A borderless world in curbing corruption

More countries now allow outside influence in battling corruption. Latest example: Ukraine agrees to set up an anti-corruption court as a condition of aid. A bill in the US Senate would greatly expand this global drive against graft.

The worldwide push to root out corruption has achieved a new landmark. For the first time, the International Monetary Fund has insisted that a country set up a special court to deal with anti-corruption cases as a condition for receiving financial aid. The country is Ukraine, which agreed with the IMF this month to establish such a court by next year and provide it with ample resources and independence. But the larger point is that the struggle for honesty and transparency in governance is taking on a borderless quality. read more »

Court Upholds Fraud Claims in Investor Class-Action Lawsuit Against Theranos

A U.S. District Judge today upheld fraud claims brought in an investor class-action lawsuit against Theranos, Elizabeth Holmes and Ramesh “Sunny” Balwani, allowing the lawsuit to continue for the proposed class of Theranos investors represented by Hagens Berman.

The order given on Apr. 18, 2017, by U.S. Magistrate Judge Nathanael M. Cousins stated, “Here, plaintiffs list the specific newspaper articles that were part of the advertising campaign touting Theranos’ technology...The Court finds these allegations to be reasonably specific and plausibly state a claim for fraud.” Defendants have 14 days to answer the complaint.

“We’re pleased that the court saw through the smoke and mirrors of Theranos’ extensive marketing tactics that duped investors into placing their bets on Holmes and her company,” said Steve Berman, managing partner of Hagens Berman. “Theranos’ promises were built on false statements, and we look forward to bringing this case on behalf of the thousands of investors who believed what they were told.”

Theranos to pay Arizona customers $4.7 mln in settlement

Embattled blood-testing company Theranos Inc will pay $4.65 million to customers in Arizona who used its services between 2013 and 2016, the state's attorney general said on Tuesday.

Arizona Attorney General Mark Brnovich had alleged that Theranos' advertisements misrepresented the method, accuracy and reliability of its blood testing.

Of the roughly 1.5 million blood tests Theranos sold to more than 175,000 customers in Arizona, 10 percent were voided or corrected, Brnovich said in a statement. read more »

A look into Brazil’s Odebrecht bribery machine

Thanks to bribes, Odebrecht multiplied its revenue and became an international powerhouse

No other topic has attracted as much attention as the content of the Odebrecht plea deals. The 900+ statements, recorded in video, became public on April 12. They launched investigations against 108 politicians, including the last three Brazilian presidents.

The common thread in these statements is how Odebrecht, Brazil’s largest construction firm, used the political establishment to expand its revenue. Bribery was the central pillar of the company’s business model – to the extent that it had a sector to serve that purpose only.

Between 2006 and 2014, the money paid in bribes ($60 million) even surpassed the company’s net profit ($59 million). In the long run, the firm made $4 million to every $1 million in bribes.

According to Emilio Odebrecht, the patriarch of the family, corruption has been the norm in the relationship between the company and the government for at least the past 30 years. However,  corruption reached a whole new level in recent years.

Here’s how Odebrecht’s bribery machine rigged Brazilian politics to benefit corporate interests.

Extradition Is Coming: How One Case Got Vijay Mallya on the Hook

Of the numerous cases filed against Vijay Mallya, it may have taken just one to set the ball rolling for his extradition from the UK – the over Rs 900-crore IDBI Bank loan default case. This was the first time Mallya was accused of “fraud”.

One requirement of extradition is dual criminality – that the offence must be an offence in both countries and punishable by imprisonment of at least one year. Fraud is punishable in India by seven years of imprisonment and five to 10 years under British law.

While an extradition request was made in a Service Tax Department case against Mallya, it was in the IDBI Bank loan default case that the special CBI court issued a warrant for his extradition, leading to his arrest in London on Tuesday. He was soon released on bail. read more »

Judge awards victims in loan agency scheme $6.5 million

A Pennsylvania judge has awarded $6.5 million to five families who lost money in what authorities called a Ponzi scheme.

Northampton County Judge Michael Koury's verdict Tuesday ended a civil court battle stemming from the collapse of the Blue Mountain Consumer Discount Co. loan agency, which was raided by the FBI in 2011.

Company manager Walter "Buddy" Lambert, 75, of Plainfield Township, was sentenced in 2015 to two years in federal prison on mail fraud, wire fraud and obstruction convictions.

Koury's award includes more than $2.4 million in punitive damages against Lambert, who acknowledged wrongdoing at his civil trial, as well as damages for breach of contract, fraud and unjust enrichment and attorneys' fees.

Whistleblower gets $8.8M thanks to Falcone tax-scheme settlement

An unnamed whistle-blower got an $8.8 million tax day gift as the result of a settlement tied to disgraced hedge fund billionaire Phil Falcone.

Alabama-based Harbert Management settled with New York Attorney General Eric Schneiderman to the tune of $40 million over allegations that it avoided paying millions of dollars in taxes to New York between 2002 and 2009. The whistle-blower earned 22 percent of the pot. Harbert was a sponsor of Falcone’s Harbinger Capital Partners.

Falcone, his fund and the profits generated from it were based in New York, so some taxes on profits should have been paid to the state, the government said. Instead, all taxes were paid to Alabama, avoiding New York’s higher rates. read more »