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An experienced whistleblower attorney, successful trial attorney, former criminal prosecutor, and former reporter Representing whistleblowers reporting fraud on the Federal State Governments

deforestation-300x200The destructed land left from the acts of deforestation is an eerie sight. A distant treeline, fallen logs, and disrupted vegetation seem both natural and unnatural, and perhaps rightly so. In a recent investigation performed by Victor Galaz and members of the Stockholm Resilience Center, many acts of Amazonian deforestation can be directly linked to foreign tax havens. Why? Because there’s lots of money to be made in the destruction of these forests, which are eventually used by massive beef and soy companies to turn a profit. However, the fish industry, worth over $23 billion annually, is yet another market at the root of environmental destruction by use of oversea tax havens.

The Link Between Overfishing and Tax Havens

There is a reason why fishing boats are given a daily fish quota, as well as restrictions on the species of fish that they can keep; The environment. The practice of overfishing is capable of wiping out entire species. However, this can be viewed as limited profits for the companies involved in these restrictions; less fish equals less profits. For companies like this, it’s tempting to find a way around these regulations, and foreign tax havens offer the perfect opportunity.

consumer-product-safety-300x200After knowingly importing and selling defective dehumidifiers since 2012, executives Simon Chu and Charley Loh have been charged with failure to furnish information under the Consumer Product Safety Act (CPSA), as well as committing fraud against the U.S. Consumer Product Safety Commission (CPSC). The defendants were also charged with conspiracy to commit wire fraud. As the first criminal prosecution for the failure to furnish information under the Consumer Product Safety Act, this indictment shows the growing resolve of the U.S. government to combat corporate fraud of all forms.

According to the indictment, Chu and Loh imported the dehumidifiers from China and sold them out of companies that remained unnamed in the indictment. In 2012, the executives received a video from a consumer that showed the dehumidifier catching on fire. To follow-up with the claims of the video, Chu and Loh had the plastic components of their dehumidifiers tested, which confirmed that the parts used could easily catch on fire due to their non-compliance with safety standards.

However, these issues were not initially reported to the U.S. Consumer Product Safety Commission in an effort to avoid a recall, which would result in costly fees for the executives. After inconsistent reports regarding the safety of the dehumidifiers, the CPSC eventually ordered a massive recall for the dehumidifiers sold by Chu and Loh, as well as other Chinese imported dehumidifiers. In total, the recall involved 2.2 million dehumidifiers in September of 2013.

Security vendor Fortinet has agreed to pay the equivalent of $545,000 to settle allegations it illegally sold the U.S. military Chinese technology disguised as American-made equipment, the U.S. Department of Justice announced.

The Sunnyvale, California-based cybersecurity company agreed to pay the government $400,000 and provide the U.S. Marine Corps with equipment valued at $145,000 to resolve charges it violated the False Claims Act from January 2009 until the fall of 2016, according to a statement.

Fortinet acknowledged that an employee responsible for supply chain management altered labels on products to make them appear compliant with the Trade Agreements Act, a law prohibiting federal agencies from acquiring products in specific countries. The unnamed employee directed others at Fortinet to include the phrases “Designed in the United States and Canada” or “Assembled in the United States” before those products were sold to distributors and resellers who resold the technology to the government.

Princess-Cruise-Lines-300x156Princess Cruise Lines Ltd., a subsidiary of Carnival Corporation, may be prevented from docking ships stationed at U.S. ports following accusations by the federal government regarding its violation of probation agreements after disposing of plastic waste into the ocean.

In 2016, Carnival Corp. was accused of illegally disposing of oil-contaminated waste into the ocean from one of their Princess Cruise Lines ships and then covering it up from authorities. Carnival Corp. eventually plead guilty to seven charges of illegal dumping from the ship and agreed to pay a $40 million settlement fee. However, the penalty also required that the company follow a comprehensive environmental compliance program which would be court-supervised for a total of five years. The agreement included a court-appointed program supervisor, as well as regular audits, for a total of eight Carnival-owned companies.

However, during its probationary period, Carnival Corp. and the cruise ships associated with the company and its subsidiaries failed to follow environmental protocols by repeatedly disposing of plastic waste into the ocean. Carnival Corp. was also accused of organizing a pre-audit program created to hide incriminating information prior to its court-scheduled audits.

RussiaHome to 22% of the Earth’s undiscovered oil and natural gas, Russia has set its sights on the untapped resources of the Arctic. Since the 1960s, over 60 oil and natural gas fields have been discovered in the Arctic. However, freezing temperatures and hostile conditions have left these areas abandoned, leaving a minefield of valuable natural resources. But with rising temperatures comes melting ice and a significant opportunity for those who choose to pursue it.

Russia has earned a reputation for its resources-based power. “Russia historically has been a territorial and natural-resources-driven power, and it has remained so until present day,” states Agnia Grigas, author of The New Geopolitics of Natural Gas. She adds, “The focus on locking in Arctic resources and routes goes hand-in-hand with the Kremlin’s ambitions of extending its influence and great-power status beyond its territory.”.

With the abundance of undiscovered oil and natural gas now available for bidding, the Arctic’s resources have now become part of a strategic political power-play, and one that Russia does not intend to lose.

 

 

In an effort to gain information regarding a scheme to uplist a Samsung BioLogics Co. subsidiary on the NASDAQ in 2015, prosecutors raided the Seoul offices of Goldman Sachs and Credit Suisse earlier this month. Samsung BioLogics Co. is Korea-based company that specializes in the development and manufacturing of biological products. Samsung Bioepis Co. is a subsidiary of Samsung BioLogics Co., which the company had planned on uplisting to the NASDAQ in 2015. However, Samsung BioLogics Co. is currently being investigated for falsifying the value of its subsidiary prior to its initial public offering in 2016. According to media reports, Goldman Sachs, an American headquartered multinational investment bank, is suspected of being a major part of this uplisting scheme, while Credit Suisse, a Swiss headquartered multinational investment bank, was also an alleged participant. The Financial Services Commission, a Korean financial watchdog agency, conducted its own investigation into the case and found that the falsified accounting amounted to just under $4 billion (US).

Many civic groups in Korea believe that the scheme was an effort to expand Lee Jae-yong’s control over the powerful Samsung giant. Lee Jae-yong currently serves as the vice chairman of Samsung, and as the son of the Chairman of Samsung is likely to inherit his father’s position. Control over Samsung is of high value as it is currently the largest business group in Korea. Lee Jae-yong is also powerful in his own right with an estimated net worth of $7.9 billion (US), making him the third wealthiest person in South Korea.

The uplisting of the Samsung BioLogics Co. subsidiary would effectively improve the value of the business group and extend the power of those involved. Details of this case still remain unsolved, it is likely that the documents recovered by the raid of Goldman Sachs and Credit Suisse will shed more light on the ongoing investigation.

 

 

Banks Agree to Pay Over $1.3 Billion for Violating Sanctions
UniCredit Bank AG (UCB AG), a financial institution headquartered in Munich, operating under the name HypoVereinsbank, and part of the UniCredit Group has agreed to enter a guilty plea to conspiring to violate the International Emergency Economic Powers Act (IEEPA) and to defraud the United States by processing hundreds of millions of dollars of transactions through the U.S. financial system on behalf of an entity designated as a weapons of mass destruction proliferator and other Iranian entities subject to U.S. economic sanctions.  UniCredit Bank Austria (BA), another financial institution in the UniCredit Group, headquartered in Vienna, Austria, agreed to forfeit $20 million and entered into a non-prosecution agreement to resolve an investigation into its violations of IEEPA.  UniCredit SpA, the parent of both UCB AG and BA, has agreed to ensure that UCB AG and BA’s obligations are fulfilled.

According to court documents, over the course of almost 10 years, UCB AG knowingly and willfully moved at least $393 million through the U.S. financial system on behalf of sanctioned entities, most of which was for an entity the U.S. Government specifically prohibited from accessing the U.S. financial system.  UCB AG engaged in this criminal conduct through a scheme, formalized in its own bank polices and designed to conceal from U.S. regulators and banks the involvement of sanctioned entities in certain transactions.  UCB AG routed illegal payments through U.S. financial institutions for the benefit of the sanctioned entities in ways that concealed the involvement of the sanctioned entities, including through the use of companies that UCB AG knew would appear unconnected to the sanctioned entity despite being controlled by the sanctioned entity.

drug-resistant-fungus-300x228According to the Centers for Disease Control, a multidrug-resistant fungus, Candida auris, is beginning to spread in numerous countries, including the United States where a total of 617 cases have already been reported. Of these cases, 309 have been reported in New York, while Illinois and New Jersey have also reported high numbers and more cases are currently present in nine other states. However, this is not the first time the C. auris fungus has emerged. Symptoms might not be noticeable because patients infected with C. auris are often already sick in the hospital with another serious illness or condition. The symptoms of C. auris infection depend on the body part that is affected. For bloodstream infections, the most common symptoms are fever and chills.

The very first case of the C. auris fungus was discovered in 2009, upon testing of the ear discharge of a patient in Japan. At the time, there were very few reports of the fungus, however throughout 2018 and 2019 such reports are on the rise. Currently, cases of C. auris have also been reported in South America, South Africa, and Asia. It is likely that the fungus was introduced to the United States when a patient or multiple patients received healthcare from an area where the pathogen has already spread and then returned to the United States.

But, what exactly is the fungus and how dangerous is it? One of the major concerns of the C. auris fungus is that it is difficult to diagnose and seemingly impossible to treat given its resistance to multiple antibiotics. This resilient fungus can be spread through contact with a person exposed with fungus or even through objects where the pathogen has colonized. Patients infected with C. auris have been reported to suffer from severe bloodstream and wound infections, as well as ear infections.

General Electric (GE) will pay a civil penalty of $1.5 billion under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) settling claims involving subprime residential mortgage loans originated by WMC Mortgage (WMC), a GE subsidiary. The government said that WMC, GE, and their affiliates misrepresented the quality of WMC’s loans and the extent of WMC’s internal quality and fraud controls in connection with the marketing and sale of residential mortgage-backed securities (RMBS). FIRREA authorizes the federal government to seek civil penalties for violations of various predicate criminal offenses, including wire and mail fraud where the violation affects a federally insured financial institution.

General Electric Capital Corporation (GECC), then the financial services unit of GE, acquired WMC, a subprime residential mortgage loan originator, in 2004. WMC originated more than $65 billion dollars in mortgage loans between 2005 and 2007. WMC sold the vast majority of its loans to investment banks, which, in turn, issued and sold RMBS backed by WMC loans to investors. The United States alleged that a majority of the mortgage loans WMC originated and sold for inclusion in RMBS in 2005-2007 did not comply with WMC’s representations about the loans, and that certain of WMC’s representations were reviewed by, approved by, or made with the knowledge of personnel from GE or GECC. Investors, including federally insured financial institutions, suffered billions of dollars in losses as a result of WMC’s fraudulent origination and sale of loans for inclusion in RMBS.

The United States said that in 2005-2007, WMC attempted to increase its profits and meet profit goals by increasing originations. WMC loan analysts responsible for underwriting mortgage loans were encouraged to approve loans in order to meet volume targets, even where the loan applications did not meet the criteria outlined in WMC’s published underwriting guidelines, and received additional compensation based on the number of mortgages they approved. At the same time, there were significant deficiencies with respect to WMC’s quality control, which was viewed by some as an impediment to volume. In 2005, a WMC quality control manager described his department as a “toothless tiger” with inadequate resources and no authority to prevent the approval or sale of loans his department had determined were fraudulent or otherwise defective. By late third quarter 2006, managers responsible for quality control and risk management at WMC and GECC had expressed concerns that WMC’s quality and fraud controls were so lax that WMC received more mortgage applications containing fraud or other defects than its competitors. As a member of GE’s Corporate Audit Staff (CAS) involved in audits of WMC observed in April 2007, WMC “jacked up volume without controls.”

Russian-spies-300x225American Universities have always been proud to welcome global students into their community, but with reports of foreign agents from Russia entering these school as professors and students, it is difficult to determine the reliability of this practice. These alleged spies are under suspicion for using the academic system to get close to current and future influential figures in the United States and gain certain benefits in the process, such as information to report back to those who recruited them.

While there are a number of ways to gain access to the plethora of information available in the United States, many have discovered that the least risky access to it is through the lax academic system. Professors and students are often viewed to have the most potential to rise up in the world as future politicians and researchers, and so the Russians seem to view academia as a safe way to make connections and be where they need to in order to please those they are working for by delivering relevant information.

One example of this situation comes from Columbia Business School, where a student by the name of Cynthia Murphy was discovered to be a Russian woman by the name of Lydia Guryeva. Guryeva seamlessly integrated herself into a key fundraiser for the 2008 presidential campaign in support of Hillary Clinton.