuels later sold the purchased biodiesel for as high as double the price it paid for it. When Imperial’s CEO Jeffrey Wilson learned that E-Biofuels was not producing biodiesel from raw materials, he allowed the scheme to continue instead of taking corrective action. Imperial’s annual revenue increased from $1 million to more than $100 million and its stock price soared as the company falsely told investors that E-Biofuels was in the business of environmentally friendly biodiesel production. Imperial’s stock price plummeted to less than 10 cents per share after the scheme fell apart, resulting in a market loss of approximately $60 million.
“Imperial Petroleum and its executives outright lied to investors about how their company turned a profit,” said Robert Burson, Associate Director of the SEC’s Chicago Regional Office. “When their illegal scheme collapsed, investors paid the price.”
The SEC’s complaint filed in federal court in Indianapolis charges Imperial Petroleum and Wilson as well as three former owners of E-Biofuels – brothers Craig and Chad Ducey of Fisher, Ind., and Brian Carmichael, who now lives in Bend, Oregon. The complaint also charges three New Jersey-based companies – Caravan Trading LLC, Cima Green LLC, and CIMA Energy Group – and their operators Joseph Furando and Evelyn Pattison (also known as Katirina Tracy) for acting as the middlemen in the scheme. They allegedly provided false and misleading documents to deceive government regulators and attract investors to Imperial.
In a separate action, the U.S. Attorney’s Office for the Southern District of Indiana today announced criminal charges.
According to the SEC’s complaint, Imperial falsely stated in its annual reports for fiscal years 2010 and 2011 that E-Biofuels produced and sold more than 28 million gallons of biodiesel from May 24, 2010 (the closing date of Imperial’s acquisition of E-Biofuels) to July 31, 2011 (end of the fiscal year). More than 99 percent of Imperial’s revenues came from E-Biofuels during this time period. Wilson, the Duceys, Carmichael, and others under their direction misrepresented to customers that the product they were selling was valid renewable fuel produced by E-Biofuels. In reality, the vast majority was biodiesel bought from the New Jersey companies and fraudulently recertified with new incentives and tax credits. The biodiesel was purchased and then resold unchanged to customers for more than $100 million.
The SEC alleges that the scheme generated gross illicit profits of more than $50 million by buying the biodiesel at or near market price, fabricating invoices describing the transactions as the purchase of soybean oil or some other legitimate type of feedstock, and falsely certifying to the Environmental Protection Agency that E-Biofuels had produced biodiesel. On some occasions, E-Biofuels pretended to blend the biodiesel in order to receive improper tax credits, or sold the fuel with the tax credits to end users. From November 2009 to January 2012, E-Biofuels created more than 52 million fraudulent renewable energy credits and $35 million in false tax credits. This illegal business model was never disclosed to Imperial’s investors or auditors.
According to the SEC’s complaint, Wilson knew by at least mid-June 2010 that E-Biofuels was not operating in the manner described in its annual report for 2010. Nonetheless, he signed and certified the accuracy of the 10-K filing. For the next three quarters and in the 10-K a year later, Imperial filed similar disclosures falsely describing the business as “biodiesel production” and misrepresenting that it used raw feedstock – primarily “premium white grease (chicken fat)” – to produce biodiesel. Wilson signed and certified the accuracy of these reports. Wilson also gave a false portrayal of the company when he had direct contact with prospective investors, including a power-point presentation with a video about E-Biofuels purportedly producing biodiesel from waste oils and greases. In reality, E-Biofuels’ business was almost entirely illegal and unsustainable.
The SEC complaint charges Imperial with violating Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), and 13(b) of the Securities Exchange Act of 1934 and various rules thereunder. Wilson, the Duceys, and Carmichael are charged with violating Section 17(a) of the Securities Act, Sections 10(b) and 13(b) of the Exchange Act, and various rules thereunder. They also are charged with aiding and abetting violations of the Exchange Act. The complaint charges Furando, Pattison, and the three New Jersey companies with aiding and abetting violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5.
The SEC’s complaint seeks disgorgement of ill-gotten gains, financial penalties, and permanent injunctions against further violations of the securities laws. The SEC seeks to bar Wilson, the Duceys, and Carmichael from acting as officers or directors of a public company.
The SEC’s investigation, which is continuing, has been conducted by Scott J. Hlavacek and James A. Davidson of the Chicago Regional Office. The SEC’s litigation will be led by John E. Birkenheier and Anne Graber Blazek. The investigation of the criminal action was conducted by the U.S. Attorney’s Office for the Southern District of Indiana, the Department of Justice’s Environmental Crimes Division, the Federal Bureau of Investigation, the Environmental Protection Agency, the Internal Revenue Service, and the Department of Agriculture.
The Securities and Exchange Commission today charged a company in Evansville, Ind., and several executives and suppliers for posing to investors as a legitimate biodiesel production business while concealing the extensive illegal activity that accounted for 99 percent of its revenues.
The SEC alleges that when Imperial Petroleum purchased Middletown, Ind.-based E-Biofuels LLC as a subsidiary in 2010, E-Biofuels’ owners falsely represented that they were producing renewable fuel from raw agricultural products such as soybean oil and chicken fat. E-Biofuels received significant government incentives based on its biodiesel production representations. But E-Biofuels actually used middlemen to buy finished biodiesel and portrayed those purchases in fake invoices as the raw “feedstock” needed to produce biodiesel. E-Biofuels later sold the purchased biodiesel for as high as double the price it paid for it. When Imperial’s CEO Jeffrey Wilson learned that E-Biofuels was not producing biodiesel from raw materials, he allowed the scheme to continue instead of taking corrective action. Imperial’s annual revenue increased from $1 million to more than $100 million and its stock price soared as the company falsely told investors that E-Biofuels was in the business of environmentally friendly biodiesel production. Imperial’s stock price plummeted to less than 10 cents per share after the scheme fell apart, resulting in a market loss of approximately $60 million.
“Imperial Petroleum and its executives outright lied to investors about how their company turned a profit,” said Robert Burson, Associate Director of the SEC’s Chicago Regional Office. “When their illegal scheme collapsed, investors paid the price.”
The SEC’s complaint filed in federal court in Indianapolis charges Imperial Petroleum and Wilson as well as three former owners of E-Biofuels – brothers Craig and Chad Ducey of Fisher, Ind., and Brian Carmichael, who now lives in Bend, Oregon. The complaint also charges three New Jersey-based companies – Caravan Trading LLC, Cima Green LLC, and CIMA Energy Group – and their operators Joseph Furando and Evelyn Pattison (also known as Katirina Tracy) for acting as the middlemen in the scheme. They allegedly provided false and misleading documents to deceive government regulators and attract investors to Imperial.
In a separate action, the U.S. Attorney’s Office for the Southern District of Indiana today announced criminal charges.
According to the SEC’s complaint, Imperial falsely stated in its annual reports for fiscal years 2010 and 2011 that E-Biofuels produced and sold more than 28 million gallons of biodiesel from May 24, 2010 (the closing date of Imperial’s acquisition of E-Biofuels) to July 31, 2011 (end of the fiscal year). More than 99 percent of Imperial’s revenues came from E-Biofuels during this time period. Wilson, the Duceys, Carmichael, and others under their direction misrepresented to customers that the product they were selling was valid renewable fuel produced by E-Biofuels. In reality, the vast majority was biodiesel bought from the New Jersey companies and fraudulently recertified with new incentives and tax credits. The biodiesel was purchased and then resold unchanged to customers for more than $100 million.
The SEC alleges that the scheme generated gross illicit profits of more than $50 million by buying the biodiesel at or near market price, fabricating invoices describing the transactions as the purchase of soybean oil or some other legitimate type of feedstock, and falsely certifying to the Environmental Protection Agency that E-Biofuels had produced biodiesel. On some occasions, E-Biofuels pretended to blend the biodiesel in order to receive improper tax credits, or sold the fuel with the tax credits to end users. From November 2009 to January 2012, E-Biofuels created more than 52 million fraudulent renewable energy credits and $35 million in false tax credits. This illegal business model was never disclosed to Imperial’s investors or auditors.
According to the SEC’s complaint, Wilson knew by at least mid-June 2010 that E-Biofuels was not operating in the manner described in its annual report for 2010. Nonetheless, he signed and certified the accuracy of the 10-K filing. For the next three quarters and in the 10-K a year later, Imperial filed similar disclosures falsely describing the business as “biodiesel production” and misrepresenting that it used raw feedstock – primarily “premium white grease (chicken fat)” – to produce biodiesel. Wilson signed and certified the accuracy of these reports. Wilson also gave a false portrayal of the company when he had direct contact with prospective investors, including a power-point presentation with a video about E-Biofuels purportedly producing biodiesel from waste oils and greases. In reality, E-Biofuels’ business was almost entirely illegal and unsustainable.
The SEC complaint charges Imperial with violating Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), and 13(b) of the Securities Exchange Act of 1934 and various rules thereunder. Wilson, the Duceys, and Carmichael are charged with violating Section 17(a) of the Securities Act, Sections 10(b) and 13(b) of the Exchange Act, and various rules thereunder. They also are charged with aiding and abetting violations of the Exchange Act. The complaint charges Furando, Pattison, and the three New Jersey companies with aiding and abetting violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5.
The SEC’s complaint seeks disgorgement of ill-gotten gains, financial penalties, and permanent injunctions against further violations of the securities laws. The SEC seeks to bar Wilson, the Duceys, and Carmichael from acting as officers or directors of a public company.
The SEC’s investigation, which is continuing, has been conducted by Scott J. Hlavacek and James A. Davidson of the Chicago Regional Office. The SEC’s litigation will be led by John E. Birkenheier and Anne Graber Blazek. The investigation of the criminal action was conducted by the U.S. Attorney’s Office for the Southern District of Indiana, the Department of Justice’s Environmental Crimes Division, the Federal Bureau of Investigation, the Environmental Protection Agency, the Internal Revenue Service, and the Department of Agriculture.
Thursday, September 26, 2013
CITGO PETROLEUM CORP. TO PAY PENALTY AND IMPLEMENT PROJECTS TO REDUCE AIR POLLUTION
FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY
Thursday, September 19, 2013
Citgo Agrees to Reduce Air Pollution and Pay Penalty to Resolve Clean Air Act Violations at Two Refineries
The Department of Justice and U.S. Environmental Protection Agency (EPA) announced that Houston-based CITGO Petroleum Corp. (CITGO) has agreed to pay a $737,000 civil penalty and to implement projects to reduce harmful air pollution, resolving alleged violations of the Clean Air Act (CAA) at its petroleum refining facilities located in Lemont, Ill., and Lake Charles (Westlake), La.
In addition to the penalty, today’s settlement, lodged in U.S. District Court for the Southern District of Texas, requires that CITGO implement projects that are expected to reduce emissions of volatile organic compounds (VOCs), including toxics, by more than 100 tons over the next five years.
“The terms of this settlement require projects to significantly reduce harmful air pollution, including reductions in benzene emissions and other cancer-causing air toxics,” said Robert G. Dreher, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “This agreement will benefit communities across the United States with cleaner healthier air and will bring mobile sources of pollution under control, according to the standards of the Clean Air Act.”
“Producing fuel for cars sold in the U.S. carries a requirement to meet Clean Air Act standards,” said Cynthia Giles, Assistant Administrator for EPA's Office of Enforcement and Compliance Assurance. “The innovative technologies that CITGO is required to install will reduce the impact of its fuel production on the environment and help protect communities from harmful air pollution.”
To reduce VOC emissions, including toxics, the settlement requires that CITGO install and maintain a geodesic dome on one of the fuel storage tanks at its Lemont refinery, as well as carbon adsorption systems on two fuel storage tanks at its Lake Charles refinery.
In a complaint filed at the same time as the settlement, EPA alleged that the Lake Charles refinery produced fuel that exceeded the refinery’s annual average emissions limit for mobile source air toxics, including benzene. EPA further alleged that CITGO failed to sample and test reformulated gasoline blendstock at its Lemont refinery, as required by the CAA.
The CAA requires that all fuel produced, imported, and sold in the United States meet certain emissions standards for harmful pollutants, such as benzene and other cancer-causing air toxics. Air toxics emissions from vehicles and other mobile sources are of particular concern in the areas closest to where they are emitted, but can also be transported long distances, affecting the health and welfare of people in other geographic areas. Some of these toxic compounds can persist in the environment and bioaccumulate in the food chain, further spreading their harmful effects.
The sampling, testing, recordkeeping, and reporting requirements of the fuels program provide the foundation for EPA’s compliance program. Refiners that violate these requirements undermine the integrity of the fuels regulations and hinder the Agency’s ability to ensure gasoline complies with fuel quality and performance standards, potentially leading to an increase in harmful air pollution. Today’s settlement supports EPA’s efforts to reduce toxic air pollution from facilities that threaten communities and the environment.
CITGO is a refiner and marketer of transportation fuels, lubricants, petrochemicals and other industrial products. CITGO is owned by PDV America Inc., an indirect, wholly-owned subsidiary of Petróleos de Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of Venezuela.
Thursday, September 19, 2013
Citgo Agrees to Reduce Air Pollution and Pay Penalty to Resolve Clean Air Act Violations at Two Refineries
The Department of Justice and U.S. Environmental Protection Agency (EPA) announced that Houston-based CITGO Petroleum Corp. (CITGO) has agreed to pay a $737,000 civil penalty and to implement projects to reduce harmful air pollution, resolving alleged violations of the Clean Air Act (CAA) at its petroleum refining facilities located in Lemont, Ill., and Lake Charles (Westlake), La.
In addition to the penalty, today’s settlement, lodged in U.S. District Court for the Southern District of Texas, requires that CITGO implement projects that are expected to reduce emissions of volatile organic compounds (VOCs), including toxics, by more than 100 tons over the next five years.
“The terms of this settlement require projects to significantly reduce harmful air pollution, including reductions in benzene emissions and other cancer-causing air toxics,” said Robert G. Dreher, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “This agreement will benefit communities across the United States with cleaner healthier air and will bring mobile sources of pollution under control, according to the standards of the Clean Air Act.”
“Producing fuel for cars sold in the U.S. carries a requirement to meet Clean Air Act standards,” said Cynthia Giles, Assistant Administrator for EPA's Office of Enforcement and Compliance Assurance. “The innovative technologies that CITGO is required to install will reduce the impact of its fuel production on the environment and help protect communities from harmful air pollution.”
To reduce VOC emissions, including toxics, the settlement requires that CITGO install and maintain a geodesic dome on one of the fuel storage tanks at its Lemont refinery, as well as carbon adsorption systems on two fuel storage tanks at its Lake Charles refinery.
In a complaint filed at the same time as the settlement, EPA alleged that the Lake Charles refinery produced fuel that exceeded the refinery’s annual average emissions limit for mobile source air toxics, including benzene. EPA further alleged that CITGO failed to sample and test reformulated gasoline blendstock at its Lemont refinery, as required by the CAA.
The CAA requires that all fuel produced, imported, and sold in the United States meet certain emissions standards for harmful pollutants, such as benzene and other cancer-causing air toxics. Air toxics emissions from vehicles and other mobile sources are of particular concern in the areas closest to where they are emitted, but can also be transported long distances, affecting the health and welfare of people in other geographic areas. Some of these toxic compounds can persist in the environment and bioaccumulate in the food chain, further spreading their harmful effects.
The sampling, testing, recordkeeping, and reporting requirements of the fuels program provide the foundation for EPA’s compliance program. Refiners that violate these requirements undermine the integrity of the fuels regulations and hinder the Agency’s ability to ensure gasoline complies with fuel quality and performance standards, potentially leading to an increase in harmful air pollution. Today’s settlement supports EPA’s efforts to reduce toxic air pollution from facilities that threaten communities and the environment.
CITGO is a refiner and marketer of transportation fuels, lubricants, petrochemicals and other industrial products. CITGO is owned by PDV America Inc., an indirect, wholly-owned subsidiary of Petróleos de Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of Venezuela.
Wednesday, September 25, 2013
UBS SECURITIES JAPAN CO. LTD SENTENCED FOR MANIPULATION OF LIBOR
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, September 18, 2013
UBS Securities Japan Co. Ltd Sentenced for Long-running Manipulation of Libor
UBS Securities Japan Co. Ltd. (UBS Securities Japan), an investment bank, financial advisory securities firm and wholly-owned subsidiary of UBS AG, was sentenced today for its role in manipulating the London Interbank Offered Rate (LIBOR), a leading benchmark used in financial products and transactions around the world, the Justice Department announced.
UBS Securities Japan was sentenced by U.S. District Judge Robert N. Chatigny in the District of Connecticut. UBS Securities Japan pleaded guilty on Dec. 19, 2012, to one count of engaging in a scheme to defraud counterparties to interest rate derivative trades by secretly manipulating LIBOR benchmark interest rates. UBS Securities Japan signed a plea agreement with the government in which it admitted its criminal conduct and agreed to pay a $100 million fine, which the court accepted in imposing sentence. In addition, UBS AG, the Zurich-based parent company of UBS Securities Japan, entered into a non-prosecution agreement (NPA) with the government requiring UBS AG to pay an additional $400 million penalty, to admit and accept responsibility for its misconduct as set forth in an extensive statement of facts and to continue cooperating with the Justice Department in its ongoing investigation. The NPA reflects UBS AG’s substantial cooperation in discovering and disclosing LIBOR misconduct within the financial institution and recognizes the significant remedial measures undertaken by new management to enhance internal controls.
Together with approximately $1 billion in regulatory penalties and disgorgement – $700 million as a result of a Commodity Futures Trading Commission (CFTC) action; $259.2 million as a result of a U.K. Financial Conduct Authority (FCA) action; and $64.3 million as a result of a Swiss Financial Market Supervisory Authority (FINMA) action – the Justice Department’s criminal penalties bring the total amount of the resolution to more than $1.5 billion.
“This action, and the resulting sentence, prove that no individual or firm is above the law – no matter what,” said Attorney General Eric Holder. “The Department of Justice will continue to stand vigilant against corporations or individuals who threaten the integrity of our financial markets, undermine the stability of our economy, or jeopardize the well-being of our citizens. And, when supported by the facts and the law, we will never hesitate to use every tool and authority available to us to hold accountable those who illegally take advantage of others for their own financial gain.”
“Through its guilty plea and sentence, UBS has been held to account for deliberately manipulating LIBOR, one of the cornerstone interest rates in our global financial system,” said Acting Assistant Attorney General Mythili Raman of the Criminal Division. “The $1.5 billion global resolution against UBS – of which this guilty plea and sentence are a critical element – is just one of several actions we have taken against financial firms throughout the world that sought to illegally influence LIBOR. As we continue our active and ongoing investigation of the manipulation of LIBOR, our prosecutors and agents will continue to tenaciously follow the evidence wherever it leads. Neither UBS, nor the individual UBS defendants we have charged in connection with this sophisticated scheme, nor any other bank or individual, is above the law.”
According to documents filed in these cases, LIBOR is an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if borrowing from other banks. LIBOR serves as the primary benchmark for short-term interest rates globally, and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products. The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were estimated at approximately $450 trillion.
LIBOR, published by the British Bankers’ Association (BBA), a trade association based in London, is calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year. The LIBOR for a given currency at a specific maturity is the result of a calculation based upon submissions from a panel of banks.
Beginning in September 2006, UBS Securities Japan and a senior trader employed in the Tokyo office of UBS Securities Japan orchestrated a sustained, wide-ranging and systematic scheme to move Yen LIBOR in a direction favorable to the trader’s trading positions, defrauding UBS’s counterparties and harming others with financial products referencing Yen LIBOR who were unaware of the manipulation. Between November 2006 and August 2009, the senior trader or a colleague of the senior trader endeavored to manipulate Yen LIBOR on at least 335 of the 738 trading days in that period, and during some periods on almost a daily basis. Because of the large size of the senior trader’s positions, even slight moves of a fraction of a percent in Yen LIBOR could generate large profits. For example, the senior trader once estimated that a 0.01 percent movement in the final Yen LIBOR fixing on a specific date could result in a $2 million profit for UBS.
According to the charging documents, UBS Securities Japan and the senior trader employed three strategies to execute the scheme: causing UBS to make false and misleading Yen LIBOR submissions to the BBA; causing cash brokerage firms, which purported to provide market information regarding LIBOR to panel banks, to disseminate false and misleading information about short-term interest rates for Yen, which those banks could and did rely upon in formulating their own LIBOR submissions to the BBA; and communicating with interest rate derivatives traders employed at three other Yen LIBOR panel banks in an effort to cause them to make false and misleading Yen LIBOR submissions to the BBA.
In entering into the NPA with UBS AG, the Justice Department considered information from UBS and from regulatory agencies in Switzerland and Japan demonstrating that in the last two years UBS has made important and positive changes in its management, compliance and training to ensure adherence to the law. The Department received favorable reports from the FINMA and the Japan Financial Services Authority (JFSA) describing, respectively, progress that UBS has made in its approach to compliance and enforcement and UBS Securities Japan’s effective implementation of the remedial measures the JFSA imposed based on findings relating to the attempted manipulation of Yen benchmarks.
The investigation was conducted by the FBI’s Washington Field Office. The prosecution is being handled by Deputy Chiefs Daniel Braun and William Stellmach and Trial Attorneys Thomas B.W. Hall and Sandra L. Moser, along with former Trial Attorney Luke Marsh, of the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Eric Glover and Liam Brennan of the U.S. Attorney’s Office for the District of Connecticut have provided valuable assistance. The Criminal Division’s Office of International Affairs also provided assistance in this matter.
The investigation leading to these cases has required, and has greatly benefited from, a diligent and wide-ranging cooperative effort among various enforcement agencies both in the United States and abroad. The Justice Department acknowledges and expresses its deep appreciation for this assistance. In particular, the CFTC’s Division of Enforcement referred this matter to the Department and, along with the FCA, has played a major role in the investigation. The SEC has also played a significant role in the LIBOR series of investigations and, among other efforts, has made an invaluable contribution to the investigation relating to UBS. The Department of Justice also wishes to acknowledge and thank FINMA, the Japanese Ministry of Justice, and the JFSA. Various agencies and enforcement authorities from other nations also have participated in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the Department is grateful for their cooperation and assistance.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.
Wednesday, September 18, 2013
UBS Securities Japan Co. Ltd Sentenced for Long-running Manipulation of Libor
UBS Securities Japan Co. Ltd. (UBS Securities Japan), an investment bank, financial advisory securities firm and wholly-owned subsidiary of UBS AG, was sentenced today for its role in manipulating the London Interbank Offered Rate (LIBOR), a leading benchmark used in financial products and transactions around the world, the Justice Department announced.
UBS Securities Japan was sentenced by U.S. District Judge Robert N. Chatigny in the District of Connecticut. UBS Securities Japan pleaded guilty on Dec. 19, 2012, to one count of engaging in a scheme to defraud counterparties to interest rate derivative trades by secretly manipulating LIBOR benchmark interest rates. UBS Securities Japan signed a plea agreement with the government in which it admitted its criminal conduct and agreed to pay a $100 million fine, which the court accepted in imposing sentence. In addition, UBS AG, the Zurich-based parent company of UBS Securities Japan, entered into a non-prosecution agreement (NPA) with the government requiring UBS AG to pay an additional $400 million penalty, to admit and accept responsibility for its misconduct as set forth in an extensive statement of facts and to continue cooperating with the Justice Department in its ongoing investigation. The NPA reflects UBS AG’s substantial cooperation in discovering and disclosing LIBOR misconduct within the financial institution and recognizes the significant remedial measures undertaken by new management to enhance internal controls.
Together with approximately $1 billion in regulatory penalties and disgorgement – $700 million as a result of a Commodity Futures Trading Commission (CFTC) action; $259.2 million as a result of a U.K. Financial Conduct Authority (FCA) action; and $64.3 million as a result of a Swiss Financial Market Supervisory Authority (FINMA) action – the Justice Department’s criminal penalties bring the total amount of the resolution to more than $1.5 billion.
“This action, and the resulting sentence, prove that no individual or firm is above the law – no matter what,” said Attorney General Eric Holder. “The Department of Justice will continue to stand vigilant against corporations or individuals who threaten the integrity of our financial markets, undermine the stability of our economy, or jeopardize the well-being of our citizens. And, when supported by the facts and the law, we will never hesitate to use every tool and authority available to us to hold accountable those who illegally take advantage of others for their own financial gain.”
“Through its guilty plea and sentence, UBS has been held to account for deliberately manipulating LIBOR, one of the cornerstone interest rates in our global financial system,” said Acting Assistant Attorney General Mythili Raman of the Criminal Division. “The $1.5 billion global resolution against UBS – of which this guilty plea and sentence are a critical element – is just one of several actions we have taken against financial firms throughout the world that sought to illegally influence LIBOR. As we continue our active and ongoing investigation of the manipulation of LIBOR, our prosecutors and agents will continue to tenaciously follow the evidence wherever it leads. Neither UBS, nor the individual UBS defendants we have charged in connection with this sophisticated scheme, nor any other bank or individual, is above the law.”
According to documents filed in these cases, LIBOR is an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if borrowing from other banks. LIBOR serves as the primary benchmark for short-term interest rates globally, and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products. The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were estimated at approximately $450 trillion.
LIBOR, published by the British Bankers’ Association (BBA), a trade association based in London, is calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year. The LIBOR for a given currency at a specific maturity is the result of a calculation based upon submissions from a panel of banks.
Beginning in September 2006, UBS Securities Japan and a senior trader employed in the Tokyo office of UBS Securities Japan orchestrated a sustained, wide-ranging and systematic scheme to move Yen LIBOR in a direction favorable to the trader’s trading positions, defrauding UBS’s counterparties and harming others with financial products referencing Yen LIBOR who were unaware of the manipulation. Between November 2006 and August 2009, the senior trader or a colleague of the senior trader endeavored to manipulate Yen LIBOR on at least 335 of the 738 trading days in that period, and during some periods on almost a daily basis. Because of the large size of the senior trader’s positions, even slight moves of a fraction of a percent in Yen LIBOR could generate large profits. For example, the senior trader once estimated that a 0.01 percent movement in the final Yen LIBOR fixing on a specific date could result in a $2 million profit for UBS.
According to the charging documents, UBS Securities Japan and the senior trader employed three strategies to execute the scheme: causing UBS to make false and misleading Yen LIBOR submissions to the BBA; causing cash brokerage firms, which purported to provide market information regarding LIBOR to panel banks, to disseminate false and misleading information about short-term interest rates for Yen, which those banks could and did rely upon in formulating their own LIBOR submissions to the BBA; and communicating with interest rate derivatives traders employed at three other Yen LIBOR panel banks in an effort to cause them to make false and misleading Yen LIBOR submissions to the BBA.
In entering into the NPA with UBS AG, the Justice Department considered information from UBS and from regulatory agencies in Switzerland and Japan demonstrating that in the last two years UBS has made important and positive changes in its management, compliance and training to ensure adherence to the law. The Department received favorable reports from the FINMA and the Japan Financial Services Authority (JFSA) describing, respectively, progress that UBS has made in its approach to compliance and enforcement and UBS Securities Japan’s effective implementation of the remedial measures the JFSA imposed based on findings relating to the attempted manipulation of Yen benchmarks.
The investigation was conducted by the FBI’s Washington Field Office. The prosecution is being handled by Deputy Chiefs Daniel Braun and William Stellmach and Trial Attorneys Thomas B.W. Hall and Sandra L. Moser, along with former Trial Attorney Luke Marsh, of the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Eric Glover and Liam Brennan of the U.S. Attorney’s Office for the District of Connecticut have provided valuable assistance. The Criminal Division’s Office of International Affairs also provided assistance in this matter.
The investigation leading to these cases has required, and has greatly benefited from, a diligent and wide-ranging cooperative effort among various enforcement agencies both in the United States and abroad. The Justice Department acknowledges and expresses its deep appreciation for this assistance. In particular, the CFTC’s Division of Enforcement referred this matter to the Department and, along with the FCA, has played a major role in the investigation. The SEC has also played a significant role in the LIBOR series of investigations and, among other efforts, has made an invaluable contribution to the investigation relating to UBS. The Department of Justice also wishes to acknowledge and thank FINMA, the Japanese Ministry of Justice, and the JFSA. Various agencies and enforcement authorities from other nations also have participated in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the Department is grateful for their cooperation and assistance.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.
Tuesday, September 24, 2013
3 CORPORATIONS, 6 INDIVIDUALS CHARGED IN BIOFUELS FRAUD SCHEME
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, September 18, 2013
Six Individuals, Three Corporations Charged in Indiana-based Biofuels Fraud Scheme
The Justice Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Southern District of Indiana announced today the return of two indictments against six individuals and three companies for offenses involving federal renewable fuel programs, allegedly creating losses to victims totaling more than $100 million. The 88 counts included in the three charging documents include allegations of conspiracy, wire fraud, false tax claims, false statements under the Clean Air Act, obstruction of justice, money laundering and securities fraud.
“Congress enacted incentives for the production of biofuels to make the United States stronger and more energy independent,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Fraud by parties claiming such incentives threatens these important public policies. The Justice Department will vigorously prosecute those seeking to line their pockets using scams like those alleged in this indictment.”
“This morning, federal agents brought into custody individuals who allegedly operated the largest tax and securities fraud scheme in Indiana history,” said U.S. Attorney for the Southern District of Indiana Joseph H. Hogsett. “This case represents a collaborative effort on the part of law enforcement to hold fully accountable those who seek personal profit at the taxpayer’s expense.”
“The Renewable Fuel Standard Program was designed to achieve greenhouse gas emission reductions, promote energy independence and expand our nation’s renewable fuels sector,” said Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance, Environmental Protection Agency (EPA). “Today’s action supports these goals by protecting the integrity of the biofuel market. Those that cheat the system are breaking the law, and undermine our commitment to protect public health and the environment.”
“We are proud to work with our federal partners to identify and investigate groups that manipulate and utilize federal government programs to line their pockets by fraud,” said Robert A. Jones, Special Agent in Charge of the FBI Indianapolis Division. “In doing so, they deceive their customers, their shareholders, and the American public. The FBI will continue the fight against this dishonest and fraudulent behavior which harms the American people and the American economy.”
“The indictments returned today send a loud message that IRS Criminal Investigation operates year round to protect the integrity of our tax system and today is a victory for the American people,” said James C. Lee, Special Agent in Charge, IRS Criminal Investigation. “Together with the cooperative efforts of our law enforcement partners, we were able to identify and vigorously investigate the fraud involved in this scheme.”
The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production of biodiesel. A dollar-per-gallon tax credit was available only to the first person to blend the pure biodiesel (known as B100) with petroleum diesel. After the biodiesel was blended and the tax credit claimed, the resulting product was generally known in the industry as B99, meaning that it was approximately 99 percent biodiesel and 1 percent petroleum diesel. Additionally, biodiesel producers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. These two incentives were available only once for any given volume of biodiesel. For these reasons, a gallon of B100 with RINs and an available tax credit was worth much more than a gallon of RIN-stripped B99. At times during the conspiracy, a gallon of B100 was worth up to $2.50 more than an equivalent gallon of B99.
Four of the defendants—Craig Ducey, Chad Ducey, Chris Ducey and Brian Carmichael— operated E Biofuels, a Middletown, Indiana company that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. The government alleges that these defendants conspired with Joseph Furando and Evelyn Katirina Pattison—two executives with a pair of related New Jersey-based companies that operated under the names Caravan Trading Company and CIMA Green—to purchase RIN-stripped B99 from third parties, pretend that E-Biofuels had produced that fuel at its Middletown facility and fraudulently resell that fuel to customers as B100 with RINs and an available tax credit. While the E-Biofuels facility was capable of producing B100, at times during the conspiracy it was producing no fuel of its own, but instead was simply acting as a pass-through facility for fuel purchased elsewhere.
The indictment alleges that beginning in July 2009 and continuing until May 2012, these defendants fraudulently sold more than 35 million gallons of RIN-stripped B99 to unwitting customers who paid an inflated price, thinking they were purchasing B100 with RINs and an available tax credit. All told, the customers were allegedly defrauded of more than $55 million as a result of these activities and the Internal Revenue Service was exposed to as much as $35 million in false claims.
The government alleges that the defendants delivered the fraudulently mislabeled fuel to the victims in one of three ways. In some cases, the biodiesel was transported from fuel terminals to the E-Biofuels facility in Middletown where it was unloaded into a holding tank. A short time later, the biodiesel would be reloaded into tanker trucks and delivered to unsuspecting customers along with fraudulent paperwork that misidentified it as B100 with RINs produced by E-Biofuels. On other occasions, the truck drivers did not unload the fuel when they arrived at Middletown plant. Instead, they simply picked up paperwork falsely stating that the truck contained a load of B100 with RINs that originated at the E-Biofuels facility. The truck drivers referred to this procedure as “flipping a load.”
Finally, in the most egregious instances, the truck drivers hauled RIN-stripped B99 from fuel terminals directly to customers. Because these loads never went to the E-Biofuels facility they were known as “ghost loads” or “phantom loads.” In those cases, the defendants faxed or e-mailed the false paperwork to the truck drivers along their routes between the fuel terminals and the customer locations.
In May 2010, E-Biofuels was purchased by Imperial Petroleum, a publicly traded company based in Evansville. After the acquisition, E-Biofuels accounted for more than 97% of Imperial Petroleum’s operating income. Defendant Jeffrey Wilson was the president and chief executive officer of Imperial Petroleum.
The government alleges that Jeffrey Wilson and Craig Ducey knew that E-Biofuels was purchasing biodiesel from third parties instead of making its own biodiesel. They hid this fact from Imperial’s investors, shareholders and outside auditors by falsely stating that E-Biofuels produced biodiesel from chicken fat and other feedstocks. They made these and other related false statements and omissions in Imperial Petroleum’s annual and quarterly reports filed with the Securities and Exchange Commission and in written and oral communications with Imperial Petroleum’s investors and outside auditors.
If found guilty, the six individuals charged by indictment face up to 20 years in federal prison on some counts, as well as significant fines. The three companies indicted today also face significant fines and other regulatory action. The defendants were scheduled for initial appearances before a federal magistrate judge today.
An additional defendant was charged today by federal information, and has petitioned the court to enter a plea of guilty and cooperate with investigators. Brian Carmichael was charged with one count of conspiracy to defraud the United States. Carmichael has filed a petition with the court indicating his willingness to plead guilty to this charge. Carmichael faces up to five years in federal prison if convicted.
The case is being prosecuted by Senior Litigation Counsel Steven D. DeBrota of the U.S. Attorney’s Office, along with Senior Counsel Thomas Ballantine of the Environmental Crimes Section in the Department of Justice’s Environment and Natural Resources Division, and Jake Schmidt, a Special Assistant U.S. Attorney of the U.S. Attorney’s Office and Senior Attorney for the Securities and Exchange Commission.
An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
The collaborative investigation that led to today’s arrests was the result of work by the EPA’s Criminal Investigation Division, the Internal Revenue Service Criminal Investigation, the FBI, the Securities and Exchange Commission, as well as the U.S. Department of Agriculture and the Indiana Department of Environmental Management.
Wednesday, September 18, 2013
Six Individuals, Three Corporations Charged in Indiana-based Biofuels Fraud Scheme
The Justice Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Southern District of Indiana announced today the return of two indictments against six individuals and three companies for offenses involving federal renewable fuel programs, allegedly creating losses to victims totaling more than $100 million. The 88 counts included in the three charging documents include allegations of conspiracy, wire fraud, false tax claims, false statements under the Clean Air Act, obstruction of justice, money laundering and securities fraud.
“Congress enacted incentives for the production of biofuels to make the United States stronger and more energy independent,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Fraud by parties claiming such incentives threatens these important public policies. The Justice Department will vigorously prosecute those seeking to line their pockets using scams like those alleged in this indictment.”
“This morning, federal agents brought into custody individuals who allegedly operated the largest tax and securities fraud scheme in Indiana history,” said U.S. Attorney for the Southern District of Indiana Joseph H. Hogsett. “This case represents a collaborative effort on the part of law enforcement to hold fully accountable those who seek personal profit at the taxpayer’s expense.”
“The Renewable Fuel Standard Program was designed to achieve greenhouse gas emission reductions, promote energy independence and expand our nation’s renewable fuels sector,” said Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance, Environmental Protection Agency (EPA). “Today’s action supports these goals by protecting the integrity of the biofuel market. Those that cheat the system are breaking the law, and undermine our commitment to protect public health and the environment.”
“We are proud to work with our federal partners to identify and investigate groups that manipulate and utilize federal government programs to line their pockets by fraud,” said Robert A. Jones, Special Agent in Charge of the FBI Indianapolis Division. “In doing so, they deceive their customers, their shareholders, and the American public. The FBI will continue the fight against this dishonest and fraudulent behavior which harms the American people and the American economy.”
“The indictments returned today send a loud message that IRS Criminal Investigation operates year round to protect the integrity of our tax system and today is a victory for the American people,” said James C. Lee, Special Agent in Charge, IRS Criminal Investigation. “Together with the cooperative efforts of our law enforcement partners, we were able to identify and vigorously investigate the fraud involved in this scheme.”
The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production of biodiesel. A dollar-per-gallon tax credit was available only to the first person to blend the pure biodiesel (known as B100) with petroleum diesel. After the biodiesel was blended and the tax credit claimed, the resulting product was generally known in the industry as B99, meaning that it was approximately 99 percent biodiesel and 1 percent petroleum diesel. Additionally, biodiesel producers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. These two incentives were available only once for any given volume of biodiesel. For these reasons, a gallon of B100 with RINs and an available tax credit was worth much more than a gallon of RIN-stripped B99. At times during the conspiracy, a gallon of B100 was worth up to $2.50 more than an equivalent gallon of B99.
Four of the defendants—Craig Ducey, Chad Ducey, Chris Ducey and Brian Carmichael— operated E Biofuels, a Middletown, Indiana company that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. The government alleges that these defendants conspired with Joseph Furando and Evelyn Katirina Pattison—two executives with a pair of related New Jersey-based companies that operated under the names Caravan Trading Company and CIMA Green—to purchase RIN-stripped B99 from third parties, pretend that E-Biofuels had produced that fuel at its Middletown facility and fraudulently resell that fuel to customers as B100 with RINs and an available tax credit. While the E-Biofuels facility was capable of producing B100, at times during the conspiracy it was producing no fuel of its own, but instead was simply acting as a pass-through facility for fuel purchased elsewhere.
The indictment alleges that beginning in July 2009 and continuing until May 2012, these defendants fraudulently sold more than 35 million gallons of RIN-stripped B99 to unwitting customers who paid an inflated price, thinking they were purchasing B100 with RINs and an available tax credit. All told, the customers were allegedly defrauded of more than $55 million as a result of these activities and the Internal Revenue Service was exposed to as much as $35 million in false claims.
The government alleges that the defendants delivered the fraudulently mislabeled fuel to the victims in one of three ways. In some cases, the biodiesel was transported from fuel terminals to the E-Biofuels facility in Middletown where it was unloaded into a holding tank. A short time later, the biodiesel would be reloaded into tanker trucks and delivered to unsuspecting customers along with fraudulent paperwork that misidentified it as B100 with RINs produced by E-Biofuels. On other occasions, the truck drivers did not unload the fuel when they arrived at Middletown plant. Instead, they simply picked up paperwork falsely stating that the truck contained a load of B100 with RINs that originated at the E-Biofuels facility. The truck drivers referred to this procedure as “flipping a load.”
Finally, in the most egregious instances, the truck drivers hauled RIN-stripped B99 from fuel terminals directly to customers. Because these loads never went to the E-Biofuels facility they were known as “ghost loads” or “phantom loads.” In those cases, the defendants faxed or e-mailed the false paperwork to the truck drivers along their routes between the fuel terminals and the customer locations.
In May 2010, E-Biofuels was purchased by Imperial Petroleum, a publicly traded company based in Evansville. After the acquisition, E-Biofuels accounted for more than 97% of Imperial Petroleum’s operating income. Defendant Jeffrey Wilson was the president and chief executive officer of Imperial Petroleum.
The government alleges that Jeffrey Wilson and Craig Ducey knew that E-Biofuels was purchasing biodiesel from third parties instead of making its own biodiesel. They hid this fact from Imperial’s investors, shareholders and outside auditors by falsely stating that E-Biofuels produced biodiesel from chicken fat and other feedstocks. They made these and other related false statements and omissions in Imperial Petroleum’s annual and quarterly reports filed with the Securities and Exchange Commission and in written and oral communications with Imperial Petroleum’s investors and outside auditors.
If found guilty, the six individuals charged by indictment face up to 20 years in federal prison on some counts, as well as significant fines. The three companies indicted today also face significant fines and other regulatory action. The defendants were scheduled for initial appearances before a federal magistrate judge today.
An additional defendant was charged today by federal information, and has petitioned the court to enter a plea of guilty and cooperate with investigators. Brian Carmichael was charged with one count of conspiracy to defraud the United States. Carmichael has filed a petition with the court indicating his willingness to plead guilty to this charge. Carmichael faces up to five years in federal prison if convicted.
The case is being prosecuted by Senior Litigation Counsel Steven D. DeBrota of the U.S. Attorney’s Office, along with Senior Counsel Thomas Ballantine of the Environmental Crimes Section in the Department of Justice’s Environment and Natural Resources Division, and Jake Schmidt, a Special Assistant U.S. Attorney of the U.S. Attorney’s Office and Senior Attorney for the Securities and Exchange Commission.
An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
The collaborative investigation that led to today’s arrests was the result of work by the EPA’s Criminal Investigation Division, the Internal Revenue Service Criminal Investigation, the FBI, the Securities and Exchange Commission, as well as the U.S. Department of Agriculture and the Indiana Department of Environmental Management.
Monday, September 23, 2013
OWNERS OF 'MO' MONEY TAXES' BARRED FROM TAX PREPARATION BUSINESS
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, September 18, 2013
Tennessee Federal Court Bars the Owners of Mo’ Money Taxes from Owning, Operating, Licensing or Franchsing a Tax Return Preparation Business and Preparing Tax Returns for Others
Memphis, Tenn.-Based Chain and Related Entities Allegedly Engaged in Misconduct
A federal court in Memphis, Tenn., permanently barred the owners of Mo’ Money Taxes, Markey Granberry and Derrick Robinson, as well as a former Mo’ Money manager, Eumora Reese, from preparing tax returns for others and owning or operating a tax return preparation business, the Justice Department announced today. The civil injunction order, to which Granberry, Robinson and Reese agreed without admitting the allegations against them, was signed by Judge S. Thomas Anderson of the U.S. District Court for the Western District of Tennessee.
The United States brought the civil injunction suit in April, seeking to shut down Mo’ Money Taxes, a Memphis-based tax-preparation chain that at one time operated as many as 300 offices in 18 states. The government complaint, which can be viewed at www.justice.gov/tax/2013/txdv13412.htm , alleged that Mo’ Money Taxes, its owners Granberry and Robinson and store manager Reese created and maintained a business environment that encouraged the preparation of fraudulent federal income tax returns. According to the complaint, Mo’ Money Taxes’ managers, licensees and employees prepared fraudulent returns that caused their customers to incorrectly report their federal tax liabilities and underpay their taxes. The complaint further alleged that defendants charged customers bogus and unconscionably high fees.
According to the complaint, Granberry and Robinson most recently used the business name Marquis Taxes and, along with Reese, also used the name Southern King Taxes. The complaint also alleges that Granberry and Robinson received fees for each tax return prepared by these businesses through Caymau Service Bureau LLC. The civil injunction order not only bars Granberry, Robinson and Reese from owning and operating these businesses, but also from managing, working in, controlling, licensing or franchising a tax return preparation business.
The complaint alleges that Granberry, Robinson and Reese encouraged Mo’ Money Taxes preparers to falsely claim the earned-income credit; claim improper filing status; claim bogus education credits, improperly prepare returns using paystubs rather than employer-issued W-2 forms; fabricate bogus W-2 forms; file tax returns without customers’ consent; sell false and deceptive loan products; and charge deceptive and unconscionable fees.
Return preparer fraud, claiming false income or expenses to secure larger refundable credits such as the earned-income credit, and identity theft are among the IRS’s “Dirty Dozen” Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 .
“American taxpayers need to know they can rely on their tax preparers to prepare honest, accurate returns,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “The Internal Revenue Service and Justice Department are committed to strong enforcement action against tax preparers who fail to live up to that standard.”
Wednesday, September 18, 2013
Tennessee Federal Court Bars the Owners of Mo’ Money Taxes from Owning, Operating, Licensing or Franchsing a Tax Return Preparation Business and Preparing Tax Returns for Others
Memphis, Tenn.-Based Chain and Related Entities Allegedly Engaged in Misconduct
A federal court in Memphis, Tenn., permanently barred the owners of Mo’ Money Taxes, Markey Granberry and Derrick Robinson, as well as a former Mo’ Money manager, Eumora Reese, from preparing tax returns for others and owning or operating a tax return preparation business, the Justice Department announced today. The civil injunction order, to which Granberry, Robinson and Reese agreed without admitting the allegations against them, was signed by Judge S. Thomas Anderson of the U.S. District Court for the Western District of Tennessee.
The United States brought the civil injunction suit in April, seeking to shut down Mo’ Money Taxes, a Memphis-based tax-preparation chain that at one time operated as many as 300 offices in 18 states. The government complaint, which can be viewed at www.justice.gov/tax/2013/txdv13412.htm , alleged that Mo’ Money Taxes, its owners Granberry and Robinson and store manager Reese created and maintained a business environment that encouraged the preparation of fraudulent federal income tax returns. According to the complaint, Mo’ Money Taxes’ managers, licensees and employees prepared fraudulent returns that caused their customers to incorrectly report their federal tax liabilities and underpay their taxes. The complaint further alleged that defendants charged customers bogus and unconscionably high fees.
According to the complaint, Granberry and Robinson most recently used the business name Marquis Taxes and, along with Reese, also used the name Southern King Taxes. The complaint also alleges that Granberry and Robinson received fees for each tax return prepared by these businesses through Caymau Service Bureau LLC. The civil injunction order not only bars Granberry, Robinson and Reese from owning and operating these businesses, but also from managing, working in, controlling, licensing or franchising a tax return preparation business.
The complaint alleges that Granberry, Robinson and Reese encouraged Mo’ Money Taxes preparers to falsely claim the earned-income credit; claim improper filing status; claim bogus education credits, improperly prepare returns using paystubs rather than employer-issued W-2 forms; fabricate bogus W-2 forms; file tax returns without customers’ consent; sell false and deceptive loan products; and charge deceptive and unconscionable fees.
Return preparer fraud, claiming false income or expenses to secure larger refundable credits such as the earned-income credit, and identity theft are among the IRS’s “Dirty Dozen” Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 .
“American taxpayers need to know they can rely on their tax preparers to prepare honest, accurate returns,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “The Internal Revenue Service and Justice Department are committed to strong enforcement action against tax preparers who fail to live up to that standard.”
Sunday, September 22, 2013
SETTLEMENT REACHED REGARDING 2007 UTAH MINE COLLAPSE
FROM: U.S. LABOR DEPARTMENT SETTLEMENT
MSHA, engineering firm reach settlement in deadly 2007 Utah mine collapse
Agapito Associates Inc. agrees to pay $100,000 penalty
ARLINGTON, Va. — The U.S. Department of Labor's Mine Safety and Health Administration announced today that it submitted a settlement between MSHA and Agapito Associates Inc. in the August 2007 Crandall Canyon Mine disaster to the Federal Mine Safety and Health Review Commission. Under the settlement agreement, the mining engineering consulting firm accepted responsibility and agreed to pay $100,000 for a high negligence violation for its role in the mine collapse that killed six miners and three rescue workers at Genwal Resources Inc.'s underground coal mine in Emery County, Utah.
According to MSHA's investigation, the miners were killed when roof-supporting coal pillars collapsed in a catastrophic outburst that violently ejected coal over a half-mile area in the underground mine tunnels. Ten days later, two mine employees and an MSHA inspector died in another coal outburst that occurred during rescue efforts.
The investigation also determined that the flawed engineering analysis by Agapito resulted in an inadequate mine design, with unsafe pillar dimensions, which contributed to the accident. Genwal and its parent company, UtahAmerican Energy Inc. submitted their mining plan to MSHA based on Agapito's analysis.
"With this settlement, Agapito takes responsibility for its role in the tragic mine collapse at Crandall Canyon," said Joseph A. Main, assistant secretary of labor for mine safety and health. "Since this tragedy occurred, the agency has made a number of enforcement, administrative and regulatory reforms to improve the health and safety of the nation's miners, particularly in the area of roof control safety."
If approved by the administrative law judge, the settlement will mark the end of legal proceedings brought by the federal government arising from the 2007 mine disaster. In September 2012, Genwal Resources and Andalex Resources Inc., also owned by UtahAmerican Energy, agreed to pay nearly $950,000 in civil penalties for Crandall Canyon violations. In addition, Genwal Resources pled guilty in federal court to two criminal misdemeanors for its willful violation of mandatory health and safety standards at the mine and agreed to pay a $500,000 fine.
MSHA, engineering firm reach settlement in deadly 2007 Utah mine collapse
Agapito Associates Inc. agrees to pay $100,000 penalty
ARLINGTON, Va. — The U.S. Department of Labor's Mine Safety and Health Administration announced today that it submitted a settlement between MSHA and Agapito Associates Inc. in the August 2007 Crandall Canyon Mine disaster to the Federal Mine Safety and Health Review Commission. Under the settlement agreement, the mining engineering consulting firm accepted responsibility and agreed to pay $100,000 for a high negligence violation for its role in the mine collapse that killed six miners and three rescue workers at Genwal Resources Inc.'s underground coal mine in Emery County, Utah.
According to MSHA's investigation, the miners were killed when roof-supporting coal pillars collapsed in a catastrophic outburst that violently ejected coal over a half-mile area in the underground mine tunnels. Ten days later, two mine employees and an MSHA inspector died in another coal outburst that occurred during rescue efforts.
The investigation also determined that the flawed engineering analysis by Agapito resulted in an inadequate mine design, with unsafe pillar dimensions, which contributed to the accident. Genwal and its parent company, UtahAmerican Energy Inc. submitted their mining plan to MSHA based on Agapito's analysis.
"With this settlement, Agapito takes responsibility for its role in the tragic mine collapse at Crandall Canyon," said Joseph A. Main, assistant secretary of labor for mine safety and health. "Since this tragedy occurred, the agency has made a number of enforcement, administrative and regulatory reforms to improve the health and safety of the nation's miners, particularly in the area of roof control safety."
If approved by the administrative law judge, the settlement will mark the end of legal proceedings brought by the federal government arising from the 2007 mine disaster. In September 2012, Genwal Resources and Andalex Resources Inc., also owned by UtahAmerican Energy, agreed to pay nearly $950,000 in civil penalties for Crandall Canyon violations. In addition, Genwal Resources pled guilty in federal court to two criminal misdemeanors for its willful violation of mandatory health and safety standards at the mine and agreed to pay a $500,000 fine.
Subscribe to:
Posts (Atom)