Chilean Chemicals and Mining Company Agrees to Pay More Than $15 Million to Resolve Foreign Corrupt Practices Act Charges

Chilean chemicals and mining company Sociedad Química y Minera de Chile (SQM) agreed to pay a criminal penalty of more than $15 million in connection with payments to politically-connected individuals in Chile in violation of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.

According to the company’s admissions, SQM knowingly failed to implement internal controls sufficient to ensure that payments from a fund under the control of one of its officers and high-level executives were made for services received and in compliance with Chilean law.  Between 2008 and 2015, SQM made donations to dozens of foundations controlled by or closely tied to Chilean politicians.  During this period, for example, SQM funneled approximately $630,000 to foundations controlled by a Chilean official with influence over the government’s mining plans in Chile, a key segment of SQM’s business. read more »

S.E.C. Inertia on Paybacks Adds to Investor Harm

When securities laws are broken and investors get hurt, the Securities and Exchange Commission often rides to the rescue, using its regulatory muscle to extract penalties that can be returned to victims.

But as a cadre of harmed Citigroup investors is learning, it is one thing to persuade a wrongdoer to pay reparations and quite another to disburse the money. read more »

Gambler Wants Insider-Trading Case Tossed Over FBI Leaks

Las Vegas gambler Billy Walters played his hand on Friday, asking a judge to dismiss insider-trading charges against him after an FBI agent leaked details about the confidential probe to the press.

Walters said in a court filing that the FBI violated his rights by leaking to the press details of a confidential probe of his stock trading. The agency did so to breathe life into a flagging investigation, hoping to prod targets to incriminate themselves after a wiretap on Walters’s phone failed to turn up evidence, his lawyers said. read more »

Lies or banter? Ex-Jefferies trader's fate lies with jury

Jesse Litvak, 42, was "motivated by greed," and it was no excuse that other traders might have similarly deceived their own customers, Assistant U.S. Attorney Jonathan Francis told jurors in New Haven, Connecticut in his closing argument on Friday.

"Even a child knows that 'Billy did it too' isn't an excuse for bad behavior," Francis said. "A grown man knows that lying to cheat people is the wrong thing to do." read more »

Wells Fargo Struggling in Aftermath of Fraud Scandal

Wells Fargo continues to struggle with the fallout from a phony accounts scandal that engulfed it last year.

The bank said on Friday that new credit card applications were down 43 percent in the fourth quarter of 2016 from a year ago, and that new checking account openings fell 40 percent.

The results reflected the first full quarter since September, when Wells, which is based in San Francisco, announced that its employees had, over the course of years, created as many as two million unauthorized credit card and checking accounts. read more »

More VW Executives Could Be Charged, Court Documents Suggest

The hunt for the people behind Volkswagen’s emissions scandal did not end with the company’s plea bargain this week.

There was the man identified in court documents only as “Supervisor B,” who overruled nervous subordinates and told them to develop the illegal software. Don’t get caught, he told them, according to the documents.

There was “Attorney A,” who, as regulators closed in, urged co-workers to destroy any emails that mentioned the “acoustic function,” the code name for emissions cheating software.

The two suspects were conspicuously missing from the group of six Volkswagen executives indicted on Wednesday — a clear indication that there could be more criminal charges, further eroding the company’s reputation and destabilizing management. There is little doubt that investigators will lean on suspects to testify against others, and push as high up in Volkswagen’s organization chart as the evidence allows. read more »

Volkswagen’s Diesel Scandal: Who Has Been Charged?

A star troubleshooter known as “the fireman.” The head of the team that developed a new diesel engine. The executive dealing with American regulators.

If there was any argument that Volkswagen’s diesel scandal was carried out by a small group of low-level employees, charges filed by the Department of Justice sharply undermine it.

The executives charged worked across multiple Volkswagen divisions, painting a portrait of an organized deception carried out over several years. Prosecutors allege that they collectively directed engineers to fit the company’s cars with “defeat devices,” which changed vehicle settings so they spewed fewer pollutants during tests by regulators than they did on the road.

I’m posting the VW stuff in the auto blog too – but assume that the prosecution of execs is good for WB blog as a story about corporate misbehavior? read more »

Justice Department Toughened Approach on Corporate Crime, but Will That Last?

When the dust settled on the 2008 financial crisis, not a single top Wall Street executive went to prison.

And for that, the Obama administration’s Justice Department took one lashing after another, from Congress, the press and a few maverick judges. The critics even coined a new phrase — that banks and their executives were “too big to jail” — and it reverberated through Wall Street and Washington, a taunting reminder of the ones who got away.

Over the past two years, the Justice Department, loath to be seen as treating the corporate world with kid gloves, began changing its approach. Two prosecutors with specialties in white-collar cases joined the administration and helped spearhead the push: Deputy Attorney General Sally Q. Yates, who created new guidelines for prosecuting corporate employees, and Leslie R. Caldwell, who took over the Justice Department’s criminal division. read more »

NY AG - Indictment And Arraignment Of Long Island Attorney And Operators Of “Three-Quarter” Houses On Charges Of Medicaid Fraud And Money Laundering

Attorney General Eric T. Schneiderman today announced the indictment and arraignment of attorney Anthony Cornachio, 74, of Garden City as well as the indictment and arraignment of NRI Group, LLC. (“NRI”) and Canarsie A.W.A.R.E., Inc. (“Canarsie”), both Medicaid-enrolled drug treatment programs companies controlled by Cornachio. Also announced today was the indictment and arraignment of three-quarter housing operators Yury Baumblit, 66, and Rimma Baumblit, 60, of Brooklyn, and their company Back on Track Group, Inc.

“New York’s homeless and substance abuse programs are funded by taxpayers to provide a basic human right and assist those suffering from addiction,” said Attorney General Schneiderman. “Treating vulnerable New Yorkers as pawns to maximize Medicaid reimbursement to generate unjust profits is shocking, and those who steal from Medicaid will be caught and prosecuted.” read more »