General Cable Corporation Agrees to Pay $20 Million Penalty for Foreign Bribery Schemes in Asia and Africa

General Cable Corporation, a Kentucky-based manufacturer and distributor of cable and wire, entered into a non-prosecution agreement and agreed to pay a $20 million penalty, reflecting a 50 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range, to resolve the government’s investigation into improper payments to government officials in Angola, Bangladesh, China, Indonesia and Thailand to corruptly gain business in violation of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Leslie R. Caldwell of the Criminal Division and Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division.

“General Cable paid bribes to officials in multiple countries in a scheme that involved a high-level executive of the company and resulted in profits of more than $50 million worldwide,” said Assistant Attorney General Caldwell.  “But General Cable also voluntarily self-disclosed this misconduct to the government, fully cooperated and remediated.  This resolution demonstrates the very real upside to coming in and cooperating with federal prosecutors and investigators. It also reflects our ongoing commitment to transparency.” read more »

Justice Department Reaches Final Resolutions Under Swiss Bank Program

The Department of Justice announced today that it has reached final resolutions with banks that have met the requirements of the Swiss Bank Program.  The Program provided a path for Swiss banks to resolve potential criminal liabilities in the United States, and to cooperate in the Department’s ongoing investigations of the use of foreign bank accounts to commit tax evasion.  The Program also provided a path for those Swiss banks that were not engaged in wrongful acts but nonetheless wanted a resolution of their status.  Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the Program.

“The Swiss Bank Program has been and continues to be a vital part of the Justice Department's efforts to aggressively pursue tax evasion,” said Attorney General Loretta E. Lynch. “This groundbreaking initiative has uncovered those who help facilitate evasion schemes and those who hide funds in secret offshore accounts; improved our ability to return tax dollars to the United States; and allowed us to pursue investigations into banks and individuals.  I want to thank the Swiss government for their cooperation in this effort, and I look forward to continuing our work together to eradicate fraud and corruption.” read more »

Businessman Settles Charges of Fraudulent EB-5 Offering

The Securities and Exchange Commission today announced that a Florida-based businessman has agreed to settle charges that he misused investor funds intended to create U.S. jobs through the EB-5 Immigrant Investor Program.

The SEC alleges that Jason Adam Ogden, the CEO of a pair of smoothie and frozen yogurt franchises called Juiceblendz and Yoblendz, formed AJN Investments LLC to conduct an investment offering in conjunction with the EB-5 program, which provides foreign investors a path to permanent residency when their investments create at least 10 jobs for American workers.  Investors were allegedly told that their money would help build and operate Juiceblendz and Yoblendz stores in strip malls and create a sufficient amount of jobs for them to qualify for an EB-5 visa and ultimately a green card.

But according to the SEC’s complaint, Ogden changed his business model midstream without updating the offering materials, focusing on developing kiosks in sports arenas and university campuses rather than following through with the construction of full-size stores.  Not only did this result in smaller-than-promised returns for investors, but also jeopardized their EB-5 program status because kiosks don’t stimulate the same job creation as full-size stores and construction projects. read more »

U.S. appeals court rejects SEC's use of administrative law judges

A divided federal appeals court has ruled that the U.S. Securities and Exchange Commission's in-house administrative judges are not constitutionally appointed, raising the prospect that the U.S. Supreme Court may need to address the issue.

The ruling by the 10th U.S. Circuit Court of Appeals in Denver in the case of Colorado businessman David Bandimere marked a major setback for the SEC amid attacks by defendants who question the fairness of its administrative court system. read more »

United Shore Financial Services LLC Agrees To Pay $48 Million To Resolve Alleged False Claims Act Liability Arising From Fha-Insured Mortgage Lending

United Shore Financial Services LLC (USFS) has agreed to pay the United States $48 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today.  USFS is headquartered in Troy, Michigan.

“The settlement announced today holds United Shore accountable for its endorsement of ineligible loans for FHA mortgage insurance,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Over the past several years, the Civil Division, in collaboration with numerous U.S. Attorneys’ Offices, HUD and its Office of Inspector General, has diligently worked to hold FHA-approved lenders accountable for actions that deprived homeowners of their homes, wasted taxpayer funds, and contributed to the financial crisis.  The settlement announced today is yet another success in this continuing effort.” read more »

Dozens of allegations of corruption made over UK defence contracts

The Ministry of Defence has made dozens of allegations of bribery and corruption involving Britain's multibillion-pound defence budget, prompting warnings that more should be done to tackle the problem.

Forty-four allegations have been referred to law enforcement agencies by the Ministry of Defence since 2011, according to figures released to Parliament by defence minister Harriett Baldwin.

Four of these involved the bribing of foreign public officials.

The MoD has not excluded any companies from bidding for contracts under procurement law, as none have been found guilty of bribery or corruption.

With nearly £24 billion of MoD money going to British and foreign companies last year, Corruption Watch's Susan Hawley said : "The lack of any effective action against contractors alleged to have been involved in bribery and corruption is deeply worrying. read more »