JPMorgan Chase to Pay $264 Million to Settle Foreign Bribery Charges

Vying for lucrative deals in China, JPMorgan Chase deployed all the usual wining-and-dining tactics that big banks use to woo clients. JPMorgan, federal authorities now say, also had ways of sweetening the deal that crossed a legal line.

Federal prosecutors and regulators announced on Thursday a settlement of roughly $264 million with the bank and its Hong Kong subsidiary, accusing them of a vast foreign bribery scheme that may have spread to a number of Wall Street banks.

The case, the first of what could be several settlements with these banks, centers on JPMorgan’s hiring practices in China, where it is accused of hiring the children of Chinese leaders to win business in the fast-growing nation. Some of the well-connected candidates were unqualified, the authorities said, and often “performed ancillary work” — telltale signs of hidden bribery. read more » 

SEC announcement 

DOJ Announcement 

Venezuela congress declares Ramirez responsible for PDVSA graft

Venezuela's opposition-led National Assembly on Wednesday declared former PDVSA President Rafael Ramirez "politically responsible" for what it says was flagrant corruption at the state oil company during his decade-long tenure.

Last month, a report by Venezuela's congressional comptroller's commission said some $11 billion in funds went missing when Ramirez was at the helm from 2004 to 2014. read more » 

Theranos Whistleblower Shook the Company—And His Family

After working at Theranos Inc. for eight months, Tyler Shultz decided he had seen enough. On April 11, 2014, he emailed company founder Elizabeth Holmes to complain that Theranos had doctored research and ignored failed quality-control checks.

The reply was withering. Ms. Holmes forwarded the email to Theranos President Sunny Balwani, who belittled Mr. Shultz’s grasp of basic mathematics and his knowledge of laboratory science, and then took a swipe at his relationship with George Shultz, the former secretary of state and a Theranos director.

“The only reason I have taken so much time away from work to address this personally is because you are Mr. Shultz’s grandson,” wrote Mr. Balwani to his employee in an email, a copy of which was reviewed by The Wall Street Journal.

Mr. Shultz quit the same day. As he was leaving Theranos’s headquarters in Palo Alto, Calif., he says he got a frantic cellphone call from his mother, who told him Ms. Holmes had just called the elder Mr. Shultz to warn that his grandson would “lose” if he launched a vendetta against the blood-testing startup. read more » 

Medicare Manipulation Fraud Busted in Houston

Attorney General Ken Paxton announced today that a former Medicare provider, Chimaroke Echenwune, has been convicted of conducting fraudulent Medicare and Medicaid programs, attempting to steal more than $1.3 million through illegal practices.

Echenwune worked with his wife and 13 EMTs to manipulate health care programs through Diamex EMS, his ambulance company. Mentally handicapped patients were billed for transports to hospitals when they were being taken to adult daycare facilities, destinations not covered by Medicare. Several patients’ caretakers testified that their clients were never transported by the company at all. Some individuals were billed up to three times the original cost of the ambulance service.

Additionally, two co-defendants testified that they were instructed by Echenwune to falsify entries in patient records kept by Echenwune, and a doctor testified that his signature appeared forged on a medical authorization form. After facing trial, Echenwune was sentenced to serve 30 years with the Texas Department of Criminal Justice and to pay a $10,000 fine. read more » 

Tobacco farmers accused of filing false claims under federal crop insurance program

The federal government alleges several individuals filed false claims under the federal crop insurance program.

United States of America recently filed a complaint in the U.S. District Court for the Southern District of Georgia, Waycross Division against Julian Rigby, Jasper Allen, Benjamin Swain, Alma Brightleaf Blueberry Farms Inc., Julian Rigby Inc., Georgia-Florida Tobacco Exchange Inc. and Heritage Tobacco Inc. citing the False Claims Act and other counts.

According to the complaint, the plaintiff alleges that beginning in crop year 2008 through crop year 2010, it has suffered damages for paying defendants' higher insurance claims under the Multi-Peril Crop Insurance program. read more » 

2 Former Investigators Sue GlaxoSmithKline

Two former private investigators have sued GlaxoSmithKline, charging that the drug maker misled them and induced them to investigate an innocent person, resulting in their imprisonment.

The complaint, filed at the United States District Court in Philadelphia and made public on Wednesday, was brought by Peter Humphrey, who is British, and Yu Yingzeng, his wife, who is American.

The couple were detained in 2013 and found guilty by a Chinese court in 2014 after being asked by Glaxo to investigate a whistle-blower within the pharmaceuticals group.

They were convicted of illegally obtaining private records of Chinese citizens.

The couple said that Glaxo misled them by stating that the whistle-blower’s accusations of widespread corruption within the company were false. The company was fined a record 3 billion renminbi (nearly $500 million) in 2014 for paying bribes to doctors to use its drugs. read more » 

Sérgio Cabral, Ex-Governor of Rio de Janeiro, Arrested on Corruption Charges

The former governor of Rio de Janeiro, who helped bring the Summer Olympics to the city, was arrested on Thursday as part of an investigation into bribery and embezzlement in construction projects.

The former governor, Sérgio Cabral, was arrested as part of an inquiry into the embezzlement of 224 million reais, or about $64 million, intended for public works projects, according to the authorities. He led the state of Rio de Janeiro from 2007 to 2014, when he resigned amid suspicions of corruption and growing street protests. read more » 

More than $35 Million in Restitution and a Civil Penalty for Soliciting at Least $50 Million from Members of the Public to Trade Forex, without Being Registered with the CFTC

The U.S. Commodity Futures Trading Commission (CFTC) obtained a Consent Order against Defendants IB Capital FX, LLC (a/k/a IB Capital FX (NZ) LLP) d/b/a IB Capital (IB Capital), Michel Geurkink, and Emad Echadi, requiring them to pay, jointly and severally, $35 million in restitution to defrauded customers and a $420,000 civil monetary penalty for soliciting and accepting at least $50 million from approximately 1,850 customers in the United States and worldwide for off-exchange margined retail foreign currency (forex) trading, without being registered with the CFTC as is required. read more » 

Ex-Digital Realty VP No Whistleblower, 9th Circ. Told

Digital Realty Trust Inc. asked the Ninth Circuit on Wednesday to reverse an order giving whistleblower status to a former executive in his ongoing wrongful termination and discrimination case, saying he can’t enjoy Dodd-Frank Act protections because he only reported accounting fraud internally and not to the government.

In the underlying case, Paul Somers, former Digital Realty vice president of portfolio management, claims the technology-related real estate investment trust discriminated against him for being openly gay and then fired him in retaliation for his complaints about a supervisor’s actions. read more »