STABILITY AND MISSILE DEFENSE

Photo:  Missile Interceptor Test.  Credit:  U.S. Navy
FROM:  U.S. DEPARTMENT OF STATE
Reinforcing Stability through Missile Defense
Remarks
Frank A. Rose
Deputy Assistant Secretary, Bureau of Arms Control, Verification and Compliance
National Defense University Congressional Breakfast Seminar
Washington, DC
May 11, 2012
Thank you so much for inviting me to speak today. I attended a number of these breakfasts as a Congressional Hill staffer myself, so I’m very pleased to be on the opposite side of the podium today.

At the State Department, I am responsible for overseeing a wide range of defense policy issues, including missile defense. In that capacity, it was my responsibility to negotiate the details of the BMD agreements with Poland, Romania, and Turkey that will enable the United States to implement the European Phased Adaptive Approach. I will touch more on this later in my presentation, but suffice to say that I have been focused over the last couple of years on ensuring that we are able to meet the vision the President laid out in his 2009 announcement regarding the European Phased Adaptive Approach.

Missile Defense Policy
Today, the threat from short-, medium-, and intermediate-range ballistic missiles to our deployed forces, allies, and partners is growing. This regional threat is likely to increase in both quantitative and qualitative terms in the coming years, as some states are increasing their inventories, and making their ballistic missiles more accurate, reliable, mobile, and survivable.

Recognizing the seriousness of the ballistic missile threat, the United States seeks to create an environment, based on strong cooperation with allies and partners, which will eliminate an adversary’s confidence in the effectiveness of ballistic missile attacks. This will devalue and provide a disincentive for the development, acquisition, deployment, and use of ballistic missiles. To that end, President Obama has made international cooperation on missile defense a key priority, and we are pursuing a region-by-region approach based on the following three principles:

1) First, the United States will deter adversaries through strong regional deterrence architectures built upon solid cooperative relationships with an eye toward efficiently incorporating assets and structures that our partners already have today or are seeking.

2) Second, the United States will pursue Phased Adaptive Approaches (PAAs) within key regions that are tailored to their unique deterrence requirements and threats, including the scale, scope, and pace of their development, and the capabilities available and most suited for deployment. We will phase in and implement the best available technology to meet existing and evolving threats, and adapt to situations that evolve in an unforeseen manner.

3) Third, recognizing that our supply of missile defense assets cannot meet the global demand we face, the United States is developing mobile capabilities that can be relocated to adapt to a changing threat and provide surge defense capabilities where they are most needed.

Missile defense plays an important role in the broader U.S. international security strategy, supporting both deterrence and diplomacy. Missile defense assures our allies and partners that the United States has the will and the means to deter and, if necessary, defeat a limited ballistic missile attack against the U.S. homeland and regional ballistic missile attacks against our forward deployed troops, allies, and partners.

NATO and European Missile Defense
I’d like to focus today on our work in Europe, which continues to receive a great deal of attention. In order to augment the defense of the United States and a future long-range threat and provide more comprehensive and more rapid protection to our deployed forces and European Allies against the current threat, the President outlined a four-phase approach for European missile defense called the European Phased Adaptive Approach or EPAA. Through the EPAA, the United States will deploy increasingly capable BMD assets to defend Europe against a ballistic missile threat from the Middle East that is increasing both quantitatively and qualitatively.

The EPAA will protect our deployed forces and our allies and partners in Europe, as well as augment the defense of the U.S. homeland against a potential by ICBMs from the Middle East in several ways. As part of Phase 1, we have deployed to Turkey missile defense radar, referred to as the AN/TPY-2 radar, which will provide data earlier in the engagement of an incoming ballistic missile from the Middle East. This radar enhances the homeland missile defense coverage of the United States provided by our Ground-Based Interceptor (GBI) capabilities in Alaska and California.

A year ago last week, we concluded negotiations with Romania to host a U.S. land-based SM-3 BMD interceptor site, designed to provide protection against medium-range ballistic missiles. The land-based SM-3 system to be deployed to Romania is anticipated to become operational in the 2015 timeframe. We also reached an agreement with Poland to place a similar U.S. BMD interceptor site there in the 2018 timeframe.

Defense of the homeland will be further augmented by the basing in Poland of the SM-3 IIB interceptor, which is a future evolution of the SM-3 series of interceptors. The SM-3 IIB interceptor will provide us an opportunity for an early-intercept against potential long-range missile launched from the Middle East. It is important for everyone to know that we are already protected from limited ICBM attacks by the GBIs we have deployed at Fort Greely, Alaska, and Vandenberg, California.

The EPAA will eventually provide us with additional protection, ensuring that we can take multiple shots at a long-range missile heading to the United States. The EPAA – in all of its phases – also provides protection to for the thousands of U.S. military personnel based in Europe.

The Obama Administration is implementing the EPAA within the NATO context. At the 2010 Lisbon Summit, NATO Heads of State and Government approved a new Strategic Concept and decided to develop the capability to defend NATO European populations and territory against the growing threat from ballistic missile proliferation. The Allies also welcomed the EPAA as a U.S. national contribution to the new NATO territorial missile defense capability, in support of our commitment to the collective defense of the Alliance under Article 5 of the North Atlantic Treaty. At the Lisbon Summit, NATO Heads of State and Government also decided to expand the scope of the NATO Active Layered Theatre Ballistic Missile Defense (ALTBMD) program to serve as the command, control, and communications network to support this new capability. NATO allies have committed to investing over $1 billion for command, control, and communications infrastructure to support NATO missile defense.

These decisions have created a framework for Allies to contribute and optimize their own BMD assets for our collective defense. Our Allies possess land- and sea-based sensors that could be linked into the system, as well as lower tier systems that can be integrated and used to provide point defense. For example, Germany and the Netherlands each have Patriot PAC-3s while Spain and Greece have Patriot PAC-2s. Turkey is also considering Patriot PAC-3s to address its air defense and BMD requirements. On the sea-based side, the Dutch announced in September 2011, their intention to upgrade the SMART-L air search radars on their De Zeven Provinciën-class frigates with an extended long-range (ELR) mode. In December 2006, the Dutch frigate Tromp participated in an Aegis BMD test during which it demonstrated the capability of a modified radar to track ballistic missiles.

Germany also has the SMART-L and Active Phased Array Radars (APARs) on its F-124 frigates and may decide to pursue a BMD capability in the future, while Spain has frigates equipped with a version of the SPY-1 radar used on our Aegis BMD ships. In June 2007, the Spanish frigate Méndez Núñez, participated in a BMD test off of Kaui, Hawaii, during which it was able to detect and track a ballistic missile with a minor modification to its Aegis Weapon System. Italy and Germany are also working with the United States to develop a Proof of Concept for MEADS, which will allow all three nations to harvest the advanced technologies of MEADS for follow-on systems.

Later this month on May 20-21, the NATO Heads of State and Government will meet in Chicago for the NATO Summit. Our goal is to declare an interim NATO MD capability at the Summit. What this means is that the United States could transfer select missile defense assets to NATO operational control should conditions warrant which results in a limited NATO missile defense capability. Over time, through additional contributions by the United States and other Allies, NATO missile defense will become even more capable.
Separate from the EPAA, it is important to note that our European allies are contributing directly to the defense of the United States today. The United Kingdom and Denmark each host an Upgraded Early Warning Radar at Fylingdales and Thule, Greenland, respectively. These radars are critical to the defense of the United States against a potential long-range missile threat from the Middle East. I would also note that U.S. EPAA capabilities will provide protection for these important assets. Therefore, I think it’s fair to say that the defense of the U.S. homeland is linked to the defense of Europe.


Russia
An update on missile defense cooperation with Europe should also include a discussion of our efforts to pursue cooperation with Russia. Missile defense cooperation with Russia is a Presidential priority, as it has been for several Administrations going back to President George H.W. Bush in the early 1990s.

When President Obama announced his new vision for missile defense in Europe in September 2009, he stated that “we welcome Russia’s cooperation to bring its missile defense capabilities into a broader defense of our common strategic interests.” Missile defense cooperation with Russia will not only strengthen our bilateral and NATO-Russia relationships, but also could enhance NATO’s missile defense capabilities. Successful missile defense cooperation would provide concrete benefits to Russia, our NATO Allies, and the United States and will strengthen – not weaken – strategic stability over the long term.
This means it is important to get Russia inside the missile defense tent now, working alongside the United States and NATO, while we are in the early stages of our efforts. Close cooperation between Russia and the United States and NATO is the best and most enduring way for Russia to gain the assurance that European missile defenses cannot and do not undermine its strategic deterrent.

Through this cooperation, Russia would see firsthand that this system is designed for the ballistic missile threat from outside the Euro-Atlantic area, and that NATO missile defense systems will not threaten Russia’s strategic nuclear deterrent capabilities. Cooperation will also allow Russia to see that the EPAA is designed to be flexible. Should the ballistic missile threat from nations like Iran change, our missile defense system can be adapted accordingly. Working together on missile defense would also send a strong message to proliferators that the United States, NATO, and Russia are working to counter their efforts.

That said, Russia has raised the issue of a legal guarantee with a set of “military-technical criteria” that could, in effect, create limitations on our ability to develop and deploy future missile defense systems against regional ballistic missile threats such as those presented by Iran and North Korea. We have also made it clear to Russia that we cannot and will not accept limitations on our ability to defend ourselves, our allies, and our partners, including where we deploy our Aegis ships. These are multi-mission ships that are used for a variety of purposes around the world, not just for missile defense.

The United States cannot accept any Russian proposal that limits the operational areas of U.S. or allied ships. Such limits are contrary to international law on navigational rights and freedom of the sea. We also will not accept limitations on the capabilities and numbers of our missile defense systems. Let me be clear, our missile defense capabilities are critical to our ability to counter a growing threat to our deployed forces, allies, and partners; therefore, no nation or group of nations will have veto power over U.S. missile defense efforts.

And while we seek to develop ways to cooperate with Russia on missile defense, it is important to remember that under the terms of Article 5 of the North Atlantic Treaty, NATO alone will bear responsibility for defending the Alliance from the ballistic missile threat. This is why the United States and NATO cannot agree to Russia’s proposal for “sectoral” missile defense. Just as Russia must ensure the defense of Russian territory, NATO must ensure the defense of NATO territory.

We would, however, be willing to agree to a political framework including a statement that our missile defenses are not directed at Russia. Any such statement would be politically binding and would publicly proclaim our intent to work together and chart the direction for cooperation, not limitations. Our bottom line is that missile defense cooperation with Russia will not come at the expense of our plans to defend against regional ballistic missile threats or our plans for the defense of the U.S. homeland.

Conclusion
Today’s ballistic missile threats continue to increase in number and sophistication. This increasing threat reinforces the importance of our collaborative missile defense efforts with partners around the world, which not only strengthen regional stability, but also provide protection for our forces serving abroad and augment the defense of the United States.
Thank you for your time and attention. I look forward to your questions.

HEALTH CARE PROVIDERS SETTLE HIV DISCRIMINATION COMPLAINTS

Photo:  Lady Justice.  Credit Wikimedia.
FROM:  U.S. DEPARTMENT OF JUSTICE
Friday, May 11, 2012
Health Care Providers Settle with Justice Department Over Complaints of HIV Discrimination

The Justice Department announced that it has reached two settlements today resolving claims that health care providers refused to serve people with HIV in violation of the Americans with Disabilities Act (ADA).

The first complaint was filed by a man with HIV who went to the Mercy Medical Group Midtown Clinic in Sacramento, Calif.   After meeting with the patient and examining him, a podiatrist at the clinic informed the patient of his treatment options.   Although surgery was one of the treatment options, the podiatrist incorrectly told the patient that he could not perform the surgery because of a risk that he would contract HIV from the patient during surgery.   The United States determined that the podiatrist’s actions violated the ADA by denying the patient the full and equal enjoyment of the services offered at the clinic on the basis of his disability.

The second complaint was filed by a man with HIV who went to the Knoxville Chiropractic Clinic North in Knoxville, Tenn., for chiropractic treatment following an automobile accident.   After examining him, the doctor determined that the patient required 24 subsequent appointments to treat his injuries.   On his third visit to the clinic, however, the receptionist informed him that the doctor would not see him because they could not treat people “like him.”   The United States determined that Knoxville Chiropractic Centers had a blanket policy of refusing treatment to persons with HIV in violation of the ADA.

“It is critical that people with disabilities, including HIV, not be denied equal access to goods and services, especially to health care services.   The Civil Rights Division takes discrimination based on unfounded fears and stereotypes about HIV very seriously,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.   “We applaud Mercy Medical Group and CHW Medical Foundation, as well as Knoxville Chiropractic Centers, for working cooperatively with the Justice Department to resolve these matters quickly and fairly.”

The settlement agreements require the entities to develop and implement a non-discrimination policy and to train staff on the requirements of the ADA.   In addition, Mercy Medical Group and CHW Medical Foundation are required to pay $60,000 to the complainant and $25,000 as a civil penalty, and Knoxville Chiropractic Centers is required to pay $10,000 as a civil penalty.

The ADA requires public accommodations, like doctors’ offices, medical clinics, hospitals and other health care providers, to provide individuals with disabilities, including people with HIV, equal access to goods, services, privileges, accommodations, facilities, advantages and accommodations.

The Department of Justice provides a webpage specifically dedicated to information about the ADA and HIV at www.ada.gov/aids.   Those interested in finding out more about these settlements or the obligations of public accommodations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov.  ADA complaints may be filed by email toada.complaint@usdoj.gov.

FIRST LADY AT WHITE HOUSE MOTHER'A DAY TEA

FROM:  THE WHITE HOUSE
First Lady Michelle Obama greets guests during a Mother’s Day Tea in the East Room of the White House, May 10, 2012. (Official White House Photo by Sonya N. Hebert)


White House Women's Update: Happy Mother's Day!
Friends --
Happy Mother's Day to you and yours!


Yesterday, the President released a presidential proclamation to celebrate the special role mothers play as cornerstones of our families and our communities, and on Thursday, First Lady, Michelle Obama and Dr. Jill Biden hosted a Mother's Day Tea for military families in the East Room of the White House and we hosted a Twitter Chat with the leadership of MomsRising.org, Mocha Moms, and Mamiverse – who were joined by their children and parents.

Additionally, please take a moment to read a new post by Lynn Rosenthal, the first-ever White House Advisor on Violence Against Women, and Senior Policy Director for Immigration, Felicia Escobar on the risk of Rolling Back Protections for Domestic Violence Victims.

We hope that you took a moment to watch the President's interview with ABC News on Wednesday, where he said that, "I think same sex couples should be able to get married." He made it clear that he believes that it’s wrong to prevent couples who are in loving, committed relationships from getting married.
Happy Mother's Day and thank you for all that you do!
The White House Council on Women & Girls

TESTS PILOTS AND CYBERSPACE

FROM:  U.S. AIR FORCE SPACE COMMAND
Test Pilot School adds cyberspace training to its program.
by Laura Mowry

5/11/2012 - EDWARDS AIR FORCE BASE, Calif. (AFNS) -- The U.S. Air Force Test Pilot School has a long, rich history of educating the best of the best in air and space. Apollo 13 astronaut, Fred Haise; X-15 pilot, Joe Engle; and the first man to break the sound barrier, Chuck Yeager; are just a few of the notable Test Pilot School alumnae who have cemented their places in history books for their impressive accomplishments in both air and space.

Now that cyberspace is an integral part of the Air Force mission - it is time for TPS to educate the next generation of heroes.

"We are the place where the world comes to learn about test and evaluation. With the introduction of the Cyber Systems Test Course, we can now teach our graduates and others the framework for testing cyber systems in a contested environment," said Col. Noel Zamot, USAF TPS commandant. "This is the first course of its kind that includes a disciplined, yet flexible approach to testing cyber intensive systems."

The Cyber Systems Test Course provides Test Pilot School students with the knowledge and resources for successfully identifying and testing cyber vulnerabilities on a variety of systems. It provides students with a construct developed for identifying and testing cyber vulnerabilities, loosely based on a common decision making process known as the OODA Loop, which stands for observe, orient, decide, and act.

"The rigorous thought process applies to a wide variety of systems, whether it's testing vulnerabilities of a support system for the Joint Strike Fighter, the radar signal processer of a Global Hawk, or even a laser targeting pod for the B-1 or F-16," said Zamot. "We're asking students to think broadly about cyber vulnerabilities. I expect that students will look at systems in a disciplined fashion."

The course ensures that Test Pilot School students are better able to recognize cyber vulnerabilities, such as interference with precision airdrop missions and gives them the resources to not only identify that threat, but create an experiment to challenge it.

According to Zamot, the intensive curriculum of the Test Pilot School ensures that each graduate knows the entire test process, which includes mitigating cyber risks and vulnerabilities. It is their job as test professionals to lead people, bring experts together, and function as the glue and grease of the test program, even when it comes to cyber systems.

The need for the course became apparent during a visit approximately 18 months ago from Gen. Donald J. Hoffman, Air Force Material Command commander, during which he questioned how the school was integrating cyberspace studies into the curriculum.

"We were a little behind when it came to teaching cyber," said Zamot. "We were glad to have General Hoffman's support and interest. So, we talked to a number of folks and everyone agreed that the perfect person to help us develop the course was Dr. Kamal Jabbour."

The school immediately contacted Dr. Jabbour, the Air Force's senior scientist for information assurance, at the Air Force Research Laboratory's Information Directorate facility located in Rome, N.Y. The school invited Jabbour to take the Senior Executive Short Course to better understand the test culture and asked for his assistance in developing a cyber curriculum.

Jabbour, the Air Force's premiere information assurance scientist, with more than 30 years of experience developing systems-related curricula at the undergraduate and graduate levels, was the ideal candidate to work with the TPS on developing the Cyber Systems Test Course.

"We needed someone who has extensive knowledge of cyber and understands test and evaluation, as well as Test Pilot School limitations and constraints. In my mind, there was only one person in the world, and that was Dr. Jabbour," said Zamot.

Throughout his career, Jabbour has spent an immense amount of time educating top military leaders on the inherent threat associated with cyber vulnerabilities.

According to Jabbour, he began teaching Air Force ROTC cadets ten years ago and gradually made his way up to helping develop and even teaching the Cyber Operations Executive Course at Air University. Just a few years back, he taught every cyber component for flag officer courses at Air University, educating more than 200 General officers in one year.

His valuable expertise played a critical role in the development of the Cyber Systems Test Course, as he worked with the school to create a curriculum that will provide students with resources to evaluate and mitigate risk associated with cyber vulnerabilities, which will evolve as technology continues to advance.

"Aircraft functional dependence on software increased from next-to-nil with the F-4 Phantom to approximately 85 percent with the Joint Strike Fighter. It is increasingly important for testers to understand this dependence and test accordingly," said Jabbour.

After five months of working with the school and three visits to Edwards, the Cyber Systems Test Course was ready to be taught for the first time to the senior class, during the systems phase of the intensive year-long masters program.

"We sought to educate future developmental testers on evaluating weapons systems in a contested cyber environment through development of hypothesis, design of experiment, and creating of a test plan," said Jabbour. "I want the students to think critically about developing hypotheses to explain and challenge thoughts on aircraft functions."

Currently, the class has been taught three times to a variety of students, including during the school's first-ever Enlisted Flight Test Course. Initial feedback from all three classes was positive.

The intent moving forward is to expand on the class, which would drastically increase the length from four to six hours, to perhaps as lengthy as one week. Additionally, preparations are underway to write and present a formal scientific paper at a conference about the Cyber Systems Test Course framework.

USS LABON DURING TRAINING MISSION

FROM:  U.S. NAVY
The guided-missile destroyer USS Laboon (DDG 58) fires its MK-45 5-inch/54-caliber lightweight gun during a live-fire exercise. Laboon, part of Carrier Strike Group 8 is underway conducting a composite training unit exercise in the Atlantic Ocean. U.S. Navy photo by Mass Communication Specialist 2nd Class William Jamieson 

"BATTLESHIP" THE MOVIE

FROM:  U.S. NAVY
Mass Communication Specialist 3rd Class David Hooper, films an interview between a KTLA Channel 5 reporter and writers of the movie "Battleship," Jon and Erich Hoeber, on the "blue" carpet at the premiere of the film. Universal Pictures gave service members the celebrity treatment alongside cast members of the movie and invited them to attend the special screening of the film prior to its release in more than 3,000 theaters nationwide. U.S. Navy photo by Mass Communication Specialist 2nd Class Trevor Welsh (Released)

GENERAL DEMPSEY SAYS LAW OF THE SEA CONVENTION SHOULD BE RATIFIED

Photo:  U.S. Department of Defense

F

ROM:  AMERICAN FORCES PRESS SERVICE

Dempsey Urges Ratification of Law of the Sea Convention

By Jim Garamone
American Forces Press Service

WASHINGTON, May 9, 2012 - Ratifying the Law of the Sea Convention is the right thing to do for American national security, the U.S. military's highest-ranking officer said here today.

Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, told the Pew Charitable Trusts gathering on the treaty that he joins each chairman since the document was signed in 1994 to urge the Senate to ratify it.

Republican and Democratic administrations have both urged approval. And, Dempsey maintains, the treaty is good for American military rights.

"It codifies navigational rights and freedoms essential for our global mobility," he said. "It helps sustain our combat forces in the field."

The treaty also guarantees the right of innocent passage through foreign territorial seas, the right of transit passage through international straits and the right to exercise high seas freedoms in foreign exclusive economic zones — all without permission or prior notice.

In addition, the treaty also affirms the sovereign immunity of U.S. warships and other public vessels. "And it gives us the framework to counter excessive claims by states seeking to illegally restrict movement of vessels and aircraft," Dempsey said. "These are all rights and capabilities that we want and that we need. In fact, they are of our own making. We negotiated them into the convention to advance our national security interests."

The United States could, of course, not ratify the treaty and depend on the same strategy an infant republic used more than 200 years ago, the chairman said. "At that time, we commissioned the Navy's first ships to safeguard our seaborne merchants against the Barbary pirates," he said.

The force of arms should not be America's only national security instrument, the chairman said, and the Law of the Sea Convention provides an additional way to navigate an increasingly complex international security environment.

"Ratification now represents an unprecedented opportunity," the chairman said. "The convention offers an opportunity to exercise global security leadership."

More than 160 nations are now a party to the convention. "Even so, the world looks to us for leadership," he said. "We have the world's largest and most capable navy, largest economy, and the largest exclusive economic zone. We will become the leader within the convention as soon as we enter it. And that's never been more important."

Dempsey said that on, over and under the oceans, nations are making competing claims or posturing themselves to restrict the movement of others, and these actions affect the United States, its allies and friends.

"As a party to the convention, we can help resolve conflicts, strengthen alliances and foster innovative partnerships," he said. "We have never been better poised – or more welcomed – to lead a global security order benefiting all peaceful nations."

The convention secures legitimate global freedom of access for the U.S. armed forces, Dempsey told the audience. "Today, we rely on customary international law and assert it through physical presence – warships and aircraft transiting and challenging illegal restrictions," he said. "Some say this alone is sufficient."

But this works against U.S. rights in that nations will continue to try and bend customary law to restrict movement on the ocean, he said, and it puts U.S. ships, subs, aircraft and personnel at risk to continually challenge these claims.

"We are strong enough for this role. We can and will continue to defend our interests, and we'll do that with force when necessary," Dempsey said. "But we can also be smart. We can leverage law to mitigate the need for physical assertion. Under the Law of the Sea Convention, we can be both strong and smart."

Ratifying the convention also strengthens the U.S. position in Asia, the chairman said.

Finally, Dempsey said, joining the Law of the Sea Convention will strengthen America's strategic position in Asia. "The Western Pacific is a mosaic of competing claims for territory and resources," the chairman said. "This is a critical region where, as a Pacific nation, our security and economic prosperity are inextricably linked."

The United States wants to mitigate any conflict in the Pacific, Dempsey said. "The convention gives us another tool to effectively resolve conflicts at every level," he added. "It provides a common language, and therefore a better opportunity, to settle disputes with cooperation instead of cannon fire."

SEC CHARGES APARTMENTS AMERICA AND ITS OWNERS IN SCHEME TO DEFRAUD INVESTORS

Photo:  Wikimedia
FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION
May 11, 2012
On May 10, 2012, the Securities and Exchange Commission charged a California-based real estate company and its owners with defrauding potential investors by boasting a false company track record to tout their purported real estate expertise while concealing the bankruptcy of their previous company.

The SEC alleges that Michael J. Stewart, John J. Packard, and Randall A. Smith created Apartments America, LLC to pool investor proceeds from an unregistered offering of securities and invest primarily in apartment buildings in Southern California and Arizona. They solicited potential investors through a website, Internet advertisements and postings, cold calls, solicitation letters, and advertising in a national newspaper. They boasted a track record of producing more than a 60 percent annual return on investment and creating more than $100 million in net equity.

According to the SEC’s complaint filed in federal court in Orange County, California, what potential investors did not know is that Apartments America was a new company with no assets and no track record. Stewart, Packard, and Smith were merely using the same investment strategy and selective statistics from their prior bankrupt company that had defaulted on $91.6 million in promissory notes held by 647 investors.

According to the SEC’s complaint, Stewart lives in San Clemente, California, and Packard and Smith each live in Long Beach, California. Together they formed Apartments America in September 2009, just three months after Pacific Property Assets (PPA) filed for bankruptcy. Stewart and Packard owned PPA and Smith worked for them. In the months prior to defaulting on its promissory notes, PPA was actively soliciting investor funds and promising an annual interest rate of 24 to 30 percent.

The SEC alleges that under Apartments America, whose securities have never been registered with the SEC, Stewart, Packard, and Smith similarly solicited investor funds with the same plan to purchase apartment buildings. But they engaged in a concerted scheme to distance themselves from PPA and its bankruptcy. In communications to potential investors, they selectively and misleadingly used some of PPA’s historic investments and touted them as Apartments America data. For instance, they arrived at their fabricated statistic of a 60 percent annual return on investment by cherry-picking PPA’s successful property investments while omitting the losses incurred on more than 50 properties in PPA’s portfolio at the time of its bankruptcy. Stewart, Packard, and Smith also misrepresented that they had created more than $100 million in net equity by calculating some of PPA’s property investments while omitting information about its bankruptcy and the losses on its bankrupt properties. They also falsely represented to potential investors that they were managing a property portfolio valued at more than $200 million when that in fact referred to PPA’s bankrupt property portfolio, which was actually being managed by the bankruptcy trustee.

NEW ENGLAND CRIME BOSS SENTENCED FOR RACKETEERING AND EXTORTION

FROM:  U.S. DEPARTMENT OF JUSTICE 
Friday, May 11, 2012
Former New England Organized Crime Leader and Associate Sentenced for Racketeering and Extortion Activities

WASHINGTON – Luigi “Louie” Manocchio, an admitted former boss and underboss of the New England La Cosa Nostra (NELCN), was sentenced today to 66 months in federal prison for his leadership of and participation in a racketeering and extortion conspiracy that demanded and received between $800,000 and $1.5 million in “protection” payments from several Rhode Island adult entertainment businesses from 1995-2009.
Raymond R. “Scarface” Jenkins, an admitted associate of the NELCN, was also sentenced today to 37 months in prison for his admitted participation in a conspiracy to extort $25,000 from a Rhode Island individual and his wife by using implied threats of violence, including a visit to the individual’s residence.

The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Peter F. Neronha, U.S. Attorney for the District of Rhode Island; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; and Providence, R.I., Public Safety Commissioner Steven M. Pare.

Manocchio and Jenkins were sentenced by U.S. District Court Judge William E. Smith in the District of Rhode Island.  Manocchio, 84, was also sentenced to serve three years of supervised release following his prison sentence.  Jenkins, 47, was sentenced to serve three years of supervised release following his prison sentence.

Manocchio pleaded guilty on Feb. 22, 2012, to one count of racketeering conspiracy and Jenkins pleaded guilty on Feb. 23, 2012, to one count of conspiracy to violate the Hobbs Act by participating in extortion.

Manocchio and Jenkins are among eight Rhode Island men charged in a second superseding indictment returned on Sept. 22, 2011, for crimes involving racketeering and extortion.  Edward “Eddy” Lato, an NELCN leader; NELCN member Alfred “Chippy” Scivola; and NELCN associates Albino “Albie” Folcarelli, Thomas Iafrate and Richard Bonafiglia pleaded guilty to participating in racketeering and extortion activities.  Iafrate was sentenced on Dec. 12, 2011, to 30 months in prison to be followed by three years of supervised release.  The remaining defendants are awaiting sentencing.

An eighth defendant named in the second superseding indictment, Theodore Cardillo, pleaded not guilty to three counts of racketeering conspiracy and three counts of extortion conspiracy.  He is awaiting trial.

A third superseding indictment was returned in this matter on April 24, 2012, which charges Anthony L. Dinunzio, 53, of East Boston, Mass., the alleged acting leader of the NELCN, with one count each of racketeering and extortion, and five counts of travel in aid of racketeering.  He entered a plea of not guilty on April 25, 2012, and was ordered detained while awaiting trial.

GOVERNMENT SAYS "WHOLE-OF-GOVERNMENT" BOOSTS EUCOM'S EFFECTIVENESS

FROM:  AMERICAN FORCES PRESS SERVICE
Ambassador Lawrence Butler, U.S. European Command's deputy to the commander and foreign policy advisor, discusses regional security issues with U.S. Ambassador to Latvia Judith Garber, during the Baltic Sea Region Senior Leadership Seminar at the Eucom headquarters in Stuttgart, Germany, April 20, 2012. U.S. European  

'Whole-of-Government' Focus Boosts Eucom's Effectiveness’
By Donna Miles
American Forces Press Service
STUTTGART, Germany, May 11, 2012 - Some staff members at U.S. European Command, the oldest and in some people's view, most traditional of the U.S. combatant commands, thought the "whole-of-government" concept introduced about three years ago was nothing but a fad.

Mike Anderson, acting director of Eucom's Interagency Partnering Directorate, said he knew differently from the start. The idea of promoting interagency collaboration that leverages all elements of national power to address challenges in Europe and Eurasia simply made too much sense to fade with the times, he said.
Navy Adm. James G. Stavridis had already seen the benefits of interagency collaboration as commander of U.S. Southern Command when he arrived here three years ago to take the helm at Eucom. Because the Eucom staff interfaces with NATO and European militaries , Stavridis opted to assign a Napoleonic "J code" to the command's new interagency partnership directorate to help synchronize it with the NATO structure and elevate its stature within his own command.

Southcom, U.S. Africa Command and U.S. Pacific Command have since adopted the same J9 model, Anderson noted. U.S. Northern Command, Centcom and U.S. Special Operations Command all also have standalone interagency directorates, although they do not designate them as "J9" staffs.

"It's one thing organizationally to make a change, but the more important thing, in my humble opinion, is the cultural change," Anderson said during an interview with American Forces Press Service. The cultural change didn't come overnight at Eucom, he admitted, but thanks to the commander's emphasis, visible contributions, and repeated reinforcement, it has taken hold.

"Two-and-a-half years into it, it is almost second nature," Anderson said. "The mindset has changed."

What's accelerated that, he said, is more than simply command emphasis. The proof has been in the pudding, the value that comes from incorporating interagency partners directly into the staff.

Stavridis' civilian deputy to the commander, Ambassador Larry Butler, brings a State Department perspective as he advises Stavridis regarding the command's missions and activities.

In addition, the Interagency Partnering Directorate -- a staff of about 30 military members, DOD civilians and agency partners from throughout the federal government -- contributes specialized expertise throughout the command. The directorate hosts representatives from the departments of State, Justice, Energy and Treasury, the FBI, Immigration and Customs Enforcement, Customs and Border Protection, the Drug Enforcement Administration, U.S. Agency for International Development, Office of Foreign Disaster Assistance and the Justice Department's International Criminal Investigative Training Assistance Program.

This sprinkling of "soft power" and law enforcement representatives throughout the command brings "vital depth and breadth to our command, its operations and our outreach across the continent," Stavridis said. That, he said, contributes directly to the mission and increases Eucom's effectiveness and ability to speak and act across various organizational cultures.

"There's been a huge return on investment," Anderson agreed. "This military headquarters of nearly 1,000 people has realized that the relatively small investment of 30 people in this directorate makes the plans they are working on and the exercises they are training on more realistic and better informed than when they previously were informed by just a single, Defense Department vantage point."

Interagency partnering has become a foundation for applying "Smart Defense" at time when budgets may be shrinking, but threats aren't, Stavridis recently told Congress.
Today's complex security environment exceeds the capacity of any single government organization, the admiral told the Senate Armed Services Committee in March.
"It demands whole-of-government solutions that draw strength and effectiveness from the collective judgment, training and experience of the many public servants in government who, working together, can effectively synchronize the elements of national power," Stavridis said.

And particularly in light of constrained resources, he said, there's clear recognition of the benefits of bringing both "soft" and "hard" power to the table. "At European Command, we believe that 'no one of us is as smart as all of us, thinking and working together,'" Stavridis told the Senate panel.

The interagency partners' contributions extend far beyond their representation on the Eucom staff, Anderson explained. Each has direct reach-back to other experts within their agencies, as well as working relationships with their counterparts in U.S. embassies in Europe and Eurasia. Besides hosting federal agency partners, the J9 directorate serves as the command's lead for interacting with international and non-governmental organizations, the private sector, think tanks and academia.

The presence of other agency expertise at a military command has had a huge payoff at Eucom, enhancing the support it's able to provide allied and partner nations. For example, Eastern European nations that come to Eucom for help in securing their borders -- not a traditional U.S. military mission -- can tap into expertise from other U.S. agencies that specialize in that function.

"Now, we have border-security experts right down the hallway," Anderson said, including Customs and Border Protection, Immigration and Customs Enforcement and DEA. And when needed, they can call on their respective agency headquarters to dispatch "A teams" to advise and train partner nations.

"So when you talk about 'bang for the buck,' there's been a realization on the staff here that by having this relatively small footprint of interagency partners, we have so much more reach-back to the rest of the 'whole-of-government,'" Anderson said.
As the United States draws down its forces in Afghanistan and shifts it focus to preserving strategic partnerships with European allies, Anderson said the "strategic bridges" established throughout the U.S. interagency can't be forgotten.

"We also don't want to lose the strategic partnerships we have developed with our own federal partners," he said. "They are strategic partners as well, and our strengthened relationships with them were also born of crisis, after 9/11. And they, too, will be critical to our country as we face the future."

TESTING THE COLD TEMPERATURES OF SPACE

Testing Webb Telescope‘s OSIM and BIA Instruments – The OTE (Optical Telescope Element) Simulator or OSIM wrapped in a silver blanket on a platform, being lowered down into a vacuum chamber (called the Space Environment Simulator, or SES) by a crane to be tested to withstand the cold temperatures of space. (Photo Credit NASA Goddard/Chris Gunn

U.S. RENEWS SECURITY RELATIONS WITH BAHRAIN

FROM:  U.S. STATE DEPARTMENT
Photo Credit:  Vladimir Arshinov([User:Vladimir_arsh GFDL CC-BY-SA-3.0 
Renewal of U.S. Security Cooperation With Bahrain
Press Statement Victoria Nuland
Department Spokesperson, Office of the Spokesperson Washington, DC
May 11, 2012
Today, the Administration informed Congress that for national security interests we have decided to release additional items and services for the Bahrain Defense Force, the Coast Guard, and the National Guard for the purpose of helping Bahrain maintain its external defense capabilities. Bahrain is an important security partner and ally in a region facing enormous challenges. Maintaining our and our partners’ ability to respond to these challenges is a critical component of our commitment to Gulf security.

We have made the decision to release additional items to Bahrain mindful of the fact that there are a number of serious unresolved human rights issues that the Government of Bahrain needs to address. We will continue to maintain the holds on the TOW missiles and Humvees that were notified to Congress last October. Certain additional items for the Bahrain Defense Force, as well as all items for the Ministry of the Interior, excepting the Coast Guard and units deployed in Afghanistan, will also remain on hold. The items that we are releasing are not used for crowd control.

While the Government of Bahrain has begun to take some important steps to implement the recommendations of the Bahrain Independent Commission of Inquiry report, the country is becoming increasingly polarized and much work remains to be done. We are concerned about excessive use of force and tear gas by police. At the same time, we are concerned by the almost daily use of violence by some protestors. We urge all sides to work together to end the violence and refrain from incitement of any kind, including attacks on peaceful protestors or on the Bahraini police.

Going forward, we will continue to engage with Bahrain to encourage meaningful progress on human rights and reform. The United States believes that addressing the underlying causes of last year’s unrest and undertaking meaningful political and institutional reforms are critical to Bahrain’s stability and the strength of our countries’ longstanding partnership. All Bahrainis have a significant stake in participating in dialogue that leads to reform, and we call on the Bahraini government and people to resolve their issues through discussion. We remain committed to supporting Bahrain in achieving progress in these areas.

AIR FORCE INSTITUTES NEW MEASURES TO MAKE F-22 FIGHTER SAFER

Photo:  U.S. Air Force
FROM:  THE U.S. AIR FORCE

Medical Official Explains F-22 Pilot-protection Efforts

By Amaani Lyle
American Forces Press Service

WASHINGTON, May 9, 2012 - The Air Force has instituted measures designed to protect its pilots, ensure mission completion and assess the possible physiological effects of flying the F-22 Raptor fighter aircraft, the command surgeon for Air Combat Command told reporters here today.

"The health and safety of our pilots -- all of our pilots -- is the utmost priority," Air Force Brig. Gen. (Dr.) Daniel O. Wyman said. "Our operational flight surgeons and medical staff interact with our pilots on a daily basis, and mission No. 1 is their health and safety."

Before resuming F-22 flights in September 2011 after a safety stand-down, Wyman said, officials collected baseline blood samples and pulmonary function tests from every pilot.

"We had every pilot go through retraining with the reduced oxygen breathing device so that they would experience and know their own specific 'hypoxia symptoms,' he said, adding that the command also incorporated a pilot pulse oximeter and the C2A1 filter as protective measures.

Designed and certified by the Defense Department for the chemical warfare environment, Wyman said, the C2A1 filter canister was incorporated into the pilot's life support system to filter any potential contaminants from the air they breathed. The filter has been tested against military and National Institute for Occupational Safety and Health protocols, and found to be effective against a number of different chemical warfare and industrial chemicals, Wyman said.

"It was cleared for flight use by the U.S. Air Force program office, and has been used by the military for over a decade in the ground crew and aircrew ensembles," he added.

For each flight, the pilot would receive a new C2A1 filter consisting of a high-efficiency particulate, or HEPA, air filter and activated carbon and charcoal, Wyman said, and they turned in the filters at the end of each flight.

Once flying resumed, Wyman said, a black dust was found in some of the breathing hoses near the C2A1 filter.

"We analyzed it and found it to be activated carbon dust ... an inert or nonreactive compound that has been used for air and water filtration for decades without any significant evidence of harm," Wyman said.

Filter test results indicated the amount of activated carbon dust liberated during normal use was well below the industrial hygiene standard levels set by government agencies, the command surgeon said. Thirty pilot throat swab samples examined by electron microscope also indicated no evidence of activated carbon, he added.

Still, some Raptor pilots have reported suffering persistent coughing, which Wyman maintained may stem from high concentrations of oxygen while undergoing spiked G-forces during maneuvering. These conditions, he said, may result in adsorption of the oxygen -- adhesion of a small layer of molecules -- and subsequent microcollapse of some of the small air sacs in the lungs.

"Coughing is a natural physiologic response that serves to re-inflate the air sacs," Wyman said, noting the condition typically occurs following the flight and is brief in duration.

Air Combat Command has implemented a "recognize-confirm-recover" approach to fortify safety measures, Wyman said. In addition to training that helps ensure pilots can more readily recognize hypoxia or hypoxia-like symptoms, fliers can also pull an emergency oxygen ring, then descend to an altitude at which hypoxia would not occur, he said.

Wyman stressed that the command will continue to evaluate for other potential contaminates or environmental or aircraft system factors through the use of sensors and other collection devices. No root cause has yet been discovered, he said.

"Every step of the way during the F-22 return-to-fly, we have worked with our pilots and all of our personnel involved to inspect the fleet, train the force, protect the crews and collect and analyze data," Wyman said.

SOLDIER'S MOM WHO HELPS THE WOUNDED

FROM:  AMERICAN FORCES PRESS SERVICE
Marilyn Durso donates blood at the Walter Reed National Military Medical Center, Bethesda, Md., with her son, Army 1st Lt. Greg Durso, a platoon leader with the 10th Mountain Division from Fort Drum, N.Y. Durso recently returned to the U.S. from deployment in Afghanistan. He and his mother visited three of his friends recovering from severe injuries at Walter Reed. Armed Services Blood Program photo by Vikki Fernette  

Face of Defense: Proud Mother Comforts Wounded Warriors
By Jessica Overbeck
Armed Services Blood Program Office
FALLS CHURCH, Va., May 11, 2012 - Marilyn Durso cherishes a Mother's Day gift that she calls "a sweet acknowledgment from a son to his mother."

It's a shirt with the words "Warriors Come from Warriors" sprawled across the front that her son, Army 1st Lt. Greg Durso, gave her a few years ago when he was attending the United States Military Academy at West Point, N.Y.
At 23, Marilyn's son, an Army ranger, deployed to Afghanistan.

"Wearing it meant more to me personally than wearing it for 'show,'" she said, explaining why she wore the shirt under sweaters during her son's deployment. While donating blood after her sun returned home, she met several warriors and another "Warriors-Come-From-Warriors" mother.

As a platoon leader in Afghanistan with the 10th Mountain Division from Fort Drum, N.Y., Durso led 40 U.S. soldiers and about 30 Afghan troops. While on patrol one day, Army Pfc. Rex Thrap triggered a roadside bomb. Army Spc. Joe Mille ran to help him, but in the process, triggered a second bomb.

"They never cried out, they never lost their cool," Marilyn said, noting the wounded soldiers were more concerned about their comrades.

Both Tharp and Mille lost their legs from the bombs.

"But because they were so poised and had it together, the medic and the rest of the team were able to attend to them more efficiently," Marilyn said. "It's survival, spirit and camaraderie. Who wouldn't want to belong to a group of people who live under that code?"

Not long after, 1st Lt. Durso learned that another soldier and friend had been severely injured during a separate mission. One month into his deployment, Army 1st Lt. Nicholas Vogt's platoon also struck several roadside bombs. Moments after the first detonation, Vogt pushed one of his soldiers out of the way of a second bomb, and took the brunt of the blast himself. Vogt survived, but required nearly 500 units of donated blood.

"Nick's story is a heart-wrenching account of survival and what people are willing to do to keep others alive," Marilyn said. "Once you have an intimate knowledge of the experience, you can't just sit there.

"Even though I had never met Nick, when I heard from Greg about what happened, in that moment, everyone becomes your son and daughter," she continued. "You quickly learn that the military family is large, and it's not just the people in uniform -- it is friends, the community and the people who are willing to donate blood."

Marilyn said her son wanted to become a soldier from childhood.
"As a mother, you don't want him to do anything that puts him in harm's way," she said, "but you have to rely on his confidence, his training ... you worry from [the time they enlist]."

For Marilyn, knowing that the Armed Services Blood Program is able to provide lifesaving blood to ill or injured service members worldwide helps to alleviate some of her fears of sending her son off to war.

"When I heard the story of Nick's injuries and the story that led to his survival, I know in my mind what [our sons and daughters] are doing is real," she said. "And it reminds me that there are men and women over there right now who still need our help."
Lt. Durso, along with his mother and grandmother, visited Vogt, Tharp and Mille while they recovered at the Walter Reed National Military Medical Center in Bethesda, Md. and also donated blood.

At first, Marilyn said she was concerned the visit would make her worry more, but she said "it brought me peace and confidence instead."

"It was an emotional feeling to experience how truly dedicated the family was to the well being of those who do so much to serve and protect us all," said Vikki Fernette, blood donor recruiter from the medical center.

Marilyn was able to spend time with Vogt's mother, Sheila, and said she could see where Vogt got his strength.

"She's amazing," Marilyn said. "A mother will do anything to help her children get through a rough time."

"It was an honor and a privilege to meet and chat with three generations of patriots who have experienced firsthand the close fight, both deployed forward and in support from back home," said Army Lt. Col. Robert Pell, chief of blood services at the Bethesda medical center. "The Dursos truly define commitment, to each other, their military family and especially to the Armed Services Blood Program that they support with their selfless blood donations."

Marilyn is planning to donate blood again when she is eligible in July.
"The facilities are beautiful and you get the chance to thank a soldier firsthand and see what they are up against, see their spirit and their great attitudes," Marilyn said of the medical facility.

"I can't wait to go back. How do you not do something that is so simple? If donating blood can keep them alive until they get to come back home, it's a privilege."

NSF: GAME OF HEARTS, QUEEN OF SPADES AND A NEW EVOLUTIONARY THEORY

FROM:  NATIONAL SCIENCE FOUNDATION
Queen of Spades Key to New Evolutionary Hypothesis 
May 10, 2012
Sleight of hand is a trait that belongs mainly to humans.
Or so scientists thought.

Studies of common, microscopic ocean plankton named Prochlorococcus show that humans aren't the only ones who can play a mean game of cards.

Their method lurks in the Black Queen Hypothesis, as it's called, after the Queen of Spades in the card game Hearts.

Scientists Jeffrey Morris and Richard Lenski of Michigan State University and the BEACON Center for the Study of Evolution in Action, and Erik Zinser of the University of Tennessee, Knoxville, knew that smaller genomes were the norm in symbiotic microbes--those that have reciprocally beneficial relationships--but wondered how non-symbionts got away with cutting out functions it appeared they needed.

These non-symbiotic microbes, the researchers found, may be getting others to do the hard work of living for them.

The biologists published their results in a recent issue of the journal mBio, in a paper titled: "The Black Queen Hypothesis: Evolution of Dependencies through Adaptive Gene Loss."

"Black Queen" sets forth the notion that eliminating a necessary function confers an evolutionary advantage--as long as your neighbors continue to do the work. "It would make sense for a microbe to 'want' to lose a gene that's a burden," says Morris, "and get someone else to pick it up."

In the game of Hearts, the winning strategy involves avoiding the Queen of Spades.
"A microbe stuck carrying the load for another is, in effect, holding the Queen of Spades," Morris says. "But the Queen of Spades is a card that, while a drag, is necessary--whether in the hand or in the sea. If everyone threw out the Queen of Spades, it would be 'game over.' The whole community would suffer."

To test the Black Queen Hypothesis, the researchers applied it to a genus of microbes that has been the source of scientific confusion. Prochlorococcus, one of the most common groups of plankton in the open ocean, has a much smaller genome than biologists would expect in free-living bacteria.

How has Prochlorococcus been so successful in colonizing the sea while jettisoning seemingly important genes, including the gene for catalase-peroxidase, which lets the microbes neutralize hydrogen peroxide, a compound that can damage or kill cells?
Prochlorococcus, it turns out, relies on other microorganisms to remove hydrogen peroxide from the environment, says Zinser, "allowing it to dump its responsibilities on the unlucky card-holders floating around nearby."

It's a clear instance, Zinser says, of one species making out like a bandit while letting other members of the community carry the load.

The Black Queen Hypothesis offers a new way of looking at complex, linked communities of microbes, says Lenski.

"People often think about evolution as leading to more and more complex organisms, and that's often, but not always, the case," he says. "Sometimes organisms evolve to become simpler if that saves time or energy."

Under the Black Queen Hypothesis, these simpler organisms take advantage of "helpers" that perform essential functions. In that sense, beneficiaries are "cheaters" that exploit what might be called a public service.

Sometimes they contribute in other ways. Prochlorococcus, which benefits from the peroxide clean-up performed by other microbes, contributes energy through photosynthesis that supports the larger community.

The Black Queen Hypothesis describes an evolutionary process that may include cheating, but in other ecological contexts, may result in neutral or positive interactions between species.

Take Shooting the Moon, an alternate route to victory in Hearts. This risky move requires a player to capture all the point-scoring cards, including the Queen of Spades, the opposite of the usual strategy of minimizing one's points.

Shooting the Moon may be an analog to the Black Queen Hypothesis. Might a species, having become a helper for one function, therefore be more likely to become a helper for other, unrelated functions?

"Such an outcome would involve evolution toward a niche with high resource requirements," write the scientists in their paper, "but with the advantage of high 'job security' for the helper owing to the dependence of the community on its continued well-being."

The scientists ask, what forces lead to the reliance of communities on keystone organisms, whose extinction can lead to instability and potential catastrophe?
"The Black Queen Hypothesis has far-reaching implications for understanding the evolutionary forces behind diverse, interconnected ecological communities," says George Gilchrist, program director in the National Science Foundation's Division of Environmental Biology, which co-funded the research with NSF's Division of Ocean Sciences.

In the game of Hearts--or the game of life--the Queen of Spades, it turns out, may be the most important card.

SEC CHARGES SCOTLAND-BASED FUND MANAGEMENT GROUP WITH CONFLICTS OF INTERESTS

Photo:  NYSE Credit:  U.S. Government
FROM:  SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., May 10, 2012 — The Securities and Exchange Commission today charged a Scotland-based fund management group for fraudulently using one of its U.S. fund clients to rescue another client, a China-focused hedge fund struggling in the midst of the global financial crisis.

Martin Currie agreed to pay a total of nearly $14 million to the SEC and the United Kingdom's Financial Services Authority (FSA) to settle the charges that it steered a U.S. publicly-traded fund called The China Fund Inc. into an investment to bolster the hedge fund. The hedge fund had acquired a significant and largely illiquid exposure to a single Chinese company. Martin Currie directly alleviated the hedge fund's liquidity problems by deciding to use the China Fund — to the detriment of the fund and its shareholders — in a bond transaction that reduced the hedge fund's exposure.

"The misconduct in this case strikes at the heart of the fiduciary relationship between an investment adviser and its client. Advisers must treat each client with undivided and disinterested loyalty, and must make full and fair disclosure of all material conflicts of interest," said Robert Khuzami, Director of the SEC's Division of Enforcement.

Bruce Karpati, Co-Chief of the SEC's Asset Management Unit, added, "The China Fund's board was led to believe it was making a routine investment in a Chinese company. But in reality, the investment proved harmful to fund shareholders while sparing an affiliated hedge fund from its own problems during the financial crisis."

According to the SEC's order instituting settled administrative proceedings against Martin Currie, the firm managed the China Fund side-by-side with the hedge fund through its SEC-registered investment adviser subsidiaries. These funds and other Martin Currie accounts made similar investments in Chinese companies under the direction of two senior portfolio managers based in Shanghai. One company was Jackin International, a printer-cartridge recycling company listed on the Hong Kong Stock Exchange.

According to the SEC's order, in June 2007, Martin Currie's lead portfolio manager in Shanghai caused the hedge fund to purchase $10 million of unlisted illiquid Jackin bonds that deviated from the fund's normal equities-trading strategy. Martin Currie improperly classified those bonds as cash in its risk-management system, and as a result the liquidity and credit risks associated with the hedge fund's exposure to Jackin weren't revealed until November 2008 after the hedge fund had purchased additional Jackin bonds. By that time, the hedge fund's total investment in Jackin had come close to breaching the fund's limit on portfolio exposure to a single issuer.

The SEC's order says that as the global financial crisis deepened, the hedge fund faced a significant increase in redemption requests by its investors, exacerbating the fund's liquidity problems. At the same time, Jackin was starved for capital to continue funding its operations and make debt payments to bondholders such as the hedge fund. In response to the hedge fund's overlapping problems, Martin Currie decided to use the China Fund to purchase $22.8 million in convertible bonds from a Jackin subsidiary. The subsidiary instantly lent $10 million of the proceeds to Jackin, which in turn redeemed $10 million in otherwise-illiquid bonds held by the troubled hedge fund. The bond transaction closed in April 2009.

According to the SEC's order, Martin Currie officials were aware that the China Fund's involvement presented a direct conflict of interest and may have been unlawful. In an attempt to cure that conflict, they sought and obtained approval from the China Fund's board of directors. However, they failed to disclose that proceeds of the fund's investment would be used to redeem bonds held by another client — the hedge fund. Martin Currie also failed to sufficiently consider whether the investment's rationale and pricing were in the China Fund's best interests.

The SEC's order noted that the China Fund's bond investment in the Jackin subsidiary turned out poorly. In April 2011, the China Fund sold the bonds for about 50 percent of their face value for a loss of $11.5 million.

The SEC's order found that Martin Currie engaged in separate improper conduct by failing to follow the China Fund's policies and procedures for fair valuing the convertible bonds at issue. Between April 2009 and October 2010, Martin Currie advised the China Fund's board to value the convertible bonds at cost ($22.8 million) while failing to disclose information that was relevant for the board to fair value the bonds.

The SEC charged Martin Currie with certain violations of the antifraud, affiliated transaction, reporting, and compliance provisions of the Investment Advisers Act of 1940 and the Investment Company Act of 1940. Without admitting or denying the SEC's findings, Martin Currie agreed to settle the SEC's charges by paying a penalty of $8.3 million and accepting censures and cease-and-desist orders against future violations. Martin Currie also agreed to pay a penalty of £3.5 million ($5.6 million in U.S. dollars) to settle the FSA's action. In reaching the settlement, the SEC took into account that Martin Currie had compensated the China Fund for losses and expenses arising from the misconduct. Martin Currie cooperated with the SEC's investigation and implemented several remedial measures, including severing association with its lead Shanghai-based portfolio manager and making enhancements to its compliance program.

The SEC's investigation, which is continuing, has been conducted by Paul Kim and Natasha Guinan under the supervision of Scott Weisman, who are all members of the Enforcement Division's Asset Management Unit. The case originated from an SEC examination conducted by Jason Rosenberg and Lucas Tepper under the supervision of Mavis Kelly.

The SEC thanks the FSA for its assistance in this matter.

JUSTICE DEPARTMENT SEIZES ILLEGAL GAINS FROM DISTRIBUTION OF COUNTERFEIT SPORTS APPAREL

Photo:  Lady Justice.  Cr. WIKIMEDIA
FROM:  U.S. DEPARTMENT OF JUSTICE
Friday, May 11, 2012
Department of Justice Seizes More Than $1.5 Million in Proceeds from the Online Sale of Counterfeit Sports Apparel Manufactured in China. Action Comes After Earlier Seizures of Another $896,000 in Proceeds

WASHINGTON – The Department of Justice has seized more than $1.5 million in proceeds from the distribution of counterfeit sports apparel and jerseys as the result of an investigation into the sale of counterfeit goods on commercial websites, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the District of Columbia Ronald C. Machen Jr. and John Morton, Director of the Department of Homeland Security’s Immigration and Customs Enforcement (ICE).

The investigation also resulted in the seizure of three domain names used in the sale of counterfeit sports apparel.  The funds were seized from interbank accounts and six money service business accounts.  The seizure warrants were unsealed in U.S. District Court in the District of Columbia on May 7, 2012.

The developments are the latest result of Operation In Our Sites, a law enforcement initiative targeting online commercial intellectual property crime announced by ICE’s Office of Homeland Security Investigations (HSI) in June 2010.  Operation In Our Sites targeted online retailers of a diverse array of counterfeit goods, including sports equipment, shoes, handbags, athletic apparel, sunglasses and DVD boxed sets.  To date, 761 domain names of websites used in the sale and distribution of counterfeit goods and illegal copyrighted works have been seized as a result of Operation In Our Sites.

Additionally, last month, the Department of Justice seized more than $896,000 in proceeds from the sale of counterfeit sports apparel on commercial websites as part of Operation In Our Sites.

According to court documents, investigation by federal law enforcement agents revealed that subjects whose domain names had been seized in a November 2010 In Our Sites operation continued to sell counterfeit goods using new domain names.  In particular, the individuals, based in China, sold counterfeit professional and collegiate sports apparel, primarily counterfeit sports jerseys.  Law enforcement agents made numerous undercover purchases from the websites associated with the new domain names.  After the goods were confirmed to be counterfeit or infringing, seizure warrants for three domain names used to sell the infringing goods were obtained from a U.S. Magistrate Judge in U.S. District Court for the District of Columbia.

The individuals conducted sales and processed payments for the counterfeit goods using money service business accounts and then wired their proceeds to bank accounts held at a Chinese bank, the court documents state.

Under warrants issued by a U.S. District Judge, law enforcement agents seized $1,455,438.72 in proceeds that had been transferred from the money service business accounts to various bank accounts in China.  The funds were seized from correspondent, or interbank, accounts held by the Chinese bank in the United States.  Under additional seizure warrants issued by a U.S. Magistrate Judge, law enforcement agents also seized $94,730.12 in funds remaining in six money service business accounts used by the subjects.

“The seizures we are announcing today are another step forward in our efforts to disrupt and disable those engaged in intellectual property crime,” said Assistant Attorney General Breuer.  “By seizing the domain names and profits of online counterfeit goods operations, we are protecting consumers and sending a message to criminals that we will use every tool at our disposal to stop them.”

“Within a matter of weeks, this law enforcement operation has seized more than $2.4 million in proceeds from individuals overseas who are preying on the American economy and consumers with their sales of counterfeit goods,” said U.S. Attorney Machen.  “We will continue to work with our law enforcement partners to target these unscrupulous operators where it hurts them the most – at the bank.”

“ICE will continue to target those who traffic in counterfeit goods by attacking the financial profits of counterfeiting sites and shutting them down,” said ICE Director Morton.  “Operation In Our Sites and the tireless work of the National Intellectual Property Rights Coordination Center protect consumers from fraud on the Internet and combat intellectual property theft which exacts a toll on our economy and industries.”

The investigation was conducted by the National Intellectual Property Rights Center and ICE-HSI.  The case is being prosecuted by Assistant U.S. Attorneys Jonathan Hooks and Diane Lucas of the District of Columbia, Senior Trial Attorney Pamela Hicks and Trial Attorney Katharine Wagner of the Asset Forfeiture and Money Laundering Section and Trial Attorney Thomas Dougherty of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.

USNS MERCY ARRIVES AT JOINT BASE PEARL HARBOR-HICKMAN

FROM:  U.S. NAVY

Service members man the rails aboard the Military Sealift Command hospital ship USNS Mercy (T-AH 19) while arriving at Joint Base Pearl Harbor-Hickam in support of Pacific Partnership 2012 (PP12). PP12 is the seventh in a series of U.S. Pacific Fleet-sponsored humanitarian and civic assistance missions that work to strengthen regional relationships and to collectively respond to natural disasters in southeast Asia and the western Pacific region. U.S. Navy Photo by Mass Communication Specialist 2nd Class Daniel Barker (Released) 120509-N-RI884-094 

THE MARINE CORPS WRESTLER

FROM:  AMERICAN FORCES PRESS SERVICE
Marine Corps Sgt. Gaylon Summers, left, grapples with Azteca at an outdoor wrestling match in Fukuoka, Japan, May 4, 2012. U.S. Marine Corps photo by Lance Cpl. Kenneth Trotter

Face of Defense: Marine Balances Duty, Professional Wrestling
By Marine Corps Lance Cpl. Kenneth Trotter
Marine Corps Air Station Iwakuni
IWAKUNI, Japan, May 10, 2012 - What do Randy Orton, the "Road Dogg" Jesse James and Chuck Palumbo all have in common? All three men were Marines and professional wrestlers sometime in their careers.

Marine Corps Sgt. Gaylon Summers, ground safety manager for Marine Aviation Logistics Squadron 12, hopes to be counted among those who have handled the stress of being a Marine and professional wrestler.

Summers, a Dyersburg, Tenn., native, has the tall, massive physique many would expect of a professional wrestler.

"It's always [been] something I've wanted to do," Summers said. While stationed in Cherry Point, N.C., he said, he saw a television commercial for an independent wrestling show. He sought contacts and soon was in touch with other wrestlers and began wrestling with them.

Summers said he has been an avid professional wrestling fan since he was a child, watching the likes of Hulk Hogan, Randy "Macho Man" Savage. He was attracted to the spectacle and athleticism he saw on the screen, he said.

"I started watching it when I was 3 or 4 years old," he said. "Memphis wrestling was really big in the '80s and '90s, and my grandfather was a big wrestling fan. Every Saturday morning, when I was staying with him, I would get up and watch that with him."

Summers gradually spread his horizons to take in any wrestling programs he could.
"It got to the point where even if I wasn't there, I was watching it," he said. "I started watching World Championship Wrestling, the National Wrestling Alliance and World Wresting Entertainment."

Summers has wrestled in various independent promotions in Japan and earned a tryout with New Japan Pro-Wrestling and made the cut to train at their dojo in coming months.
"I'm excited," he said.

Summers credits the Marine Corps with instilling the type of discipline and confidence needed to consistently train as a wrestler.

"A lot of people think because it's a scripted sport, it's easy. It's not," he said. "It's given me a lot of discipline to push through the training. As much as I love it, there are some mornings when I'm hurting from training."

His Marine Corps background helps with handling the pressure, Summers said. "I'm still nervous," he added, "but I don't look at it as something I can't do. I just know it's going to be difficult."

Summers juggles the responsibilities of being a Marine and a family man with a family who supports him.

"The first time I experienced it with him was when we watched it on TV," his wife, Sarah, said. "At that point in time, he had never actually wrestled." She thought her husband's desire to wrestle was just a weekend hobby, she said.
"I didn't know it would grow into what it has," she added. "I thought it was going to be something he did for fun."

Now that she's seen her husband's genuine love for wrestling, she lends her full support to his endeavors, trying to attend as many shows as possible.
Summers said hopes he can open more Marines' eyes to professional wrestling by having wrestling promotions on the base.

"I believe a lot of Marines would be open to it, even ones who aren't really into wrestling," he said.

CORONAL CELLS AND THEIR PROPERTIES

U.S. DEPARTMENT OF DEFENSE ARMED WITH SCIENCE

This shows the locations of the STEREO-A and -B spacecraft in 2011 relative to the Sun, Earth, and SDO spacecraft. (Photo: U.S. Naval Research Laboratory )

Written on MAY 10, 2012 AT 7:23 AM by JTOZER
NRL Researchers Discover New Solar Feature
Scientists at the Naval Research Laboratory have discovered a previously unreported solar feature – Coronal Cells – where high-temperature coronal emission is confined to discrete plumes that extend upward from unipolar concentrations of magnetic flux.

The NRL researchers think that future studies of these cellular regions will lead to an improved understanding of magnetic field line reconnection at the boundaries of coronal holes, and how these changes are transmitted outward into the solar wind. This research is published in the March 20 issue of the Astrophysical Journal.

NASA provided financial support through their Heliophysics Guest Investigator Program and their Living With a Star Program.

Drs. Neil Sheeley and Harry Warren, researchers in NRL’s Space Science Division, describe these Coronal Cells as appearing in discrete bundles “like candles on a birthday cake.” The researchers discovered the cells in ultraviolet emission lines formed at temperatures around one-million degrees Kelvin.

Although the researchers made their discovery using high-resolution images from the Atmospheric Imaging Assembly aboard the Solar Dynamics Observatory (SDO), they also observed the cells on ultraviolet images from STEREO-A and -B spacecraft recently, and from the Solar and Heliospheric Observatory (SOHO) in 2000 near the previous sunspot maximum. In addition, they used Doppler images, constructed from the Extreme-Ultraviolet Imaging Spectrometer (EIS) on the Hinode spacecraft, to deduce that the outflow is faster at the centers of the cells than at their boundaries.

The researchers used time-lapse sequences of Fe XII 193 Å coronal images to follow these special regions as they were carried across the solar disk by the 27-day solar rotation.

Near disk center, the Coronal Cells looked like photospheric granules with bright centers and dark, narrow intercellular lanes. The cells appeared as long plumes of emission projecting toward the nearest solar limb. Moreover, simultaneous observations from the STEREO-B and SDO spacecraft, separated by about 90 degrees along Earth’s orbit around the Sun, showed the same plumes projecting in opposite directions.
Such stereoscopic views left no doubt that the Coronal Cells are columns of emission extending radially outward through the lower corona, like candles on a birthday cake.

The researchers addressed the question of how the Coronal Cells are lit and extinguished, and found that the visibility of the cells bears a close relation to the evolution of the adjacent coronal holes. The Coronal Cells appeared when the holes closed and disappeared when the holes opened.

This behavior suggested that coronal holes have the same cellular magnetic structure as the newly observed Coronal Cells, but that this structure is not visible until the encroachment of opposite-polarity flux causes some of the open magnetic flux in the holes to close. For coronal holes at the north and south poles of the Sun, this happens during the approach to sunspot maximum, which is the present time in our current 11-year sunspot cycle.

During the course of their research, Drs. Sheeley and Warren observed the occasional disappearance of cellular regions when solar filaments erupted alongside them. As the chromospheric ribbon swept across the region signaling the reconnection of the field lines that were opened during the eruption, the same cells reappeared immediately behind the ribbon.

This indicates that the plumes of material are established rapidly, in step with the reconnection of the associated magnetic fields.

The discovery of Coronal Cells has already increased our knowledge of coronal magnetic structure.

In the future, studies of the evolution of Coronal Cells may improve scientists’ understanding of magnetic field line reconnection at coronal-hole boundaries and its effects on the solar wind and Earth’s space weather.