Nova bank Chairman gets 11 months in jail for bank-bailout fraud

Former Main Line money manager Barry R. Bekkedam was sentenced Monday to 11 months in prison for his role in a loan scheme in 2009 at Nova Bank designed to defraud the U.S. Treasury Department's bank bailout program of $13.5 million.

Bekkedam, well-known in the Philadelphia region from his Villanova University basketball days in the late 1980s, was found guilty in April of conspiracy to defraud the federal government, fraud against the Troubled Asset Relief Program (TARP), and two counts of making false statements to the federal government.

Also found guilty in April was Nova Bank cofounder and former chief executive Brian Hartline, who has already started serving a 14-month sentence at Joint Base McGuire-Dix-Lakehurst. read more »

Morgan Stanley, Citigroup Charged With Misleading Investors About Forex Trading Program

The Securities and Exchange Commission today announced that Morgan Stanley Smith Barney and Citigroup Global Markets have agreed to pay more than $2.96 million apiece to settle charges that they made false and misleading statements about a foreign exchange trading program they sold to investors.

According to the SEC’s orders, Citigroup held a 49 percent ownership interest in Morgan Stanley Smith Barney at the time, and registered representatives at both firms were pitching a foreign exchange trading program known as “CitiFX Alpha” to Morgan Stanley customers from August 2010 to July 2011.  The SEC’s orders find that their written and verbal presentations were based on the program’s past performance and risk metrics, and they failed to adequately disclose that investors could be placed into the program using substantially more leverage than advertised and markups would be charged on each trade.  The undisclosed leverage and markups caused investors to suffer significant losses. read more »

U.S. Intervenes in East Texas False Claims Act Lawsuit Alleging Kickbacks for Ambulance Services

The United States has filed a complaint intervening in an alleged kickback scheme in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

The United States filed a complaint today in partial intervention against East Texas Medical Center Regional Healthcare System, Inc., East Texas Medical Center Regional Health Services, Inc. (together, “ETMC”), Paramedics Plus, LLC, Emergency Medical Services Authority (“EMSA”), and EMSA’s President, Herbert Stephen Williamson (“Williamson”) alleging, among other things, violations of the False Claims Act and the Anti-Kickback Statute. read more »

Washington River Protection Solutions Agrees to Pay $5.275 Million to Settle False Overtime and Premium Pay Allegations

Washington River Protection Solutions LLC (WRPS) has agreed to pay the United States $5.275 million to settle allegations that WRPS knowingly submitted false claims to the Department of Energy (DOE) for overtime and premium pay and also failed to comply with the contract’s internal audit requirements. The contract was performed at DOE’s Hanford Site near Richland, Washington.

“The monies utilized by DOE to fund important nuclear site environmental remediation across the nation are both precious and limited,” said Deputy Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “Today’s settlement demonstrates that the Department of Justice will pursue contractors that knowingly divert those funds from the projects for which they were provided.” read more »

Deutsche Bank fails to end BlackRock, Pimco mortgage debt lawsuit

A U.S. judge on Monday narrowed but refused to dismiss a lawsuit seeking to hold Deutsche Bank AG (DBKGn.DE) liable to investors, including dozens of portfolios from BlackRock Inc (BLK.N) and Pacific Investment Management Co, for losses on poorly underwritten residential mortgage-backed securities.

The proposed class-action lawsuit sought to recover "significant monetary damages" arising from Deutsche Bank's alleged "failure to discharge its essential duties" as trustee of 62 trusts created between 2004 and 2008, and which issued notes backed by about $90.3 billion of home loans.

In a docket entry, U.S. District Judge Jesse Furman in Manhattan granted Deutsche Bank's bid to dismiss conflict-of-interest claims but denied its request to dismiss representations-and-warranties, servicer-notification and event-of-default claims. read more »

No 'joke': SocGen admits fault, pays $50 million in U.S. fraud case

Societe Generale agreed to pay a $50 million civil fine and admit to misconduct to settle U.S. claims that it fraudulently concealed from investors the poor quality of residential mortgage-backed securities it marketed and sold.

In a statement on Friday, the U.S. Department of Justice said the French bank concealed problems in a $780 million debt issue it arranged in 2006, and which has since left investors with "significant losses" that may grow further.

The settlement papers quote from a senior Societe Generale banker who used a profanity in characterizing industrywide subprime lending practices at the time, and declared that "the whole process is a joke."

U.S. investigators were not amused. read more »

U.S. judge approves Volkswagen dealers $1.2 billion settlement

Volkswagen AG's (VOWG_p.DE) dealers will receive an average of $1.85 million in a $1.2 billion settlement approved by a U.S. judge on Monday over its diesel emissions scandal.

U.S. District Judge Charles Breyer said the 650 U.S. dealers would be paid over 18 months, ruling the settlement "fair, reasonable, and adequate."

VW also agreed to keep making volume-based incentive payments to dealers, and will allow them to defer capital improvements for two years. In total, VW has now agreed to spend up to $22 billion in the United States to address claims from owners, environmental regulators, U.S. states and dealers stemming from the excess vehicle emissions.

VW admitted in September 2015 to installing secret software in its diesel cars to cheat exhaust emissions tests and make them appear cleaner in testing than they really were. read more »

Ex-Guinea minister pleads not guilty in U.S. to laundering bribes

A former minister of mines in Guinea pleaded not guilty on Tuesday to U.S. charges that he laundered $8.5 million in bribes he received from a Chinese conglomerate to help it secure mining rights in the West African country.

Mahmoud Thiam, a U.S. citizen who served as Guinea's minister of mines from 2009 to 2010, entered his plea in federal court in Manhattan to one count of money laundering and one count of transactions in criminally derived property.

His plea came after Thiam, 50, was arrested on Dec. 13 in one of the latest cases to focus on allegations of bribery involving individuals tied to Guinea's mining sector.

According to the indictment, beginning in 2009, Thiam received bribes from representatives of a Chinese conglomerate to help it obtain highly-valuable investment rights, including near total control of Guinea's mining sector. read more »