Venezuela bribery scandal in U.S. widens

Venezuela's corruption scandal in America is getting bigger.

U.S. prosecutors filed new criminal charges against a Venezuelan man living in the United States who they allege bribed officials at Venezuela's state-run oil company, PDVSA.

The bribes -- free hotel rooms, meals and cash -- were meant to help get lucrative contracts for U.S. energy companies owned by Venezuelans, according to prosecutors.

Earlier this year, two Venezuelan oil barons living in the United States pled guilty to being part of a bribery ring valued at about $1 billion. read more »

How to spot a fraud

Police arrested seven executives connected to the $1 billion hedge fund Platinum Partners in late December on fraud charges.

The charges against them include overvaluing assets and a Ponzi-like practice of paying departing investors with new investors’ money.

Platinum Partners reminds me of lesson No. 1 on spotting financial fraud: If an investment fund never, ever, shows a loss, it’s probably a fraud. read more »

Result of LuxLeaks whistleblowers appeal set for March 15

The Luxembourg Court of Appeal will hand down its decision in an appeal by two whistleblowers in the so-called "Luxleaks" tax scandal on March 15, the head judge said Monday.

Former PricewaterhouseCoopers employee Antoine Deltour was given a 12-month jail sentence and colleague Raphael Halet nine months at the original trial in June.

Prosecutors in December recommended that Deltour get only six months and that Halet receive only a fine.

Investigative reporter Edouard Perrin, was acquitted of all charges but his name was added to the appeal after prosecutors argued his case was tightly linked to the others. read more »

Four Individuals Charged for Alleged Involvement in Foreign Bribery Scheme Involving $800 Million International Real Estate Deal

Court documents were unsealed today charging four individuals for their roles in a scheme to pay $2.5 million in bribes to facilitate the $800 million sale of a commercial building in Vietnam to a Middle Eastern sovereign wealth fund.

“The father-son defendants, Ban Ki Sang and Joo Hyun Bahn, allegedly conspired to bribe a foreign official to close an $800 million deal for a 72-story skyscraper in Vietnam, a deal that would have led to a multimillion-dollar commission for the Manhattan real estate broker son and much needed capital for the father’s construction company in Korea,” said U.S. Attorney Bharara. “But these alleged schemers were themselves double-crossed, as the man who purportedly set up the bribery scheme, Malcolm Harris, took the bribe money and pocketed it. This alleged bribery and fraud scheme offends all who believe in honest and transparent business, and it stands as a reminder that those who bring international corruption to New York City, as alleged here, will face the scrutiny of American law enforcement.” read more »

SEC: Port Authority Omitted Risks to Investors in Roadway Projects

The Securities and Exchange Commission today announced that the Port Authority of New York and New Jersey has agreed to admit wrongdoing and pay a $400,000 penalty to settle charges that it was aware of risks to a series of New Jersey roadway projects but failed to inform investors purchasing the bonds that would fund them.

The SEC’s order finds that the Port Authority offered and sold $2.3 billion worth of bonds to investors despite internal discussions about whether certain projects outlined in offering documents, including the Pulaski Skyway, ventured outside its mandate and potentially weren’t legal to pursue.  One internal memo noted, “There is no clear path to legislative authority to undertake such projects.” Another memo explicitly identified “the risk of a successful challenge by the bondholders and investors” in connection with the funding of the roadway projects.  But the Port Authority omitted any mention in its offering documents about these risks surrounding its ability to fund the projects.  Its offering documents stated that it issued bonds “only for purposes for which the Port Authority is authorized by law to issue bonds.”

“The Port Authority represented to investors that it was authorized to issue bonds while not disclosing significant known risks that its actions were not legally permitted,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.  “Municipal bond issuers must ensure that their disclosures are complete and accurate so that investors can make fully informed decisions about whether to invest.” read more »

Don’t repeal financial reforms, outgoing CFTC chief warns

Says regulations could be improved, though

Timothy Massad, the outgoing chairman of the Commodity Futures Trading Commission, warned the incoming Donald Trump administration against rolling back postcrisis financial regulation.

“My belief is that to repeal or dismantle the reforms we have implemented would be a major mistake,” Massad said Tuesday during a speech at the London School of Economics. “Their repeal would not contribute to improving the economic conditions that might have given rise to populist discontent expressed in recent elections.” read more »

Texas Dental Management Firm, 19 Affiliated Dental Practices, and Their Owners and Marketing Chief Agree to Pay $8.45 Million to Resolve Allegations of False Medicaid Claims for Pediatric Dental Services

Texas-based MB2 Dental Solutions (MB2) and 19 pediatric dental practices affiliated with MB2, along with their owners and marketing chief, have agreed to pay the United States and the State of Texas Medicaid program $8.45 million to resolve allegations that they violated the False Claims Act by knowingly submitting, or causing the submission of, claims for pediatric dental services that were not rendered, were tainted by kickbacks, or falsely identified the person who performed the service, announced U.S. Attorney John Parker of the Northern District of Texas.

Part of the allegations resolved by this settlement were originally filed under the qui tam, or whistleblower, provisions of the False Claims Act by Veronica Garcia, a former MB2 employee. The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. It also permits the government to intervene in such lawsuits, as it did in this case. Ms. Garcia will receive $1.521 million from the United States and the State of Texas. read more »