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A researcher at the University of Kansas (KU) has been indicted on federal charges of hiding the fact he was working full time for a Chinese university while doing research at KU funded by the U.S. government. Feng “Franklin” Tao, 47, of Lawrence, Kansas, an associate professor at KU’s Center for Environmentally Beneficial Catalysis (CEBC), is charged with one count of wire fraud and three counts of program fraud.  He was employed since August 2014 by the CEBC, whose mission is to conduct research on sustainable technology to conserve natural resources and energy. His bio and academic papers are listed here: Miller Associate Professor Tao ; All Publications Tao

The indictment alleges that in May 2018 Tao signed a five-year contract with Fuzhou University in China that designated him as a Changjiang Scholar Distinguished Professor.  The contract required him to be a full time employee of the Chinese university.  While Tao was under contract with Fuzhou University, he was conducting research at KU that was funded through two U.S. Department of Energy contracts and four National Science Foundation contracts.

Kansas Board of Regents’ policy requires staff to file an annual conflict of interest report.  In Tao’s reports to KU, he falsely claimed to have no conflicts of interest.  The indictment alleges that he fraudulently received more than $37,000 in salary paid for by the Department of Energy and the National Science Foundation.

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC)has fined a U.S. truck maker PACCAR $1.7 million for 63 alleged violations of the Iranian Transactions and Sanctions Regulations. The settlement resolves potential civil liability for actions taken by a wholly-owned subsidiary of the company that allegedly sold or supplied trucks with a total transactional value of over $5.4 million to European customers, but knew or had reason to know the trucks were ultimately intended for buyers in Iran.

In arriving at the settlement amount, various mitigating factors were considered, including that (i) neither the company nor the subsidiary have received a penalty or finding of a violation in the five years prior to the transactions at issue; (ii) the subsidiary had in place at the time of the alleged violations a trade sanctions compliance program with contractual prohibitions on dealers and service partners that were re-selling products in violation of U.S. trade sanctions; and (iii) the company and subsidiary voluntarily self-disclosed the issue to OFAC, cooperated with OFAC during the investigation, and undertook remedial efforts to minimize the risk of similar violations from occurring in the future.

The Treasury also considered various aggravating factors, including that the subsidiary failed to exercise caution when alerted to warning signs regarding the potential sales, and that in each instance, a subsidiary employee was aware of the conduct leading to the alleged violations.

The Securities and Exchange Commission today charged an analyst at a large international investment bank with insider trading based on confidential information that he learned about Siris Capital Group’s plans to acquire Electronics for Imaging, Inc. (EFII).

According to the SEC’s complaint filed in federal court in Manhattan, Bill Tsai, a junior investment banker in the bank’s New York office, learned of the acquisition when Siris consulted the bank about providing financing and advice on the transaction. The SEC alleges that soon after learning about the deal, Tsai purchased EFII call options, which he sold for a profit of approximately $98,750 shortly after the deal was announced in mid-April 2019.

Tsai allegedly attempted to hide his illegal activity by conducting his trading in a brokerage account that he concealed from his employer, and by circumventing the bank’s policies that require employees to pre-clear securities trades.

American International Group, the insurance giant has agreed to pay $725 million to three Ohio pension funds to settle  claims of accounting fraud, stock manipulation and bid-rigging. The money will go to firefighters, teachers, librarians and other pensioners. Ohio’s attorney general, that it was the 10th largest securities class-action settlement in United States history. A.I.G.’s former chief executive, Maurice R. Greenberg, and other executives agreed to pay $115 million in an earlier settlement with Ohio, which filed its lawsuit in 2004.

The Ohio case was filed for pension funds for their significant losses in their holdings of A.I.G. when its share price plummeted.

The problems apparently began in the autumn of 2008, when a sudden downgrade in its creditworthiness after it was revealed that the company had sold questionable derivatives used to prop up the portfolios of other financial institutions.

The Federal Trade Commission (FTC) filed an Administrative Complaint against data-mining company Cambridge Analytica, and reached settlements with the former CEO and an app developer who worked with the company. The FTC complaint filed on Wednesday alleges Cambridge Analytica used false and deceptive tactics to harvest personal information from tens of millions of Facebook users, which was later used to profile U.S. voters.  The FTC says the UK-based political consultancy, which advised the President in his 2016 campaign, violated U.S. federal law by using ‘trickery’ to access Facebook user data. The FTC also  reached settlements with ex-CEO Alexander Nix, a British national, and app developer Aleksander Kogan, a U.S. citizen, requiring them to destroy any personal data they have collected and restricted how they do business in the future.

Former Cambridge Analytica CEO Alexander Nix agreed in the settlement to destroy all data obtained from Facebook.In a separate but related action on Wednesday, the FTC reached a settlement with Facebook in which the social media giant agreed to pay a record $5 billion fine for violating consumers’ privacy. In 2014, when Cambridge Analytica partnered with Kogan to develop detailed psychological profiles of potential voters. Kogan was the developer of a Facebook application called the GSRApp—sometimes referred to as the ‘thisisyourdigitallife’ app, which asked its users to answer personality and other questions, and collected information such a user’s ‘likes’.

The FTC alleges Kogan, together with Cambridge Analytica and Nix used data obtained from the GSRApp to advance an algorithm that generated personality scores for the app users and their friends. Cambridge Analytica, Kogan, and Nix then matched these personality scores with U.S. voter records for its voter profiling and targeted advertising services, according to the complaint.To convince Facebook users to take the personality quiz, the app assured them that it would not ‘download your name or any other identifiable information—we are interested in your demographics and likes.’ The FTC claims that was a false statement.

Customs and Border Protection is looking into a Minnesota company for tariff evasion after a Channel 9 and Cox Media Group investigation which found the country of origin labeling irregularities on surge protectors made in China. CyberPower Systems surge protectors being sold in  Home Depots.   Cox Media Group stations in Atlanta, Boston, Jacksonville, Memphis, and Pittsburgh discovered similar irregularities in other products.

Packaging for the CyberPower Systems surge protectors bought had “Made in Philippines” and “Made in Taiwan” stickers covering other wording that said, “Made in China.” In other products “Made in China” print had been blacked out with a permanent marker.

The U.S.  previously imposed a tariff of 25 percent on hundreds of categories of products imported from China, including surge protectors.

Violating “Made in USA Laws”

Michael P. Casey of Poquoson, Virginia, pleaded guilty today in federal court  on charges stemming from his participation in a lucrative conspiracy to falsely label millions of dollars-worth of foreign crab meat as “Product of USA.”

“By illegally mislabeling hundreds of thousands of pounds of crab meat, the defendant intentionally undermined the local crab processing industry – defrauding customers and, in turn, damaging the public’s trust in an industry that is important to the local economy,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “Mr. Casey’s actions are an affront to those who play by the rules when selling blue crab, and The Department will continue to work closely with its partners to prosecute criminals who flout the rule of law.”

For-profit College recruitment fraud

Salter College a for profit institution in Massachusetts and its parent company will pay over $1.6 million in debt relief following allegations that it did not provide “critical information” on job placement, loan repayment and graduation rates at its now-shuttered Fall River campus and others throughout the state. Attorney General Maura Healey’s office said that the school, which has since closed its Fall River property, violated state law by not providing information to students. An assurance of discontinuance was filed by Healey’s office in Suffolk Superior Court this week, alleging the parent company Premier Education Group violated for-profit and occupation school regulations intended to protect students from deceptive and unfair practices.

“Salter College misled students and deprived them of the information they needed to make informed choices about their education,” Healey said in a statement. “This settlement will provide students the relief they deserve and stop this predatory for-profit school from doing business in our state.”

The United States Attorney in the Southern District of New York has issued a three-count indictment charging Pourghannad, Ali Reza Shokri and Farzin Faridmanesh with exporting carbon fiber from the United States to Iran. “Pourghannad is alleged to have sought to procure for Iran large amounts of carbon fiber — a commodity that can be used in the enrichment of uranium,” said Assistant Attorney General Demers.  “U.S. sanctions exist to prevent behavior, like this, which endangers our country, and the Department is committed to vigorously enforcing them.  Pourghannad and others who would attempt to thwart these laws need to know that their actions, which benefit Iran’s destabilizing efforts and make Americans less safe, will not go unpunished.”

“Carbon fiber has many aerospace and defense applications, and is strictly controlled to ensure that it doesn’t fall into the wrong hands,” said U.S. Attorney Geoffrey Berman.  “Pourghannad and his co-defendants allegedly went to great lengths to circumvent these controls and the United States’ export laws.  Together with our law enforcement partners, we will continue to protect our nation’s assets and protect our national security.”

According to the allegations contained in the Indictment, unsealed in White Plains federal court[1]:

Johnson & Johnson is facing a U.S. Justice Department criminal investigation into whether it lied about potential cancer risks of its talcum powder and has convened a grand jury in Washington, Reuters has reported.  Bloomberg has also reported an investigation into documents related to what company officials knew about any carcinogens in their products.

J&J disclosed in its annual report in February that it had received subpoenas from the Justice Department and Securities and Exchange Commission related to the ongoing baby powder litigation but did not give more details.

Johnson & Johnson faces lawsuits involving over 14,000 plaintiffs who allege use of its talc products, including Baby Powder, caused cancer.