FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
SEC Halts Ex-Marine’s Hedge Fund Fraud Targeting Fellow Military
FOR IMMEDIATE RELEASE
2013-149
Washington D.C., Aug. 6, 2013 —
The Securities and Exchange Commission today obtained an emergency court order to halt a hedge fund investment scheme by a former Marine living in the Chicago area who has been masquerading as a successful trader to defraud fellow veterans, current military, and other investors.
The SEC alleges that Clayton A. Cohn and his hedge fund management firm Market Action Advisors raised nearly $1.8 million from investors through a hedge fund he managed. Cohn lied to investors about his success as a trader, the performance of the hedge fund, his use of investor proceeds, and his personal stake in the hedge fund. Cohn only invested less than half of the money raised from investors and instead used more than $400,000 for such personal expenses as a Hollywood mansion, luxury automobile, and extravagant tabs at high-end nightclubs. He used his lavish lifestyle to carefully contrive the image of a successful trader and investor, when in reality he lost nearly all of the money invested through the hedge fund. In order to cover up his fraud and continue raising money from investors, Cohn generated phony hedge fund account statements showing annual returns exceeding 200 percent.
“Cohn lured fellow military and other investors into his hedge fund by portraying himself as a successful trader who generated massive returns for his investors,” said Timothy L. Warren, Acting Director of the Chicago Regional Office. “But Cohn’s hedge fund investors didn’t have a chance to make a profit since he never invested most of their money and promptly lost the portion he did invest.”
According to the SEC’s complaint filed in federal court in Chicago, Cohn targets mostly unsophisticated investors and has solicited friends, family members, and fellow veterans to invest in his hedge fund. Cohn controls a so-called charity called the Veterans Financial Education Network (VFEN) that purports to teach veterans how to understand and manage their money. Cohn has touted his Marine Corps pedigree in VFEN press releases and encourages veterans to find “a money-manager who is both trustworthy and knows what he is doing.” VFEN’s website identifies Cohn as a money manager who “manages millions of dollars.”
According to the SEC’s complaint, Cohn managed his hedge fund Market Action Capital Management through his investment advisory firm Market Action Advisors, which is registered with the state of Illinois. Cohn solicited investments by falsely claiming that he had major success as a personal trader and invested $1.5 million of his own money in the hedge fund. He also misrepresented that an accounting firm would audit the hedge fund’s financial statements.
The SEC alleges that Cohn had a record of trading losses, invested no more than $4,000 of his own money, and absconded with far more money for his personal expenses. The audit firm named by Cohn never agreed to audit the fund’s financial statements. Cohn continued to deceive investors after their initial investment by issuing account statements that showed annual returns of more than 200 percent for 2012 when the hedge fund actually lost money.
The SEC’s complaint charges Cohn and Market Action Advisors with violating the antifraud provisions of the federal securities laws. The court granted the SEC’s request for emergency relief including a temporary restraining order and asset freeze. The SEC further seeks permanent injunctions, disgorgement of ill-gotten gains, and financial penalties from Cohn and Market Action Advisors.
The SEC’s investigation was conducted by John J. Sikora, Jr. and Jason A. Howard, and the litigation will be led by Jonathan S. Polish.
Wednesday, August 7, 2013
U.S. EXPORT-IMPORT BANK SAYS EXPORTS REACH ALL-TIME HIGH
FROM: EXPORT-IMPORT BANK
U.S. Exports Reach All-Time High of $191.2 Billion in June
Exports Up 41.5 Percent Since 2009
WASHINGTON, D.C. – The United States exported a record $191.2 billion of goods and services in June 2013, according to trade data was released today by the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department.
U.S. exports in June 2013 reached an all-time high, exceeding the previous record of $188.7 billion set in December 2012. The June export level is also 2.2 percent higher than that of the previous month.
“Today’s announcement of record-level U.S. exports in June is a testament to the strength of American exports. Increased exports mean more jobs here at home – the goal of President Obama’s National Export Initiative. We at Ex-Im Bank work every day to help American exporters and their workers succeed in selling their products and services in an increasingly competitive global marketplace,” said Ex-Im Bank Chairman and President Fred P. Hochberg.
Exports of goods and services over the past twelve months totaled $2.2 trillion, which is 41.5 percent above the level of exports in 2009. Exports have been growing at an annualized rate of 10.4 percent when compared to the same period in 2009.
Over the last twelve months, among the major export markets (i.e., markets with at least $6 billion in annual imports of U.S. goods), the countries with the largest annualized increase in U.S. goods purchases, when compared to 2009, occurred in Panama (28.6 percent), United Arab Emirates (23.1 percent), Russia (22.6 percent), Peru (21.9 percent), Chile (21.4 percent), Colombia (19.5 percent), Hong Kong (19.2 percent), Argentina (18.5 percent), South Africa (18.3 percent) and Venezuela (18.1 percent).
U.S. Exports Reach All-Time High of $191.2 Billion in June
Exports Up 41.5 Percent Since 2009
WASHINGTON, D.C. – The United States exported a record $191.2 billion of goods and services in June 2013, according to trade data was released today by the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department.
U.S. exports in June 2013 reached an all-time high, exceeding the previous record of $188.7 billion set in December 2012. The June export level is also 2.2 percent higher than that of the previous month.
“Today’s announcement of record-level U.S. exports in June is a testament to the strength of American exports. Increased exports mean more jobs here at home – the goal of President Obama’s National Export Initiative. We at Ex-Im Bank work every day to help American exporters and their workers succeed in selling their products and services in an increasingly competitive global marketplace,” said Ex-Im Bank Chairman and President Fred P. Hochberg.
Exports of goods and services over the past twelve months totaled $2.2 trillion, which is 41.5 percent above the level of exports in 2009. Exports have been growing at an annualized rate of 10.4 percent when compared to the same period in 2009.
Over the last twelve months, among the major export markets (i.e., markets with at least $6 billion in annual imports of U.S. goods), the countries with the largest annualized increase in U.S. goods purchases, when compared to 2009, occurred in Panama (28.6 percent), United Arab Emirates (23.1 percent), Russia (22.6 percent), Peru (21.9 percent), Chile (21.4 percent), Colombia (19.5 percent), Hong Kong (19.2 percent), Argentina (18.5 percent), South Africa (18.3 percent) and Venezuela (18.1 percent).
SECRETARY OF STATE KERRY'S STATEMENT ON THE FOUNDING OF ASEAN
FROM: U.S. STATE DEPARTMENT
Marking the Anniversary of the Founding of ASEAN
Press Statement
John Kerry
Secretary of State
Washington, DC
August 6, 2013
On behalf of President Obama and the people of the United States, we join the 600 million people of the member states of the Association of Southeast Asian Nations (ASEAN) - Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic, Malaysia, the Republic of the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand, and the Socialist Republic of Vietnam - in marking the 46th anniversary of the founding of ASEAN.
ASEAN plays a critical and growing role in Asia through promoting regional integration and maintaining regional security. As the central regional organization in Asia, ASEAN is the keystone for Asia’s multilateral architecture, including the ASEAN Regional Forum and the East Asia Summit.
The United States is deeply committed to supporting and partnering with ASEAN. The United States was the first dialogue partner nation to establish a dedicated mission to ASEAN. Our engagement with ASEAN has led to collaboration on everything from maritime security to investing in sustainable energy resources to development in the Lower Mekong sub-region.
I was privileged to participate in my first ASEAN-U.S. Ministerial meeting just last month in Brunei to advance our cooperation on this wide range of shared interests, and I look forward to deepening and broadening our cooperation in the coming years. And I know that President Obama looks forward to participating in the East Asia Summit and the ASEAN-U.S. Summit in Brunei in October.
As we celebrate the anniversary of the founding of ASEAN, know that the United States stands with you as a steadfast partner.
Marking the Anniversary of the Founding of ASEAN
Press Statement
John Kerry
Secretary of State
Washington, DC
August 6, 2013
On behalf of President Obama and the people of the United States, we join the 600 million people of the member states of the Association of Southeast Asian Nations (ASEAN) - Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic, Malaysia, the Republic of the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand, and the Socialist Republic of Vietnam - in marking the 46th anniversary of the founding of ASEAN.
ASEAN plays a critical and growing role in Asia through promoting regional integration and maintaining regional security. As the central regional organization in Asia, ASEAN is the keystone for Asia’s multilateral architecture, including the ASEAN Regional Forum and the East Asia Summit.
The United States is deeply committed to supporting and partnering with ASEAN. The United States was the first dialogue partner nation to establish a dedicated mission to ASEAN. Our engagement with ASEAN has led to collaboration on everything from maritime security to investing in sustainable energy resources to development in the Lower Mekong sub-region.
I was privileged to participate in my first ASEAN-U.S. Ministerial meeting just last month in Brunei to advance our cooperation on this wide range of shared interests, and I look forward to deepening and broadening our cooperation in the coming years. And I know that President Obama looks forward to participating in the East Asia Summit and the ASEAN-U.S. Summit in Brunei in October.
As we celebrate the anniversary of the founding of ASEAN, know that the United States stands with you as a steadfast partner.
FTC SEEKS CONTEMPT RULING AGAINST DEFENDANTS WHO VIOLATED A PERMANENT INJUNCTION
FROM: U.S. FEDERAL TRADE COMMISSION
FTC Seeks Contempt Ruling Against Suntasia Telemarketing Defendants
Defendants Ordered to Pay Over $11 Million in 2008
The Federal Trade Commission is seeking a contempt order in federal court against defendants previously involved in a massive, Florida-based marketing scheme, alleging that they violated the terms of a court-ordered permanent injunction by engaging in some of the same deceptive tactics that led to the FTC’s prior charges against them.
In 2007, the FTC took action against the defendants behind Suntasia Marketing, Inc., charging them with deceptively marketing negative option programs to consumers nationwide. According to the agency, the defendants defrauded consumers and charged their bank accounts without consent for various negative option programs, including memberships in discount buyer’s and travel clubs. In a negative option program, a company takes consumers’ silence or failure to cancel the program as acceptance of the offer and permission to debit funds from their accounts.
The defendants agreed to the 2008 injunction in order to settle the FTC’s charges. Under the settlement, 14 defendants involved in the scheme were required to pay more than $16 million. In particular, defendants Bryon Wolf and Roy Eliasson were required to pay over $11 million, and were barred from misrepresenting material facts regarding an offer, failing to disclose material terms of what they sell, debiting consumers’ accounts without their consent, and other unlawful acts.
But according to the FTC, within months of the court’s 2008 order, defendants Bryon Wolf and Roy Eliasson, and their firm Membership Services, LLC, which Wolf and Eliasson control, devised a new plan to defraud consumers. In this scheme, they targeted recent loan applicants with deceptive phone and Internet solicitations that misled consumers to believe the defendants would provide them with cash advances or loans, or general lines of credit. Instead of providing these services, the defendants debited consumers’ accounts for membership in a continuity program. Very few consumers used the program and many cancelled upon discovering their account had been debited by defendants. The continuity plans go under the names “Monster Rewards,” “Mongo,” and “Money on the Go.”
Based on this conduct, the FTC charged the defendants with violating the permanent injunction by making misrepresentations to consumers about their programs, by failing to make key disclosures, by failing to get express informed consent before debiting consumers’ accounts, and by failing to disclose clearly and promptly their programs during telemarketed solicitations. According to the FTC, through their deceptive actions, the defendants have netted over $9 million.
The civil contempt action was filed under seal in the U.S. District Court for the Middle District of Florida, Tampa Division on May 22, 2013, and unsealed by the Court on July 31, 2013. It names as defendants Bryon Wolf, Roy Eliasson, and Membership Services, LLC.
FTC Seeks Contempt Ruling Against Suntasia Telemarketing Defendants
Defendants Ordered to Pay Over $11 Million in 2008
The Federal Trade Commission is seeking a contempt order in federal court against defendants previously involved in a massive, Florida-based marketing scheme, alleging that they violated the terms of a court-ordered permanent injunction by engaging in some of the same deceptive tactics that led to the FTC’s prior charges against them.
In 2007, the FTC took action against the defendants behind Suntasia Marketing, Inc., charging them with deceptively marketing negative option programs to consumers nationwide. According to the agency, the defendants defrauded consumers and charged their bank accounts without consent for various negative option programs, including memberships in discount buyer’s and travel clubs. In a negative option program, a company takes consumers’ silence or failure to cancel the program as acceptance of the offer and permission to debit funds from their accounts.
The defendants agreed to the 2008 injunction in order to settle the FTC’s charges. Under the settlement, 14 defendants involved in the scheme were required to pay more than $16 million. In particular, defendants Bryon Wolf and Roy Eliasson were required to pay over $11 million, and were barred from misrepresenting material facts regarding an offer, failing to disclose material terms of what they sell, debiting consumers’ accounts without their consent, and other unlawful acts.
But according to the FTC, within months of the court’s 2008 order, defendants Bryon Wolf and Roy Eliasson, and their firm Membership Services, LLC, which Wolf and Eliasson control, devised a new plan to defraud consumers. In this scheme, they targeted recent loan applicants with deceptive phone and Internet solicitations that misled consumers to believe the defendants would provide them with cash advances or loans, or general lines of credit. Instead of providing these services, the defendants debited consumers’ accounts for membership in a continuity program. Very few consumers used the program and many cancelled upon discovering their account had been debited by defendants. The continuity plans go under the names “Monster Rewards,” “Mongo,” and “Money on the Go.”
Based on this conduct, the FTC charged the defendants with violating the permanent injunction by making misrepresentations to consumers about their programs, by failing to make key disclosures, by failing to get express informed consent before debiting consumers’ accounts, and by failing to disclose clearly and promptly their programs during telemarketed solicitations. According to the FTC, through their deceptive actions, the defendants have netted over $9 million.
The civil contempt action was filed under seal in the U.S. District Court for the Middle District of Florida, Tampa Division on May 22, 2013, and unsealed by the Court on July 31, 2013. It names as defendants Bryon Wolf, Roy Eliasson, and Membership Services, LLC.
IMMUNITY GENES FOUND IN SEA FANS
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| Photo Shows Sea Fan In Back. Credit: U.S. NOAA |
Sick Sea Fans: Undersea "Doctors" to the Rescue
Scientists discover genes involved in immunity of sea fans to coral diseases
Like all of us, corals get sick. They respond to pathogens (disease-causing microbes) and recover or die. But unlike us, they can't call a doctor for treatment.
Instead, help has arrived in the form of scientists who study the causes of the corals' disease, and the immune factors that might be important in their response and resistance.
With support from the National Science Foundation (NSF), scientists Drew Harvell and Colleen Burge of Cornell University and their colleagues have developed a catalog of genes that, the researchers say, will allow us to better understand the immune systems of corals called sea fans.
The marine ecologists have trained their undersea eyes on a particular sea fan species, Gorgonia ventalina, or the purple sea fan, found in the western Atlantic Ocean and the Caribbean Sea.
The team has monitored sea fan health in the Florida Keys, Mexican Yucatan and Puerto Rico for the past 15 years. The most recent research, in collaboration with Ernesto Weil of the University of Puerto Rico, is underway on reefs at La Parguera, Puerto Rico.
Gorgonia ventalina is a fan-shaped coral with several main branches and a latticework of smaller branches. Its skeleton is composed of calcite and gorgonian, a collagen-like compound. Purple sea fans often have smaller, accessory fans growing sideways out of their main fans.
These large sea fans fare best near shore in shallow waters with strong waves and on deeper outer reefs with strong currents, down to a depth of about 50 feet. Small polyps on the graceful fans catch plankton drifting by on fast-flowing currents.
Turning (more) purple
Life as a purple sea fan isn't always easy. The coral may be attacked by the fungus Aspergillus sydowii, which causes the disease aspergillosis.
It results in damaged patches on the fan, extreme purpling of tissues and sometimes death. Several outbreaks of aspergillosis have occurred in the Caribbean; corals in stressful conditions such as warming waters may be especially susceptible.
"Diseases and climate change are very tightly linked," says Mike Lesser, program director in NSF's Division of Ocean Sciences, which funds the research along with the joint NSF-National Institutes of Health Evolution and Ecology of Infectious Diseases (EEID) Program.
"The role of climate change in diseases is important," Lesser says, "for understanding the spread of infectious diseases in every corner of the globe, including the oceans."
Adds Sam Scheiner, NSF EEID program director, "Human-induced climate change is having profound effects on many parts of the world. As this research shows, coral reefs are being decimated by the combination of climate change and infectious diseases."
Undersea "doctors" come to sea fans' aid
Harvell agrees.
In a paper published earlier this year in The Annual Review of Marine Science, Harvell, Burge and other scientists reviewed climate change influences on marine infectious diseases.
Now the scientists are using the purple sea fan as a model for studying ocean diseases. "We're looking at microbial infection, pathways of defense and the health of this sea fan in the face of warming waters and climate change," says Harvell.
"All animals on Earth--from humans to fish to corals--are susceptible to infection by pathogens that cause illness," she says. "What we hope to answer is: How widespread are these infections? Why do they happen? And, what can we do about them?"
Coral reefs are declining worldwide. Even very old coral colonies in remote locations are dying. "Disease-related deaths are caused in part by pathogens alone and in part by interactions between pathogens and climate change," says Burge.
Many of these pathogens are unidentified, leaving sea fans and their coral relatives at high risk.
But the mystery is slowly being solved.
The scientists have discovered two pathogens in purple sea fans. The microbes are being cultured and used to examine how sea fans' immune systems work.
Past is prologue?
A look back a decade or more may provide clues to the present--and the future--for sea fans.
From 1996 through 2004, thousands of sea fans in the Caribbean died of aspergillosis. Many survived, however, and appear resistant to further attack.
But they're far from home free.
Purple sea fans are now being infected by a new pathogen, called Aplanochytrium. Burge was the first to isolate and culture the microbe from a sick sea fan.
Aplanochytrium is a member of an order of lethal microbes known as Labyrinthulomycetes. It grows faster at warmer temperatures, leaving sea fans in "hot water."
Corals don't have "immune memory," such as the T cells and antibodies found in humans. Instead they have an ancient defense system called the innate immune system.
Studying sea fans' immunity through their genes is an important step in protecting them, says Burge.
"We used molecular biology and bioinformatics--a combination of biology, computer science and information technology--to make a set of the genes' messages, called transcripts," she says. "Then we characterized these messages, which are known collectively as a transcriptome."
The results, reported this month in a paper in the journal Frontiers in Physiology, are the first to show which genes are activated in response to pathogens in sea fans. Co-authors of the paper are Burge, Harvell and Morgan Mouchka of Cornell, and Steven Roberts of the University of Washington.
Message in a (genetic) bottle
The purple sea fan may hold messages for the oceans, and for us, but the messages come in a genetic bottle.
The scientists studied what's called messenger RNA, which transfers genetic messages, in sea fans exposed to Aplanochytrium, comparing it with that of unexposed sea fans.
They found that the sea fans' genes hold clues to questions such as how the fans recognize and kill pathogens, and how they repair injured tissues.
The scientists are increasing the sea fan genetic "catalog" by adding genes expressed, or turned on, in response to record-breaking Caribbean Sea temperatures in 2010.
The researchers, working in Puerto Rico with Weil and Laura Mydlarz of the University of Texas at Arlington, assessed the effect of the 2010 Caribbean coral bleaching event, as it's known, on sea fans' genes and immune function.
The study compared immune system genes in a heat-sensitive coral species, Orbicella annularis, the boulder star coral, with that of Gorgonia ventalina.
The purple sea fan was thought to be resilient to the stresses of warming waters. But Gorgonia ventalina, the scientists found, is also susceptible to the double whammy of disease and warming.
-- Cheryl Dybas, NSF
Tuesday, August 6, 2013
SECRETARY OF DEFENSE HAGEL'S MESSAGE ON CIVILIAN FURLOUGHS
FROM: U.S. DEPARTMENT OF DEFENSE
SECRETARY OF DEFENSE CHUCK HAGEL MESSAGE ON REDUCING CIVILIAN FURLOUGHS
When I announced my decision on May 14 to impose furloughs of up to 11 days on civilian employees to help close the budget gap caused by sequestration, I also said we would do everything possible to find the money to reduce furlough days for our people. With the end of the fiscal year next month, managers across the DoD are making final decisions necessary to ensure we make the $37 billion spending cuts mandated by sequestration, while also doing everything possible to limit damage to military readiness and our workforce. We are joined in this regard by managers in non-defense agencies who are also working to accommodate sequestration cuts while minimizing mission damage. As part of that effort at the Department of Defense, I am announcing today that, thanks to the DoD's efforts to identify savings and help from Congress, we will reduce the total numbers of furlough days for DoD civilian employees from 11 to six.
When sequestration took effect on March 1, DoD faced shortfalls of more than $30 billion in its budget for day-to-day operating costs because of sequestration and problems with wartime funding. At that point we faced the very real possibility of unpaid furloughs for civilian employees of up to 22 days.
As early as January, DoD leaders began making painful and far reaching changes to close this shortfall: civilian hiring freezes, layoffs of temporary workers, significant cuts in facilities maintenance, and more. We also sharply cut training and maintenance. The Air Force stopped flying in many squadrons, the Navy kept ships in port, and the Army cancelled training events. These actions have seriously reduced military readiness.
By early May, even after taking these steps, we still faced day-to-day budgetary shortfalls of $11 billion. At that point I decided that cutting any deeper into training and maintenance would jeopardize our core readiness mission and national security, which is why I announced furloughs of 11 days.
Hoping to be able to reduce furloughs, we submitted a large reprogramming proposal to Congress in May, asking them to let us move funds from acquisition accounts into day-to-day operating accounts. Congress approved most of this request in late July, and we are working with them to meet remaining needs. We are also experiencing less than expected costs in some areas, such as transportation of equipment out of Afghanistan. Where necessary, we have taken aggressive action to transfer funds among services and agencies. And the furloughs have saved us money.
As a result of these management initiatives, reduced costs, and reprogramming from Congress, we have determined that we can make some improvements in training and readiness and still meet the sequestration cuts. The Air Force has begun flying again in key squadrons, the Army has increased funding for organizational training at selected units, and the Navy has restarted some maintenance and ordered deployments that otherwise would not have happened. While we are still depending on furlough savings, we will be able to make up our budgetary shortfall in this fiscal year with fewer furlough days than initially announced.
This has been one of the most volatile and uncertain budget cycles the Department of Defense has ever experienced. Our fiscal planning has been conducted under a cloud of uncertainty with the imposition of sequestration and changing rules as Congress made adjustments to our spending authorities.
As we look ahead to fiscal year 2014, less than two months away, the Department of Defense still faces major fiscal challenges. If Congress does not change the Budget Control Act, DoD will be forced to cut an additional $52 billion in FY 2014, starting on October 1. This represents 40 percent more than this year's sequester-mandated cuts of $37 billion. Facing this uncertainty, I cannot be sure what will happen next year, but I want to assure our civilian employees that we will do everything possible to avoid more furloughs.
I want to thank our civilian workers for their patience and dedication during these extraordinarily tough times, and for their continued service and devotion to our department and our country. I know how difficult this has been for all of you and your families. Your contribution to national security is invaluable, and I look forward to one day putting this difficult period behind us. Thank you and God Bless you and your families.
SECRETARY OF DEFENSE CHUCK HAGEL MESSAGE ON REDUCING CIVILIAN FURLOUGHS
When I announced my decision on May 14 to impose furloughs of up to 11 days on civilian employees to help close the budget gap caused by sequestration, I also said we would do everything possible to find the money to reduce furlough days for our people. With the end of the fiscal year next month, managers across the DoD are making final decisions necessary to ensure we make the $37 billion spending cuts mandated by sequestration, while also doing everything possible to limit damage to military readiness and our workforce. We are joined in this regard by managers in non-defense agencies who are also working to accommodate sequestration cuts while minimizing mission damage. As part of that effort at the Department of Defense, I am announcing today that, thanks to the DoD's efforts to identify savings and help from Congress, we will reduce the total numbers of furlough days for DoD civilian employees from 11 to six.
When sequestration took effect on March 1, DoD faced shortfalls of more than $30 billion in its budget for day-to-day operating costs because of sequestration and problems with wartime funding. At that point we faced the very real possibility of unpaid furloughs for civilian employees of up to 22 days.
As early as January, DoD leaders began making painful and far reaching changes to close this shortfall: civilian hiring freezes, layoffs of temporary workers, significant cuts in facilities maintenance, and more. We also sharply cut training and maintenance. The Air Force stopped flying in many squadrons, the Navy kept ships in port, and the Army cancelled training events. These actions have seriously reduced military readiness.
By early May, even after taking these steps, we still faced day-to-day budgetary shortfalls of $11 billion. At that point I decided that cutting any deeper into training and maintenance would jeopardize our core readiness mission and national security, which is why I announced furloughs of 11 days.
Hoping to be able to reduce furloughs, we submitted a large reprogramming proposal to Congress in May, asking them to let us move funds from acquisition accounts into day-to-day operating accounts. Congress approved most of this request in late July, and we are working with them to meet remaining needs. We are also experiencing less than expected costs in some areas, such as transportation of equipment out of Afghanistan. Where necessary, we have taken aggressive action to transfer funds among services and agencies. And the furloughs have saved us money.
As a result of these management initiatives, reduced costs, and reprogramming from Congress, we have determined that we can make some improvements in training and readiness and still meet the sequestration cuts. The Air Force has begun flying again in key squadrons, the Army has increased funding for organizational training at selected units, and the Navy has restarted some maintenance and ordered deployments that otherwise would not have happened. While we are still depending on furlough savings, we will be able to make up our budgetary shortfall in this fiscal year with fewer furlough days than initially announced.
This has been one of the most volatile and uncertain budget cycles the Department of Defense has ever experienced. Our fiscal planning has been conducted under a cloud of uncertainty with the imposition of sequestration and changing rules as Congress made adjustments to our spending authorities.
As we look ahead to fiscal year 2014, less than two months away, the Department of Defense still faces major fiscal challenges. If Congress does not change the Budget Control Act, DoD will be forced to cut an additional $52 billion in FY 2014, starting on October 1. This represents 40 percent more than this year's sequester-mandated cuts of $37 billion. Facing this uncertainty, I cannot be sure what will happen next year, but I want to assure our civilian employees that we will do everything possible to avoid more furloughs.
I want to thank our civilian workers for their patience and dedication during these extraordinarily tough times, and for their continued service and devotion to our department and our country. I know how difficult this has been for all of you and your families. Your contribution to national security is invaluable, and I look forward to one day putting this difficult period behind us. Thank you and God Bless you and your families.
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