Mobile phone company to pay $30 million in U.S. fraud case

A KDDI Corp mobile phone unit has agreed to pay $30 million to resolve U.S. government claims that it defrauded a low-income subsidy program by seeking reimbursement for ineligible consumers, prosecutors said on Thursday.

Launched in 1985, the $1.5 billion Lifeline program provides a $9.25 monthly subsidy to help low-income Americans get telephone service. The FCC in March approved a plan to add internet access.

Manhattan U.S. Attorney Preet Bharara accused Total Call of knowingly submitting from 2012 to 2016 false claims for federal payments by enrolling tens of thousands of ineligible consumers into Lifeline. read more »

Barclays to Face Off Against U.S. Over ‘Craptacular’ Loans

The U.S. Justice Department sued Barclays Plc for fraud over its sale of mortgage bonds after the bank balked at paying the amount the government sought in settlement negotiations.

The lawsuit announced on Thursday is rare for big banks, which typically negotiate a settlement with the government rather than risk drawn-out litigation and a possible trial. read more »

Platinum Partners Fraud Case Has Investigators Casting Wide Net

Prosecutors ask about billionaire hedge-fund manager, Bermuda reinsurer in Platinum investigation

Federal investigators are asking questions about a billionaire New York hedge-fund manager and a Bermuda reinsurer as they examine the alleged fraud by hedge fund Platinum Partners.

On Monday, six Platinum executives, including chief investment officer Mark Nordlicht, were arrested and charged with faking the firm’s investment performance. The allegations against Platinum, which had more than $1 billion under management, outline what would be one of the largest investment frauds since Bernard L. Madoff’s Ponzi scheme.

As part of the Platinum probe, prosecutors are casting a wide net. read more »

U.S. hits Credit Suisse, Deutsche Bank with toxic debt penalties

Credit Suisse and Deutsche Bank have been hit with a combined penalty of more than $12 billion over the sale of U.S. toxic debt, further hampering two of Europe's leading investment banks as they struggle with weak earnings.

The penalties stem from an initiative launched by U.S. President Barack Obama to pursue banks for selling sub-prime debt without warning of the risks, a practice that led to the worst economic crisis since the Great Depression.

Credit Suisse agreed to pay more than $5.2 billion in a deal with U.S. authorities and the penalty is likely to push it to a second consecutive annual loss.

The payment, to settle claims it misled investors when selling mortgage-backed securities in the run-up to the 2008 financial crisis, is split into two parts.

It will first pay $2.48 billion and later provide $2.8 billion over five years to offset the impact on consumers, the bank said. read more »

U.S. appeals court revives Navigators whistleblower retaliation case

A U.S. appeals court on Thursday reinstated a whistleblower retaliation lawsuit by a former executive at insurer Navigators Group Inc who said she was fired for complaining about improper risk control procedures that she said violated securities laws.

The 2nd U.S. Circuit Court of Appeals in New York reversed a decision from January that dismissed the lawsuit by Jennifer Yang, who was employed as Navigators' chief risk officer for just a few months before her termination in November 2012. read more »

 

 

Senator Looks to Expand Protections for Whistle-Blowers

Senator Claire McCaskill, responding to what she has called troubling weaknesses in protections for whistle-blowers, has asked federal agencies to provide information on senior managers who may have retaliated against employees who reported wrongdoing. read more »