JUDGEMENT ENTERED AGAINST DEFENDANT MAGNUM D'OR RESOURCES, INC.,

The following excerpt is from the SEC website:

February 24, 2012
COURT ENTERS JUDGMENTS AGAINST DEFENDANTS MAGNUM D’OR RESOURCES, INC., DAVID DELLA SCIUCCA, JR., AND DWIGHT FLATT
Securities and Exchange Commission v. Magnum d’Or Resources, Inc., et al., Civil Action No. 11-60920-CIV-JORDAN/BANDSTRA (S.D. Fla.)
The Securities and Exchange Commission announced that on February 13, 2012, the Court entered a final judgment of permanent injunction and other relief, by consent, against defendant Magnum d’Or Resources, Inc. The final judgment against Magnum enjoins the company from violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities and Exchange Act of 1934 and Exchange Act Rule 10b-5. In addition to injunctive relief, the Court orders Magnum to pay disgorgement in the amount of $7,728,824, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest in the amount of $233,543.01, and imposes a civil penalty in the amount of $725,000. Also, on December 8, 2011 and January 4, 2012 the United States District Court for the Southern District of Florida entered judgments of permanent injunction and other relief, by consent, against defendants David Della Sciucca, Jr. and Dwight Flatt, respectively. The judgments enjoin Sciucca and Flatt from violations of Sections 5(a) and 5(c) of the Securities Act. Sciucca and Flatt also are barred from participating in any penny stock offering and from owning, receiving or purchasing Form S-8 stock. The judgments against Sciucca and Flatt provide for disgorgement and the imposition of civil penalties in amounts to be determined by the Court upon motion of the Commission.

The Commission commenced this action by filing its Complaint on April 29, 2011, against Magnum, Sciucca, Flatt, and others. The Complaint alleges Magnum issued stock pursuant to false Form S-8 registration statements, and used bogus consultants to funnel more than $7 million in illicit stock proceeds back into the company. The Complaint also alleges that in facilitating this kickback scheme, Magnum garnered the assistance of Flatt, Sciucca, and others, who liquidated Magnum S-8 stock, kept a portion of the sales proceeds, and then returned the remaining sales proceeds to Magnum under the guise of loan agreements. The Complaint further alleges that Magnum made false and misleading statements in its Form S-8 registration statements and in various press releases during the relevant time period.”

FORMER CEO KELLOGG, BROWN & ROOT SENTENCED TO 30 MONTHS IN PRISON FOR BRIBERY

The following excerpt is from the Department of Justice website:

“Thursday, February 23, 2012Former Chairman and CEO of Kellogg, Brown & Root Inc. Sentenced to 30 Months in Prison for Foreign Bribery and Kickback SchemesU.K. Solicitor and Former Salesman Also Sentenced for Participation in Scheme to Bribe Nigerian Government Officials

WASHINGTON – Albert “Jack” Stanley, a former chairman and chief executive officer of Kellogg, Brown & Root Inc. (KBR), was sentenced today to 30 months in prison for conspiring to violate the Foreign Corrupt Practices Act (FCPA) by participating in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts and for conspiring to commit mail and wire fraud as part of a separate kickback scheme, the Justice Department’s Criminal Division today announced.    

U.S. District Judge Keith P. Ellison for the Southern District of Texas also ordered Stanley to serve three years of supervised release following the prison term and to pay $10.8 million in restitution to KBR, the victim of the separate kickback scheme.   Stanley, 69, pleaded guilty on Sept. 3, 2008, to a two-count criminal information charging him with one count of conspiracy to violate the FCPA and one count of conspiracy to commit mail and wire fraud.

Two of Stanley’s co-conspirators also were sentenced by Judge Ellison.   Today, Jeffrey Tesler, 63, a United Kingdom citizen and licensed solicitor, was sentenced to 21 months in prison, followed by two years of supervised release.   Tesler also was ordered to pay a $25,000 fine and previously was ordered to forfeit $148,964,568.   Yesterday, Wojciech J. Chodan, 74, a United Kingdom citizen and former salesman at KBR’s U.K. subsidiary, was sentenced to one year of probation and ordered to pay a $20,000 fine.   Chodan previously was ordered to forfeit $726,885.

Tesler and Chodan were indicted on Feb. 17, 2009, and subsequently extradited to the United States from the United Kingdom.   On Dec. 6, 2011, Chodan pleaded guilty to count one of the indictment charging him with conspiring to violate the FCPA.   On March 11, 2011, Tesler pleaded guilty to one count of conspiracy to violate the FCPA and one count of violating the FCPA.
         
All three defendants fully cooperated with the department’s investigation, which resulted in more than $1.7 billion in penalties, disgorgement and forfeitures.   The defendants’ substantial assistance in the investigation and prosecution of other defendants was reflected in the sentences the court imposed.

“Today’s prison sentences for Mr. Stanley and Mr. Tesler mark another important step in our prosecution of those responsible for a massive bribery scheme involving engineering, procurement and construction contracts in Nigeria,” said Mythili Raman, Principal Deputy Assistant Attorney General for the Criminal Division.  “These sentences reflect not only the defendants’ illegal acts, but also their substantial cooperation with the government.  As a result of this investigation, three individuals have been convicted of FCPA-related crimes, and five companies in four countries have paid substantial penalties and undertaken significant efforts to enhance their compliance programs.  This case shows the importance the department places on putting an end to foreign bribery.”

According to court documents, KBR was a member of the TSKJ joint venture (named for the first letters of the names of the companies involved), along with Technip S.A., Snamprogetti Netherlands B.V., and JGC Corporation.  Between 1995 and 2004, TSKJ was awarded four EPC contracts, valued at more than $6 billion, by Nigeria Liquefied Natural Gas (LNG) Ltd. to build the LNG facilities on Bonny Island.  The government-owned Nigerian National Petroleum Corporation was the largest shareholder of NLNG, owning 49 percent of the company.

From approximately 1994 through June 2004, the joint venture companies, Stanley, Tesler, Chodan and others agreed to pay bribes to a wide range of Nigerian government officials in order to obtain and retain the EPC contracts.   To pay the bribes, the joint venture hired two agents – Tesler and Marubeni Corporation, a Japanese trading company headquartered in Tokyo.   The joint venture hired Tesler as a consultant to pay bribes to high-level Nigerian government officials, including top-level executive branch officials, and hired Marubeni to pay bribes to lower-level Nigerian government officials.  At crucial junctures preceding the award of the EPC contracts, Stanley and other co-conspirators met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom TSKJ should negotiate bribes to Nigerian government officials.  TSKJ paid approximately $132 million to a Gibraltar corporation controlled by Tesler and $51 million to Marubeni during the course of the bribery scheme for use, in part, to pay bribes to Nigerian government officials.

In a related criminal case, KBR’s successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to FCPA-related charges for its participation in the scheme to bribe Nigerian government officials.  Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program.

In another related criminal case, the department filed a deferred prosecution agreement and criminal information against Technip in June 2010.  According to that agreement, Technip agreed to pay a $240 million criminal penalty and to retain an independent compliance monitor for two years.   In July 2010, the department filed a deferred prosecution agreement and criminal information against Snamprogetti, which also agreed to pay a $240 million criminal penalty.  In April 2011, the department filed a deferred prosecution agreement and criminal information against JGC, in which JGC agreed to pay a $218.8 million criminal penalty and to retain an independent compliance consultant for two years.   In January 2012, the department filed a deferred prosecution agreement and criminal information against Marubeni, in which Marubeni agreed to pay a $54.6 million criminal penalty and to retain a corporate compliance consultant for two years
         
The criminal cases were prosecuted by Assistant Chief William J. Stuckwisch and Deputy Chief Patrick F. Stokes of the Criminal Division’s Fraud Section, with investigative assistance from the FBI-Houston Division.  The Criminal Division’s Office of International Affairs and the SEC’s Division of Enforcement provided substantial assistance.  Significant assistance was provided by authorities in France, Italy, Switzerland and the United Kingdom.   Investigative assistance with the prosecution of Stanley was also provided by the Internal Revenue Service’s Criminal Investigations Division in Houston.”

FORMER FLORIDA-BASED AIRLINE OWNER GOES TO PRISON FOR FRAUD

The following excerpt is from the Department of Justice Antitrust website:

January 27, 2012

"WASHINGTON — A former owner and operator of a Florida-based airline services company was sentenced today to serve 24 months in prison and to pay restitution for conspiring to commit wire fraud and honest services fraud in a kickback scheme to defraud Ryan International Airlines, a charter airline company located in Rockford, Ill., the Department of Justice announced.

Robert A. Riddell, the former owner and operator of a Florida aviation security and ground services company, was sentenced to serve 24 months in prison and to pay $131,540 in restitution. On Oct. 17, 2011, Riddell pleaded guilty in U.S. District Court in West Palm Beach, Fla., to participating in a conspiracy to defraud Ryan by making kickback payments to Wayne E. Kepple, a former vice president of ground operations for Ryan, in exchange for Kepple awarding business to Riddell's company. Riddell and Kepple also split the proceeds of fraudulent invoices submitted to Ryan for payment.

Ryan provides air passenger and cargo services for corporations, private individuals, professional sports teams and the U.S. government, including the U.S. Department of Defense, the U.S. Department of Homeland Security and the U.S. Marshals Service. Riddell's company provided ground security and other ground services coordination for Ryan flights in Europe.

According to court documents, from March 2006 through at least August 2009, Riddell paid Kepple more than $330,000 in kickbacks, including payments based on fabricated invoices submitted by Riddell's company to Ryan. Kepple was in charge of contracting with providers of goods and services on behalf of Ryan and approving the invoices submitted by the providers to Ryan for payment. Riddell was charged with one count of conspiracy to commit wire fraud and honest services fraud, and one substantive count of wire fraud.

Including Riddell, four individuals have been charged in conjunction with this investigation. On Nov. 4, 2011, Kepple pleaded guilty to participating in a conspiracy to commit wire fraud and honest services fraud in three separate kickback schemes with co-conspirators to defraud Ryan, including his fraudulent scheme with Riddell. He is awaiting sentencing. On Aug. 12, 2011, David A. Chaisson and James E. Murphy pleaded guilty to participating in different conspiracies to defraud Ryan by making kickback payments to Kepple in exchange for winning contracts for their respective companies. On Oct. 28, 2011, Murphy was sentenced to serve 23 months in prison and to pay $42,500 in restitution and Chaisson was sentenced to serve 16 months in prison and to pay $50,742.48 in restitution.

The investigation is being conducted by the Antitrust Division's Atlanta Field Office and the U.S. Department of Defense's Office of Inspector General, with assistance from the U.S. Attorney's Office for the Southern District of Florida. "

CASES FILED ALLEGEING KICKBACK SCHEMES IN THINLY TRADED STOCKS

The following excerpt is from the SEC website:
December 2, 2011
"The Securities and Exchange Commission announced that, on December 1, 2011, the Commission, U.S. Attorney for the District of Massachusetts, and Federal Bureau of Investigation filed parallel cases in federal court against several corporate officers, lawyers and a stock promoter alleging they used kickbacks and other schemes to trigger investments in various thinly-traded stocks. The Commission filed civil charges of securities fraud against ZipGlobal Holdings, Inc.; Microholdings US, Inc.; Michael Lee of Hingham, MA; James Wheeler of Camas, WA; Paul Desjourdy of Medfield, MA; and Edward Henderson of Lincoln, Rhode Island and alleging they used kickbacks to engage in fraudulent activity involving microcap stocks.
The criminal case charged 13 defendants who engaged in criminal activity in the midst of an undercover FBI operation. According to the charges filed in U.S. District Court, the schemes involved secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in certain companies; the kickbacks were to be concealed through the use of sham consulting agreements. What the insiders and promoters did not know was that the purported investment fund representative was actually an undercover agent.
The charges follow a year-long investigation focusing on preventing fraud in the micro-cap stock markets. Microcap companies are small publicly traded companies whose stock often trades at pennies per share. Fraud in the microcap stock markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the Commission.
The Commission's complaint charges the defendants with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The complaints seeks a permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, civil monetary penalties, penny stock and officer and director bars.”