Federal Judge OKs $13.3m Jay Peak Settlement with Citibank

A federal judge has approved a $13.3 million settlement between a court-appointed receiver overseeing properties at the center of the largest alleged fraud case in the state’s history and a bank for one of the accused developers.

“The Settlement Agreement was entered into in good faith, is at arm’s length, and is not collusive,” Judge Darrin P. Gayles wrote Tuesday.

The settlement brings to a close a legal dispute that began in March 2015 when Citibank extended a $15 million credit line to Ariel Quiros, a Miami businessman, which he backed with collateral from two of his companies.

Those funds later became part of the receivership and had been ordered frozen, making it difficult for the bank to recoup them after Quiros drew down his credit line.

Goldberg, the receiver, had said that the pledged money was part of the receivership, arguing that it was improperly diverted by Quiros from foreign investors who put up money into his projects through the federal EB-5 visa program read more »

Blowing the Whistle

Corporate greed, evidenced by the Wells Fargo scandals, and government wrongdoing, like that disclosed by Chelsea Manning (formerly known as Bradley Manning) and Edward Snowden, illustrate the need for increased understanding and improvement of our nation’s whistleblower and false claims laws.

Whistleblower laws. The first federal whistleblower law was passed in 1778 to protect sailors who were arrested after reporting incidents of torture committed by their superior officer. Current federal statutes protect government employees, and private employees who work in certain regulated industries, from employer retaliation for reporting improper acts. Employees must follow procedures carefully or risk losing protection. Employees have a short timeframe in which to report alleged retaliation. Misconduct may be reported internally to an inspector general or compliance officer, or externally to a law enforcement officer, regulatory agent or member of Congress. read more »

Flash Crash Of Pound: Challenges For Central Bank

On Oct 7, the pound suffered a flash crash with the dollar to sterling rate being reported to be falling as low as $1.1378 dropping by almost 6% in one Asian trade. With this free fall in the sterling, major outlying trades were cancelled. The question as to why this happened has left many baffled. Some factors that have been stated behind the flash crash are a possible technical glitch due to algorithmic trading and tough comments from the French president Francois Hollande on Brexit negotiations. Data from the Bank of England demonstrates that the sterling is on a continuous depreciating path-spot exchange rate of US dollar into sterling depreciated 17.6% since the Brexit referendum vote on June 23, earlier this year. This raises many challenges for the Bank of England in trying to stabilize the economy. read more »

Goldman Sachs won a 2.5-year legal battle with a Libyan fund — but it got bruised along the way

The outcome of a two-and-a-half-year legal battle between Goldman Sachs and Libya's $67 billion sovereign fund is a triumph for the Wall Street giant, which was vindicated despite embarrassing revelations about how some of its bankers conducted business.

The London High Court found in favor of Goldman Sachs on Friday, with Judge Vivien Rose dismissing the fund's arguments, made over the course of a bruising seven-week trial.

While the Libyan Investment Authority (LIA) is likely to appeal, according to a source with knowledge of the matter, the lurid details spilling out of the case mesmerized observers because of the profile of the parties involved and the glimpse they offered into the secretive world of multi-billion-dollar sovereign wealth fund (SWF) investments.

The dispute centered on the $1.2 billion the LIA paid to Goldman to invest in nine equity derivatives trades, all of which ultimately turned out to be worthless.

In the course of the trial, observers were treated to tales of lavish hospitality involving soccer matches, nightclubs, London West End musicals, and in one instance prostitutes. read more »

Lucifer’s Banker The Untold Story of How I Destroyed Swiss Bank Secrecy

Bradley Birkenfeld held a book launch party at the National Press Club tonight.

And it is telling that he invited some of the nation’s top whistleblowers — including John Kiriakou who spent two years in prison — to be his guests.

One of the ironies that was not lost on anyone in the room is that increasingly, it’s not corporate executives but whistleblowers who are doing jail time.

Birkenfeld himself blew the whistle on his employer, the giant Swiss bank UBS, where the rich and famous stashed their millions in numbered accounts to evade U.S. tax authorities.

Guess who went to jail?

Birkenfeld.

A copy of Birkenfeld’s book — Lucifer’s Banker: The Untold Story of How I Destroyed Swiss Bank Secrecy was given to each guest at the book launch.

And tucked inside was a book mark — a laminated copy of the check that Birkenfeld got from the U.S. government for helping recover over $15 billion from American tax cheats. read more »

South Korea prosecutors to indict Lotte chairman, father and brother in corruption probe

South Korean prosecutors will file charges on Wednesday against Lotte Group's chairman, Shin Dong-bin, father and brother alleging they committed offences such as embezzlement and breach of trust worth hundreds of millions of dollars at the family-owned conglomerate, wire service Yonhap reported on Tuesday.

Closing a wide-ranging probe into corruption that has convulsed Korea's fifth-largest conglomerate read more »

Eighth Circuit revives FCA suit against for-profit college

A federal appeals court on Wednesday overturned a lower court ruling that dismissed a False Claims Act lawsuit in which two former employees accused a for-profit college of falsifying grades to keep students eligible for federal financial aid. The ruling by the U.S. Court of Appeals for the Eighth Circuit means that Heritage College, a for-profit chain that prepares health care workers, will have to defend itself in federal court against charges that it fraudulently induced the Education Department to give it funds by falsely promising to keep accurate student records when it was purposefully manipulating them. read more »