Global Corruption
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Global Corruption
Corruption is a particularly viral form of cancer. It is caught here and there but it reappears somewhere else as soon as vigilance is relaxed. It is not eliminated, just driven underground. The corrupt merely suspend their operations temporarily. It lingers, hovering always in the background for its next opportunity.<br>                                                                         - Gerald E. Caiden <br>
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US SEC Charges Minneapolis-Based Hedge Fund Manager With Bilking Investors and Portfolio Pumping

US SEC Charges Minneapolis-Based Hedge Fund Manager With Bilking Investors and Portfolio Pumping | Global Corruption | Scoop.it

The Securities and Exchange Commission today charged a Minneapolis-based hedge fund manager, his investment advisory firm, and an accomplice with bilking investors in two hedge funds out of more than $1 million under the guise of research expenses and fees. 

 

The SEC alleges that as the management fees earned by Archer Advisors LLC were shrinking due to the funds’ worsening performance, the firm’s owner Steven R. Markusen and an employee Jay C. Cope implemented a scheme to enrich themselves at the expense of investors in the funds.  Markusen routinely caused the funds to reimburse Archer for fake research expenses, and he eventually routed much of that money to his personal checking account and spent it on country club dues, boarding school tuition, and a Lexus among other luxury items.  Furthermore, Markusen devised a way to essentially charge fund investors twice for the same fake research expenses.  First, he billed the funds directly by falsely claiming that Archer had paid Cope to conduct “research” for the funds.  Second, he and Cope improperly diverted soft dollars from the hedge funds to Cope for the same purported “research” under the additional pretense that Cope was an independent consultant.  Soft dollars were supposed to be used to buy third-party investment research that benefited the funds.  Cope conducted no third-party research as an Archer officer whose main duties were placing trades and helping Markusen find new investors.

 

The SEC’s complaint filed in federal court in Minneapolis also charges Markusen and Cope with conducting a separate scheme to manipulate the stock price of the funds’ largest holding in order to inflate the monthly returns reported to investors and conceal the true extent of the funds’ mounting investment losses.

 

“Markusen and his firm had an obligation to manage investor money in the hedge funds fairly and honestly.  Instead, he and Cope exploited their control of the funds to engage in long-running schemes to misappropriate fund assets and artificially pump up the value of the poorly-performing funds,” said Robert J. Burson, Associate Director of the SEC’s Chicago Regional Office. 

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US$401.6bn Flowed Illegally out of Brazil from 1960 to 2012, Finds New GFI Report

A new GFI study finds that US$402bn flowed illegally out of Brazil from 1960-2012, with trade misinvoicing accounting for 93% of such outflows...— draining domestic resources, driving the underground economy, exacerbating inequality, and facilitating crime and corruption—according to a new report...Titled “Brazil: Capital Flight, Illicit Flows, and Macroeconomic Crises, 1960-2012,” the study finds that trade misinvoicing—the fraudulent over- and under-invoicing of trade transactions—accounted for the vast majority (92.7 percent) of the country’s illicit financial outflows over the 53-year period analyzed.

“Brazil has a very serious problem with illicit financial flows, and curtailing them should be a priority for whichever administration wins the forthcoming elections,” noted GFI President Raymond Baker, a longtime authority on financial crime. “Illicit outflows are draining billions of dollars each year from the official Brazilian economy; money that could otherwise be used to help the nation’s economy grow.  Beyond the direct loss to the economy, these outflows are driving the underground economy, fueling crime and corruption, and costing the government significant revenue.”

Authored by GFI Chief Economist Dev Kar, the study estimates that illicit financial flows from Brazil totaled US$401.6 billion from 1960 through 2012, with annual average illicit outflows increasing from US$310 million in the 1960s to US$14.7 billion in the first decade of the twenty first century before jumping to US$33.7 billion over the last three years of the study, 2010-2012.  On average, Brazil’s illicit outflows are equivalent to 1.5 percent of the country’s GDP.

“Illicit outflows drain capital from the Brazilian economy, facilitate tax evasion, exacerbate inequality, and deplete domestic savings,” said Dr. Kar, who served as a senior economist at the International Monetary Fund before joining GFI.  “Even more troubling, our study finds that illicit outflows have grown over time—averaging just over US$300 million per annum in the 1960s, they’re averaging over US$30 billion per year today.  Unless corrective actions are taken, the economic toll of these illicit flows only will continue to grow.”

The report reveals that the vast majority of Brazil’s illicit outflows—92.7 percent, or US$372.3 billion of the US$401.6 billion in total outflows—were channeled through the misinvoicing of trade transactions.  The remaining US$29.4 billion in the illicit outflows detected by GFI occurred via hot money outflows, such as unrecorded wire transfers.

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Philippines Wages War on Crooked Customs Agents - The Jakarta Globe

Philippines Wages War on Crooked Customs Agents - The Jakarta Globe | Global Corruption | Scoop.it

“I’ve never seen anything like it,” John Sevilla said, commenting on a pervasive culture of bribery, extortion and stealing at a government agency that collects revenues equivalent to 20 percent of the nation’s budget.

“There’s no secret about the fact that this is not an agency which inspires a lot of trust and confidence among our people.”

But Sevilla, a former Goldman Sachs executive, has bold plans for systemic change that are showing early signs of success.

President Benigno Aquino, who has made fighting graft a central tenet of his administration, appointed Sevilla to head the bureau in December last year after launching a scathing verbal assault on customs personnel.

“Where do these people get the gall,” Aquino said in his annual State of the Nation address as he accused customs staff of “heedlessly permitting the smuggling of goods, and even drugs, arms and other items”.

Aquino said customs personnel’s greed cost the country at least 200 billion pesos ($4.6 billion) in lost revenues each year — at least 2 percent of the country’s economic output.

Several months later, the then-customs chief resigned after being charged over a separate corruption scandal involving the alleged theft of government funds.

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Texas Border County Judge Pleads Guilty to Extortion

Texas Border County Judge Pleads Guilty to Extortion | Global Corruption | Scoop.it
 A justice of the peace from the Laredo area has pleaded guilty to federal extortion charges for taking a $250 bribe to rig the bond of a man accused of drunken driving.

Ricardo Rangel has been a justice of the peace in Webb County since 2002. Where as part of his job he served as a magistrate judge on various state charges, according to court records obtained by Breitbart Texas.

On Thursday, Rangel, 48, went before U.S. District Judge Diana Saldaña who formally charged him with one count of extortion under color of official right and accepted his guilty plea. As part of his guilty plea, Rangel agreed to cooperate with prosecutors as a witness and to help in any other related investigations.  During the hearing, Saldaña set bond for Rangel at $75,000, at his sentencing hearing the justice of the peace faces a possible sentence of up to 20 years in prison.

The accusation against Rangel is that on March 25, 2012 he took a $250 bribe from a bail bondsman in order to grant a lower bond of $1,000 for a man that had been arrested on a driving while intoxicated charge, court records show.

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Avid Sailor Sent To Prison For $2.8 Million Fraud - CBS Detroit

Avid Sailor Sent To Prison For $2.8 Million Fraud - CBS Detroit | Global Corruption | Scoop.it

 A former Detroit-area lawyer has been sentenced to more than five years in federal prison for illegally obtaining nearly $2.8 million that belonged to his firm or clients.

Ken Flaska pleaded guilty to one count of bank fraud and one count of money laundering in April 2014.

According to court records, Flaska executed a scheme over several years to defraud his clients and the law firm at which he was employed. Flaska used false and fraudulent pretenses and representations to obtain funds payable to his clients, which he then diverted for his own personal use.

The FBI says the money fueled Flaska’s extravagant lifestyle, including a 31-foot sailboat used in last year’s Port Huron to Mackinac Island race.

Flaska, a longtime sailor, told Grosse Pointe Magazine in 2010 that he’s sailed in dozen of races in the Great Lakes and international waters.

“Attorneys are paid to serve their clients, not to enrich themselves,” U.S. Attorney Barbara McQuade said in a statement. “The defendant in this case went beyond committing criminal conduct by breaching professional duties to clients and colleagues.”

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USA: 'Godfather' accused of $50 million workers' comp fraud

USA: 'Godfather' accused of $50 million workers' comp fraud | Global Corruption | Scoop.it

Peyman Heidary is a chiropractor known to call himself “The Godfather.”

Law enforcement authorities say Heidary is a crime boss beyond his alias, accusing him of masterminding one of the largest insurance fraud cases the Riverside County District Attorney’s Office has ever prosecuted.

Heidary, 44, of Riverside is charged with heading a criminal organization that established medical clinics in Riverside, Orange and Los Angeles counties and a law firm that submitted thousands of workers’ compensation claims for nonexistent or exaggerated injuries that billed insurance companies for at least $50 million, court records say.

Investigators from the Riverside County District Attorney’s Office and the State Fund had also been able to document a loss of $5 million to the State Fund as of July 23, court documents say.

District attorney spokesman John Hall said the amount that insurance companies actually paid to Heidary was less than $50 million.

The criminal complaint filed July 25 in Superior Court in Riverside lists Heidary’s aliases as Brian Heidary, The Godfather and Number One.

The District Attorney’s Office wouldn’t say how it learned of Heidary’s aliases, but a search of public records showed that Heidary indeed is the No. 1 person in many companies.

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Analytics Fights Fraud In Government Benefits Programs - InformationWeek

Analytics Fights Fraud In Government Benefits Programs - InformationWeek | Global Corruption | Scoop.it

Right combination of data analytics can help agencies weed out identity thieves and fraudsters....

 

 

As a nation, we are seeing more and more headlines like this one from The Washington Post: "Agencies Can't Always Tell Who's Dead and Who's Not, So Benefit Checks Keep Coming."

Fraud is all around us, and government benefits programs are particularly vulnerable. Programs like the Supplemental Nutrition Assistance Program (SNAP) and Social Security provide vital assistance to citizens in need, but, unfortunately, qualified recipients aren't the only ones cashing in on benefits.

Every year public benefits programs lose billions of dollars to fraud, siphoning money away from legitimate recipients and increasing the burden on already-tight government budgets and weary taxpayers.

Though the threat of fraud is nothing new, advanced technology continues to change the game. When benefits were disbursed in check form, forgery and counterfeiting were the main concerns. Today, as agencies have moved from paper checks to electronic benefit transfer and debit cards, fraud threats have become more sophisticated, leading to a vast array of challenges.

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USA: Bob McDonnell joins 8 other former governors convicted of corruption in recent years

USA: Bob McDonnell joins 8 other former governors convicted of corruption in recent years | Global Corruption | Scoop.it
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USA - Georgia: DeKalb County Ethics Board plans hearing for Boyer

The DeKalb County Board of Ethics has scheduled a preliminary hearing for former Commissioner Elaine Boyer, who pleaded guilty to fraud charges this week.
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USA: SEC Charges Immigration Attorneys With Defrauding Investors Seeking U.S. Residency

USA: SEC Charges Immigration Attorneys With Defrauding Investors Seeking U.S. Residency | Global Corruption | Scoop.it

The Securities and Exchange Commission today charged a Los Angeles-based immigration attorney, his wife, and his law firm partner with conducting an investment scheme to defraud foreign investors trying to come to the U.S. through the EB-5 Immigrant Investor Program.

 

The SEC alleges that Justin Moongyu Lee along with Rebecca Taewon Lee and Thomas Edward Kent raised nearly $11.5 million from two dozen investors seeking to participate in the EB-5 program, which provides immigrants an opportunity to apply for U.S. residency by investing in a domestic project to create jobs for U.S. workers.  The Lees and Kent informed investors that they would be EB-5 eligible if they invested in an ethanol production plant they would build and operate in Ulysses, Kan.  However, investors’ money was misappropriated for other uses instead of the ethanol plant project.  The plant was never built and the promised jobs never created, yet the Lees and Kent continued to misrepresent to investors that the project was ongoing.

 

In a parallel action, the U.S. Attorney’s Office for the Central District of California today announced criminal charges against Justin Lee.

 

“These immigration lawyers exploited a desire by foreign investors to participate in a program that would not only generate them a positive investment return, but also provide them a path to legal residency in the United States,” said Michele Wein Layne, Regional Director of the SEC’s Los Angeles office.  “Long after all construction had ceased, they continued to falsely tell investors that they were building the plant.”

 

According to the SEC’s complaint filed in U.S. District Court for the Central District of California, the investors defrauded by the Lees and Kent were primarily of Chinese and Korean descent.  Justin Lee and Kent applied to the U.S. Citizenship and Immigration Services (USCIS) in 2006 for designation as a “regional center” under the EB-5 program.  They claimed there would be “substantial economic benefit” and “thousands” of new jobs for this area in southwest Kansas.  However, by mid-2008, construction of an ethanol plant at the site was no longer economically feasible, and the Lees and Kent concealed their failure to generate the jobs required by the EB-5 program by submitting false documents to the USCIS. 

 

Meantime, the SEC alleges, when Justin Lee was running low on cash and having difficulty obtaining financing, he took money out of investor escrow accounts without their knowledge prior to the approval of an investor’s application for residency.  Lee and his wife subsequently misused several million dollars raised from the ethanol plant investors for other undisclosed purposes such as financing an iron ore project in the Philippines and repaying investors in other unrelated offerings. 

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USDEPARTMENT OF JUSTICE: Former Virginia Governor and Former First Lady Convicted on Public Corruption Charges

USDEPARTMENT  OF JUSTICE: Former Virginia Governor and Former First Lady Convicted on Public Corruption Charges | Global Corruption | Scoop.it

According to the evidence presented at trial, from April 2011 through March 2013, the McDonnells participated in a scheme to use the former governor’s official position to enrich themselves and their family members by soliciting and obtaining payments, loans, gifts and other things of value from Star Scientific, a Virginia-based corporation, and Jonnie R. Williams Sr., then Star Scientific’s chief executive officer.   The McDonnells obtained the things of value in exchange for the former governor performing official actions on an as-needed basis to legitimize, promote, and obtain research studies for Star’s products, including the dietary supplement Anatabloc.

According to court records and evidence, the McDonnells obtained from Williams more than $170,000 in direct payments as gifts and loans, thousands of dollars in golf outings, and numerous other things of value.   As part of the scheme, the official actions that Robert McDonnell performed included arranging meetings for Williams with Virginia government officials, hosting and attending events at the Governor’s Mansion designed to encourage Virginia university researchers to initiate studies of Star’s products and to promote Star’s products to doctors for referral to their patients, contacting other Virginia government officials as part of an effort to encourage Virginia state research universities to initiate studies of Star’s products, and promoting Star’s products and facilitating its relationships with Virginia government officials.

The evidence further showed that the McDonnells attempted to conceal the things of value received from Williams and Star to hide the nature and scope of their dealings with Williams from the citizens of Virginia by, for example, routing things of value through family members and corporate entities controlled by the former governor to avoid annual disclosure requirements.

Similarly, on Feb. 15, 2013, Maureen McDonnell was questioned by law enforcement about the loans and made false and misleading statements regarding the defendants’ relationship with Williams.  Additionally, after her interview with law enforcement, Maureen McDonnell drafted a handwritten note to Williams in which she falsely attempted to make it appear that she and Williams had previously discussed and agreed that she would return certain designer luxury goods rather than keep them permanently, all as part of an effort to obstruct, influence, and impede the investigation.

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USA, Virginia: Thoughts on the McDonnell conviction

USA, Virginia: Thoughts on the McDonnell conviction | Global Corruption | Scoop.it

The sad end to the McDonnell fiasco... if it should stand, the precedent that doing innocuous favors for donors constitutes criminal activity should be alarming to politicians throughout the country. Recall that McDonnell didn’t give state money to Jonnie R. Williams Sr., nor did he usher through legislation on his behalf. He set up some meetings and made some calls. By transforming politics as usual into a felony, the Obama Justice Department has broken new ground to be sure.

The theory of the case doesn’t depend on the amount of the gifts, and technically it doesn’t seem to require the gifts be given during the term of office. Are campaign donations themselves the basis of prosecution if, for example, an administration sets up green energy funds for its donors and pals? What about millions in speaking fees doled out in expectation of a candidate’s future help and access?

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USA: Ex-Virginia governor, wife guilty of public corruption

USA:  Ex-Virginia governor, wife guilty of public corruption | Global Corruption | Scoop.it

Former Virginia Gov. Bob McDonnell and his wife were convicted Thursday of taking bribes to promote a dietary supplement in a corruption case that derailed the career of the onetime rising Republican...

 

The couple was convicted on nearly all the counts involving doing favors for wealthy vitamin executive Jonnie Williams in exchange for more than $165,000 in gifts and loans that they admitted taking.

Maureen McDonnell also was convicted of obstructing justice after the scandal broke, by returning a designer gown Williams had bought for her during a New York shopping trip, along with a handwritten note that tried to diminish its value by suggesting they had agreed Williams could give the dress to his daughters or to charity.

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USDOJ: Owner of Home Heath Care Company Sentenced to 75 Months in Prison for $6.5 Million Medicare Fraud Scheme

USDOJ: Owner of Home Heath Care Company Sentenced to 75 Months in Prison for $6.5 Million Medicare Fraud Scheme | Global Corruption | Scoop.it

The owner and operator of a Miami home health care company was sentenced to 75 months in prison today for her participation in a $6.5 million Medicare fraud scheme involving the now defunct home health care company, Nestor’s Health Services Inc. (Nestor Home Health)... 

Cruz Sonia Collado, 64, of Homestead, Florida, was an owner and operator of Nestor Home Health, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.   On June 23, 2014, Collado pleaded guilty to one count of conspiracy to offer and pay health care kickbacks and to defraud the United States, and one count of offering and paying health care kickbacks.   In addition to her prison term, Collado was sentenced to serve three years of supervised release and ordered to pay $6,536,657 in restitution.   

According to court documents, Collado paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Nestor Home Health for home health care and therapy services that were medically unnecessary and, in many instances, not provided.   Collado then fraudulently billed the Medicare program for home health care services on behalf of the recruited patients.   

From March 2009 through at least January 2014, Nestor Home Health submitted more than $6.5 million in false claims for home health services.  Medicare paid Nestor Home Health more than $6.1 million for these fraudulent claims.

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China's Corruption Investigation Into Volkswagen's China Venture Is Getting Wider

China's Corruption Investigation Into Volkswagen's China Venture Is Getting Wider | Global Corruption | Scoop.it

China's anti-graft watchdog has said it is investigating a former senior executive at Volkswagen AG's Chinese venture, FAW-Volkswagen Automotive Co Ltd, for corruption, the latest target in a widening probe against the company.

An Dewu, FAW's former deputy general manager, was investigated for "suspected serious violations of the law", the ruling Chinese Communist Party's discipline watchdog said late on Friday.

The brief report did not give any details of the investigation. In China, the term "serious violations of the law" can be used to denote corruption. It was not possible to contact An or any of his representatives.

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USDOJ: Caribbean-Based Investment Advisor Sentenced for Using Offshore Accounts to Launder and Conceal Funds

USDOJ: Caribbean-Based Investment Advisor Sentenced for Using Offshore Accounts to Launder and Conceal Funds | Global Corruption | Scoop.it

Joshua Vandyk, an investment advisor, was sentenced today to serve 30 months in prison for conspiring to launder monetary instruments, the Justice Department and Internal Revenue Service (IRS) announced.

 

Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were indicted by a grand jury in the U.S. District Court for the Eastern District of Virginia on March 6, and the indictment was unsealed March 12 after the defendants were arrested in Miami.  Vandyk, 34, pleaded guilty on June 12, St-Cyr, 50, pleaded guilty on June 27, and Poulin, 41, pleaded guilty on July 11.  St-Cyr and Poulin are scheduled to be sentenced on Oct. 3. 

 

According to the plea agreements and statements of facts, Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud, specifically $2 million.  Vandyk, St-Cyr and Poulin assisted undercover law enforcement agents posing as U.S. clients in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners.  Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented that the funds would not be reported to the U.S. government.

  

According to court documents, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based there.  St-Cyr was the founder and head of the investment firm, whose clientele included numerous U.S. citizens.  Poulin, an attorney at a law firm based in Turks and Caicos, worked and resided in Canada as well as Turks and Caicos.  His clientele also included numerous U.S. citizens.  Vandyk, St-Cyr and Poulin solicited U.S. citizens to use their services to hide assets from the U.S. government, including the IRS.  Vandyk and St-Cyr directed the undercover agents to create an offshore corporation with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with U.S. clients.  Vandyk, St-Cyr and Poulin used the offshore entity to move money into the Cayman Islands and used Poulin as a nominee intermediary for the transactions.

 

According to court documents, Poulin established an offshore corporation called Zero Exposure Inc. for the undercover agents and served as a nominal board member in lieu of the clients.  Poulin transferred approximately $200,000 that the defendants believed to be the proceeds of bank fraud from the offshore corporation to the Cayman Islands, where Vandyk and St-Cyr invested those funds outside of the United States in the name of the offshore corporation.  The investment firm represented that it would neither disclose the investments or any investment gains to the U.S. government, nor would it provide monthly statements or other investment statements to the clients.  Clients were able to monitor their investments online through the use of anonymous, numeric passcodes.  Upon request from the U.S. client, Vandyk and St-Cyr liquidated investments and transfered money, through Poulin, back to the United States.  According to Vandyk and St-Cyr, the investment firm would charge clients higher fees to launder criminal proceeds than to assist them in tax evasion.

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Leading Brazilian political parties tainted by corruption scandal

Leading Brazilian political parties tainted by corruption scandal | Global Corruption | Scoop.it

A jailed former executive at state-controlled oil giant Petrobras has reportedly implicated dozens of politicians from Brazil's leading political parties in a kickback scheme, a legal development that could shake up next month's general election.

The case centers on alleged kickbacks paid to dozens of politicians by construction firms that were awarded contracts with Petrobras between 2004 and 2012.

Several prominent Brazilian politicians were supposedly implicated by the jailed former director of Petrobras' refining and supply unit, Paulo Roberto Costa, who has reached a plea-bargain deal with the Federal Police.

The politicians he mentioned, news magazine Veja reported Saturday, include the late Eduardo Campos, who was the candidate of the opposition Brazilian Socialist Party when he died in a airplane crash on Aug. 13.

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Chasing riches led China down the path of corruption, say party elders' children

Chasing riches led China down the path of corruption, say party elders' children | Global Corruption | Scoop.it

The all-out pursuit of wealth and economic growth, and empty moral slogans, are to blame for rampant corruption in the Communist Party, children of several party elders have said.

It was "unthinkable" that some officials took advantage of their political power to become the first to "get rich" after the country embraced economic reforms, they said on the sidelines of a conference in Hong Kong commemorating the founding of the prestigious Huangpu Military Academy 90 years ago.

"One of the major reasons [for corruption] is that our party has adopted a problematic guiding ideology," Dong Lianghui said. She is the daughter of Dong Biwu , a key member of the first-generation party leadership and who served as a vice-president.

"There is nothing wrong with letting Chinese people get rich, but the officials should never have treated themselves as the group of people who should get rich first," Dong said, referring to Deng Xiaoping's famous remark in the mid-1980s that China should reform its planned economy and "let some people get rich first" .

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Second Defendant Convicted in $8 Million Fraud Scheme Concerning Purported Alternative Energy Technology

Second Defendant Convicted in $8 Million Fraud Scheme Concerning Purported Alternative Energy Technology | Global Corruption | Scoop.it

A Ventura, California man has pleaded guilty to federal fraud charges for his involvement in an $8 million investment scheme that lured investors with false promises relating to the development of an alternative energy technology, Richard S. Hartunian, the United States Attorney for the Northern District of New York, announced today.

William A. Stehl, 69, pleaded guilty in federal court in Los Angeles on September 2 to five counts: conspiracy to commit mail and wire fraud, lying to federal agents, two counts of attempting to evade the payment of federal income taxes for calendar years 2003 and 2004, and subscribing to a false federal income tax return for calendar year 2003.

Stehl entered his plea before United States District Judge Terry J. Hatter, Jr., who scheduled a sentencing hearing for December 15, 2014. At sentencing, Stehl faces up to 38 years in federal prison.

Judge Hatter allowed Stehl to enter guilty pleas based on the 1970 United States Supreme Court decision in North Carolina v. Alford, which held there is no constitutional bar to a defendant entering a plea of guilty without acknowledging his guilt, if, the defendant concludes he would be convicted after a trial. Stehl and a co-defendant—Richard M. Rossignol, 64, of Los Angeles, California—were arrested in Oxnard, California four years ago in connection with an indictment filed in the Northern District of New York. Both men were charged with conspiracy to commit mail and wire fraud. Additionally, Stehl was charged with several tax charges and lying to federal agents.

The conspiracy count alleged that from 2001 up to the time of the indictment in March 2010, Stehl, Rossignol and others induced victims to invest money in companies that were purportedly developing or utilizing an alternative energy source Stehl claimed he had developed. Investors were told that one of Stehl’s applications related to the processing of precious metals allegedly contained in a slag pile in Silver City, New Mexico.

Stehl and Rossignol were charged with fraudulently obtaining money from investors by making false representations about the status of the process, claiming that contracts and licensing agreements had either been signed, or were about to be signed, that would result in significant financial returns for the investors. Stehl, Rossignol, and others obtained more than $8 million from more than 300 victims, and attempted to obtain at least an additional $50 million. None of the investors received the returns promised by Stehl and Rossignol, and most of the money obtained was used for personal expenditures.

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USA: Grant fraud included $10K bonus to cover up sexual tryst

USA: Grant fraud included $10K bonus to cover up sexual tryst | Global Corruption | Scoop.it

A former top state public health official and a Chicago businessman who got caught in a sexual tryst quickly steered a $10,000 bonus to the person who walked in on them as part of a state grant fraud scheme, federal prosecutors allege.

The revelation surfaced in court papers on the eve of a money-laundering trial that is part of an ongoing federal investigation into alleged abuse of social service and faith-based grants at the Illinois Department of Public Health and other agencies dating to the tenure of now-imprisoned former Democratic Gov. Rod Blagojevich.

 

Leon Dingle and wife Karin Dingle are charged with money laundering, mail fraud and conspiracy to defraud after prosecutors alleged that as much as $3.7 million of the grant money designated to fight cancer and AIDS instead helped pay for luxury cars, yacht club expenses and vacation getaway spots in Savannah, Ga., and Hilton Head, S.C. Both Dingles have pleaded not guilty.

Prosecutors alleged that onetime public health chief of staff Quinshaunta Golden, who oversaw distribution of the grants, had "what appeared to be a sexual encounter" in her office with Leon Dingle, who received $11 million in grant money through several social service groups, largely without having to go through a bidding process.

According to prosecutors, Golden, 45, and Leon Dingle, 76, were in Golden's office in 2007 when the two got a surprise visit from an unidentified person working on a faith-based initiative who was being paid by Dingle.

lRelatedCLOUT STREETFormer top aide to Obama pal Whitaker indicted in state grant kickback schemeSEE ALL RELATED 8 

Dingle and Golden, who was partially undressed, gathered themselves, praised the work of the unidentified person and told the person to expect a $10,000 bonus, prosecutors alleged in court papers. Bank records later showed the bonus was paid, prosecutors said.

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Former El Salvador president wanted for corruption given house arrest

Former El Salvador president wanted for corruption given house arrest | Global Corruption | Scoop.it

A judge ordered former El Salvador President Francisco Flores to be held under house arrest after he turned himself in on Friday to await trial on corruption charges.

Flores, who was president of the Central American country from 1999 to 2004, had been on the run since January and has been accused of misappropriating $15 million donated by Taiwan for earthquake relief efforts in 2001.

Earlier on Friday, Flores handed himself into Judge Levis Orellana accompanied by his lawyers. A few hours later Orellana ordered Flores to be held under house arrest, said judiciary spokesman Ulises Marinero.

"I presented myself voluntarily and in respect of the law. I don't think I'll be able to make any other comments right now," Flores said, flanked by police as he left the courtroom before heading to his home in an upscale part of San Salvador.

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USA: GEORGIA Ethics chief placed on leave

USA: GEORGIA Ethics chief placed on leave | Global Corruption | Scoop.it

Holly LaBerge, the head of the state ethics commission, has been placed on administrative leave, two days after a judge said she had been “dishonest and non-transparent,” the AJC has learned.

Commission Chairwoman Hillary Stringfellow told The Atlanta Journal-Constitution that she has the power to unilaterally make this move, which comes just hours before the full commission is set to meet at 4:30 p.m. today to discuss litigation and personnel.

LaBerge’s personal attorney did not immediately respond to a request for comment.

Stringfellow said she informed LaBerge by phone at 8:15 Friday morning of the decision to place her on administrative leave with pay “until further notice.” Stringfellow said Judge Ural Glanville’s order fining LaBerge $10,000 and calling her “dishonest and non-transparent” was the tipping point.

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USDOJ: Two Companies to Pay $3.75 Million for Allegedly Causing Submission of Claims for Unreasonable or Unnecessary Rehabilitation Therapy at Skilled Nursing Facilities

USDOJ: Two Companies to Pay $3.75 Million for Allegedly Causing Submission of Claims for Unreasonable or Unnecessary Rehabilitation Therapy at Skilled Nursing Facilities | Global Corruption | Scoop.it

Life Care Services LLC (LCS), a manager of skilled nursing facilities based in Des Moines, Iowa, and CoreCare V LLP, doing business as ParkVista, a skilled nursing facility in Fullerton, California, have agreed to pay a total of $3.75 million to the government for causing the submission of false claims to Medicare for unreasonable or unnecessary rehabilitation therapy purportedly provided by RehabCare Group East Inc., a subsidiary of Kindred Healthcare Inc. 

 

“The provision of Medicare benefits must be dictated by patient need, not the fiscal interests of providers,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division.  “ Today’s settlement demonstrates the department’s commitment to safeguarding both Medicare beneficiaries and taxpayer dollars by holding accountable all entities involved in billing for unnecessary services.”

 

LCS has operated and managed skilled nursing facilities across the country, including ParkVista and, until 2013, a facility in Massachusetts.  At the suggestion of LCS, ParkVista and the Massachusetts facility hired RehabCare to provide rehabilitation therapy services at their facilities. 

 

The settlement resolves allegations that ParkVista submitted and LCS caused both ParkVista and the Massachusetts facility to submit false claims for rehabilitation therapy.  The government alleges that LCS and ParkVista failed to prevent RehabCare from providing unreasonable or unnecessary therapy to patients in order to increase Medicare reimbursement to the facilities.  The government contended that the reported therapy did not reflect the lower amounts of therapy generally provided to patients over the course of their stay. 

 

The settlement further resolves allegations that LCS and ParkVista failed to prevent other RehabCare practices designed to inflate Medicare reimbursement, including: in lieu of using individualized evaluations to determine the level of care most suitable for each patient’s clinical needs, presumptively placing patients in the highest reimbursement level unless it was shown that the patients could not tolerate that amount of therapy; providing the minimum number of minutes of therapy required to bill at the highest reimbursement level while discouraging the provision of therapy in amounts beyond that minimum threshold, despite the Medicare requirement that the amount of care provided be determined by patients’ clinical needs; arbitrarily shifting the number of minutes of planned therapy between therapy disciplines to ensure targeted reimbursement levels were achieved; and reporting estimated or rounded minutes instead of reporting the actual minutes of therapy provided. 

 

“Patients in skilled nursing facilities and the patients’ families should be able to have confidence that the facilities are not allowing therapy companies to manipulate the amount of therapy being provided based on financial motives,” said U.S. Attorney Carmen M. Ortiz for the District of Massachusetts.  “Settlements like this one show that, when a facility contracts with an outside rehabilitation therapy provider, the facility has a continuing responsibility to ensure that the provider is not engaged in conduct that causes the submission of false claims to Medicare.”

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Bob McDonnell’s shocking stupidity: How could a politician have been this dumb?

Bob McDonnell’s shocking stupidity: How could a politician have been this dumb? | Global Corruption | Scoop.it

Latest GOP governor to humiliate himself -- and break the law -- endured a crazy saga. Here's why it's so surreal...

 

Cash, golf trips, Rolexes, vacations, checks, vacations, Ferrari rides: The components of the $100,000+ in gifts and loans that they received from Star Scientific CEO Jonnie Williams Sr., in exchange for using the powers of the governorship to promote his dumb diet pill thing, couldn’t have been a shinier bundle of objects for the prosecution to present to the jury. In modern politics, corruption charges are usually more tediously complex: Money was wired here and then laundered via a pass-through, which made its way through another pass-through and was distributed through a foundation before ending up at a nonprofit designed to help such and such’s interests with a client trying to change regulations in foreign markets, or whatever. Not in this case. The prosecution just had to show the jury images of the idiot governor showing off his flashy watch that was given to him by the rich businessman for whom he did favors in return. How much simpler could this get? It’s only a degree of reality or two away from an old-timey political cartoon of a tuxedoed plutocrat, smoking a cigar, handing over a big bag marked “$$$,” to a crooked politician slapping his back and cackling.

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God, the stupidity.

Even when the McDonnells realized they’d been caught, and indicted, for cartoonish quid pro quo corruption, they inexplicably continued to roll the dice. You’d think they’d realize, Oh god, they caught us taking lots of money from this guy, better strike a deal! And yet they didn’t. Bob McDonnell rejected a plea deal that would have charged him with one felony and let Maureen McDonnell off free. Whoops!

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UN Tribunal Weakens Whistleblowers' Rights, Disregards U.S. Appropriations Law

Over Labor Day weekend, the United Nations Appeals Tribunal (UNAT) issued a decision in the whistleblower protection appeal of Government Accountability Project (GAP) client* James Wasserstrom, a former senior staff member at the U.N. Interim Administration Mission in Kosovo (UNMIK). In overturning the strongly worded decision of the U.N. Dispute Tribunal (UNDT) in Mr. Wasserstrom's favor, the UNAT has eviscerated UNDT’s precedent protecting whistleblowers and has significantly weakened their rights within the U.N.'s internal justice system.

In its decision, the UNAT applied its previous restrictive rulings that only certain "administrative decisions" by specific U.N. entities confer jurisdiction on the UNDT to entertain staff complaints. In Wasserstrom’s case, UNAT determined "recommendations" made by the U.N. Ethics Office – the unit established to protect U.N. whistleblowers – are not administrative decisions subject to judicial review by the UNDT. As a result of this precedent, U.N. whistleblowers will no longer be able to challenge the decisions of the Ethics Office, an admittedly dubious channel for redress, which has historically failed to protect 99 percent of the whistleblowers who have sought its support, including Wasserstrom. Without a clear and effective procedure for protecting whistleblowers, the United Nations fails to meet international best practices.

"This Labor Day weekend, the United Nations significantly weakened the rights of its own employees," said GAP international program consultant Shelley Walden. "As a result of this judgment, some cases filed by U.N. whistleblowers will likely be thrown out by the Tribunal. This judgment may also further exacerbate the chilling effect that prevents U.N. employees from speaking out about misconduct. This is a sad day for whistleblowers and those who wish the U.N. was more accountable and effective."

The judgment (2014-UNAT-457) was by majority with Judge Faherty dissenting. The majority reversed the judgments on liability and relief made in Wasserstrom’s favor by UNDT. The judges unanimously upheld an award of $15,000 in costs against the Secretary-General for having abused the judicial process by refusing to comply with the production and discovery orders.

- See more at: http://whistleblower.org/blog/120003-un-tribunal-weakens-whistleblowers-rights-disregards-us-appropriations-law-0#sthash.a9tqPKj3.dpuf
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