How the Flash Crash Trader’s $50 Million Fortune Vanished

Wine Ponzi Scheme

Long-Running Fraud Cost Victims Millions of Dollars

In 1980, a California man named John E. Fox opened a wine store near San Francisco called Premier Cru. More than a decade later, when the business was struggling financially, Fox devised a way to make a lot of money—all at his customers’ expense.

What transpired on and off during the next two decades was a massive Ponzi scheme: Fox sold millions of dollars of “phantom” wine that only existed on paper and then used some of the proceeds to pay back previous customers who had invested in his fictitious wine futures.

Fox, of course, took millions of dollars for himself, living a lavish lifestyle that included memberships to private golf clubs and buying and leasing expensive vehicles such as Ferraris and a Maserati. He also used his ill-gotten gains to pay for a variety of other personal expenses, not least of which was nearly $1 million on women he met online.

“He had a pretty lucrative scheme going for a time,” said Special Agent Scott Medearis, who investigated the case from the FBI’s San Francisco Division. “Like all Ponzi schemes, though, it was destined to fail, but not before his victims lost pretty much everything.” read more »

 

Campaigners fear Trump draft executive order could hit coffers of poor countries

Draft order would sweep away regulations designed to prevent US extraction firms from making secret payments to access natural resources abroad

It is an oil-rich country with an impoverished populace, home to Africa’s longest serving dictator and a small, self-seeking elite whose excesses are epitomised by the president’s son and deputy, a playboy with a penchant for luxurious cars and crystal-studded Michael Jackson memorabilia.

Small wonder, then, that Equatorial Guinea is widely regarded as a model example of the need for transparency regulations designed to prevent US extraction firms making undisclosed payments to foreign governments for access to natural resources – regulations that Donald Trump is preparing to axe before their planned introduction in 2019.

The US president is expected to sign a resolution doing away with the “Cardin-Lugar regulations” – named after the politicians who created it – after Washington DC’s Republican Senate voted to nullify the anti-corruption initiative.

Part of the Dodd-Frank financial reform bill, currently under review by the Trump administration, the provisions also require declarations on data including revenues and payments to overseas workers. read more »

Former FAW chief jailed over graft

XU Jianyi, former chairman of one of China’s largest auto producers, FAW Group Corp, was yesterday sentenced to 11-and-a-half years’ jail for accepting bribes.

Beijing No.1 Intermediate People’s Court ordered that all of Xu’s personal property listed in its verdict statement should be confiscated, and his illicit gains should be surrendered.

The court found that from 2000 to 2013, Xu took advantage of his various posts to help others with business contracts, promotions, and directly or indirectly accepted assets worth 12.2 million yuan (US$1.8 million). read more »

 

Putting Clients Second

THE Trump administration recently announced that it intends to review, and presumably overturn, the Obama-era fiduciary duty rule that is scheduled to take effect in April. The administration’s case was articulated by Gary Cohn, the new director of the National Economic Council.

Mr. Cohn, most recently the president of Goldman Sachs, called it “a bad rule” and likened it to “putting only healthy food on the menu, because unhealthy food tastes good but you still shouldn’t eat it because you might die younger.” Comparing healthy and unhealthy food to healthy and unhealthy investments is an interesting analogy.

The now-endangered fiduciary rule is based on a simple — and seemingly unarguable — principle: that in giving advice to clients with retirement funds, stockbrokers, registered investment advisers and insurance agents must act in the best interests of their clients. read more »

Doctor gets $11.4 million settlement in whistleblower suit

A Texas physician has been awarded $11.4 million in a federal whistleblower lawsuit against a major U.S. hospital service provider.

Dr. Bijan Oughatiyan filed the lawsuit against his former employer, IPC Healthcare Inc., in the Northern District of Illinois, according to the U.S. Attorney’s office in Chicago. IPC Healthcare Inc. is based in North Hollywood, California.

As a result of the lawsuit, TeamHealth Holdings, which is affiliated with IPC Healthcare Inc., has agreed to pay $60 million plus interest to resolve allegations that it violated the False Claims Act by billing Medicare, Medicaid, the Defense Health Agency and the Federal Employees Health Benefits Program for higher and more expensive levels of medical service than were actually performed, according to a news release from the U.S. Attorney’s office. read more »

 

 

Mead Johnson whistleblower lawsuit claims baby formula packaging defective

by formula allegedly vulnerable to spoilage is at the center of a whistleblower lawsuit filed by a former Mead Johnson Nutrition compliance director who claims she was eventually fired after raising concerns about packaging defects.

Linda O'Risky, who was a consultant and employee for Mead Johnson for more than 25 years, claims in a lawsuit filed Thursday in U.S. District Court in Chicago that the Glenview-based maker of pediatric food products "touted its hermetically sealed liquid formula as safer than powdered formula," but in reality, she alleges, the seals on the 8-ounce product were prone to leaking, making it easier for microorganisms and other contaminants to enter the packaging.

The lawsuit says the Evansville, Ind., resident spent seven months in 2015 trying to persuade her managers to comply with Food and Drug Administration regulations and contacted the publicly traded company's "integrity concern hotline," but it alleges she was eventually excluded from meetings and shunned. read more »

 

 

United States Department of Justice Criminal Division Fraud Section Year in Review 2013

The Fraud Section plays a pivotal role in the Department of Justice’s fight against economic crime. The Section prosecutes white-collar crime in federal courts around the country, and focuses on cases of national significance and international scope. Fraud Section prosecutors have vast experience with corporate investigations, foreign bribery plots, and health care fraud schemes. Because of this expertise, and given that the Section has the largest constellation of white-collar prosecutors in the country, it is routinely the national leader in large, sophisticated financial fraud investigations and prosecutions. The Section also regularly partners with United States Attorney’s Offices and coordinates with foreign law enforcement agencies.

The Section is composed of three litigating units – the Foreign Corrupt Practices Act (FCPA) Unit, the Health Care Fraud (HCF) Unit, and the Securities & Financial Fraud (SFF) Unit – as well as the Strategy, Policy & Training (SPT) Unit and the Administration & Management Unit. The FCPA Unit has primary jurisdiction among Department components in prosecuting FCPA matters and in developing FCPA enforcement policy. The HCF Unit identifies and responds to emerging fraud trends across the country, including large corporate health care fraud. The SFF Unit has unrivaled expertise in corporate fraud matters and in parallel investigations with domestic and foreign law enforcement agencies and regulators. The SPT Unit develops and implements strategic enforcement initiatives to identify and combat emerging white-collar crimes read more »