U.S. judge approves $2.6 billion fine for Odebrecht in corruption case

A U.S. judge on Monday sentenced Brazilian engineering company Odebrecht SA to pay $2.6 billion in fines in a massive criminal corruption case, signing off on a plea deal between the company and U.S., Brazilian and Swiss authorities.

U.S. District Judge Raymond Dearie said at a hearing in Brooklyn federal court that about $93 million will go to the United States, $2.39 billion to Brazil and $116 million to Switzerland.

Odebrecht, along with affiliated petrochemical company Braskem SA, pleaded guilty to U.S. bribery charges in December. U.S. authorities charged Odebrecht with paying about $788 million in bribes to officials in 12 countries, mostly in Latin America, to secure lucrative contracts.

Some of those bribes flowed through U.S. banks, the prosecutors said.

Monday's order comes as Odebrecht tries to negotiate plea deals with other countries, including Argentina, Chile, Colombia, Ecuador, Mexico, Peru, the Dominican Republic, Venezuela, Panama and Portugal. read more »

Ousted South Korean President Park Geun-hye Is Formally Indicted

South Korea's ousted President Park Geun-hye has been formally indicted on corruption charges. Impeached by lawmakers late last year and officially removed from office by the country's high court last month, the former leader now faces the prospect of life in prison.

South Korean prosecutors brought charges Monday that range from bribery and coercion to abuse of power and the leaking of government secrets. The New York Times reports the criminal charges, which totaled 13 when she was taken into custody, now number up to 18. read more »

How the Airlines Became Abusive Cartels

The recent United Airlines bumping debacle has prompted calls for reforms in the system of auctions that reward fliers for voluntarily giving up seats. Delta Airlines has now authorized payments as high as $9,950 to induce passengers to give up seats on overbooked flights.

But no refinement of voluntary market remedies will fix the deeper mess of the airline industry. For air travel is far from a free market. read more »

HSBC to pay $2 million to resolve U.S. civil loan fraud lawsuit

HSBC Holdings Plc  has agreed to pay about $2 million to settle a civil fraud lawsuit that alleged the bank improperly attempted to get reimbursement from the federally backed U.S. Small Business Administration (SBA) on bad loans it knew were based on fraudulent or potentially fraudulent information.

Under the SBAExpress loan program, designed to help startups and small businesses, the SBA guarantees up to half the value of loans made to companies by lenders such as HSBC.

According to a complaint made by the U.S. government in federal court in Manhattan, HSBC sought reimbursement for 42 defaulted loans without revealing that borrowers may have submitted false information to the bank to obtain many of the loans, or that the bank had included them on an internal list of fraudulent or potentially fraudulent loans.

The case was initially brought by a whistleblower under the False Claims Act, and the U.S. government intervened in the case. read more »

The Hotel Industry Is Striking Back at Airbnb

Traditional hoteliers are going to war on Airbnb.

The New York Times, citing minutes from a meeting of the American Hotel and Lodging Association, reports that the trade group has engaged in a “multipronged, national campaign approach at the local, state and federal level” to limit Airbnb's expansion. The campaign involves lobbying government officials and financing studies that show that Airbnb hosts are effectively running hotels out of residential buildings despite not being subject to the same regulatory standards as the hotel industry.

“Airbnb is operating a lodging industry, but it is not playing by the same rules,” a spokesperson for the trade group told The Times.  read more »