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False Statement Plea for Two Businessmen
According to a DOJ Press Release, two South Carolina businessmen "have pleaded guilty to causing numerous federal campaigns to make false statements to the Federal Election Commission." The plea was to a one count Information of "causing a false statement to be made." (esp)
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Will Subprime Become the Next Source for White Collar Crime?
The fallout from the collapse of the subprime mortgage market has been spreading to hedge funds and financial firms that invested in various securities tied to mortgages, and when there’s financial turmoil it has usually been the case that civil and even criminal actions are not too far behind. Reuters reports (here) that the SEC…
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Republican National Committee Continues to Resist Subpoena for Documents
When Congress is out of session, especially in the dog days of summer, little of interest emerges from Capitol Hill, especially on a Friday. What better day to deliver a letter explaining the decision to refuse to comply with a Congressional subpoena, which is what the Republican National Committee did regarding documents related to the…
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O.C. Treasurer Being Investigated for Misuse of Bankruptcy Assets
The Orange County Register reports (here) that the Orange County Treasurer is being investigated by the FBI for misuse of the assets of a bankrupt company that he was appointed to liquidate. The funds were allegedly used to pay for, among other things, a family vacation, gym memberships, and Botox injections, in addition to paying…
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BP Discloses Expanded Probe of Its Commodity Trading
Oil giant BP plc had earlier disclosed that its commodity trading operation was being investigated by the CFTC and the Department of Justice, and its most recent disclosure (here) indicates that the probe is expanding. The company’s initial disclosure was that the government was looking at trading back to 2002, but it latest filing states:…
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SEC Files Securities Fraud Charges Against Former Executives for Revenue Inflation
The SEC filed civil fraud charges against three former senior executives of Nicor, Inc., an Illinois natural gas distribution company. The alleged scheme involved manipulating the value of the company’s natural gas inventory through the LIFO (last-in-first-out) method — how’s that for exciting accounting. The defendants are the former CEO, CFO, and treasurer of the…
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Will the Reyes Conviction Lead to More Options Backdating Prosecutions?
The conviction of former Brocade Communications CEO Gregory Reyes on fraud charges for options backdating may well embolden prosecutors in San Francisco and elsewhere to pursue criminal cases against other executives. There is one prosecution already pending against the former general counsel of McAfee, then known as Network Associates, that is similar to the Reyes…
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Kobi Gets the Run of Namibia
Former Comverse Technology CEO Kobi Alexander seems to be prospering in Namibia, where he moved – or fled, depending on your point of view – prior to being indicted for his role in options backdating at the company. Since his arrival in August 2006, Alexander has begun investing in low-cost housing in the country and…
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The Reyes Sentencing
The conviction of former Brocade Communications Systems, Inc. CEO Gregory Reyes on ten counts for conspiracy, fraud, and filing false financial statements related to options backdating at the company raises interesting questions for sentencing. A key driver in fraud cases is the amount of the loss from the misconduct, or gain to the defendant. Because…
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American Express Bank International Gets Deferred Prosecution Agreement
According to a DOJ Press Release, American Express International has landed a deferred prosecution agreement with the government. The alleged charges were a failure to have an effective anti-money laundering program and the government will be 55 million richer as a result of this settlement, and that’s without even mentioning civil penalties. The government will…
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