Deutsche Bank whistleblower spurns share of $16.5m SEC award

Ben-Artzi, who exposed false accounting, declines share of payout after executives go unpunished

A whistleblower who helped expose false accounting at Deutsche Bank has turned down a multimillion-dollar dollar award from the Securities and Exchange Commission in protest against the agency’s failure to punish executives at the bank. read more »

Bribery Arrest May Expose African Mining Rights Scandal Tied to Och-Ziff

African officials say the arrest of a Gabonese man on bribery charges may help pull back the curtain on a long-running foreign corruption scandal that has ensnared the giant hedge fund founded by Daniel Och.

United States authorities on Tuesday arrested Samuel Mebiame, a consultant who worked for a joint venture involving Och-Ziff Capital Management Group, on charges that he paid bribes to foreign officials to secure mineral concessions in at least three African countries.

Prosecutors described Mr. Mebiame, the son of a former prime minister of Gabon, as a “fixer” who routinely paid bribes to officials in Niger, Guinea and Chad, according to a criminal complaint filed in the Federal District Court in Brooklyn. read more »

Mexico: President's Approval Ratings Tank As Public's Frustration With Corruption Grows

MEXICO CITY—The long term prospects for anti-corruption enforcement are starting to look progressively brighter in Mexico. On July 18 President Enrique Peña Nieto ratified the secondary legislation for the new National Anti-corruption System (SNA), which introduces stronger mechanisms to tackle corruption.

While the SNA is fully implemented, civil society is likely to be the main driving force behind anti-corruption investigations. Companies operating or with interests in Mexico, and subject to the Foreign Corrupt Practices Act (FCPA) and other anti-corruption legislation, will continue to be exposed to corruption risks in the short-to-medium term, most typically involving bribes and kickbacks in bidding, permitting and judicial processes. But they are also likely to face increased scrutiny from a public that has grown increasingly less tolerant of abuses by government officials, whether at municipal, state or federal level, and their counterparties in the private sector. read more »

Former Vice President of Wholesale Tool Company Sentenced to 63 Months in Prison for Role in $9 Million Bank Fraud Scheme

The former vice president of a California wholesale tool company was sentenced to 63 months in prison today for his role in a scheme to defraud East West Bank that resulted in losses of over $9 million.

As part of his guilty plea, Yeung, a former vice president of Eastern Tools & Equipment Inc. (Eastern Tools) of Ontario, California, admitted that he and his co-conspirators defrauded East West Bank by making material misrepresentations about Eastern Tools’ accounts receivable and its financial statements to obtain and maintain a loan with the bank.  The conspirators created numerous shell corporations to act as purported suppliers and retailers doing business with Eastern Tools, when, in reality, these shell corporations were entirely under the control of Yeung and existed for the sole purpose of creating the illusion of such business, he admitted.  Yeung also admitted that the fictitious companies allowed Yeung and other conspirators to falsely inflate Eastern Tools’ accounts receivable and financial statements in representations to East West Bank. read more »

Inmates made defective combat helmets for U.S. troops — and no one was prosecuted

Federal inmates made thousands of defective combat helmets for the U.S. military at a prison facility that was rife with problems, including the use of degraded armor and the submission of preselected helmets for inspection to make sure they would get approved, according to a newly released investigative report.

The Justice Department announced in March that it reached a $3 million false-claims settlement against ArmorSource, and noted that FPI was a subcontractor. The new report states that FPI made helmets that had unauthorized or degraded materials, expired paint and other deformities. For example, fragments of Kevlar and dust were used to fill parts of helmets. The serial numbers on some helmets also were either altered or changed, the report said. read more »

Criminal defense bar sides with business lobby in False Claims Act case at SCOTUS

It’s easy to understand why groups such as the U.S. Chamber of Commerce, the American Tort Reform Association and the Coalition for Government Procurement are siding with State Farm in one of the most colorful business cases the U.S. Supreme Court will hear in its upcoming term. But the organized criminal defense bar?

The case, State Farm v. United States, stems from a 2006 False Claims Act suit two onetime insurance adjustors filed against State Farm, which they accused of fraudulently shifting Hurricane Katrina property damage claims to a government-backed flood insurance program. The adjusters – sisters named Cori and Kerri Rigsby – were represented by plaintiffs’ lawyer Dickie Scruggs, who was at that time one of the most powerful plaintiffs’ lawyers in the country. Scruggs also represented thousands of homeowners who alleged insurance companies were improperly denying their claims by attributing damage to floods rather than wind and storm surge. read more »

SEC Pursues Companies For Restricting Whistleblowers

The Securities and Exchange Commission continued its boosting of whistleblowers on Tuesday, penalizing another company for restricting the rights of outgoing employees. read more »

SEC files $1.2 million claim in SandRidge bankruptcy over whistleblower provisions

The Securities and Exchange Commission has filed a $1.2 million claim in SandRidge Energy Inc.'s bankruptcy case relating the company's firing of a whistleblower who alleged the company had inflated its oil and natural gas reserves.

The claim comes as the SEC has announced several fines of companies that have run afoul of federal securities regulations that protect whistleblowers.  read more »

Amtrak Police Chief Polly Hanson under investigation for fraud, conflict of interest

Amtrak’s inspector general has launched a fraud and conflict of interest investigation involving the rail system’s top law enforcement officer, her “alleged boyfriend” and a counterterrorism contract she helped oversee, according to federal court documents.

Amtrak Police Chief Polly Hanson, who oversees 500 sworn officers and other personnel across the country, was deeply involved in preparing a contract that was awarded to ABS Consulting in May 2014, according to a statement from the inspector general filed in U.S. District Court for the District of Columbia. read more »