FROM: U.S. JUSTICE DEPARTMENT
Tuesday, June 9, 2015
Former President of Riverside General Hospital Sentenced to 45 Years in Prison in $158 Million Medicare Fraud Scheme
Operator of Psychiatric Facility Sentenced to 20 Years in Prison, and Owner of Group Home Sentenced to 12 Years in Prison
The former president of a Houston hospital, his son and a co-conspirator were sentenced today to 45 years, 20 years and 12 years in prison, respectively, for their roles in a $158 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge Lucy R. Cruz of the Internal Revenue Service Criminal Investigation’s (IRS-CI) Houston Field Office, the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU), Special Agent in Charge Mike Fields of the U.S. Department of Health & Human Services-Office of the Inspector General (HHS-OIG) Dallas Regional Office, Special Agent in Charge Joseph J. Del Favero of the Railroad Retirement Board-Office of Inspector General (RRB-OIG) and Inspector General Patrick E. McFarland of the Office of Personnel Management-Office of Inspector General (OPM-OIG) made the announcement.
“The former President of Houston's Riverside hospital, his son and their co-conspirators saw mentally ill, elderly and disabled Medicare beneficiaries as commodities to be turned into profit centers – not as vulnerable individuals in need of health care,” said Assistant Attorney General Caldwell. “Rather than providing needed medical care to a historically underserved community, the defendants ran a longstanding hospital into the ground through their greed and fraud. According to the evidence presented at trial, the defendants had patients sit around the facility watching movies while they received no treatment. Meanwhile, the defendants billed Medicare more than $158 million for care that was never provided. This brazen fraud cannot and will not be tolerated.”
Earnest Gibson III, 70, the former president of Riverside General Hospital, Earnest Gibson IV, 37, the operator of Devotions Care Solutions, a satellite psychiatric facility of Riverside General Hospital, and Regina Askew, 50, the owner of Safe and Sound group home, were sentenced by U.S. District Judge Lee H. Rosenthal of the Southern District of Texas. In addition to the significant terms of imprisonment, Earnest Gibson III was ordered to pay restitution in the amount of $46,753,180, Earnest Gibson IV was ordered to pay restitution in the amount of $7,518,480, and Regina Askew was ordered to pay restitution in the amount of $46,255,893.
Following a five-week jury trial, on Oct. 20, 2014, Earnest Gibson III, Earnest Gibson IV and Regina Askew each were convicted of conspiracy to commit health care fraud, conspiracy to pay and receive kickbacks, as well as related counts of paying or receiving illegal kickbacks. Earnest Gibson III and Earnest Gibson IV also were convicted of conspiracy to commit money laundering. Co-defendant Robert Crane, a patient recruiter, also was convicted of conspiracy to pay and receive kickbacks, and is scheduled to be sentenced on Dec. 9, 2015.
According to evidence presented at trial, from 2005 until June 2012, the defendants and others engaged in a scheme to defraud Medicare by submitting to Medicare, through Riverside and its satellite locations, approximately $158 million in false and fraudulent claims for partial hospitalization program (PHP) services. A PHP is a form of intensive outpatient treatment for severe mental illness.
Specifically, evidence at trial demonstrated that the Medicare beneficiaries for whom the hospital billed Medicare did not qualify for or need PHP services. Moreover, the evidence showed that Medicare beneficiaries rarely saw a psychiatrist and did not receive intensive psychiatric treatment. In fact, some of the beneficiaries were suffering from Alzheimer’s and could not actively participate in the treatment for which Medicare was billed.
Evidence presented at trial also showed that Earnest Gibson III paid kickbacks to patient recruiters and to owners and operators of group care homes, including Regina Askew, in exchange for which those individuals delivered ineligible Medicare beneficiaries to the hospital’s PHPs. Earnest Gibson IV also paid patient recruiters, including Robert Crane and others, to deliver ineligible Medicare beneficiaries to the specific PHP operated by Earnest Gibson IV.
To date, six other individuals either have pleaded guilty based on their involvement in the scheme. Mohammad Khan, an assistant administrator at Riverside, who managed many of the hospital’s PHPs, pleaded guilty to conspiracy to commit health care fraud, conspiracy to defraud the United States and to pay illegal kickbacks, and five counts of paying illegal kickbacks; on May 21, 2015, Mohammad Khan was sentenced by U.S. District Judge Sim Lake of the Southern District of Texas to 40 years in prison for his role in the scheme. William Bullock, an operator of a Riverside satellite location, as well as Leslie Clark, Robert Ferguson, Waddie McDuffie and Sharonda Holmes, who were involved in paying or receiving kickbacks, also have pleaded guilty to participating in the scheme and await sentencing.
The case was investigated by the FBI, IRS-CI, Texas MFCU, HHS-OIG, RRB-OIG and OPM-OIG. The case was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Texas. The case is being prosecuted by Assistant Chiefs Laura M.K. Cordova and Jennifer L. Saulino and Trial Attorney Ashlee C. McFarlane of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who collectively have billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Thursday, June 11, 2015
Wednesday, June 10, 2015
DOD REPORTS ON AIRSTRIKES AGAINST ISIL INFRASTRUCTURE FROM: U.S. DEFENSE DEPARTMENT ISIL, ISIS, ISIL
Airstrikes Destroy ISIL Infrastructure, Weapons
From a Combined Joint Task Force Operation Inherent Resolve News Release
SOUTHWEST ASIA, June 10, 2015 – U.S. and coalition military forces have continued to attack Islamic State of Iraq and the Levant terrorists in Syria and Iraq, Combined Joint Task Force Operation Inherent Resolve officials reported today.
Officials reported details of the latest strikes, which took place between 8 a.m. yesterday and 8 a.m. today, local time, noting that assessments of results are based on initial reports.
Airstrikes in Syria
Bomber and fighter aircraft conducted five airstrikes in Syria:
-- Near Hasakah, one airstrike struck an ISIL staging area.
-- Near Raqqah, three airstrikes struck two ISIL tactical units, destroying three ISIL fighting positions and an ISIL armored vehicle.
-- Near Dayr Az Zawr, one airstrike struck an ISIL crude oil collection point.
Airstrikes in Iraq
Attack, fighter and remotely piloted aircraft conducted 16 airstrikes in Iraq, approved by the Iraqi Ministry of Defense:
-- Near Baghdadi, one airstrike struck an ISIL resupply vehicle.
-- Near Beiji, five airstrikes struck four ISIL tactical units, destroying three ISIL vehicles, an ISIL building and an ISIL vehicle-borne improvised explosive device.
-- Near Kirkuk, one airstrike struck an ISIL tactical unit, destroying an ISIL building.
-- Near Makhmur, two airstrikes struck an ISIL tactical unit and an ISIL mortar system, destroying an ISIL building and an ISIL heavy machine gun.
-- Near Mosul, two airstrikes struck an ISIL tactical unit and an ISIL mortar system, destroying an ISIL building, an ISIL fighting position and an ISIL heavy machine gun.
-- Near Sinjar, one airstrike truck an ISIL large tactical unit, an ISIL mortar firing position and an ISIL building, destroying five ISIL buildings, an ISIL vehicle-borne improvised explosive device, an ISIL heavy machine gun and an ISIL rocket propelled grenade cache.
-- Near Tal Afar, four airstrikes struck two ISIL tactical units, two ISIL mortar systems, an ISIL heavy machine gun and an ISIL rocket firing position, destroying three ISIL buildings, an ISIL rocket and an ISIL tunnel system.
Part of Operation Inherent Resolve
The strikes were conducted as part of Operation Inherent Resolve, the operation to eliminate the ISIL terrorist group and the threat they pose to Iraq, Syria, the region, and the wider international community. The destruction of ISIL targets in Syria and Iraq further limits the terrorist group's ability to project terror and conduct operations, officials said.
Coalition nations conducting airstrikes in Iraq include the United States, Australia, Belgium, Canada, Denmark, France, Jordan, the Netherlands and the United Kingdom. Coalition nations conducting airstrikes in Syria include the United States, Bahrain, Canada, Jordan, Saudi Arabia and the United Arab Emirates.
From a Combined Joint Task Force Operation Inherent Resolve News Release
SOUTHWEST ASIA, June 10, 2015 – U.S. and coalition military forces have continued to attack Islamic State of Iraq and the Levant terrorists in Syria and Iraq, Combined Joint Task Force Operation Inherent Resolve officials reported today.
Officials reported details of the latest strikes, which took place between 8 a.m. yesterday and 8 a.m. today, local time, noting that assessments of results are based on initial reports.
Airstrikes in Syria
Bomber and fighter aircraft conducted five airstrikes in Syria:
-- Near Hasakah, one airstrike struck an ISIL staging area.
-- Near Raqqah, three airstrikes struck two ISIL tactical units, destroying three ISIL fighting positions and an ISIL armored vehicle.
-- Near Dayr Az Zawr, one airstrike struck an ISIL crude oil collection point.
Airstrikes in Iraq
Attack, fighter and remotely piloted aircraft conducted 16 airstrikes in Iraq, approved by the Iraqi Ministry of Defense:
-- Near Baghdadi, one airstrike struck an ISIL resupply vehicle.
-- Near Beiji, five airstrikes struck four ISIL tactical units, destroying three ISIL vehicles, an ISIL building and an ISIL vehicle-borne improvised explosive device.
-- Near Kirkuk, one airstrike struck an ISIL tactical unit, destroying an ISIL building.
-- Near Makhmur, two airstrikes struck an ISIL tactical unit and an ISIL mortar system, destroying an ISIL building and an ISIL heavy machine gun.
-- Near Mosul, two airstrikes struck an ISIL tactical unit and an ISIL mortar system, destroying an ISIL building, an ISIL fighting position and an ISIL heavy machine gun.
-- Near Sinjar, one airstrike truck an ISIL large tactical unit, an ISIL mortar firing position and an ISIL building, destroying five ISIL buildings, an ISIL vehicle-borne improvised explosive device, an ISIL heavy machine gun and an ISIL rocket propelled grenade cache.
-- Near Tal Afar, four airstrikes struck two ISIL tactical units, two ISIL mortar systems, an ISIL heavy machine gun and an ISIL rocket firing position, destroying three ISIL buildings, an ISIL rocket and an ISIL tunnel system.
Part of Operation Inherent Resolve
The strikes were conducted as part of Operation Inherent Resolve, the operation to eliminate the ISIL terrorist group and the threat they pose to Iraq, Syria, the region, and the wider international community. The destruction of ISIL targets in Syria and Iraq further limits the terrorist group's ability to project terror and conduct operations, officials said.
Coalition nations conducting airstrikes in Iraq include the United States, Australia, Belgium, Canada, Denmark, France, Jordan, the Netherlands and the United Kingdom. Coalition nations conducting airstrikes in Syria include the United States, Bahrain, Canada, Jordan, Saudi Arabia and the United Arab Emirates.
STATEMENT ON ADDITIONAL STEPS TO COUNTER ISIL
FROM: THE WHITE HOUSE
June 10, 2015
Statement by the Press Secretary on Additional U.S. Steps in the Counter-ISIL Effort
In furtherance of his comprehensive strategy to degrade and destroy the ISIL terrorist group, President Obama has approved additional actions to enhance the implementation of the counter-ISIL campaign.
To improve the capabilities and effectiveness of partners on the ground, the President authorized the deployment of up to 450 additional U.S. military personnel to train, advise, and assist Iraqi Security Forces at Taqaddum military base in eastern Anbar province. The President made this decision after a request from Prime Minister Haider Al-Abadi and upon the recommendation of Secretary Carter and Chairman Dempsey, and with the unanimous support of his national security team. These new advisors will work to build capacity of Iraqi forces, including local tribal fighters, to improve their ability to plan, lead, and conduct operations against ISIL in eastern Anbar under the command of the Prime Minister. This effort will complement the efforts of U.S. and coalition trainers at the four previously-established training sites in Al-Asad, Besmaya, Erbil, and Taji, where over 9,000 Iraqi troops have already been trained, with an additional 3,000 currently in training. These additional U.S. troops will not serve in a combat role and will augment the 3,100 U.S. troops who have already deployed to Iraq.
This train, advise, and assist mission builds on lessons learned during the past several months and is just one aspect of our commitment to support the Iraqi Security Forces. Toward this end, the President has also directed the expedited delivery of essential equipment and materiel in coordination with the central government to Iraqi forces, including Peshmerga and tribal fighters, operating under Iraqi command, to ensure that our partners have the equipment needed to effectively fight ISIL.
The President also approved a comprehensive approach to aid the Iraqi government’s efforts to support the people and communities living in areas newly liberated from ISIL. At the President’s direction, the United States has been working closely with the Iraqi government, the global counter-ISIL coalition, and the United Nations to develop a holistic framework to help the Iraqi government provide sustained security, services and assistance, and local governance among other key support. The United States fully supports the development of an international fund facilitated by the United Nations to help these communities across Iraq recover.
More broadly, we will continue our efforts to leverage all instruments of power to counter ISIL globally and most importantly, to protect the US Homeland. Thousands of foreign fighters – including Europeans and some Americans – have joined ISIL in Syria and Iraq. We remain concerned that these trained fighters will return to their home countries and carry out attacks and seek to inspire supporters to conduct attacks at home, and the President directed his national security team to intensify efforts with coalition partners to stem the flow of foreign fighters to and from Iraq and Syria.
The President also reaffirmed U.S. support for the efforts of Prime Minister Al-Abadi and other Iraqi leaders to build an inclusive and effective governance structure within which all of Iraq’s diverse communities feel that they have a say in determining the future of their country. In this regard, the U.S. will fully support the plan endorsed by the Council of Ministers on May 19 for the liberation of Anbar, as well as the Iraqi Government’s priority of de-centralization to empower local communities in line with the Iraqi Constitution. This “functional federalism” effort being pursued by the Iraqi government is integral to ensuring that ISIL – once defeated – can never again return to Iraqi soil.
June 10, 2015
Statement by the Press Secretary on Additional U.S. Steps in the Counter-ISIL Effort
In furtherance of his comprehensive strategy to degrade and destroy the ISIL terrorist group, President Obama has approved additional actions to enhance the implementation of the counter-ISIL campaign.
To improve the capabilities and effectiveness of partners on the ground, the President authorized the deployment of up to 450 additional U.S. military personnel to train, advise, and assist Iraqi Security Forces at Taqaddum military base in eastern Anbar province. The President made this decision after a request from Prime Minister Haider Al-Abadi and upon the recommendation of Secretary Carter and Chairman Dempsey, and with the unanimous support of his national security team. These new advisors will work to build capacity of Iraqi forces, including local tribal fighters, to improve their ability to plan, lead, and conduct operations against ISIL in eastern Anbar under the command of the Prime Minister. This effort will complement the efforts of U.S. and coalition trainers at the four previously-established training sites in Al-Asad, Besmaya, Erbil, and Taji, where over 9,000 Iraqi troops have already been trained, with an additional 3,000 currently in training. These additional U.S. troops will not serve in a combat role and will augment the 3,100 U.S. troops who have already deployed to Iraq.
This train, advise, and assist mission builds on lessons learned during the past several months and is just one aspect of our commitment to support the Iraqi Security Forces. Toward this end, the President has also directed the expedited delivery of essential equipment and materiel in coordination with the central government to Iraqi forces, including Peshmerga and tribal fighters, operating under Iraqi command, to ensure that our partners have the equipment needed to effectively fight ISIL.
The President also approved a comprehensive approach to aid the Iraqi government’s efforts to support the people and communities living in areas newly liberated from ISIL. At the President’s direction, the United States has been working closely with the Iraqi government, the global counter-ISIL coalition, and the United Nations to develop a holistic framework to help the Iraqi government provide sustained security, services and assistance, and local governance among other key support. The United States fully supports the development of an international fund facilitated by the United Nations to help these communities across Iraq recover.
More broadly, we will continue our efforts to leverage all instruments of power to counter ISIL globally and most importantly, to protect the US Homeland. Thousands of foreign fighters – including Europeans and some Americans – have joined ISIL in Syria and Iraq. We remain concerned that these trained fighters will return to their home countries and carry out attacks and seek to inspire supporters to conduct attacks at home, and the President directed his national security team to intensify efforts with coalition partners to stem the flow of foreign fighters to and from Iraq and Syria.
The President also reaffirmed U.S. support for the efforts of Prime Minister Al-Abadi and other Iraqi leaders to build an inclusive and effective governance structure within which all of Iraq’s diverse communities feel that they have a say in determining the future of their country. In this regard, the U.S. will fully support the plan endorsed by the Council of Ministers on May 19 for the liberation of Anbar, as well as the Iraqi Government’s priority of de-centralization to empower local communities in line with the Iraqi Constitution. This “functional federalism” effort being pursued by the Iraqi government is integral to ensuring that ISIL – once defeated – can never again return to Iraqi soil.
CHAIRMAN JOINT CHIEFS SAYS PRESIDENT OBAMA WANTS ADVICE ON IRAQ
FROM: U.S. DEFENSE DEPARTMENT
Dempsey: President Seeks Advice on Improving Iraq Mission
By Jim Garamone
DoD News, Defense Media Activity
JERUSALEM, June 9, 2015 – President Barack Obama has asked the military for recommendations on how to make the effort to train and equip Iraqi security forces more effective, the chairman of the Joint Chiefs of Staff said here today.
“What he’s asked us to do is take a look at what we’ve learned over the last eight months in the train-and-equip program and make recommendations to him on whether there are capabilities that we may want to provide to the Iraqis to actually make them more capable,” Army Gen. Martin E. Dempsey said to reporters traveling with him.
“He’s asked us to look at whether there are other locations where we might establish training sites,” the general added. “He’s asked us to take a look at how we might develop Iraq’s leaders.”
The president asked military leaders to examine where there has been success and where the effort “may have been moving at a pace that’s late-to-need or where certain units have not stood and fought,” Dempsey said.
Looking at Ways to Instill Confidence
The Joint Chiefs are looking at ways to instill confidence in Iraqi forces or other means to improve their training, the chairman said. They have made some recommendations, he said, but follow-on questions must first be answered, such as how recommendations would be implemented, what risks they might entail to the mission and the force, and trade-offs around the globe.
U.S. military capabilities are needed in other parts of the world, Dempsey noted. U.S. forces are operating in Europe to reassure NATO allies in the face of Russian aggression in Ukraine, there are additional issues in the Persian Gulf region related to reassuring allies against Iranian threats, and U.S. forces still are needed in Afghanistan, he said.
In addition, the general said, “some of our Pacific allies are unsettled by Chinese reclamation projects, so we’ve got work to do with our allies there.”
Necessary Troop Levels Undetermined
Whether more troops will be needed in Iraq remains to be seen, the chairman said. The process calls for the U.S. Central Command Commander Army Gen. Lloyd J. Austin III to determine how recommendations would be put in place, he explained.
“We try not to negotiate the resources before we negotiate the concept,” Dempsey said. “Then we ask at some point is if he has the resources currently assigned.” If the answer is no, then we look across the force to see where they can be generated.
“I haven’t received from Centcom the assessment of resources required,” he continued, “and that is appropriate, because I want to first understand that we have a concept that could actually improve capability.”
The president specifically asked about enhancing the train-and-equip mission, Dempsey said. “It wasn’t whether there are options that would imply the strategy is ineffective, it was, rather, ‘Are there things we can do?’” he said.
The military has two lines of effort against the Islamic State of Iraq and the Levant in Iraq. One entails a combination of airstrikes and intelligence, surveillance and reconnaissance assets to support the Iraqi security forces. The other is to train and equip the Iraqi security forces to take the fight to ISIL.
Dempsey: President Seeks Advice on Improving Iraq Mission
By Jim Garamone
DoD News, Defense Media Activity
JERUSALEM, June 9, 2015 – President Barack Obama has asked the military for recommendations on how to make the effort to train and equip Iraqi security forces more effective, the chairman of the Joint Chiefs of Staff said here today.
“What he’s asked us to do is take a look at what we’ve learned over the last eight months in the train-and-equip program and make recommendations to him on whether there are capabilities that we may want to provide to the Iraqis to actually make them more capable,” Army Gen. Martin E. Dempsey said to reporters traveling with him.
“He’s asked us to look at whether there are other locations where we might establish training sites,” the general added. “He’s asked us to take a look at how we might develop Iraq’s leaders.”
The president asked military leaders to examine where there has been success and where the effort “may have been moving at a pace that’s late-to-need or where certain units have not stood and fought,” Dempsey said.
Looking at Ways to Instill Confidence
The Joint Chiefs are looking at ways to instill confidence in Iraqi forces or other means to improve their training, the chairman said. They have made some recommendations, he said, but follow-on questions must first be answered, such as how recommendations would be implemented, what risks they might entail to the mission and the force, and trade-offs around the globe.
U.S. military capabilities are needed in other parts of the world, Dempsey noted. U.S. forces are operating in Europe to reassure NATO allies in the face of Russian aggression in Ukraine, there are additional issues in the Persian Gulf region related to reassuring allies against Iranian threats, and U.S. forces still are needed in Afghanistan, he said.
In addition, the general said, “some of our Pacific allies are unsettled by Chinese reclamation projects, so we’ve got work to do with our allies there.”
Necessary Troop Levels Undetermined
Whether more troops will be needed in Iraq remains to be seen, the chairman said. The process calls for the U.S. Central Command Commander Army Gen. Lloyd J. Austin III to determine how recommendations would be put in place, he explained.
“We try not to negotiate the resources before we negotiate the concept,” Dempsey said. “Then we ask at some point is if he has the resources currently assigned.” If the answer is no, then we look across the force to see where they can be generated.
“I haven’t received from Centcom the assessment of resources required,” he continued, “and that is appropriate, because I want to first understand that we have a concept that could actually improve capability.”
The president specifically asked about enhancing the train-and-equip mission, Dempsey said. “It wasn’t whether there are options that would imply the strategy is ineffective, it was, rather, ‘Are there things we can do?’” he said.
The military has two lines of effort against the Islamic State of Iraq and the Levant in Iraq. One entails a combination of airstrikes and intelligence, surveillance and reconnaissance assets to support the Iraqi security forces. The other is to train and equip the Iraqi security forces to take the fight to ISIL.
FINANCIAL FIRM PRESIDENT SENT TO PRISON FOR 10 YEARS
FROM: U.S. JUSTICE DEPARTMENT
Thursday, June 4, 2015
President of New Jersey-Based Financial Services Firm Sentenced to 10 Years in Prison for Multimillion-Dollar Securities Fraud
The president of an investment and financial services firm was sentenced today to 120 months in prison for evading taxes and defrauding dozens of investors in New Jersey, Pennsylvania, Texas and elsewhere of $5 million, announced by U.S. Attorney Paul J. Fishman for the District of New Jersey.
Everett C. Miller, 45, of Marlton, New Jersey, previously pleaded guilty before U.S. District Judge Renee Marie Bumb to information charging him with one count of securities fraud and one count of tax evasion. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court: Miller was the founder, chief executive officer, president, principal and sole owner of Carr Miller Capital LLC (CMC), an investment and financial services firm based in Marlton, New Jersey. Miller and others solicited investments through the firm from individuals located in New Jersey, Pennsylvania, North Carolina, Arkansas, Texas and elsewhere. CMC had more than 30 affiliates and related entities and more than 75 related bank accounts. Miller controlled the firm’s finances and established himself as synonymous with CMC. Prior to founding CMC in June 2006, Miller was a registered financial advisor at several financial institutions.
Miller admitted that from June 2006 through December 2010, he and others issued promissory notes to more than 190 investors across the United States and Miller and CMC received $41.2 million from these investors. The notes were provided as “securities,” but Miller and CMC never registered the notes as securities with any federal or state agency, nor were the notes exempt from such registration requirements. The notes had a term of nine months and promised the investors returns of seven to 20 percent per year and a return of the principal investment at the end of the nine-month period.
Miller and others falsely represented to the investors that their money would be invested in certain ways, but the investors were not provided with material information about their investments or were misled about the risks of their investments. Miller commingled and pooled the investors’ monies into one of CMC’s 75 related bank accounts. Unbeknown to the investors, Miller used some of the monies in the following ways: to repay prior investors, most in Ponzi scheme fashion, to pay CMC and its related entities’ payrolls and operating expenses and to support Miller’s lifestyle. Miller’s purchases included luxury automobiles; home furnishings and electronic equipment; tickets to entertainment and sporting events; travel, lodging and vacations; meals, entertainment, retail shopping; and groceries.
On Aug. 11, 2009, the Arkansas Securities Department (ASD) initiated an investigation of Miller, CMC and others for selling unregistered securities to investors in the form of the promissory notes. Following the investigation, the ASD issued a cease-and-desist order against Miller, CMC and others from selling the notes.
From August 2009 through December 2010, despite knowing about the ASD’s investigation of the promissory notes and CMC’s inability to pay either the interest or the principal on them, Miller and others continued to sell the notes as unregistered securities to investors. They issued notes to approximately 50 new investors, but never returned any of the principal to the new investors.
Miller admitted that for calendar years 2007, 2008 and 2009, he intentionally failed to provide the Internal Revenue Service (IRS) with any information regarding the proceeds that he personally received in connection with his fraudulent scheme. Miller failed to disclose $218,770, $244,879 and $199,507 for 2007, 2008 and 2009, respectively. In total, Miller admitted failing to report $663,156 in taxable income to the IRS, resulting in a tax loss to the government of $47,342.
At the plea proceeding, Judge Bumb entered a consent judgment and order of forfeiture in the amount of $4,999,400, which constitutes the proceeds Miller obtained as a result of the securities fraud.
In addition to the prison term, Judge Bumb sentenced Miller to three years of supervised release and ordered him to pay restitution of $22.34 million.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larson; and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentencing. He also thanked the Financial Industry Regulatory Authority – Criminal Prosecution Assistance Group and the U.S. Securities and Exchange Commission’s Philadelphia Office for its assistance with this investigation. In addition, he thanked the New Jersey Securities Fraud Prosecution Section, the Arkansas Securities Department and the Texas State Securities Board for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the Economic Crimes Unit in Newark, New Jersey.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force.
Thursday, June 4, 2015
President of New Jersey-Based Financial Services Firm Sentenced to 10 Years in Prison for Multimillion-Dollar Securities Fraud
The president of an investment and financial services firm was sentenced today to 120 months in prison for evading taxes and defrauding dozens of investors in New Jersey, Pennsylvania, Texas and elsewhere of $5 million, announced by U.S. Attorney Paul J. Fishman for the District of New Jersey.
Everett C. Miller, 45, of Marlton, New Jersey, previously pleaded guilty before U.S. District Judge Renee Marie Bumb to information charging him with one count of securities fraud and one count of tax evasion. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court: Miller was the founder, chief executive officer, president, principal and sole owner of Carr Miller Capital LLC (CMC), an investment and financial services firm based in Marlton, New Jersey. Miller and others solicited investments through the firm from individuals located in New Jersey, Pennsylvania, North Carolina, Arkansas, Texas and elsewhere. CMC had more than 30 affiliates and related entities and more than 75 related bank accounts. Miller controlled the firm’s finances and established himself as synonymous with CMC. Prior to founding CMC in June 2006, Miller was a registered financial advisor at several financial institutions.
Miller admitted that from June 2006 through December 2010, he and others issued promissory notes to more than 190 investors across the United States and Miller and CMC received $41.2 million from these investors. The notes were provided as “securities,” but Miller and CMC never registered the notes as securities with any federal or state agency, nor were the notes exempt from such registration requirements. The notes had a term of nine months and promised the investors returns of seven to 20 percent per year and a return of the principal investment at the end of the nine-month period.
Miller and others falsely represented to the investors that their money would be invested in certain ways, but the investors were not provided with material information about their investments or were misled about the risks of their investments. Miller commingled and pooled the investors’ monies into one of CMC’s 75 related bank accounts. Unbeknown to the investors, Miller used some of the monies in the following ways: to repay prior investors, most in Ponzi scheme fashion, to pay CMC and its related entities’ payrolls and operating expenses and to support Miller’s lifestyle. Miller’s purchases included luxury automobiles; home furnishings and electronic equipment; tickets to entertainment and sporting events; travel, lodging and vacations; meals, entertainment, retail shopping; and groceries.
On Aug. 11, 2009, the Arkansas Securities Department (ASD) initiated an investigation of Miller, CMC and others for selling unregistered securities to investors in the form of the promissory notes. Following the investigation, the ASD issued a cease-and-desist order against Miller, CMC and others from selling the notes.
From August 2009 through December 2010, despite knowing about the ASD’s investigation of the promissory notes and CMC’s inability to pay either the interest or the principal on them, Miller and others continued to sell the notes as unregistered securities to investors. They issued notes to approximately 50 new investors, but never returned any of the principal to the new investors.
Miller admitted that for calendar years 2007, 2008 and 2009, he intentionally failed to provide the Internal Revenue Service (IRS) with any information regarding the proceeds that he personally received in connection with his fraudulent scheme. Miller failed to disclose $218,770, $244,879 and $199,507 for 2007, 2008 and 2009, respectively. In total, Miller admitted failing to report $663,156 in taxable income to the IRS, resulting in a tax loss to the government of $47,342.
At the plea proceeding, Judge Bumb entered a consent judgment and order of forfeiture in the amount of $4,999,400, which constitutes the proceeds Miller obtained as a result of the securities fraud.
In addition to the prison term, Judge Bumb sentenced Miller to three years of supervised release and ordered him to pay restitution of $22.34 million.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larson; and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentencing. He also thanked the Financial Industry Regulatory Authority – Criminal Prosecution Assistance Group and the U.S. Securities and Exchange Commission’s Philadelphia Office for its assistance with this investigation. In addition, he thanked the New Jersey Securities Fraud Prosecution Section, the Arkansas Securities Department and the Texas State Securities Board for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the Economic Crimes Unit in Newark, New Jersey.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force.
PRESIDENT OBAMA'S SPEECH ON HEALTH CARE IN AMERICA
FROM: THE WHITE HOUSE
June 09, 2015
The President's Speech to the Catholic Health Association on Health Care in America
Today, at the invitation of the Catholic Health Association, President Obama will address their annual conference and thank them for their dedication to helping ensure all Americans have access to health care. The President will discuss how the passage of the Affordable Care Act reflects our values and the kind of country we strive to be. He will also describe how the Affordable Care Act has become part of the fabric of an improved American health care system, one where we and our children can rely on health security throughout our lives, and make the most of our opportunities as a result.
Additionally, the White House released updated data on how the Affordable Care Act is working in every state in the country. Five years after healthcare reform became a reality, more than 16 million Americans have gained coverage, and the Affordable Care Act has improved coverage for virtually everyone who already had insurance. Americans can no longer be discriminated against for having pre-existing conditions, women can't be charged more just for being women, and there are no longer lifetime limits on the care Americans receive. And hospitals, doctors and other providers are changing the way they operate to deliver better care at lower cost.
The White House also launched a new interactive long form webpage -- "Health Care in America" -- which includes an embedded letter to the President written by the late Senator Ted Kennedy as he endured brain cancer, having instructed his wife to send the letter to the President after he passed away. A lifelong champion for health reform, Senator Kennedy encouraged the President to endure the fight for health care reform and thanked him "one last time" for carrying it forward. The page also includes an interactive timeline that contextualizes a century-long fight for real health reform in America, dozens of stories of Americans whose lives have benefited from reform, and a live player that will stream the President's remarks tomorrow.
President Obama’s remarks will be livestreamed HERE, and excerpts of his prepared remarks are included below:
“The rugged individualism that defines America has always been bound by a set of shared values; an enduring sense that we are in this together. That America is not a place where we simply ignore the poor or turn away from the sick. It’s a place sustained by the idea that I am my brother’s keeper and I am my sister’s keeper. That we have an obligation to put ourselves in our neighbor’s shoes, and to see the common humanity in each other.
So after nearly a century of talk, after decades of trying, after a year of sustained debate, we finally made health care reform a reality for America.”
…
“Five years in, what we’re talking about is no longer just a law. This isn’t about the Affordable Care Act. This isn’t about Obamacare. This isn’t about myths or rumors that won’t go away.
This is reality. This is health care in America.”
June 09, 2015
The President's Speech to the Catholic Health Association on Health Care in America
Today, at the invitation of the Catholic Health Association, President Obama will address their annual conference and thank them for their dedication to helping ensure all Americans have access to health care. The President will discuss how the passage of the Affordable Care Act reflects our values and the kind of country we strive to be. He will also describe how the Affordable Care Act has become part of the fabric of an improved American health care system, one where we and our children can rely on health security throughout our lives, and make the most of our opportunities as a result.
Additionally, the White House released updated data on how the Affordable Care Act is working in every state in the country. Five years after healthcare reform became a reality, more than 16 million Americans have gained coverage, and the Affordable Care Act has improved coverage for virtually everyone who already had insurance. Americans can no longer be discriminated against for having pre-existing conditions, women can't be charged more just for being women, and there are no longer lifetime limits on the care Americans receive. And hospitals, doctors and other providers are changing the way they operate to deliver better care at lower cost.
The White House also launched a new interactive long form webpage -- "Health Care in America" -- which includes an embedded letter to the President written by the late Senator Ted Kennedy as he endured brain cancer, having instructed his wife to send the letter to the President after he passed away. A lifelong champion for health reform, Senator Kennedy encouraged the President to endure the fight for health care reform and thanked him "one last time" for carrying it forward. The page also includes an interactive timeline that contextualizes a century-long fight for real health reform in America, dozens of stories of Americans whose lives have benefited from reform, and a live player that will stream the President's remarks tomorrow.
President Obama’s remarks will be livestreamed HERE, and excerpts of his prepared remarks are included below:
“The rugged individualism that defines America has always been bound by a set of shared values; an enduring sense that we are in this together. That America is not a place where we simply ignore the poor or turn away from the sick. It’s a place sustained by the idea that I am my brother’s keeper and I am my sister’s keeper. That we have an obligation to put ourselves in our neighbor’s shoes, and to see the common humanity in each other.
So after nearly a century of talk, after decades of trying, after a year of sustained debate, we finally made health care reform a reality for America.”
…
“Five years in, what we’re talking about is no longer just a law. This isn’t about the Affordable Care Act. This isn’t about Obamacare. This isn’t about myths or rumors that won’t go away.
This is reality. This is health care in America.”
SECRETARY KERRY'S STATEMENT ON 'CLIMATE CHANGE ADAPTATION AND RESILIENCE'
FROM: U.S. STATE DEPARTMENT
Climate Change Adaptation and Resilience
Press Statement
John Kerry
Secretary of State
Washington, DC
June 9, 2015
Climate change poses a threat to every country on Earth, and we all need to do what we can to take advantage of the small window of opportunity we still have to stave off its worst, most disastrous impacts. But even as we take unprecedented steps to mitigate the climate threat, we also have to ensure our communities are prepared for the impacts we know are headed our way – and the impacts we are already seeing all over the world in the form of heat waves, floods, historic droughts, ocean acidification and more.
Thanks to President Obama’s Climate Action Plan, we’ve taken a number of important steps to increase the resilience of American communities. But as the President has always said, this is a global challenge, and we’re not going to get very far if we keep our efforts contained within our borders. That’s why the United States is deeply committed to helping the rest of the world – especially the poorest and most vulnerable nations – adapt to the changing climate as well.
As part of that commitment, last fall, President Obama announced his intention to create a private-public partnership to provide climate data and information to help promote resilient development worldwide. Today we formally launched the Climate Services for Resilient Development partnership, along with the government of the United Kingdom and our partners at the American Red Cross, the Asian Development Bank, Esri, Google, the Inter-American Development and the Skoll Global Threats Fund. In addition to the $34 million we and our partners are putting toward that new partnership, we also announced a series of individual steps we’re taking to make adapting to climate change easier around the globe – including, for example, the volunteer “climate resilience corps” that the Peace Corps and AmeriCorps will be launching in developing countries, and NASA’s release of the first-ever climate modeling system that breaks data down to the country level, which will enable countries to better target their individual adaptation planning efforts.
In the United States, we’ve developed some of the most advanced technologies and scientific expertise on climate change, and we want to make sure these tools are reaching those who need it the most. Each of the commitments announced today will make it easier for people to take control of their own futures and play an active role in helping to prepare their communities, their countries, and ultimately their planet for the changes ahead.
When it comes to confronting climate change, no country should be forced to go it alone – because no country can possibly address this threat alone. It will require all of us – every country, around the world, doing what it can to contribute to the solution. That understanding is at the core of the initiatives we are unveiling today, it’s what is driving our work toward an ambitious global agreement in Paris later this year, and it’s what will continue to guide our leadership in the fight against climate change in the months and years to come.
Climate Change Adaptation and Resilience
Press Statement
John Kerry
Secretary of State
Washington, DC
June 9, 2015
Climate change poses a threat to every country on Earth, and we all need to do what we can to take advantage of the small window of opportunity we still have to stave off its worst, most disastrous impacts. But even as we take unprecedented steps to mitigate the climate threat, we also have to ensure our communities are prepared for the impacts we know are headed our way – and the impacts we are already seeing all over the world in the form of heat waves, floods, historic droughts, ocean acidification and more.
Thanks to President Obama’s Climate Action Plan, we’ve taken a number of important steps to increase the resilience of American communities. But as the President has always said, this is a global challenge, and we’re not going to get very far if we keep our efforts contained within our borders. That’s why the United States is deeply committed to helping the rest of the world – especially the poorest and most vulnerable nations – adapt to the changing climate as well.
As part of that commitment, last fall, President Obama announced his intention to create a private-public partnership to provide climate data and information to help promote resilient development worldwide. Today we formally launched the Climate Services for Resilient Development partnership, along with the government of the United Kingdom and our partners at the American Red Cross, the Asian Development Bank, Esri, Google, the Inter-American Development and the Skoll Global Threats Fund. In addition to the $34 million we and our partners are putting toward that new partnership, we also announced a series of individual steps we’re taking to make adapting to climate change easier around the globe – including, for example, the volunteer “climate resilience corps” that the Peace Corps and AmeriCorps will be launching in developing countries, and NASA’s release of the first-ever climate modeling system that breaks data down to the country level, which will enable countries to better target their individual adaptation planning efforts.
In the United States, we’ve developed some of the most advanced technologies and scientific expertise on climate change, and we want to make sure these tools are reaching those who need it the most. Each of the commitments announced today will make it easier for people to take control of their own futures and play an active role in helping to prepare their communities, their countries, and ultimately their planet for the changes ahead.
When it comes to confronting climate change, no country should be forced to go it alone – because no country can possibly address this threat alone. It will require all of us – every country, around the world, doing what it can to contribute to the solution. That understanding is at the core of the initiatives we are unveiling today, it’s what is driving our work toward an ambitious global agreement in Paris later this year, and it’s what will continue to guide our leadership in the fight against climate change in the months and years to come.
CYBER PHYSICAL THERAPY BEING TRIED BY VETERANS
FROM: NATIONAL SCIENCE FOUNDATION
Veterans will be first to try cyber physical therapy
High-speed research networks help scientists develop and deploy future health technologies
The Internet has been transformational, changing how we communicate with friends and family, how we shop, and more recently, how we heal. Physical therapy is the latest treatment to be offered as telemedicine, with an experimental system now connecting specialists to patients to provide help they otherwise couldn't get, aiding recovery from serious ailments, from broken limbs to stroke.
In an effort to connect physical therapy with wounded veterans far from treatment facilities, researchers from the University of Texas (UT) at Dallas have developed a rehabilitation system that uses real-time video, 3-D computer-generated worlds and force-feedback "haptic" devices to re-create a physical therapy session between a patient and a therapist, all at long distance over high-speed networks.
The team demonstrated the system at the Beyond Today's Internet Summit in March 2015. Organized by US Ignite and the Global Environment for Networking Innovations (GENI), two groups dedicated to advancing the frontiers of the Internet, the event showed what new capabilities are possible with ultra-high-speed, "smart", programmable networks.
Powerful Internet brings powerful applications
Though the majority of U.S. citizens still have Internet connection speeds in the tens of megabits per second, through the GENI and US Ignite programs, supported by the U.S. National Science Foundation, researchers, experts and some communities are able to access gigabit networks with speeds 40-100 times faster than standard networks.
For 3-D tele-rehabilitation to be lifelike and effective requires the system to have virtually no lag-time--or latency, in networking lingo--between action and reaction.
"To transfer all of this data requires a bandwidth greater than 100 megabits per second, which we currently can't do over the Internet," said Karthik Venkataraman, a Ph.D. student working on the computer-enabled health technologies in computer scientist Balakrishnan Prabhakaran's Multimedia Systems Lab at UT Dallas."GENI and US Ignite provide the bandwidth and low latency that is required by these kinds of applications."
Reach out and touch someone
Every year, physical therapists help millions of people recover from the debilitating impacts of strokes, injuries and a range of other ailments--but not everyone has access to a treatment facility or a physical therapy professional.
"We're trying to virtualize a physical therapy session in which a patient and a therapist cannot be present at the same location," explained Venkataraman.
To bring the tele-rehabilitation to life, the system uses Microsoft Kinect to create 3-D, real-time models of the patient and the doctor. The models then join a shared virtual environment, a computer-generated space customized by the participants.
To simulate the touch aspect of the physical therapy session, the patient responds to a touch-sensitive "haptic" arm controlled by the therapist via a paired haptic device.
At the summit, the team demonstrated a physical therapy session in which two individuals practice sawing a log, a task that mimics the movements used by recovering stroke patients. The participants feel both the resistance of the log and the guiding movements of their partner, just as would occur at an in-person therapy session.
The researchers say this is just one example of what can be achieved with next-generation networks that support high-bandwidth and low-latency communication. The team is also working on extending the tele-rehabilitation system so one therapist or physician can work with multiple patients at the same time.
"This scaled-up version will ensure privacy in the sense that the patients will not be able to see other patients. Only the therapist will be able to view and monitor multiple patients," said Prabhakaran Balakrishnan, the lead researcher on the project. "The therapist will also be able to pick one patient and work with him or her on a one-to-one basis."
In collaboration with Thiru Annaswamy, a physician and assistant professor of medicine, the 3-D tele-rehabilitation system will be deployed at the Dallas Veterans Affairs Medical Center and used to help rehabilitate disabled veterans, with field trials beginning in June.
"If the patient and the therapist cannot be in the same location," Venkataraman said, "we still want to be able to give that virtual experience of him or her being together with the therapist in the same room."
-- Aaron Dubrow, (
Investigators
Balakrishnan Prabhakaran
Ovidiu Daescu
Mark Spong
Xiaohu Guo
Gopal Gupta
Dinesh Bhatia
Roozbeh Jafari
Related Institutions/Organizations
University of Texas at Dallas
Dallas Veterans Affairs Medical Center
Veterans will be first to try cyber physical therapy
High-speed research networks help scientists develop and deploy future health technologies
The Internet has been transformational, changing how we communicate with friends and family, how we shop, and more recently, how we heal. Physical therapy is the latest treatment to be offered as telemedicine, with an experimental system now connecting specialists to patients to provide help they otherwise couldn't get, aiding recovery from serious ailments, from broken limbs to stroke.
In an effort to connect physical therapy with wounded veterans far from treatment facilities, researchers from the University of Texas (UT) at Dallas have developed a rehabilitation system that uses real-time video, 3-D computer-generated worlds and force-feedback "haptic" devices to re-create a physical therapy session between a patient and a therapist, all at long distance over high-speed networks.
The team demonstrated the system at the Beyond Today's Internet Summit in March 2015. Organized by US Ignite and the Global Environment for Networking Innovations (GENI), two groups dedicated to advancing the frontiers of the Internet, the event showed what new capabilities are possible with ultra-high-speed, "smart", programmable networks.
Powerful Internet brings powerful applications
Though the majority of U.S. citizens still have Internet connection speeds in the tens of megabits per second, through the GENI and US Ignite programs, supported by the U.S. National Science Foundation, researchers, experts and some communities are able to access gigabit networks with speeds 40-100 times faster than standard networks.
For 3-D tele-rehabilitation to be lifelike and effective requires the system to have virtually no lag-time--or latency, in networking lingo--between action and reaction.
"To transfer all of this data requires a bandwidth greater than 100 megabits per second, which we currently can't do over the Internet," said Karthik Venkataraman, a Ph.D. student working on the computer-enabled health technologies in computer scientist Balakrishnan Prabhakaran's Multimedia Systems Lab at UT Dallas."GENI and US Ignite provide the bandwidth and low latency that is required by these kinds of applications."
Reach out and touch someone
Every year, physical therapists help millions of people recover from the debilitating impacts of strokes, injuries and a range of other ailments--but not everyone has access to a treatment facility or a physical therapy professional.
"We're trying to virtualize a physical therapy session in which a patient and a therapist cannot be present at the same location," explained Venkataraman.
To bring the tele-rehabilitation to life, the system uses Microsoft Kinect to create 3-D, real-time models of the patient and the doctor. The models then join a shared virtual environment, a computer-generated space customized by the participants.
To simulate the touch aspect of the physical therapy session, the patient responds to a touch-sensitive "haptic" arm controlled by the therapist via a paired haptic device.
At the summit, the team demonstrated a physical therapy session in which two individuals practice sawing a log, a task that mimics the movements used by recovering stroke patients. The participants feel both the resistance of the log and the guiding movements of their partner, just as would occur at an in-person therapy session.
The researchers say this is just one example of what can be achieved with next-generation networks that support high-bandwidth and low-latency communication. The team is also working on extending the tele-rehabilitation system so one therapist or physician can work with multiple patients at the same time.
"This scaled-up version will ensure privacy in the sense that the patients will not be able to see other patients. Only the therapist will be able to view and monitor multiple patients," said Prabhakaran Balakrishnan, the lead researcher on the project. "The therapist will also be able to pick one patient and work with him or her on a one-to-one basis."
In collaboration with Thiru Annaswamy, a physician and assistant professor of medicine, the 3-D tele-rehabilitation system will be deployed at the Dallas Veterans Affairs Medical Center and used to help rehabilitate disabled veterans, with field trials beginning in June.
"If the patient and the therapist cannot be in the same location," Venkataraman said, "we still want to be able to give that virtual experience of him or her being together with the therapist in the same room."
-- Aaron Dubrow, (
Investigators
Balakrishnan Prabhakaran
Ovidiu Daescu
Mark Spong
Xiaohu Guo
Gopal Gupta
Dinesh Bhatia
Roozbeh Jafari
Related Institutions/Organizations
University of Texas at Dallas
Dallas Veterans Affairs Medical Center
Tuesday, June 9, 2015
MAN MAKES GUILTY PLEA IN KANSAS AIRPORT CAR BOMB PLOT
FROM: U.S. JUSTICE DEPARTMENT
Monday, June 8, 2015
Kansas Man Pleads Guilty in Plot to Explode Car Bomb at Airport
A Wichita, Kansas, man pleaded guilty to attempting to explode a car bomb at the airport in Wichita, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Barry R. Grissom of the District of Kansas.
Terry Lee Loewen, 59, of Wichita, pleaded guilty today to one count of attempting to use a weapon of mass destruction. Loewen was arrested in December 2013 when he tried to enter the grounds of the Wichita Mid-Continent Airport for the purpose of exploding a bomb. (The airport recently was renamed Wichita Dwight D. Eisenhower National Airport).
“Terry Loewen utilized his privileged airport access to attempt a terrorist attack in Wichita,” said Assistant Attorney General Carlin. “Detecting, disrupting and holding accountable those who wish to harm Americans remains our highest priority.”
“Protecting the American people from terrorism is our primary mission,” said U.S. Attorney Grissom. “It is vital that we disrupt attacks against our homeland and bring terrorists to justice.”
In his plea, Loewen admitted he came to the attention of the FBI late in May 2013 when he became a Facebook friend of a person who was posting comments advocating violent jihad. The FBI began communicating with Loewen through an undercover employee. After Loewen expressed his desire to engage in violent jihad, the undercover employee offered to introduce him to someone who could help him do it.
Loewen told the undercover employee he was waiting for what he called “the green light” from Allah to carry out a violent attack on a civilian target. He said he did not expect to live through any of the attacks he had in mind. He also said he was inspired by the teachings of Osama bin Laden and Anwar al-Awlaki, and that he had downloaded thousands of pages of information on jihad.
In September 2013, Loewen sent photos of airplanes on the tarmac at the Wichita airport. He commented that he could have “walked over there, shot both pilots … slapped some C4 on both fuel trucks and set them off before anyone even called TSA.”
In October 2013, Loewen met with a second undercover FBI employee who Loewen believed was a “brother” and would help him blow up a plane. Loewen said he had scouted the airport to determine a time and place for an attack that would be sure to kill as many people as possible.
Loewen assisted the second FBI employee in the final assembly of an improvised explosive device. He was not aware that the explosive materials used in the device were inert. In the early hours of Dec. 13, 2013, the second FBI employee picked up Loewen at a Wichita hotel. They drove to where the bomb was stored and finished wiring the device. When they reached the airport, Loewen twice used his airport badge at a card reader to attempt to get onto the tarmac before he was arrested.
Loewen’s sentencing will be scheduled at a later date. Both parties have agreed to recommend a sentence of 20 years in federal prison.
Assistant Attorney General Carlin and U.S. Attorney Grissom commended the FBI Wichita Joint Terrorism Task Force, which includes members from the FBI, Sedgwick County, Kansas, Sheriff’s Office and Kansas Highway Patrol. Assisting with the investigation were the FBI Kansas City Division, the Transportation Security Administration, the Wichita Airport Authority and the Wichita Police Department. Assistant Attorney General Carlin and U.S. Attorney Grissom also commended the prosecutors on the case, Assistant U.S. Attorneys David Smith and Tony Mattivi of the District of Kansas and Trial Attorney Erin Creegan of the Justice Department’s National Security Division.
Monday, June 8, 2015
Kansas Man Pleads Guilty in Plot to Explode Car Bomb at Airport
A Wichita, Kansas, man pleaded guilty to attempting to explode a car bomb at the airport in Wichita, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Barry R. Grissom of the District of Kansas.
Terry Lee Loewen, 59, of Wichita, pleaded guilty today to one count of attempting to use a weapon of mass destruction. Loewen was arrested in December 2013 when he tried to enter the grounds of the Wichita Mid-Continent Airport for the purpose of exploding a bomb. (The airport recently was renamed Wichita Dwight D. Eisenhower National Airport).
“Terry Loewen utilized his privileged airport access to attempt a terrorist attack in Wichita,” said Assistant Attorney General Carlin. “Detecting, disrupting and holding accountable those who wish to harm Americans remains our highest priority.”
“Protecting the American people from terrorism is our primary mission,” said U.S. Attorney Grissom. “It is vital that we disrupt attacks against our homeland and bring terrorists to justice.”
In his plea, Loewen admitted he came to the attention of the FBI late in May 2013 when he became a Facebook friend of a person who was posting comments advocating violent jihad. The FBI began communicating with Loewen through an undercover employee. After Loewen expressed his desire to engage in violent jihad, the undercover employee offered to introduce him to someone who could help him do it.
Loewen told the undercover employee he was waiting for what he called “the green light” from Allah to carry out a violent attack on a civilian target. He said he did not expect to live through any of the attacks he had in mind. He also said he was inspired by the teachings of Osama bin Laden and Anwar al-Awlaki, and that he had downloaded thousands of pages of information on jihad.
In September 2013, Loewen sent photos of airplanes on the tarmac at the Wichita airport. He commented that he could have “walked over there, shot both pilots … slapped some C4 on both fuel trucks and set them off before anyone even called TSA.”
In October 2013, Loewen met with a second undercover FBI employee who Loewen believed was a “brother” and would help him blow up a plane. Loewen said he had scouted the airport to determine a time and place for an attack that would be sure to kill as many people as possible.
Loewen assisted the second FBI employee in the final assembly of an improvised explosive device. He was not aware that the explosive materials used in the device were inert. In the early hours of Dec. 13, 2013, the second FBI employee picked up Loewen at a Wichita hotel. They drove to where the bomb was stored and finished wiring the device. When they reached the airport, Loewen twice used his airport badge at a card reader to attempt to get onto the tarmac before he was arrested.
Loewen’s sentencing will be scheduled at a later date. Both parties have agreed to recommend a sentence of 20 years in federal prison.
Assistant Attorney General Carlin and U.S. Attorney Grissom commended the FBI Wichita Joint Terrorism Task Force, which includes members from the FBI, Sedgwick County, Kansas, Sheriff’s Office and Kansas Highway Patrol. Assisting with the investigation were the FBI Kansas City Division, the Transportation Security Administration, the Wichita Airport Authority and the Wichita Police Department. Assistant Attorney General Carlin and U.S. Attorney Grissom also commended the prosecutors on the case, Assistant U.S. Attorneys David Smith and Tony Mattivi of the District of Kansas and Trial Attorney Erin Creegan of the Justice Department’s National Security Division.
SHAPE CHANGING WING FLAPS
Green Aviation Project Tests Shape Changing Wing Flaps
A NASA F-15D flies chase for the G-III Adaptive Compliant Trailing Edge (ACTE) project. This photo was taken by an automated Wing Deflection Measurement System (WDMS) camera in the G-III that photographed the ACTE wing every second during the flight. The ACTE experimental flight research project is a joint effort between NASA and the U.S. Air Force Research Laboratory to determine if advanced flexible trailing-edge wing flaps, developed and patented by FlexSys, Inc., can both improve aircraft aerodynamic efficiency and reduce airport-area noise generated during takeoffs and landings.
The experiment is being carried out on a modified Gulfstream III (G-III) business aircraft that has been converted into an aerodynamics research test bed at NASA's Armstrong Flight Research Center. The ACTE project involves replacement of both of the G-III's conventional 19-foot-long aluminum flaps with the shape changing flaps that form continuous bendable surfaces.
DOD ANNOUNCES ADDITIONAL LABS RECEIVED LIVE ANTHRAX SAMPLES
FROM: U.S. DEFENSE DEPARTMENT
Pentagon Provides DoD Laboratory Review Update
By Army Sgt. 1st Class Tyrone C. Marshall Jr.
DoD News, Defense Media Activity
WASHINGTON, June 8, 2015 – As part of its ongoing laboratory review, the Defense Department today announced additional laboratories and one new state have been added to the list of sites that received low concentrations of live anthrax samples.
In line with Deputy Defense Secretary Bob Work’s pledge of a transparent DoD laboratory review process, Pentagon spokesman Army Col. Steve Warren provided the update to reporters on the number of labs and locations which received the samples.
Warren said 66 laboratories in 19 states and Washington, D.C., as well as three foreign countries are now known to have received the live anthrax samples.
“The new state that we’re adding is Pennsylvania,” he said. “Thirty-one people remain on post-exposure prophylaxis, so that’s no change.”
In addition to Washington, D.C., Warren said the states identified as having received live samples are California, Utah, Texas, Tennessee, Virginia, Massachusetts, Wisconsin, Maryland, New Jersey, New York, Delaware, Washington, Illinois, Florida, Arizona, Ohio, North Carolina, Rhode Island and Pennsylvania.
“The [number of] countries remain the same,” he said, citing Australia, South Korea and Canada.
These locations include all identified academic, federal and civilian facilities affected, Warren said.
Pentagon Provides DoD Laboratory Review Update
By Army Sgt. 1st Class Tyrone C. Marshall Jr.
DoD News, Defense Media Activity
WASHINGTON, June 8, 2015 – As part of its ongoing laboratory review, the Defense Department today announced additional laboratories and one new state have been added to the list of sites that received low concentrations of live anthrax samples.
In line with Deputy Defense Secretary Bob Work’s pledge of a transparent DoD laboratory review process, Pentagon spokesman Army Col. Steve Warren provided the update to reporters on the number of labs and locations which received the samples.
Warren said 66 laboratories in 19 states and Washington, D.C., as well as three foreign countries are now known to have received the live anthrax samples.
“The new state that we’re adding is Pennsylvania,” he said. “Thirty-one people remain on post-exposure prophylaxis, so that’s no change.”
In addition to Washington, D.C., Warren said the states identified as having received live samples are California, Utah, Texas, Tennessee, Virginia, Massachusetts, Wisconsin, Maryland, New Jersey, New York, Delaware, Washington, Illinois, Florida, Arizona, Ohio, North Carolina, Rhode Island and Pennsylvania.
“The [number of] countries remain the same,” he said, citing Australia, South Korea and Canada.
These locations include all identified academic, federal and civilian facilities affected, Warren said.
FTC SENDS OUT CHECKS RELATED TO MORTGAGE RELIEF SERVICES SCAM
FROM: U.S. FEDERAL TRADE COMMISSION
FTC Returns Money to Consumers in Mortgage Relief Scam
The Federal Trade Commission is mailing 2,653 checks totaling more than $467,000 to consumers who lost money to a scheme that charged large up-front fees for mortgage relief services that were not provided.
The FTC won a court action against Jackson, Crowder & Associates and Crowder Law Group, in which the FTC alleged that the defendants falsely promised to modify consumers’ mortgages and substantially reduce their monthly payments, exaggerated the role an attorney would play, and pretended to be affiliated with a government agency.
Consumers who receive the checks from the FTC’s refund administrator for this matter, Gilardi & Co. LLC, should deposit or cash them within 60 days of the mailing date. The FTC never requires consumers to pay money or to provide information before refund checks can be cashed. The amount of the check will vary based upon each consumer’s loss.
FTC Returns Money to Consumers in Mortgage Relief Scam
The Federal Trade Commission is mailing 2,653 checks totaling more than $467,000 to consumers who lost money to a scheme that charged large up-front fees for mortgage relief services that were not provided.
The FTC won a court action against Jackson, Crowder & Associates and Crowder Law Group, in which the FTC alleged that the defendants falsely promised to modify consumers’ mortgages and substantially reduce their monthly payments, exaggerated the role an attorney would play, and pretended to be affiliated with a government agency.
Consumers who receive the checks from the FTC’s refund administrator for this matter, Gilardi & Co. LLC, should deposit or cash them within 60 days of the mailing date. The FTC never requires consumers to pay money or to provide information before refund checks can be cashed. The amount of the check will vary based upon each consumer’s loss.
S. KOREA ROBOT WINS FIRST PRIZE AT DARPA ROBOT FINALS
Right: Team Kaist’s robot DRC-Hubo uses a tool to cut a hole in a wall during the DARPA Robotics Challenge Finals, June 5-6, 2015, in Pomona, Calif. Team Kaist won the top prize at the competition. DARPA photo
Robots from South Korea, U.S. Win DARPA Finals
By Cheryl Pellerin
DoD News, Defense Media Activity
POMONA, Calif., June 7, 2015 – A robot from South Korea took first prize and two American robots took second and third prizes here yesterday in the two-day robotic challenge finals held by the Defense Advanced Research Projects Agency.
Twenty-three human-robot teams participating in the DARPA Robotics Challenge, or DRC, finals competed for $3.5 million in prizes, working to get through eight tasks in an hour, under their own onboard power and with severely degraded communications between robot and operator.
A dozen U.S. teams and 11 from Japan, Germany, Italy, South Korea and Hong Kong competed in the outdoor competition.
DARPA launched the DRC in response to the nuclear disaster at Fukushima, Japan, in 2011 and the need for help to save lives in the toxic environment there.
Progress in Robotics
The DRC’s goal was to accelerate progress in robotics so robots more quickly can gain the dexterity and robustness they need to enter areas too dangerous for people and mitigate disaster impacts.
Robot tasks were relevant to disaster response -- driving alone, walking through rubble, tripping circuit breakers, using a tool to cut a hole in a wall, turning valves and climbing stairs.
Each team had two tries at the course with the best performance and times used as official scores. All three winners each had final scores of eight points, so they were arrayed from first to third place according to least time on the course.
DARPA program manager and DRC organizer Gill Pratt congratulated the 23 participating teams and thanked them for helping open a new era of human-robot partnerships.
Loving Robots
The DRC was open to the public, and more than 10,000 people over two days watched from the Fairplex grandstand as each robot ran its course. The venue was formerly known as the Los Angeles County Fairgrounds.
"These robots are big and made of lots of metal, and you might assume people seeing them would be filled with fear and anxiety," Pratt said during a press briefing at the end of day 2.
"But we heard groans of sympathy when those robots fell, and what did people do every time a robot scored a point? They cheered!” he added.
Pratt said this could be one of the biggest lessons from DRC -- “the potential for robots not only to perform technical tasks for us but to help connect people to one another."
South Korean Winning Team
Team Kaist from Daejeon, South Korea, and its robot DRC-Hubo took first place and the $2 million prize. Hubo comes from the words ‘humanoid robot.’
Team Kaist is from the Korea Advanced Institute of Science and Technology, which professor JunHo Oh of the Mechanical Engineering Department called “the MIT of Korea,” and he led Team Kaist to victory here.
In his remarks at the DARPA press conference, Oh noted that researchers from a university commercial spinoff called Rainbow Co., built the Hubo robot hardware.
The professor said his team’s first-place prize doesn’t make DRC-Hubo the best robot in the world, but he’s happy with the prize, which he said helps demonstrate Korea’s technological capabilities.
Team IHMC Robotics
Coming in second with a $1 million prize is Team IHMC Robotics of Pensacola, Florida -- the Institute of Human and Machine Cognition -- and its robot Running Man.
Jerry Pratt leads a research group at IHMC that works to understand and model human gait and its applications in robotics, human assistive devices and man-machine interfaces.
“Robots are really coming a long way,” Pratt said.
“Are you going to see a lot more of them? It's hard to say when you'll really see humanoid robots in the world,” he added. “But I think this is the century of the humanoid robot. The real question is what decade? And the DRC will make that decade come maybe one decade sooner.”
Team Tartan Rescue
In third place is Team Tartan Rescue of Pittsburgh, winning $500,000. The robot is CHIMP, which stands for CMU highly intelligent mobile platform. Team members are from Carnegie Mellon University and the National Robotics Engineering Center.
Tony Stentz, NREC director, led Team Tartan Rescue, and during the press conference called the challenge “quite an experience.”
That experience was best captured, he said, “with our run yesterday when we had trouble all through the course, all kinds of problems, things we never saw before.”
While that was happening, Stentz said, the team operating the robot from another location kept their cool.
Promise for the Technology
“They figured out what was wrong, they tapped their deep experience in practicing with the machine, they tapped the tools available at their fingertips, and they managed to get CHIMP through the entire course, doing all of the tasks in less than an hour,” he added.
“That says a lot about the technology and it says a lot about the people,” Stentz said, “and I think it means that there's great promise for this technology.”
All the winners said they would put most of the prize money into robotics research and share a portion with their team members.
After the day 2 competition, Arati Prabhakar, DARPA director, said this is the end of the 3-year-long DARPA Robotics Challenge but “the beginning of a future in which robots can work alongside people to reduce the toll of disasters."
ED DEPT FACT SHEET ON MISLEADING CLAIMS BY CAREER COLLEGES
FROM: U.S. EDUCATION DEPARTMENT
Fact Sheet: Protecting Students from Abusive Career Colleges
Administration outlines new debt relief process for Corinthian Colleges’ students
JUNE 8, 2015
Over the past six years, the Education Department has taken unprecedented steps to hold career colleges accountable for giving students what they deserve: a high-quality, affordable education that prepares them for their careers. The Department established tougher regulations targeting misleading claims by colleges and incentives that drove sales people to enroll students through dubious promises. The Department has cracked down on bad actors through investigations and enforcement actions. The Department also issued "gainful employment" regulations, which will help ensure that students at career colleges don't end up with debt they cannot repay. The Department will continue to hold institutions accountable in order to improve the value of their programs, protect students from abusive colleges, and safeguard the interests of taxpayers.
"While some for-profit career colleges play a critical role in helping students succeed in their educational and training pursuits, too often, bad actors in the sector have preyed on some of our nation's most vulnerable students and taken advantage of hard-working Americans who simply want a better future for themselves and their families," said U.S. Secretary of Education Arne Duncan. "I am committed to ensuring that every student has access to an education that will put them on solid footing for a career, and I will hold schools accountable for practices that undercut their students and taxpayers. Where students have been harmed by fraudulent practices, I am fully committed to making sure students receive every penny of relief they are entitled to under law. We will make this process as easy as possible for them, including by considering claims in groups wherever possible, and hold institutions accountable."
Today, the Education Department is announcing new steps in this work, particularly to address the concerns of students who attended schools owned by Corinthian Colleges Inc.
How debt relief will work for Corinthian students
The Department has worked to rapidly develop a streamlined process for getting debt relief to Corinthian students. The Department's aim is to make the process of forgiving loans fair, clear and efficient—and to ensure that students who are eligible to participate know about this opportunity.
Some Corinthian schools closed down, while others were sold but remain open under different ownership. The announcements today are for:
Corinthian students whose schools have closed down.
Corinthian students who believe they were victims of fraud, regardless of whether their school closed.
Helping Corinthian students whose schools have closed
In general, when a college closes, students are eligible to discharge their federal student loans if they were attending when the school closed or who withdrew from the school within 120 days of the closing date. Given the unique circumstances for former Corinthian students, the Department is expanding eligibility for students to apply for a closed school loan discharge, extending the window of time back to June 20, 2014, to capture students who attended the now-closed campuses after Corinthian entered into an agreement with the Department to terminate Corinthian's ownership of its schools.
The Department's Federal Student Aid office has been and will continue to contact potentially impacted student borrowers to provide clear information about their options, including loan discharge applications, in addition to providing enhanced information on the Department's website.
In addition, the Department has worked with a group of organizations and institutions—including those within the California State University system, led by CSU Fullerton and C-REAL, Beyond 12, and the National Association of Student Financial Aid Administrators and its California and Western region affiliates—as they have established an independent volunteer advising corps that will help students navigate their options. The resource is available at www.NextStepsEDU.org, where students can sign up and be connected to a volunteer advisor from the field who can help students determine which option is best suited to their situation. (Note that as the Department is not managing this initiative, it cannot endorse any advice that a student may receive.)
Helping students who believe they were victims of fraud, regardless of whether their school closed
Provisions in the law called "defense to repayment" or "borrower's defense" allow borrowers to seek loan forgiveness if they believe they were defrauded by their college under state law. This provision has rarely been used in the past. Now, the Department is taking unprecedented action to create a streamlined process that is fair to students who may have been victims of fraud and that holds colleges accountable to taxpayers.
In taking these actions, as Under Secretary Ted Mitchell outlined in a blog post today, the Department is committed to helping support affected students. Given the pressing need presented by the unique situation for students who attended colleges owned by Corinthian, the Department is today announcing specific steps for students who attended those campuses, as well as outlining broader processes for all students that will be established moving forward.
Extending debt relief eligibility to groups of students wherever possible: In order to receive loan forgiveness under a "defense to repayment," students must assert that a college's actions violated state law and affected their provision of educational services or their federal loans. Wherever possible, the Department will rely on evidence established by appropriate authorities in considering whether whole groups of students (for example, an entire academic program at a specific campus during a certain time frame) are eligible for borrower defense relief. This will simplify and expedite the relief process, reducing the burden on borrowers.
For example, after analyzing the Department's findings in its investigation of Heald College and relevant California law, the Department has determined that evidence of misrepresentation exists for students enrolled in a large majority of programs offered at Heald College campuses between 2010 and 2015. Specifically, the Department has determined that students who relied on misrepresentations found in published job placement rates for many Heald programs qualify to have their federal direct student loans discharged. Students can have their loans forgiven and receive refunds for amounts paid based on a simple attestation. More information about this process—including the attestation form—is available on studentaid.gov/Corinthian. Additional details will be posted on the website in the coming weeks.
Providing loan forbearance and pausing payments: All former Corinthian students who apply for borrower defense have the option of having their federal loans immediately placed into forbearance, which stops their monthly payments to ensure they do not fall behind or default on their loans while the Department works to resolve the claim. For such students who are already in default on their loans, the Department will immediately halt collection activity. Students will receive a notification from their loan servicer to confirm the change in status of their loans.
Appointing a Special Master dedicated to borrower defense issues: The Department will appoint a Special Master to oversee borrower defense issues and charge that person with ensuring the process is simple, streamlined, and fair to students and taxpayers. While the specific steps announced today are for former Corinthian students, the Special Master will help develop a broader system that will support students at other institutions who believe they have a defense to repayment. The Special Master will be named in the coming weeks.
Establishing a streamlined process: As noted above, the Department will work to provide debt relief to groups of students wherever possible, as we already have determined is possible for many Heald College students. For other Corinthian students, with the help of the Special Master, the Department will create a simple application for debt relief, which borrowers can complete online or by email or postal mail. Starting today, former Corinthian students can visit studentaid.gov/Corinthian to learn more, and in the coming weeks, the Department will have an online form available for these borrowers. In addition, students can call a special toll-free borrower defense hotline at (855) 279-6207 to ask about their options.
Building a better system for debt relief for the future: The Department will develop new regulations to clarify and streamline loan forgiveness under the defense to repayment provision, while maintaining or enhancing current consumer protection standards and strengthening those provisions that hold colleges accountable for actions that result in loan discharges. That process will begin later this year and will not slow down the loan discharge process for current applicants.
Calling on Congress to do its part
The Department continues to take aggressive action that ensures defrauded borrowers get the debt relief they are entitled to, steps up oversight and enforcement to identify colleges that present the greatest risk to students and taxpayers, and holds schools accountable for their actions. But to fully address these issues, Congress must also take action. Congress needs to strengthen both consumer protections for students and accountability for colleges to make sure there are better oversight and enforcement tools in place to prevent colleges from harming students and leaving taxpayers holding the bag. The Department looks forward to working with Congress on such efforts, including:
Congress should strengthen—not roll back—efforts to protect students and taxpayers from waste and fraud.
Congress needs to enact rules that hold colleges and their executives responsible for fraudulent acts, not taxpayers.
Students deserve truth in advertising. Congress needs to ensure students have access to meaningful information about college costs and outcomes and are not bombarded by aggressive and deceptive marketing.
Students deserve borrower protections. Congress should also consider preventative action to protect prospective and current students by ensuring that students are not pressured into enrolling and can get relief when the program they signed up for is not what they were promised.
Congress must protect our service members and veterans by eliminating loopholes that make them targets for aggressive marketing and recruitment by for-profit colleges.
Additional Administration efforts to strengthen consumer protections
The Obama Administration has moved swiftly to take action on some of the most problematic practices in the for-profit industry. The steps the Department announced today are part of the Administration's comprehensive approach to protecting students, eliminating bad actors, and encouraging behavior that improves student outcomes—especially in making it easier to afford and complete a degree.
Too often, students at some of the largest career colleges—many run by for-profit companies—enroll with hopes of finding a good job but instead are left saddled with debt in exchange for a worthless degree or certificate.
For-profit students pay more up front: On average, attending a two-year for-profit institution costs a student four times as much as attending a community college.
They borrow more often: More than 80 percent of students at for-profits borrow federal student loans to pay for college, while less than half of students at public institutions do.
And they default on their student loans at disproportionately high rates: Ultimately, students at for-profit colleges represent only about 11 percent of the total higher education population but 44 percent of all federal student loan defaults, a clear sign that some of these colleges were not preparing students for good jobs.
Today's announcement, coupled with the work over the past six years and upcoming efforts, aim to crack down on these abuses and to strengthen consumer protections. Some of the additional steps the Department has taken and updates on its ongoing work include:
Establishing Regulations to Protect Students from Poor-Performing Career Colleges
Last year, the Department published regulations that will eliminate the flow of federal student aid to career training programs that leave students buried in debt with few opportunities to repay it. Those regulations take effect on July 1, 2015.
To qualify for federal student aid, the law requires that for-profit programs and certificate programs at private non-profit and public institutions prepare students for "gainful employment in a recognized occupation." In May 2015, the U.S. District Court for the Southern District of New York upheld the Department's approach to the gainful employment regulations against a challenge from a for-profit industry trade association, saying the Department's regulations represented "reasoned decisionmaking."
Enforcing the Ban on Incentive Compensation
In 2010, the Obama Administration released a broad set of rules to: strengthen the Department's authority to protect students from aggressive recruiting practices fueled by incentive compensation; take action against colleges engaging in deceptive advertising, marketing and sales practices; and to clarify minimum requirements for states to oversee postsecondary programs and handle student complaints.
Under Secretary Mitchell recently issued a memo encouraging the Office of Federal Student Aid to recover funds from schools that are found to have violated the incentive compensation ban. The memo reverses a more lenient approach initiated in 2002 under the Bush Administration by Education Deputy Secretary Hansen, which both the Education Department Inspector General and the Government Accountability Office found to be a barrier to effective enforcement of the law.
Protecting military service members, veterans and their families
For-profit colleges can obtain no more than 90 percent of their revenue from Title IV federal student aid dollars, but federal education aid from programs like the Department of Defense Tuition Assistance and Department of Veterans Affairs GI Bill Benefits is not counted toward that limit. This has made service members and veterans particularly vulnerable to aggressive marketing and recruitment by for-profit colleges, which often pursue aid targeted to such individuals to make up the required 10 percent of their revenue.
In its FY 2016 budget proposal, the Department proposed to eliminate this loophole by including DOD's tuition assistance and GI Bill benefits into the 90 percent calculation. Now, it is up to Congress to act on this plan and protect our nation's military and their families.
In addition, through Executive Order 13607 (the Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members), the Administration has worked to protect our nation's military families by ensuring that federal military and veterans educational benefits programs are providing service members, veterans, spouses, and other family members with the information, support, and protections they deserve.
Strengthening accountability and oversight across the federal government through a career college task force
The Department has established an interagency task force, led by Under Secretary Ted Mitchell, to help ensure proper accountability for and oversight of career colleges and for-profit institutions. The task force will enhance the enforcement activity at the Department as well as at other federal and state agencies through tighter coordination of their activities and better information sharing to protect students from school practices and policies that are unfair, deceptive, and abusive, and that put taxpayer funds at risk.
The task force is building on efforts already under way among various federal agencies, and includes the Departments of Justice, Defense, Treasury, Veterans Affairs, and Labor, as well as the Consumer Financial Protection Bureau, Federal Trade Commission, Internal Revenue Service, and Securities and Exchange Commission. In addition, the federal partners will continue engaging with state Attorneys General and other stakeholders. The task force gathered for its first official meeting in May.
Given the important responsibilities each of these agencies has and the vital role that states play, this team will leverage their resources and expertise to continue to assist one another in the enforcement of federal criminal and civil laws and regulations, including against institutions and individuals who commit fraud or other criminal activity, thereby making the best use of scarce resources and better protecting the interests of students and taxpayers. And to allow for greater transparency and participation from the higher education community in these efforts—including institutions, consumer advocates and student groups—the task force will periodically organize opportunities for public discussions beginning this summer.
Holding Corinthian Colleges Accountable
In the case of Corinthian Colleges, the Department began tightening oversight of the college's practices and uncovered misrepresentation of its job placement rates. The Department acted to hold Corinthian accountable and ensured students pursuing their education did not face abrupt disruption while enforcement action was being undertaken.
Since that process began in 2014, the Department has taken a series of steps to protect students by requiring the company to sell or close all of its programs, ensuring students received more information about what was happening and their options, requiring expanded refund rights for students, and establishing an independent monitor under the leadership of former U.S. Attorney Patrick Fitzgerald, who ensured Corinthian remained accountable to students. Fitzgerald and his team ensured that students were made aware of their refund options, ensured that Corinthian's use of federal student aid was made in accordance with Department regulations, and ensured that students were provided correct information about the state of Corinthian's campuses and programs.
Most of Corinthian's campuses were acquired by the nonprofit Zenith Education Group, which agreed to provide a number of new consumer protections, such as providing refund and withdrawal opportunities to students in poorly-performing programs, and to take steps to strengthen programs and improve affordability, including by reducing tuition. The sale allowed most Corinthian students to continue pursuing their education and career goals without disruption, and the Department and the Consumer Financial Protection Bureau have worked together to provide more than $480 million in loan forgiveness for borrowers who took out Corinthian's high-cost private student loans.
In April 2015, the Department informed Corinthian that it was being fined about $30 million for misrepresenting job placement rates to current and prospective students in its Heald College system. Since then, Corinthian announced it was closing down the last of its remaining campuses. Recognizing the challenges and uncertainty facing students, the Department continues to provide information directly to Corinthian's students about their federal student aid and their options, including both transferring to another school to continue their education or discharging their loan.
Creating options that make it easier to repay federal student loans
The Department is helping more students manage their student debt through flexible repayment options such as the Pay As You Earn plan (PAYE), which caps student loan payments at 10 percent of a borrower's monthly income. The Department is also acting on President Obama's Student Aid Bill of Rights proposal from earlier this year to support more borrowers to help borrowers enroll and participate in PAYE.
In addition, the Administration is continuing outreach to help borrowers who may be struggling to repay their loans, ensuring that they have the information they need to select the best repayment option for them and avoid default. Thanks to these comprehensive efforts, there are now 3.8 million borrowers enrolled in income-driven repayment plans, up from 760,000 in 2012.
Providing families with clear information to make a smart college choice
The Department has provided a wealth of consumer tools designed to help students and families decide which college is right for them. In addition to requiring institutions to provide accurate information about their graduates' job placement success and the types of employment their graduates obtained, the Administration has created resources such as the College Scorecard and the Financial Aid Shopping Sheet, which can help families compare financial aid packages apples-to-apples. Since the launch of the Shopping Sheet in 2012, more than 3,000 institutions—representing more than two-thirds of the entire undergraduate population—have voluntarily adopted the Shopping Sheet to provide prospective students.
The Department also believes there is more to be done to help increase student access to affordable higher education and to improve student outcomes, and will continue to take action toward that goal.
Fact Sheet: Protecting Students from Abusive Career Colleges
Administration outlines new debt relief process for Corinthian Colleges’ students
JUNE 8, 2015
Over the past six years, the Education Department has taken unprecedented steps to hold career colleges accountable for giving students what they deserve: a high-quality, affordable education that prepares them for their careers. The Department established tougher regulations targeting misleading claims by colleges and incentives that drove sales people to enroll students through dubious promises. The Department has cracked down on bad actors through investigations and enforcement actions. The Department also issued "gainful employment" regulations, which will help ensure that students at career colleges don't end up with debt they cannot repay. The Department will continue to hold institutions accountable in order to improve the value of their programs, protect students from abusive colleges, and safeguard the interests of taxpayers.
"While some for-profit career colleges play a critical role in helping students succeed in their educational and training pursuits, too often, bad actors in the sector have preyed on some of our nation's most vulnerable students and taken advantage of hard-working Americans who simply want a better future for themselves and their families," said U.S. Secretary of Education Arne Duncan. "I am committed to ensuring that every student has access to an education that will put them on solid footing for a career, and I will hold schools accountable for practices that undercut their students and taxpayers. Where students have been harmed by fraudulent practices, I am fully committed to making sure students receive every penny of relief they are entitled to under law. We will make this process as easy as possible for them, including by considering claims in groups wherever possible, and hold institutions accountable."
Today, the Education Department is announcing new steps in this work, particularly to address the concerns of students who attended schools owned by Corinthian Colleges Inc.
How debt relief will work for Corinthian students
The Department has worked to rapidly develop a streamlined process for getting debt relief to Corinthian students. The Department's aim is to make the process of forgiving loans fair, clear and efficient—and to ensure that students who are eligible to participate know about this opportunity.
Some Corinthian schools closed down, while others were sold but remain open under different ownership. The announcements today are for:
Corinthian students whose schools have closed down.
Corinthian students who believe they were victims of fraud, regardless of whether their school closed.
Helping Corinthian students whose schools have closed
In general, when a college closes, students are eligible to discharge their federal student loans if they were attending when the school closed or who withdrew from the school within 120 days of the closing date. Given the unique circumstances for former Corinthian students, the Department is expanding eligibility for students to apply for a closed school loan discharge, extending the window of time back to June 20, 2014, to capture students who attended the now-closed campuses after Corinthian entered into an agreement with the Department to terminate Corinthian's ownership of its schools.
The Department's Federal Student Aid office has been and will continue to contact potentially impacted student borrowers to provide clear information about their options, including loan discharge applications, in addition to providing enhanced information on the Department's website.
In addition, the Department has worked with a group of organizations and institutions—including those within the California State University system, led by CSU Fullerton and C-REAL, Beyond 12, and the National Association of Student Financial Aid Administrators and its California and Western region affiliates—as they have established an independent volunteer advising corps that will help students navigate their options. The resource is available at www.NextStepsEDU.org, where students can sign up and be connected to a volunteer advisor from the field who can help students determine which option is best suited to their situation. (Note that as the Department is not managing this initiative, it cannot endorse any advice that a student may receive.)
Helping students who believe they were victims of fraud, regardless of whether their school closed
Provisions in the law called "defense to repayment" or "borrower's defense" allow borrowers to seek loan forgiveness if they believe they were defrauded by their college under state law. This provision has rarely been used in the past. Now, the Department is taking unprecedented action to create a streamlined process that is fair to students who may have been victims of fraud and that holds colleges accountable to taxpayers.
In taking these actions, as Under Secretary Ted Mitchell outlined in a blog post today, the Department is committed to helping support affected students. Given the pressing need presented by the unique situation for students who attended colleges owned by Corinthian, the Department is today announcing specific steps for students who attended those campuses, as well as outlining broader processes for all students that will be established moving forward.
Extending debt relief eligibility to groups of students wherever possible: In order to receive loan forgiveness under a "defense to repayment," students must assert that a college's actions violated state law and affected their provision of educational services or their federal loans. Wherever possible, the Department will rely on evidence established by appropriate authorities in considering whether whole groups of students (for example, an entire academic program at a specific campus during a certain time frame) are eligible for borrower defense relief. This will simplify and expedite the relief process, reducing the burden on borrowers.
For example, after analyzing the Department's findings in its investigation of Heald College and relevant California law, the Department has determined that evidence of misrepresentation exists for students enrolled in a large majority of programs offered at Heald College campuses between 2010 and 2015. Specifically, the Department has determined that students who relied on misrepresentations found in published job placement rates for many Heald programs qualify to have their federal direct student loans discharged. Students can have their loans forgiven and receive refunds for amounts paid based on a simple attestation. More information about this process—including the attestation form—is available on studentaid.gov/Corinthian. Additional details will be posted on the website in the coming weeks.
Providing loan forbearance and pausing payments: All former Corinthian students who apply for borrower defense have the option of having their federal loans immediately placed into forbearance, which stops their monthly payments to ensure they do not fall behind or default on their loans while the Department works to resolve the claim. For such students who are already in default on their loans, the Department will immediately halt collection activity. Students will receive a notification from their loan servicer to confirm the change in status of their loans.
Appointing a Special Master dedicated to borrower defense issues: The Department will appoint a Special Master to oversee borrower defense issues and charge that person with ensuring the process is simple, streamlined, and fair to students and taxpayers. While the specific steps announced today are for former Corinthian students, the Special Master will help develop a broader system that will support students at other institutions who believe they have a defense to repayment. The Special Master will be named in the coming weeks.
Establishing a streamlined process: As noted above, the Department will work to provide debt relief to groups of students wherever possible, as we already have determined is possible for many Heald College students. For other Corinthian students, with the help of the Special Master, the Department will create a simple application for debt relief, which borrowers can complete online or by email or postal mail. Starting today, former Corinthian students can visit studentaid.gov/Corinthian to learn more, and in the coming weeks, the Department will have an online form available for these borrowers. In addition, students can call a special toll-free borrower defense hotline at (855) 279-6207 to ask about their options.
Building a better system for debt relief for the future: The Department will develop new regulations to clarify and streamline loan forgiveness under the defense to repayment provision, while maintaining or enhancing current consumer protection standards and strengthening those provisions that hold colleges accountable for actions that result in loan discharges. That process will begin later this year and will not slow down the loan discharge process for current applicants.
Calling on Congress to do its part
The Department continues to take aggressive action that ensures defrauded borrowers get the debt relief they are entitled to, steps up oversight and enforcement to identify colleges that present the greatest risk to students and taxpayers, and holds schools accountable for their actions. But to fully address these issues, Congress must also take action. Congress needs to strengthen both consumer protections for students and accountability for colleges to make sure there are better oversight and enforcement tools in place to prevent colleges from harming students and leaving taxpayers holding the bag. The Department looks forward to working with Congress on such efforts, including:
Congress should strengthen—not roll back—efforts to protect students and taxpayers from waste and fraud.
Congress needs to enact rules that hold colleges and their executives responsible for fraudulent acts, not taxpayers.
Students deserve truth in advertising. Congress needs to ensure students have access to meaningful information about college costs and outcomes and are not bombarded by aggressive and deceptive marketing.
Students deserve borrower protections. Congress should also consider preventative action to protect prospective and current students by ensuring that students are not pressured into enrolling and can get relief when the program they signed up for is not what they were promised.
Congress must protect our service members and veterans by eliminating loopholes that make them targets for aggressive marketing and recruitment by for-profit colleges.
Additional Administration efforts to strengthen consumer protections
The Obama Administration has moved swiftly to take action on some of the most problematic practices in the for-profit industry. The steps the Department announced today are part of the Administration's comprehensive approach to protecting students, eliminating bad actors, and encouraging behavior that improves student outcomes—especially in making it easier to afford and complete a degree.
Too often, students at some of the largest career colleges—many run by for-profit companies—enroll with hopes of finding a good job but instead are left saddled with debt in exchange for a worthless degree or certificate.
For-profit students pay more up front: On average, attending a two-year for-profit institution costs a student four times as much as attending a community college.
They borrow more often: More than 80 percent of students at for-profits borrow federal student loans to pay for college, while less than half of students at public institutions do.
And they default on their student loans at disproportionately high rates: Ultimately, students at for-profit colleges represent only about 11 percent of the total higher education population but 44 percent of all federal student loan defaults, a clear sign that some of these colleges were not preparing students for good jobs.
Today's announcement, coupled with the work over the past six years and upcoming efforts, aim to crack down on these abuses and to strengthen consumer protections. Some of the additional steps the Department has taken and updates on its ongoing work include:
Establishing Regulations to Protect Students from Poor-Performing Career Colleges
Last year, the Department published regulations that will eliminate the flow of federal student aid to career training programs that leave students buried in debt with few opportunities to repay it. Those regulations take effect on July 1, 2015.
To qualify for federal student aid, the law requires that for-profit programs and certificate programs at private non-profit and public institutions prepare students for "gainful employment in a recognized occupation." In May 2015, the U.S. District Court for the Southern District of New York upheld the Department's approach to the gainful employment regulations against a challenge from a for-profit industry trade association, saying the Department's regulations represented "reasoned decisionmaking."
Enforcing the Ban on Incentive Compensation
In 2010, the Obama Administration released a broad set of rules to: strengthen the Department's authority to protect students from aggressive recruiting practices fueled by incentive compensation; take action against colleges engaging in deceptive advertising, marketing and sales practices; and to clarify minimum requirements for states to oversee postsecondary programs and handle student complaints.
Under Secretary Mitchell recently issued a memo encouraging the Office of Federal Student Aid to recover funds from schools that are found to have violated the incentive compensation ban. The memo reverses a more lenient approach initiated in 2002 under the Bush Administration by Education Deputy Secretary Hansen, which both the Education Department Inspector General and the Government Accountability Office found to be a barrier to effective enforcement of the law.
Protecting military service members, veterans and their families
For-profit colleges can obtain no more than 90 percent of their revenue from Title IV federal student aid dollars, but federal education aid from programs like the Department of Defense Tuition Assistance and Department of Veterans Affairs GI Bill Benefits is not counted toward that limit. This has made service members and veterans particularly vulnerable to aggressive marketing and recruitment by for-profit colleges, which often pursue aid targeted to such individuals to make up the required 10 percent of their revenue.
In its FY 2016 budget proposal, the Department proposed to eliminate this loophole by including DOD's tuition assistance and GI Bill benefits into the 90 percent calculation. Now, it is up to Congress to act on this plan and protect our nation's military and their families.
In addition, through Executive Order 13607 (the Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members), the Administration has worked to protect our nation's military families by ensuring that federal military and veterans educational benefits programs are providing service members, veterans, spouses, and other family members with the information, support, and protections they deserve.
Strengthening accountability and oversight across the federal government through a career college task force
The Department has established an interagency task force, led by Under Secretary Ted Mitchell, to help ensure proper accountability for and oversight of career colleges and for-profit institutions. The task force will enhance the enforcement activity at the Department as well as at other federal and state agencies through tighter coordination of their activities and better information sharing to protect students from school practices and policies that are unfair, deceptive, and abusive, and that put taxpayer funds at risk.
The task force is building on efforts already under way among various federal agencies, and includes the Departments of Justice, Defense, Treasury, Veterans Affairs, and Labor, as well as the Consumer Financial Protection Bureau, Federal Trade Commission, Internal Revenue Service, and Securities and Exchange Commission. In addition, the federal partners will continue engaging with state Attorneys General and other stakeholders. The task force gathered for its first official meeting in May.
Given the important responsibilities each of these agencies has and the vital role that states play, this team will leverage their resources and expertise to continue to assist one another in the enforcement of federal criminal and civil laws and regulations, including against institutions and individuals who commit fraud or other criminal activity, thereby making the best use of scarce resources and better protecting the interests of students and taxpayers. And to allow for greater transparency and participation from the higher education community in these efforts—including institutions, consumer advocates and student groups—the task force will periodically organize opportunities for public discussions beginning this summer.
Holding Corinthian Colleges Accountable
In the case of Corinthian Colleges, the Department began tightening oversight of the college's practices and uncovered misrepresentation of its job placement rates. The Department acted to hold Corinthian accountable and ensured students pursuing their education did not face abrupt disruption while enforcement action was being undertaken.
Since that process began in 2014, the Department has taken a series of steps to protect students by requiring the company to sell or close all of its programs, ensuring students received more information about what was happening and their options, requiring expanded refund rights for students, and establishing an independent monitor under the leadership of former U.S. Attorney Patrick Fitzgerald, who ensured Corinthian remained accountable to students. Fitzgerald and his team ensured that students were made aware of their refund options, ensured that Corinthian's use of federal student aid was made in accordance with Department regulations, and ensured that students were provided correct information about the state of Corinthian's campuses and programs.
Most of Corinthian's campuses were acquired by the nonprofit Zenith Education Group, which agreed to provide a number of new consumer protections, such as providing refund and withdrawal opportunities to students in poorly-performing programs, and to take steps to strengthen programs and improve affordability, including by reducing tuition. The sale allowed most Corinthian students to continue pursuing their education and career goals without disruption, and the Department and the Consumer Financial Protection Bureau have worked together to provide more than $480 million in loan forgiveness for borrowers who took out Corinthian's high-cost private student loans.
In April 2015, the Department informed Corinthian that it was being fined about $30 million for misrepresenting job placement rates to current and prospective students in its Heald College system. Since then, Corinthian announced it was closing down the last of its remaining campuses. Recognizing the challenges and uncertainty facing students, the Department continues to provide information directly to Corinthian's students about their federal student aid and their options, including both transferring to another school to continue their education or discharging their loan.
Creating options that make it easier to repay federal student loans
The Department is helping more students manage their student debt through flexible repayment options such as the Pay As You Earn plan (PAYE), which caps student loan payments at 10 percent of a borrower's monthly income. The Department is also acting on President Obama's Student Aid Bill of Rights proposal from earlier this year to support more borrowers to help borrowers enroll and participate in PAYE.
In addition, the Administration is continuing outreach to help borrowers who may be struggling to repay their loans, ensuring that they have the information they need to select the best repayment option for them and avoid default. Thanks to these comprehensive efforts, there are now 3.8 million borrowers enrolled in income-driven repayment plans, up from 760,000 in 2012.
Providing families with clear information to make a smart college choice
The Department has provided a wealth of consumer tools designed to help students and families decide which college is right for them. In addition to requiring institutions to provide accurate information about their graduates' job placement success and the types of employment their graduates obtained, the Administration has created resources such as the College Scorecard and the Financial Aid Shopping Sheet, which can help families compare financial aid packages apples-to-apples. Since the launch of the Shopping Sheet in 2012, more than 3,000 institutions—representing more than two-thirds of the entire undergraduate population—have voluntarily adopted the Shopping Sheet to provide prospective students.
The Department also believes there is more to be done to help increase student access to affordable higher education and to improve student outcomes, and will continue to take action toward that goal.
Monday, June 8, 2015
DOD REPORTS ON ISIL OIL INFRASTRUCTURE DESTRUCTION
FROM: U.S. DEFENSE DEPARTMENT
Airstrikes Destroy ISIL Oil Infrastructure, Tactical Vehicles
From a Combined Joint Task Force Operation Inherent Resolve News Release
SOUTHWEST ASIA, June 8, 2015 – U.S. and coalition military forces have continued to attack Islamic State of Iraq and the Levant terrorists in Syria and Iraq, Combined Joint Task Force Operation Inherent Resolve officials reported today.
Officials reported details of the latest strikes, which took place between 8 a.m. yesterday and 8 a.m. today, local time, noting that assessments of results are based on initial reports.
Airstrikes in Syria
Bomber, attack and fighter aircraft conducted seven airstrikes in Syria:
-- Near Dayr Az Zawr, two airstrikes struck two ISIL crude oil collection points.
-- Near Kobani, five airstrikes struck one large and two small ISIL tactical units, destroying seven ISIL fighting positions, two ISIL vehicles and an ISIL improvised explosive device facility.
Airstrikes in Iraq
Attack, bomber, fighter and remotely piloted aircraft conducted 14 airstrikes in Iraq, approved by the Iraqi Ministry of Defense:
-- Near Baghdadi, two airstrikes struck two ISIL tactical units, destroying an ISIL tanker and an ISIL vehicle.
-- Near Beiji, three airstrikes destroyed two ISIL staging positions and seven ISIL vehicles.
-- Near Hit, one airstrike struck an ISIL tactical unit, destroying an ISIL checkpoint.
-- Near Makhmur, one airstrike struck two ISIL mortar firing positions.
-- Near Mosul, three airstrikes struck an ISIL tactical unit and an ISIL staging area, destroying two ISIL vehicles.
-- Near Sinjar, two airstrikes struck an ISIL mortar system, destroying two ISIL buildings, an ISIL rocket-propelled grenade and an ISIL heavy machine gun.
-- Near Tal Afar, two airstrikes struck an ISIL mortar firing position, destroying an ISIL tunnel entrance.
Part of Operation Inherent Resolve
The strikes were conducted as part of Operation Inherent Resolve, the operation to eliminate the ISIL terrorist group and the threat they pose to Iraq, Syria, the region, and the wider international community. The destruction of ISIL targets in Syria and Iraq further limits the terrorist group's ability to project terror and conduct operations, officials said.
Coalition nations conducting airstrikes in Iraq include the United States, Australia, Belgium, Canada, Denmark, France, Jordan, the Netherlands and the United Kingdom. Coalition nations conducting airstrikes in Syria include the United States, Bahrain, Canada, Jordan, Saudi Arabia and the United Arab Emirates.
Airstrikes Destroy ISIL Oil Infrastructure, Tactical Vehicles
From a Combined Joint Task Force Operation Inherent Resolve News Release
SOUTHWEST ASIA, June 8, 2015 – U.S. and coalition military forces have continued to attack Islamic State of Iraq and the Levant terrorists in Syria and Iraq, Combined Joint Task Force Operation Inherent Resolve officials reported today.
Officials reported details of the latest strikes, which took place between 8 a.m. yesterday and 8 a.m. today, local time, noting that assessments of results are based on initial reports.
Airstrikes in Syria
Bomber, attack and fighter aircraft conducted seven airstrikes in Syria:
-- Near Dayr Az Zawr, two airstrikes struck two ISIL crude oil collection points.
-- Near Kobani, five airstrikes struck one large and two small ISIL tactical units, destroying seven ISIL fighting positions, two ISIL vehicles and an ISIL improvised explosive device facility.
Airstrikes in Iraq
Attack, bomber, fighter and remotely piloted aircraft conducted 14 airstrikes in Iraq, approved by the Iraqi Ministry of Defense:
-- Near Baghdadi, two airstrikes struck two ISIL tactical units, destroying an ISIL tanker and an ISIL vehicle.
-- Near Beiji, three airstrikes destroyed two ISIL staging positions and seven ISIL vehicles.
-- Near Hit, one airstrike struck an ISIL tactical unit, destroying an ISIL checkpoint.
-- Near Makhmur, one airstrike struck two ISIL mortar firing positions.
-- Near Mosul, three airstrikes struck an ISIL tactical unit and an ISIL staging area, destroying two ISIL vehicles.
-- Near Sinjar, two airstrikes struck an ISIL mortar system, destroying two ISIL buildings, an ISIL rocket-propelled grenade and an ISIL heavy machine gun.
-- Near Tal Afar, two airstrikes struck an ISIL mortar firing position, destroying an ISIL tunnel entrance.
Part of Operation Inherent Resolve
The strikes were conducted as part of Operation Inherent Resolve, the operation to eliminate the ISIL terrorist group and the threat they pose to Iraq, Syria, the region, and the wider international community. The destruction of ISIL targets in Syria and Iraq further limits the terrorist group's ability to project terror and conduct operations, officials said.
Coalition nations conducting airstrikes in Iraq include the United States, Australia, Belgium, Canada, Denmark, France, Jordan, the Netherlands and the United Kingdom. Coalition nations conducting airstrikes in Syria include the United States, Bahrain, Canada, Jordan, Saudi Arabia and the United Arab Emirates.
U.S. CONGRATULATES PEOPLE OF PORTUGAL ON PORTUGAL DAY
FROM: U.S. STATE DEPARTMENT
On the Occasion of Portugal Day
Press Statement
John Kerry
Secretary of State
Washington, DC
June 8, 2015
On behalf of President Obama and the people of the United States, I congratulate the Portuguese people as you celebrate Portugal Day on June 10.
Since the founding of the United States over two centuries ago, Portugal has been an important partner and ally. The relationship between our two countries, which spans the range of cultural, economic, and security ties, has strengthened the Atlantic community. Our two nations share a commitment to human rights, liberty, and democracy.
Portugal plays an important role in global affairs and international security through its commitments to NATO, the United Nations, and other multilateral organizations. The United States is proud to work with Portugal to defend freedom throughout the world. I enjoyed meeting with Foreign Minister Machete in April and look forward to continuing our work on important global issues in the year to come.
I wish the Portuguese people joy and continued success this Portugal Day as you celebrate your rich culture, history, and the life and work of Luís de Camões.
On the Occasion of Portugal Day
Press Statement
John Kerry
Secretary of State
Washington, DC
June 8, 2015
On behalf of President Obama and the people of the United States, I congratulate the Portuguese people as you celebrate Portugal Day on June 10.
Since the founding of the United States over two centuries ago, Portugal has been an important partner and ally. The relationship between our two countries, which spans the range of cultural, economic, and security ties, has strengthened the Atlantic community. Our two nations share a commitment to human rights, liberty, and democracy.
Portugal plays an important role in global affairs and international security through its commitments to NATO, the United Nations, and other multilateral organizations. The United States is proud to work with Portugal to defend freedom throughout the world. I enjoyed meeting with Foreign Minister Machete in April and look forward to continuing our work on important global issues in the year to come.
I wish the Portuguese people joy and continued success this Portugal Day as you celebrate your rich culture, history, and the life and work of Luís de Camões.
SOLDIERS TRAIN AT CHEMICAL, BIOLOGICAL, RADIOLOGICAL AND NUCLEAR DEFENSE CHAMBER
FROM: U.S. DEFENSE DEPARTMENT
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| Soldiers train chaplain candidates at the chemical, biological, radiological and nuclear defense chamber on Fort Jackson, S.C., May 27, 2015. The soldiers are chaplain candidates assigned to 104th Training Division. U.S. Army photo by Sgt. 1st Class Brian Hamilton. |
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| A soldier prepares the CS gas, which is similar to tear gas, for the chaplain candidates at the chemical, biological, radiological and nuclear defense chamber on Fort Jackson, S.C., May 27, 2015. U.S. Army photo by Sgt. 1st Class Brian Hamilton. |
LABOR SECRETARY PEREZ LISTS 5 THINGS YOU SHOULD KNOW ABOUT EMPLOYMENT NUMBERS
FROM: U.S. LABOR DEPARTMENT
Five things US Labor Secretary Thomas E. Perez says
you should know about the May employment numbers
WASHINGTON — With the release of the May 2015 Employment Situation Report today, U.S. Secretary of Labor Thomas E. Perez says there are five things you should know about its numbers:
Record streak continues: This is the best jobs report of 2015 so far. The economy added 280,000 jobs in May, bringing us to 12.6 million private-sector jobs over the last 63 months.
Low unemployment: The unemployment rate was essentially unchanged at 5.5 percent. It's the ninth straight month under 6 percent after 73 straight months above 6 percent. Over the last year, there has been a significant decrease in the unemployment rate for every demographic group except teens.
Meaningful progress on wages: Average hourly earnings for employees on private payrolls rose by 8 cents in May. The 2.3 percent increase from last May is the largest year-over-year increase since August 2013.
Long-term unemployment trending down: 28.6 percent of the unemployed have been out of work for 27 weeks or more — that's the lowest rate in six years. There are 849,000 fewer long-term unemployed people than a year ago.
The unfinished business: The recovery continues apace with strong and steady job growth. But the wind at our back isn't propelling everyone forward. From education and skills development to minimum wage and paid leave, the Obama administration continues to work every day to extend more opportunity to more people. We hope Congress will join us in our efforts to reward hard work and give everyone the chance to punch their ticket to the middle class.
Five things US Labor Secretary Thomas E. Perez says
you should know about the May employment numbers
WASHINGTON — With the release of the May 2015 Employment Situation Report today, U.S. Secretary of Labor Thomas E. Perez says there are five things you should know about its numbers:
Record streak continues: This is the best jobs report of 2015 so far. The economy added 280,000 jobs in May, bringing us to 12.6 million private-sector jobs over the last 63 months.
Low unemployment: The unemployment rate was essentially unchanged at 5.5 percent. It's the ninth straight month under 6 percent after 73 straight months above 6 percent. Over the last year, there has been a significant decrease in the unemployment rate for every demographic group except teens.
Meaningful progress on wages: Average hourly earnings for employees on private payrolls rose by 8 cents in May. The 2.3 percent increase from last May is the largest year-over-year increase since August 2013.
Long-term unemployment trending down: 28.6 percent of the unemployed have been out of work for 27 weeks or more — that's the lowest rate in six years. There are 849,000 fewer long-term unemployed people than a year ago.
The unfinished business: The recovery continues apace with strong and steady job growth. But the wind at our back isn't propelling everyone forward. From education and skills development to minimum wage and paid leave, the Obama administration continues to work every day to extend more opportunity to more people. We hope Congress will join us in our efforts to reward hard work and give everyone the chance to punch their ticket to the middle class.
TEXAN ARRESTED FOR ATTEMPTING TO JOIN THE TERRORIST GROUP ISIL
FROM: U.S. JUSTICE DEPARTMENT
Friday, June 5, 2015
Texas Man Sentenced to 82 Months in Prison for Attempting to Travel to Syria to Join ISIL
Michael Todd Wolfe aka Faruq, 24, of Austin, Texas, was sentenced this afternoon by U.S. District Court Judge Sam Sparks of the Western District of Texas to serve 82 months in federal prison for attempting to provide material support to a designated foreign terrorist organization, announced Assistant Attorney General for National Security John Carlin, Acting U.S. Attorney Richard L. Durbin Jr. for the Western District of Texas and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division.
In June 2014, Wolfe pleaded guilty to the charge, admitting that from August 2013 to June 17, 2014, he planned to travel to the Middle East to provide material support to the Islamic State of Iraq and the Levant (ISIL). Wolfe previously acknowledged that he applied for and acquired a U.S. passport, participated in physical fitness training, practiced military maneuvers and made efforts to conceal his communications about his plans to travel overseas to engage in violent jihad. Wolfe also purchased airline tickets so that he could travel to Europe to meet an FBI undercover employee, whom the defendant then believed would facilitate travel to Syria through Turkey. In furtherance of his attempt to provide material support to ISIL, Wolfe travelled to Houston and was apprehended on June 17, 2014, on the jet-way, as he attempted to board a flight to Toronto, Canada. His ticketed itinerary had him traveling through Iceland and arriving in Copenhagen, Denmark, on June 18, 2014. He then planned to make his way to Syria to join with ISIL and engage in the armed conflict. Wolfe has remained in federal custody since his arrest.
The case was investigated by the agencies comprising the Central Texas JTTF, which include the FBI; Internal Revenue Service-Criminal Investigation; U.S. Citizenship and Immigration Services; U.S. Army Intelligence; Austin Police Department; Round Rock, Texas, Police Department; Killeen, Texas, Police Department; University of Texas Police Department; Travis County, Texas Sheriff's Office; Texas Department of Public Safety, Office of the Texas Attorney General and the Texas Alcoholic Beverage Commission.
The case was prosecuted by Assistant U.S. Attorneys Gregg N. Sofer and Michael Galdo of the Western District of Texas, and Trial Attorneys Josh Parecki and Michael Dittoe of the National Security Division’s Counterterrorism Section.
Friday, June 5, 2015
Texas Man Sentenced to 82 Months in Prison for Attempting to Travel to Syria to Join ISIL
Michael Todd Wolfe aka Faruq, 24, of Austin, Texas, was sentenced this afternoon by U.S. District Court Judge Sam Sparks of the Western District of Texas to serve 82 months in federal prison for attempting to provide material support to a designated foreign terrorist organization, announced Assistant Attorney General for National Security John Carlin, Acting U.S. Attorney Richard L. Durbin Jr. for the Western District of Texas and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division.
In June 2014, Wolfe pleaded guilty to the charge, admitting that from August 2013 to June 17, 2014, he planned to travel to the Middle East to provide material support to the Islamic State of Iraq and the Levant (ISIL). Wolfe previously acknowledged that he applied for and acquired a U.S. passport, participated in physical fitness training, practiced military maneuvers and made efforts to conceal his communications about his plans to travel overseas to engage in violent jihad. Wolfe also purchased airline tickets so that he could travel to Europe to meet an FBI undercover employee, whom the defendant then believed would facilitate travel to Syria through Turkey. In furtherance of his attempt to provide material support to ISIL, Wolfe travelled to Houston and was apprehended on June 17, 2014, on the jet-way, as he attempted to board a flight to Toronto, Canada. His ticketed itinerary had him traveling through Iceland and arriving in Copenhagen, Denmark, on June 18, 2014. He then planned to make his way to Syria to join with ISIL and engage in the armed conflict. Wolfe has remained in federal custody since his arrest.
The case was investigated by the agencies comprising the Central Texas JTTF, which include the FBI; Internal Revenue Service-Criminal Investigation; U.S. Citizenship and Immigration Services; U.S. Army Intelligence; Austin Police Department; Round Rock, Texas, Police Department; Killeen, Texas, Police Department; University of Texas Police Department; Travis County, Texas Sheriff's Office; Texas Department of Public Safety, Office of the Texas Attorney General and the Texas Alcoholic Beverage Commission.
The case was prosecuted by Assistant U.S. Attorneys Gregg N. Sofer and Michael Galdo of the Western District of Texas, and Trial Attorneys Josh Parecki and Michael Dittoe of the National Security Division’s Counterterrorism Section.
BUSINESSMAN ACCUSED OF BRIBING BANK OFFICIALS, SENTENCED TO PRISON
FROM: U.S. JUSTICE DEPARTMENT
Thursday, June 4, 2015
Kentucky Businessman Sentenced in New York Federal Court for $53 Million Tax Scheme and Massive Fraud that Involved Bribery of Bank Officials
Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division and U.S. Attorney Preet Bharara of the Southern District of New York announced that a Kentucky businessman was sentenced today to serve 12 years in prison.
Wilbur Anthony Huff, 53, of Caneyville and Louisville, Kentucky, was also ordered to pay more than $108 million in restitution for committing various tax crimes that caused more than $50 million in losses to the Internal Revenue Service (IRS), and a massive fraud that involved the bribery of bank officials, the fraudulent purchase of an insurance company, and the defrauding of insurance regulators and an investment bank. In December 2014, Huff pleaded guilty before U.S. District Judge Noemi Reice Buchwald of the Southern District of New York, who imposed today’s sentence.
“The department is committed to vigorously pursuing and prosecuting those individuals who violate the employment tax laws of the United States,” said Acting Assistant Attorney General Ciraolo. “Today’s significant prison sentence sends a loud and clear message to those engaged in such criminal conduct, including owners and operators of professional employer organizations like Mr. Huff, who steal employment taxes collected from their business clients to line their own pockets, instead of paying over those funds to the IRS.”
“Anthony Huff and his co-conspirators stole millions of dollars from taxpayers and engaged in extensive frauds, all in the pursuit of additional property, luxury cars and the like,” said U.S. Attorney Bharara. “His crimes have earned him 12 years in prison. I would like to thank our law enforcement partners for their assistance on this case.”
According to the information, plea agreement, sentencing submissions and statements made during court proceedings:
Huff was a businessman who controlled numerous entities located throughout the United States (Huff-Controlled Entities). Huff controlled the companies and their finances, using them to orchestrate a $53 million fraud on the IRS and other schemes that spanned four states, involving tax violations, bank bribery, fraud on bank regulators and the fraudulent purchase of an insurance company. As part of his crimes, Huff concealed his control of the Huff-Controlled Entities by installing other individuals to oversee the companies’ day-to-day functions and to serve as the companies’ titular owners, directors, or officers. Huff also maintained a corrupt relationship with Park Avenue Bank and Charles J. Antonucci Sr., the bank’s president and chief executive officer, and Matthew L. Morris, the bank’s senior vice president.
Tax Crimes
From 2008 to 2010, HUFF controlled O2HR, a professional employer organization (PEO) located in Tampa, Florida. Like other PEOs, O2HR was paid to manage the payroll, tax and workers’ compensation insurance obligations of its client companies. However, instead of paying $53 million in taxes that O2HR’s clients owed the IRS and $5 million to Providence Property and Casualty Insurance Company (Providence P&C) – an insurance company based in Oklahoma – for workers’ compensation coverage expenses for O2HR clients, Huff stole the money that his client companies had paid O2HR for those purposes. Among other things, Huff diverted millions of dollars from O2HR to fund his investments in unrelated business ventures and pay his family members’ personal expenses. The expenses included mortgages on Huff’s homes, rent payments for his children’s apartments, staff and equipment for Huff’s farm, designer clothing, jewelry and luxury cars.
Conspiracy to Commit Bank Bribery, Defraud Bank Regulators and Fraudulently Purchase an Oklahoma Insurance Company
From 2007 through 2010, Huff engaged in a massive multi-faceted conspiracy in which he schemed to bribe executives of Park Avenue Bank, defraud bank regulators and the board and shareholders of a publicly-traded company, and fraudulently purchase an Oklahoma insurance company. As described in more detail below, Huff paid bribes totaling hundreds of thousands of dollars in cash and other items to Morris and Antonucci in exchange for their favorable treatment at Park Avenue Bank.
As part of the corrupt relationship between Huff and the bank executives, Huff, Morris, Antonucci and others conspired to defraud various entities and regulators during the relevant time period. Specifically, Huff conspired with Morris and Antonucci to falsely bolster Park Avenue Bank’s capital by orchestrating a series of fraudulent transactions to make it appear that Park Avenue Bank had received an outside infusion of $6.5 million, and engaged in a series of further fraudulent actions to conceal from bank regulators the true source of the funds.
Huff further conspired with Morris, Antonucci and others to defraud Oklahoma insurance regulators and others by making material misrepresentations and omissions regarding the source of $37.5 million used to purchase Providence Property and Casualty Insurance Company, an insurance company based in Oklahoma that provided workers’ compensation insurance for O2HR’s clients and to whom O2HR owed a significant debt.
Bribery of Park Avenue Bank Executives
From 2007 to 2009, Huff paid Morris and Antonucci at least $400,000 in exchange for which they: provided Huff with fraudulent letters of credit obligating Park Avenue Bank to pay $1.75 million to an investor in one of Huff’s businesses if Huff failed to pay the investor back himself; allowed the Huff-Controlled Entities to accrue $9 million in overdrafts; facilitated intra-bank transfers in furtherance of Huff’s fraud; and fraudulently caused Park Avenue Bank to issue at least $4.5 million in loans to the Huff-Controlled Entities.
Fraud on Bank Regulators and a Publicly-Traded Company
From 2008 to 2009, Huff, Morris and Antonucci engaged in a scheme to prevent Park Avenue Bank from being designated as “undercapitalized” by regulators – a designation that would prohibit the bank from engaging in certain types of banking transactions and that would subject the bank to a range of potential enforcement actions by regulators. Specifically, they engaged in a series of deceptive, “round-trip” financial transactions to make it appear that Antonucci had infused the bank with $6.5 million in new capital when, in actuality, the $6.5 million was part of the bank’s pre-existing capital. Huff, Morris and Antonucci funneled the $6.5 million from the bank through accounts controlled by Huff to Antonucci. This was done to make it appear as though Antonucci was helping to stabilize the bank’s capitalization problem, so that the bank could continue engaging in certain banking transactions that it would otherwise have been prohibited from doing, and to put the bank in a better posture to receive $11 million from the Troubled Asset Relief Program. To conceal their unlawful financial maneuvering, Huff created, or directed the creation of, documents falsely suggesting that Antonucci had earned the $6.5 million through a bogus transaction involving another company Antonucci owned. Huff, Morris and Antonucci further concealed their scheme by stealing $2.3 million from General Employment Enterprises Inc., a publicly-traded temporary staffing company, in order to pay Park Avenue Bank back for monies used in connection with the $6.5 million transaction.
Fraud on Insurance Regulators and the Investment Firm
From July 2008 to November 2009, Huff, Morris, Antonucci and Allen Reichman, an executive at an investment bank and financial services company headquartered in New York City (the Investment Firm), conspired to defraud Oklahoma insurance regulators into allowing Antonucci to purchase the assets of Providence P&C and defraud the Investment Firm into providing a $30 million loan to finance the purchase. Specifically, Huff and Antonucci devised a scheme in which Antonucci would purchase Providence P&C’s assets by obtaining a $30 million loan from the Investment Firm, which used Providence P&C’s own assets as collateral for the loan. However, because Oklahoma insurance regulators had to approve any sale of Providence P&C, and because Oklahoma law forbade the use of Providence P&C’s assets as collateral for such a loan, Huff, Morris, Antonucci and Reichman made and conspired to make a number of material misstatements and material omissions to the Investment Firm and Oklahoma insurance regulators concerning the true nature of the financing for Antonucci’s purchase of Providence P&C. Among other things, Reichman directed Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan, and Huff, Morris and Antonucci conspired to falsely represent to Oklahoma insurance regulators that Park Avenue Bank – not the Investment Firm – was funding the purchase of Providence P&C.
After deceiving Oklahoma regulators into approving the sale of Providence P&C, Huff took $4 million of the company’s assets, which he used to continue the scheme to defraud O2HR’s clients. Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after Huff, Morris and Antonucci had pilfered its remaining assets.
* * *
In addition to his prison sentence, Huff was sentenced to three years of supervised release, and ordered to forfeit $10.8 million to the United States and pay a total of more than $108 million in restitution to victims of his crimes, including, among others, the Federal Deposit Insurance Corporation (FDIC) and the IRS.
In imposing today’s sentence, Judge Buchwald said Huff’s crimes were “truly staggering” and “eye popping.” Judge Buchwald described Huff’s conduct, which was preceded by a federal conviction and failure to pay millions in civil judgments, as “a living example” of “chutzpah,” which she defined as “shameless audacity and unmitigated gall.”
Morris and Reichman pleaded guilty for their roles in the above-described offenses on Oct. 17, 2013, and Feb. 20, 2015, respectively. Reichman is scheduled to be sentenced before Judge Buchwald on July 15, and Morris is scheduled to be sentenced before Judge Buchwald on Aug. 19.
Antonucci pleaded guilty to his role in the crimes described above on Oct. 8, 2010, and is scheduled to be sentenced on Aug. 20, also before Judge Buchwald.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Bharara thanked the Special Inspector General for the Troubled Asset Relief Program, the FBI, IRS-Criminal Investigation, the New York State Department of Financial Services, Immigration and Customs Enforcement’s Homeland Security Investigations, and the Office of Inspector General of the FDIC, for their work in the investigation, and the Tax Division and the U.S. Attorney’s Office of the Southern District of Florida, for their assistance in the prosecution.
Today’s announcement is part of efforts underway by the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The case is being handled by the U.S. Attorney’s Office of the Southern District of New York Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani and Special Assistant U.S. Attorney Tino Lisella of the Tax Division are in charge of the criminal case.
Thursday, June 4, 2015
Kentucky Businessman Sentenced in New York Federal Court for $53 Million Tax Scheme and Massive Fraud that Involved Bribery of Bank Officials
Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division and U.S. Attorney Preet Bharara of the Southern District of New York announced that a Kentucky businessman was sentenced today to serve 12 years in prison.
Wilbur Anthony Huff, 53, of Caneyville and Louisville, Kentucky, was also ordered to pay more than $108 million in restitution for committing various tax crimes that caused more than $50 million in losses to the Internal Revenue Service (IRS), and a massive fraud that involved the bribery of bank officials, the fraudulent purchase of an insurance company, and the defrauding of insurance regulators and an investment bank. In December 2014, Huff pleaded guilty before U.S. District Judge Noemi Reice Buchwald of the Southern District of New York, who imposed today’s sentence.
“The department is committed to vigorously pursuing and prosecuting those individuals who violate the employment tax laws of the United States,” said Acting Assistant Attorney General Ciraolo. “Today’s significant prison sentence sends a loud and clear message to those engaged in such criminal conduct, including owners and operators of professional employer organizations like Mr. Huff, who steal employment taxes collected from their business clients to line their own pockets, instead of paying over those funds to the IRS.”
“Anthony Huff and his co-conspirators stole millions of dollars from taxpayers and engaged in extensive frauds, all in the pursuit of additional property, luxury cars and the like,” said U.S. Attorney Bharara. “His crimes have earned him 12 years in prison. I would like to thank our law enforcement partners for their assistance on this case.”
According to the information, plea agreement, sentencing submissions and statements made during court proceedings:
Huff was a businessman who controlled numerous entities located throughout the United States (Huff-Controlled Entities). Huff controlled the companies and their finances, using them to orchestrate a $53 million fraud on the IRS and other schemes that spanned four states, involving tax violations, bank bribery, fraud on bank regulators and the fraudulent purchase of an insurance company. As part of his crimes, Huff concealed his control of the Huff-Controlled Entities by installing other individuals to oversee the companies’ day-to-day functions and to serve as the companies’ titular owners, directors, or officers. Huff also maintained a corrupt relationship with Park Avenue Bank and Charles J. Antonucci Sr., the bank’s president and chief executive officer, and Matthew L. Morris, the bank’s senior vice president.
Tax Crimes
From 2008 to 2010, HUFF controlled O2HR, a professional employer organization (PEO) located in Tampa, Florida. Like other PEOs, O2HR was paid to manage the payroll, tax and workers’ compensation insurance obligations of its client companies. However, instead of paying $53 million in taxes that O2HR’s clients owed the IRS and $5 million to Providence Property and Casualty Insurance Company (Providence P&C) – an insurance company based in Oklahoma – for workers’ compensation coverage expenses for O2HR clients, Huff stole the money that his client companies had paid O2HR for those purposes. Among other things, Huff diverted millions of dollars from O2HR to fund his investments in unrelated business ventures and pay his family members’ personal expenses. The expenses included mortgages on Huff’s homes, rent payments for his children’s apartments, staff and equipment for Huff’s farm, designer clothing, jewelry and luxury cars.
Conspiracy to Commit Bank Bribery, Defraud Bank Regulators and Fraudulently Purchase an Oklahoma Insurance Company
From 2007 through 2010, Huff engaged in a massive multi-faceted conspiracy in which he schemed to bribe executives of Park Avenue Bank, defraud bank regulators and the board and shareholders of a publicly-traded company, and fraudulently purchase an Oklahoma insurance company. As described in more detail below, Huff paid bribes totaling hundreds of thousands of dollars in cash and other items to Morris and Antonucci in exchange for their favorable treatment at Park Avenue Bank.
As part of the corrupt relationship between Huff and the bank executives, Huff, Morris, Antonucci and others conspired to defraud various entities and regulators during the relevant time period. Specifically, Huff conspired with Morris and Antonucci to falsely bolster Park Avenue Bank’s capital by orchestrating a series of fraudulent transactions to make it appear that Park Avenue Bank had received an outside infusion of $6.5 million, and engaged in a series of further fraudulent actions to conceal from bank regulators the true source of the funds.
Huff further conspired with Morris, Antonucci and others to defraud Oklahoma insurance regulators and others by making material misrepresentations and omissions regarding the source of $37.5 million used to purchase Providence Property and Casualty Insurance Company, an insurance company based in Oklahoma that provided workers’ compensation insurance for O2HR’s clients and to whom O2HR owed a significant debt.
Bribery of Park Avenue Bank Executives
From 2007 to 2009, Huff paid Morris and Antonucci at least $400,000 in exchange for which they: provided Huff with fraudulent letters of credit obligating Park Avenue Bank to pay $1.75 million to an investor in one of Huff’s businesses if Huff failed to pay the investor back himself; allowed the Huff-Controlled Entities to accrue $9 million in overdrafts; facilitated intra-bank transfers in furtherance of Huff’s fraud; and fraudulently caused Park Avenue Bank to issue at least $4.5 million in loans to the Huff-Controlled Entities.
Fraud on Bank Regulators and a Publicly-Traded Company
From 2008 to 2009, Huff, Morris and Antonucci engaged in a scheme to prevent Park Avenue Bank from being designated as “undercapitalized” by regulators – a designation that would prohibit the bank from engaging in certain types of banking transactions and that would subject the bank to a range of potential enforcement actions by regulators. Specifically, they engaged in a series of deceptive, “round-trip” financial transactions to make it appear that Antonucci had infused the bank with $6.5 million in new capital when, in actuality, the $6.5 million was part of the bank’s pre-existing capital. Huff, Morris and Antonucci funneled the $6.5 million from the bank through accounts controlled by Huff to Antonucci. This was done to make it appear as though Antonucci was helping to stabilize the bank’s capitalization problem, so that the bank could continue engaging in certain banking transactions that it would otherwise have been prohibited from doing, and to put the bank in a better posture to receive $11 million from the Troubled Asset Relief Program. To conceal their unlawful financial maneuvering, Huff created, or directed the creation of, documents falsely suggesting that Antonucci had earned the $6.5 million through a bogus transaction involving another company Antonucci owned. Huff, Morris and Antonucci further concealed their scheme by stealing $2.3 million from General Employment Enterprises Inc., a publicly-traded temporary staffing company, in order to pay Park Avenue Bank back for monies used in connection with the $6.5 million transaction.
Fraud on Insurance Regulators and the Investment Firm
From July 2008 to November 2009, Huff, Morris, Antonucci and Allen Reichman, an executive at an investment bank and financial services company headquartered in New York City (the Investment Firm), conspired to defraud Oklahoma insurance regulators into allowing Antonucci to purchase the assets of Providence P&C and defraud the Investment Firm into providing a $30 million loan to finance the purchase. Specifically, Huff and Antonucci devised a scheme in which Antonucci would purchase Providence P&C’s assets by obtaining a $30 million loan from the Investment Firm, which used Providence P&C’s own assets as collateral for the loan. However, because Oklahoma insurance regulators had to approve any sale of Providence P&C, and because Oklahoma law forbade the use of Providence P&C’s assets as collateral for such a loan, Huff, Morris, Antonucci and Reichman made and conspired to make a number of material misstatements and material omissions to the Investment Firm and Oklahoma insurance regulators concerning the true nature of the financing for Antonucci’s purchase of Providence P&C. Among other things, Reichman directed Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan, and Huff, Morris and Antonucci conspired to falsely represent to Oklahoma insurance regulators that Park Avenue Bank – not the Investment Firm – was funding the purchase of Providence P&C.
After deceiving Oklahoma regulators into approving the sale of Providence P&C, Huff took $4 million of the company’s assets, which he used to continue the scheme to defraud O2HR’s clients. Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after Huff, Morris and Antonucci had pilfered its remaining assets.
* * *
In addition to his prison sentence, Huff was sentenced to three years of supervised release, and ordered to forfeit $10.8 million to the United States and pay a total of more than $108 million in restitution to victims of his crimes, including, among others, the Federal Deposit Insurance Corporation (FDIC) and the IRS.
In imposing today’s sentence, Judge Buchwald said Huff’s crimes were “truly staggering” and “eye popping.” Judge Buchwald described Huff’s conduct, which was preceded by a federal conviction and failure to pay millions in civil judgments, as “a living example” of “chutzpah,” which she defined as “shameless audacity and unmitigated gall.”
Morris and Reichman pleaded guilty for their roles in the above-described offenses on Oct. 17, 2013, and Feb. 20, 2015, respectively. Reichman is scheduled to be sentenced before Judge Buchwald on July 15, and Morris is scheduled to be sentenced before Judge Buchwald on Aug. 19.
Antonucci pleaded guilty to his role in the crimes described above on Oct. 8, 2010, and is scheduled to be sentenced on Aug. 20, also before Judge Buchwald.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Bharara thanked the Special Inspector General for the Troubled Asset Relief Program, the FBI, IRS-Criminal Investigation, the New York State Department of Financial Services, Immigration and Customs Enforcement’s Homeland Security Investigations, and the Office of Inspector General of the FDIC, for their work in the investigation, and the Tax Division and the U.S. Attorney’s Office of the Southern District of Florida, for their assistance in the prosecution.
Today’s announcement is part of efforts underway by the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The case is being handled by the U.S. Attorney’s Office of the Southern District of New York Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani and Special Assistant U.S. Attorney Tino Lisella of the Tax Division are in charge of the criminal case.
Sunday, June 7, 2015
GEMINI IV EARTHVIEW
FROM: NASA
June 4, 1965, Earth Observations From Gemini IV
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This photograph of the Florida Straits and Grand Bahama Bank was taken during the Gemini IV mission during orbit no. 19, on June 4, 1965, with a Hasselblad camera and a 70mm lens. The Gemini IV crew -- astronauts Jim McDivitt and Ed White -- conducted scientific experiments, including photography of Earth's weather and terrain, for the remainder of their four-day mission following White's historic first American spacewalk on June 3.
Astronauts have been photographing Earth from space since the early Mercury missions beginning in 1961. Today, they observe the Earth from their unique point of view aboard the International Space Station, providing researchers with key data and recording changes over time from human-caused changes like urban growth and reservoir construction, to natural dynamic events such as hurricanes, floods and volcanic eruptions.
Image Credit: NASA
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U.S. CALLING FOR INVESTIGATION INTO REPORTS OF INTERNATIONAL SOLDIERS ABUSING CHILDREN IN CAR
FROM: U.S. STATE DEPARTMENT
Samantha Power
U.S. Permanent Representative to the United Nations
New York, NY
June 5, 2015
FOR IMMEDIATE RELEASE
Since horrific allegations came to light that international soldiers may have abused children in the Central African Republic, the United States has been calling for a full and impartial investigation into these disturbing reports as well as into the manner in which they were handled. We thus welcome the Secretary General’s recent announcement of the establishment of an External Independent Review to examine the UN system’s response to the allegations.
The Secretary General’s establishment of this review is an opportunity for the UN to learn how it and member states can best safeguard the dignity and welfare of vulnerable people; ensure swift action to make certain potential abuses are investigated and halted; protect those who expose abuses; and provide appropriate privacy and other protection for witnesses who come forward with allegations of abuse. There are many questions that need to be answered, and we view this as an important opportunity for member states – and the people of the Central African Republic – to learn what went wrong at every point in this process.
Alongside this independent review, it is essential that all countries whose soldiers are alleged to have been involved in such abuses fully, urgently, and transparently investigate all claims to ensure that justice is served. Any individual found to have committed such heinous abuses must be held accountable.
The United States looks forward to reviewing the outcome of the Panel’s findings in a timely manner and working with all parties to prevent sexual exploitation and abuse.
Samantha Power
U.S. Permanent Representative to the United Nations
New York, NY
June 5, 2015
FOR IMMEDIATE RELEASE
Since horrific allegations came to light that international soldiers may have abused children in the Central African Republic, the United States has been calling for a full and impartial investigation into these disturbing reports as well as into the manner in which they were handled. We thus welcome the Secretary General’s recent announcement of the establishment of an External Independent Review to examine the UN system’s response to the allegations.
The Secretary General’s establishment of this review is an opportunity for the UN to learn how it and member states can best safeguard the dignity and welfare of vulnerable people; ensure swift action to make certain potential abuses are investigated and halted; protect those who expose abuses; and provide appropriate privacy and other protection for witnesses who come forward with allegations of abuse. There are many questions that need to be answered, and we view this as an important opportunity for member states – and the people of the Central African Republic – to learn what went wrong at every point in this process.
Alongside this independent review, it is essential that all countries whose soldiers are alleged to have been involved in such abuses fully, urgently, and transparently investigate all claims to ensure that justice is served. Any individual found to have committed such heinous abuses must be held accountable.
The United States looks forward to reviewing the outcome of the Panel’s findings in a timely manner and working with all parties to prevent sexual exploitation and abuse.
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