FTC SAYS CLAIMS ABOUT "OXODEGRADABLE" PLASTIC MAY BE DECEPTIVE

FROM:  U.S. FEDERAL TRADE COMMISSION 

FTC Staff Warns Plastic Waste Bag Marketers That Their “Oxodegradable” Claims May Be Deceptive

Staff of the Federal Trade Commission has sent letters warning 15 marketers of “oxodegradable” plastic waste bags that their oxodegradable, oxo biodegradable, or biodegradable claims may be deceptive.

Oxodegradable plastic is made with an additive intended to cause it to degrade in the presence of oxygen. Most waste bags are intended to be deposited in landfills, however, where not enough oxygen likely exists for oxodegradable bags to completely degrade in the time consumers expect. Contrary to the marketing, therefore, these bags may be no more biodegradable than ordinary plastic waste bags when used as intended.

“If marketers don’t have reliable scientific evidence for their claims, they shouldn’t make them,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Claims that products are environmentally friendly influence buyers, so it’s important they be accurate.”

The staff notified 15 marketers that they may be deceiving consumers based on the agency's 2012 revisions to its Guides For the Use of Environmental Marketing Claims (the Green Guides). Based on studies about how consumers understand biodegradable claims, the Green Guides advise that unqualified “degradable” or “biodegradable” claims for items that are customarily disposed in landfills, incinerators, and recycling facilities are deceptive because these locations do not present conditions in which complete decomposition will occur within one year.

The FTC advised marketers that consumers understand the terms “oxodegradable” or “oxo biodegradable” claims to mean the same thing as “biodegradable.” Staff identified the 15 marketers as part of its ongoing review of green claims in the marketplace. It has given them until October 21, 2014, to respond to the warning letters and tell the staff if they will remove their oxodegradable claims from their marketing or if they have competent and reliable scientific evidence proving that their bags will biodegrade as advertised.

The staff notes that marketers who did not receive a letter should not assume that their claims are fine. Staff is not disclosing the recipients of the letters at this time.

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OPERATORS OF DIAGNOSTIC CENTERS TO PAY $2.6 MILLION SETTLING ALLEGATIONS OF FALSE CLAIMS ACT VIOLATIONS

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, October 17, 2014

Operators of Houston Area Diagnostic Centers Agree to Pay $2.6 Million to Settle Alleged False Claims Act Violations

Two groups of Houston-based diagnostic centers have agreed to pay the United States a total of more than $2.6 million to settle allegations that they violated the False Claims Act, announced Acting Assistant Attorney General Joyce R. Branda for the Department of Justice’s Civil Division and U.S. Attorney Kenneth Magidson for the Southern District of Texas.  The settlements were finalized without an admission of liability and without commencement of litigation.

One group of centers, which operates under the name One Step Diagnostic and is owned and controlled by Fuad Rehman Cochinwala, has agreed to pay $1.2 million.  The payment is being made to settle allegations that it violated the Stark Statute and the False Claims Act by entering into sham consulting and medical director agreements with physicians who referred patients to One Step Diagnostic Centers.

The other group of centers, which is owned and controlled by Rahul Dhawan, has agreed to pay $1,457,686.  This group consists of Complete Imaging Solutions LLC doing business as Houston Diagnostics, Deerbrook Diagnostics & Imaging Center LLC, Elite Diagnostic Inc., Galleria MRI & Diagnostic LLC, Spring Imaging Center Inc. and West Houston MRI & Diagnostics LLC.  The United States alleged that these centers engaged in improper financial relationships with referring physicians and improperly billed Medicare using the provider number of a physician who had not authorized them to do so and had not been involved in the provision of the services being billed.

“The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because such relationships can alter a physician's judgment about the patient's true health care needs and drive up health care costs for everyone,” said Acting Assistant Attorney General Branda.  “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”

“These settlements totaling more than $2.6 million represent the continuing commitment of our office in combatting health care fraud,” said U.S. Attorney Magidson.  “The U.S. takes these accusations seriously.  Working within the whistleblower laws, we will continue to bring these cases to public view where tax payer money is being used improperly.”

The settlements announced today arose from a lawsuit filed by three whistleblowers under the qui tam provisions of the False Claims Act.  Under that act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $22.5 billion through False Claims Act cases, with more than $14.3 billion of that amount recovered in cases involving fraud against federal health care programs.

The case, United States ex rel. Holderith, et al. v. One Step Diagnostic, Inc., et al., Case No. 12-CV-2988 (S.D. Tex.), was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Texas and Department of Health and Human Services - Office of Inspector General.  The claims settled by this agreement are allegations only, and there has been no determination of liability.

COURT HALTS SUPPLEMENT MARKETERS FROM DECEPTIVE ADS, ILLEGAL DEBITING OF ACCOUNTS

FROM:  U.S. FEDERAL TRADE COMMISSION 

At FTC’s Request, Court Stops Supplement Marketers From Deceptive Advertising and Illegally Debiting Consumers’ Accounts

At the Federal Trade Commission’s request, a U.S. district court has temporarily stopped a group of marketers in Nevada and California from conducting business using “free” trial offers and health claims that the agency charges are deceptive and illegal to pitch green coffee bean extract and another dietary supplements. The FTC is seeking to permanently stop their allegedly deceptive conduct.

This is the first FTC action alleging violations of the Restore Online Shoppers’ Confidence Act (ROSCA), which prohibits marketers from charging consumers in an Internet transaction, unless the marketer has clearly disclosed all material terms of the transaction and obtained the consumers’ express informed consent.

“The defendants behind Simple Pure used nearly every trick in the book to deceive consumers,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “They not only deceived consumers about the effectiveness of their products, but also repeatedly debited consumers’ accounts without their approval.”

According to the FTC’s complaint, Health Formulas, LLC, its related entities, and principals (Simple Pure) use telemarketing, the Internet, print, radio, and television advertisements to pitch a variety of dietary supplements and other weight-loss, virility, muscle-building, or skin cream products. Examples of Simple Pure’s advertising claims include: 1) “Burn fat without diet or exercise”; 2) “Shed pounds fast!” and 3) “Extreme weight loss!”  The FTC alleges that the defendants have no basis for the weight-loss claims they make about their products.

In addition, the defendants allegedly trick consumers into disclosing their credit and debit card information, and then enroll them without authorization in a negative option program in which defendants continually charge consumers’ accounts. The charge for Simple Pure’s weight-loss supplements, with names like Pure Green Coffee Bean Plus and RKG Extreme, typically ranges from $60 to $210 per month. Some consumers were sold additional products that cost between $7.95 and $60.

The FTC charges that the defendants failed to provide the disclosures required for a negative-option program, failed to provide a way for consumers to stop the automatic charges, and also failed to disclose material facts about their refund and cancellation policy.

The complaint charges the defendants with violating the FTC Act, the ROSCA, and the Commission’s Telemarketing Sales Rule (TSR). It also charges the defendants with violating the TSR’s Do Not Call provisions by calling consumers who had asked them to stop calling. Finally, the complaint charges the defendants with violating the Electronic Funds Transfer Act by debiting consumers’ accounts on a recurring basis without their prior written authorization.

Defendants in the case include: 1) Health Formulas, LLC, also doing business as (d/b/a) Simple Pure Nutrition; 2) Pure Vitamins, LLC; 3) Longhorn Marketing, LLC also d/b/a Men’s Health Formulas, LLC, Life Vitamins, and Unleash the Thunder; 4) Method Direct, LLC, also d/b/a Extamax, LLC, Vitaman Labs, Inc., Vitafit, and Playboy Offer/DVD Entertainment; 5) Weight Loss Dojo, LLC, also d/b/a Fitness DVDs; 6) VIP Savings, LLC, also d/b/a VIP Saving Center; 7) DJD Distribution, LLC; 8) MDCC, LLC, also d/b/a Method Direct Calling Center; 9) Chapnick, Smukler & Chapnick, Inc.; and 10) Brandon Chapnick, Keith Smukler, Danelle Miller (also known as Danelle Folta and Danelle Kenealy), and Jason Miller, individually and as members of the corporate defendants.

Information for Consumers

Consumers should carefully evaluate advertising claims for weight-loss products. For more information, see the FTC’s guidance for consumers of products and services advertised for Weight Loss & Fitness. The FTC also has information about understanding free trial offers, including “Free” Trial Offers?, which includes a video on potential risks of such offers, and a short online audio tip on free trials.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the District of Nevada on October 7, 2014, and the court entered a temporary restraining order against the defendants on October 9, 2014.

The FTC is a member of the National Prevention Council, which provides coordination and leadership at the federal level regarding prevention, wellness, and health promotion practices. This case advances the National Prevention Strategy’s goal of increasing the number of Americans who are healthy at every stage of life.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest.

HOUSTON HOSPITAL PRESIDENT CONVICTED FRO ROLE IN $158 MILLION MEDICARE FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, October 20, 2014

President of Houston Hospital and Three Others Convicted in $158 Million Medicare Fraud Scheme

A federal jury in Houston today convicted the president of Riverside General Hospital (Riverside), his son, and two others for their participation in a $158 million Medicare fraud scheme involving false claims for mental health treatment.  Ten defendants have now been convicted in connection with the Riverside 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 and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.  U.S. District Judge Lee H. Rosenthal of the Southern District of Texas presided over the trial.

“The former president of Riverside hospital, his son, and their co-conspirators systematically defrauded Medicare, treating mentally ill and disabled Americans like chits to be traded and cashed out to pad their own pockets,” said Assistant Attorney General Caldwell.  “For over six years, the Gibsons and their co-conspirators stuck taxpayers with millions in hospital bills, purportedly for intensive psychiatric treatment. But the ‘treatment’ was a sham – some patients just watched television all day, others had dementia and couldn’t understand the therapy they supposedly received, and other patients never even went to the hospital at all.  Today’s verdict sends another powerful message that the department will hold accountable anyone who seeks personal profits at the expense of America’s most vulnerable citizens.”

Earnest Gibson III, 70, the former president of Riverside, Earnest Gibson IV, 37, the operator of one of Riverside’s satellite locations, and Regina Askew, 49, a group home owner, were each convicted of conspiracy to commit health care fraud and conspiracy to pay kickbacks, as well as related counts of paying and receiving illegal kickbacks.  Robert Crane, 58, a patient recruiter, was convicted of conspiracy to pay and receive kickbacks.  Gibson III and Gibson IV were also convicted of conspiracy to commit money laundering.  Gibson III was acquitted of two substantive counts of paying and receiving illegal kickbacks.

According to evidence presented at trial, Gibson III, Gibson IV, and Askew operated a scheme to defraud Medicare beginning in 2005 and continuing until June 2012.  The defendants caused the submission of false and fraudulent claims for partial hospitalization program (PHP) services to Medicare through the hospital.  A PHP is a form of intensive outpatient treatment for severe mental illness.

Specifically, evidence at trial demonstrated that the Medicare beneficiaries for whom Riverside and its satellite locations billed Medicare for PHP services did not qualify for or need PHP services.  Moreover, the Medicare beneficiaries rarely saw a psychiatrist and did not receive intensive psychiatric treatment.  In fact, some of the Medicare beneficiaries were suffering from Alzheimer’s and could not actively participate in any treatment even if they actually qualified to receive PHP services.  Nevertheless, Gibson III, Gibson IV and Askew submitted claims for reimbursement to Medicare claiming that PHP services were provided to the Medicare beneficiaries.

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 Askew, in exchange for those individuals delivering ineligible Medicare beneficiaries to the hospital’s PHPs.  Gibson IV also paid patient recruiters, including Crane and others, in exchange for those individuals delivering ineligible Medicare beneficiaries to the specific PHP operated by Gibson IV.

Approximately $158 million in claims to Medicare were submitted for PHP services purportedly provided by the hospital to the recruited beneficiaries, when in fact, the PHP services were medically unnecessary or never provided.  The proceeds from the health care fraud were used to promote the fraud scheme by paying kickbacks to patient recruiters and group home owners in exchange for their sending Medicare beneficiaries to the hospital’s PHPs.

Gibson III, Gibson IV, Askew and Crane are scheduled to be sentenced on Feb. 17, 2015.

Others involved in the fraudulent scheme have already pleaded guilty and are awaiting sentencing.  Mohammad Khan, an assistant administrator at the hospital, 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.  William Bullock, an operator of a Riverside satellite location, as well as Leslie Clark, Robert Ferguson, Waddie McDuffie, and Sharonda Holmes, who were all involved in paying or receiving kickbacks, have also pleaded guilty to their roles in the scheme.

The case was investigated by the FBI, IRS-CI, and Texas MFCU, with assistance from the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Dallas Regional Office, the Railroad Retirement Board, Office of Inspector General’s Chicago Field Office and the Office of Personnel Management’s Office of Inspector General, and 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 for 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 2,000 defendants who have collectively billed the Medicare program for more than $6 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.

SECRETARY KERRY'S REMARKS WITH PHILIPPINE FOREIGN SECRETARY ROSARIO

FROM:  U.S. STATE DEPARTMENT 

Remarks With Philippine Foreign Secretary del Rosario Before Their Meeting

Remarks

John Kerry

Secretary of State

Shangri-La Hotel

Jakarta, Indonesia

October 20, 2014

QUESTION: Could I just ask you a very brief question about the thinking that went into the air drops of the weapons and ammunition into Kobane?

SECRETARY KERRY: Absolutely.

QUESTION: And, for both of you, I'm wondering if you could talk -- say anything about how concerned, if at all you are, about the case of this Marine, American Marine, who's been accused of murder in the Philippines.

SECRETARY KERRY: Well, let me first take the occasion to welcome my friend, Albert del Rosario, the Foreign Minister from the Philippines. And we have been meeting now in many different occasions over the course of the last year and a half. And the Philippines is a very strong, long-term ally of ours. We are very grateful for the support on major crises of the day, particularly on ISIL and on the challenge of Ebola, which we will talk about a little bit now.

With respect to the resupply of Turkey, let me just say very, very respectfully to our allies, the Turks, that we understand fully the fundamentals of their opposition and ours to any kind of terrorist group, and particularly, obviously, the challenges they face with respect to the PKK. But we have undertaken a coalition effort to degrade and destroy ISIL. And ISIL is presenting itself in major numbers in this place called Kobane, and they have chosen to make this a grounded battle, attacking a small group of people there who, while they are a offshoot group of the folks that the -- our friends, the Turks, oppose, they are valiantly fighting ISIL.

And we cannot take our eye off the prize here. It would be irresponsible of us, as well as morally very difficult, to turn your back on a community fighting ISIL, as hard as it is, at this particular moment. And we talked with Turkish authorities -- I did, the President did -- to make it very, very clear this is not a shift of policy by the United States. It is a crisis moment, an emergency where we clearly do not want to see Kobane become a horrible example of the unwillingness of people to be able to help those who are fighting ISIL.

So, there is this momentary effort. But what we did say very clearly is, "Help us to get the Peshmerga or other groups in there who will continue this, and we don't need to do that." And I think that's very much the objective, and I think that's very much the way we are going.

So, our hope is that, indeed, Kurds who have proven themselves to be very strong and valiant fighters will take this fight on, and it won't be necessary for us to have this kind of delicate reach, if you will, in terms of people's different interests.

With respect to the Marine, whatever charges there are, whatever infractions have been affected by any American anywhere, we believe in the rule of law, and we believe in our agreement. It is very important for our agreements to be upheld. It is very important for the rule of law to be upheld, for his rights to be protected, but for the process to unfold appropriately. And we will, indeed, uphold our agreements with our friends in the Philippines; they deserve nothing less. The people of the Philippines who are gracious enough to permit an arrangement whereby we meet mutual interests with this kind of a force's presence need to know that we're not seeking a special privilege, that everybody's rights will be appropriately protected. And that's exactly what we will do here. Due process will play out, and we will work with the Philippines in order to make certain that rule of law and the agreement are upheld.

FOREIGN SECRETARY DEL ROSARIO: Well, you want me to talk about --

QUESTION: Well, I wonder if you're concerned that this is causing stress in an otherwise good relationship.

FOREIGN SECRETARY DEL ROSARIO: Well, I think we are concerned, and it's unfortunate that we had this tragic event. But, as my friend John had mentioned, we do have all the mechanisms in place so that justice can properly be served.

QUESTION: Thank you.

QUESTION: Thank you all.

SECRETARY KERRY: Thank you all very much. Appreciate it, thank you.

SEC SANCTIONS HIGH FREQUENCY TRADING FIRM FOR ATTEMPTING TO MANIPULATE CLOSING NASDAQ PRICES

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION 

The Securities and Exchange Commission sanctioned a New York City-based high frequency trading firm for placing a large number of aggressive, rapid-fire trades in the final two seconds of almost every trading day during a six-month period to manipulate the closing prices of thousands of NASDAQ-listed stocks.  This marks the first high frequency trading manipulation case.

An SEC investigation found that Athena Capital Research used an algorithm that was code-named Gravy to engage in a practice known as “marking the close” in which stocks are bought or sold near the close of trading to affect the closing price.  The massive volumes of Athena’s last-second trades allowed Athena to overwhelm the market’s available liquidity and artificially push the market price – and therefore the closing price – in Athena’s favor.  Athena was acutely aware of the price impact of its algorithmic trading, calling it “owning the game” in internal e-mails.

Athena agreed to pay a $1 million penalty to settle the SEC’s charges.

“When high frequency traders cross the line and engage in fraud we will pursue them as we do with anyone who manipulates the markets,” said SEC Chair Mary Jo White.

According to the SEC’s order instituting a settled administrative proceeding, although Athena was a relatively small firm, it dominated the market in the last few seconds of a trading day for stocks that it otherwise traded only slightly.  The manipulative trading described in the SEC’s order occurred from June to December 2009 and made up more than 70 percent of the total NASDAQ trading volume of the affected stocks in the seconds before the market close.

“Traders today can certainly use complex algorithms and take advantage of cutting-edge technology, but what happened here was fraud,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement.  “This action should send a clear message that the Commission and its Division of Enforcement have the expertise to investigate and charge even the most sophisticated fraudulent algorithmic trading strategies.”

The SEC’s order finds that Athena’s manipulative scheme focused on trading in order imbalances in securities at the close of the trading day.  Imbalances occur when there are more orders to buy shares than to sell shares (or vice versa) at the close for any given stock.  Every day at the close of trading, NASDAQ runs a closing auction to fill all on-close orders at the best price, one that is not too distant from the price of the stock just before the close.  Athena placed orders to fill imbalances in securities at the close of trading, and then traded or “accumulated” shares on the continuous market on the opposite side of its order.

According to the SEC’s order, Athena’s algorithmic strategies became increasingly focused on ensuring that the firm was the dominant firm – and sometimes the only one – trading desirable stock imbalances at the end of each trading day.  The firm implemented additional algorithms known as “Collars” to ensure that Athena’s orders received priority over other orders when trading imbalances. These eventually resulted in Athena’s imbalance-on-close orders being at least partially filled more than 98 percent of the time.  Athena’s ability to predict that it would get filled on almost every imbalance order allowed the firm to unleash its manipulative Gravy algorithm to trade tens of thousands of stocks right before the close of trading.  As a result, these stocks traded at artificial prices that NASDAQ then used to set the closing prices for on-close orders as part of its closing auction.  Athena’s high frequency trading scheme enabled its orders to be executed at more favorable prices.

The SEC order censures Athena and finds that the firm violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.  Without admitting or denying the findings, Athena agreed to pay the $1 million penalty and cease and desist from committing or causing any future violations of the securities laws.

The SEC’s investigation was conducted by William Finkel, Peter Lamore, Preethi Krishnamurthy, and Alexander Vasilescu.  The case was supervised by Michael Osnato.  The Enforcement Division worked closely with the SEC’s Division of Economic Risk and Analysis and the Quantitative Analytics Unit.  The SEC appreciates the assistance of the Financial Industry Regulatory Authority.

DEFENSE SECRETARY HAGEL, PEOPLE'S REPUBLIC OF CHINA STATE COUNCILOR JIECHI MEET AT PENTAGON

U.S. Defense Secretary Chuck Hagel, right, meets with Chinese State Councilor Yang Jiechi, second from left, at the Pentagon, Oct. 20, 2014, to discuss matters of mutual importance. DoD photo by U.S. Air Force Master Sgt. Adrian Cadiz.

FROM:  U.S. DEFENSE DEPARTMENT

 Hagel, Chinese Leader Discuss Strengthening Cooperation

DoD News, Defense Media Activity

WASHINGTON, Oct. 20, 2014 – Defense Secretary Chuck Hagel met in the Pentagon today with People's Republic of China State Councilor Yang Jiechi, Pentagon Press Secretary Navy Rear Adm. John Kirby reported.

In a statement summarizing the meeting, Kirby said the two leaders discussed the importance of maintaining the positive momentum that has developed in the military-to-military relationship between the United States and China.

“They also reaffirmed their shared interest in strengthening cooperation on regional and global challenges,” he added, “and noted the potential for greater cooperation in several areas, to include providing humanitarian assistance and disaster relief when crises arise, and containing the spread of Ebola in West Africa.”

Hagel and Yang both highlighted the importance of President Barack Obama's trip to Beijing in November and expressed a shared desire that the trip be a success, Kirby said.

SECRETARY KERRY'S REMARKS WITH AUSTRALIAN PRIME MINISTER ABBOT

FROM:  U.S. STATE DEPARTMENT 

Remarks With Australian Prime Minister Tony Abbott Before Their Meeting

Remarks

John Kerry

Secretary of State

Jakarta, Indonesia

October 20, 2014

PRIME MINISTER ABBOTT: Well, John, look, it's terrific to have yourself here to talk and to share (inaudible) very important issues, from the situation in the Middle East to the situation (inaudible) to all the other areas where the United States and Australia have a very, very close relationship. I appreciate the tremendous leadership the United States shows with the world. I'm grateful for (inaudible) today, because I think it's (inaudible) and that you can be here to help honor the incoming Indonesian President. Australia has had a long, strong relationship with Indonesia. Prime Minister Howard attended the inauguration of President (inaudible) back in 2004. And I hope the tradition that's now been established of Australian prime ministers attending the inaugurations of Indonesian presidents, and perhaps a similar tradition (inaudible) established (inaudible) secretaries of state.

But it's good to be with you, and I'm looking forward to (inaudible).

SECRETARY KERRY: Well, thank you, Prime Minister. It's a privilege to (inaudible), and I appreciate enormously your taking a moment to share (inaudible), and I bring you President Obama's strong greetings and great gratitude of him and all of (inaudible) Australians major stepping up with respect to the coalition. As we said when Secretary Hagel and I were in Sydney, we couldn't have a stronger partner, and we're very, very grateful for Australia's consistent willingness to step up and stand for values, as well as (inaudible) that are important to us.

We couldn't agree more about the inauguration today, the meaning of this, not just in Indonesia, but in the region. It's very, very important, obviously: you're here and, while the President couldn't come, he was very anxious to make sure we were represented at a high level here.

I do want to say that your efforts with respect to foreign fighters, which you regrettably have to experience even at a lower level, brings home to everybody how important it is for this to be a global coalition, and for all of us to understand the stakes. We were well served in the last couple of days as the Iraqis themselves chose a minister of interior and a minister of defense. That's particularly helpful for the planning and implementing of our efforts.

So, I look forward to talk with to you about that, about Iran (inaudible), Afghanistan, the DPRK, the South China Sea. There are a lot of issues for us to chat about. So again, it's good to be with you, and thank you so much for (inaudible).

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STOPPING EBOLA: NSF FUNDS RESEARCH ON STOPPING EBOLA

FROM:  NATIONAL SCIENCE FOUNDATION 

Halting the spread of Ebola: Nigeria a model for quick action, scientists find

Rapid control measures critical to stopping the virus in its tracks

Ebola. The word brings fear of an unseen and potentially lethal enemy. But there are ways to stop its spread, say infectious disease scientists.

Quick intervention is needed, according to the researchers, who recently published their findings in the journal Eurosurveillance.

Analyzing Ebola cases in Nigeria, a country with success in containing the disease, the scientists estimated the rate of fatality, transmission progression, proportion of health care workers infected, and the effect of control interventions on the size of the epidemic.

Rapid response needed

"Rapid control is necessary, as is demonstrated by the Nigerian success story," says Arizona State University (ASU) scientist Gerardo Chowell, senior author of the paper.

"This is critically important for countries in the West Africa region that are not yet affected by the Ebola epidemic, as well as for countries in other regions of the world that risk importation of the disease."

The research is funded by the U.S. National Science Foundation (NSF)-National Institutes of Health (NIH)-Department of Agriculture (USDA) Ecology and Evolution of Infectious Diseases (EEID) Program.

"Controlling a deadly disease like Ebola requires understanding how it's likely to spread, and knowing the ways of managing that spread that are most likely to be effective," says Sam Scheiner, NSF EEID program director.

"Being able to respond quickly needs a foundation of knowledge acquired over many years. The work of these scientists is testimony to long-term funding by the EEID program."

Control measures in Nigeria

The largest Ebola outbreak to date is ongoing in West Africa, with more than 8,000 reported cases and 4,000 deaths. However, just 20 Ebola cases have been reported in Nigeria, with no new cases since early September.

All the cases in Nigeria stem from a single traveler returning from Liberia in July.

The study used epidemic modeling and computer simulations to project the size of the outbreak in Nigeria if control interventions had been implemented during various time periods after the initial case, and estimated how many cases had been prevented by the actual early interventions.

"This timely work demonstrates how computational simulations, informed by data from health care officials and the complex social web of contacts and activities, can be used to develop both preparedness plans and response scenarios," says Sylvia Spengler, program director in NSF's Directorate for Computer and Information Science and Engineering, which also supported the research.

Control measures implemented in Nigeria included holding all people showing Ebola symptoms in an isolation ward if they had had contact with the initial case. If Ebola was confirmed through testing, people diagnosed with the disease were moved to a treatment center.

Asymptomatic individuals were separated from those showing symptoms; those who tested negative without symptoms were discharged.

Those who tested negative but showed symptoms--fever, vomiting, sore throat and diarrhea--were observed and discharged after 21 days if they were then free of symptoms, while being kept apart from people who had tested positive.

Brief window of opportunity

Ebola transmission is dramatically influenced by how rapidly control measures are put into place.

"Actions taken by health authorities to contain the spread of disease sometimes can, perversely, spread it," says NSF-funded scientist Charles Perrings, also of ASU.

"In the Nigeria case, people who tested negative but had some of the symptoms were not put alongside others who tested positive," says Perrings. "So they had no incentive to flee, and their isolation did nothing to increase infection rates. Elsewhere in the region isolation policies have had a different effect."

The researchers found that the projected effect of control interventions in Nigeria ranged from 15-106 cases when interventions are put in place on day 3; 20-178 cases when implemented on day 10; 23-282 cases on day 20; 60-666 cases on day 30; 39-1,599 cases on day 40; and 93-2,771 on day 50.

The person who was initially infected generated 12 secondary cases in the first generation of the disease; five secondary cases were generated from those 12 in the second generation; and two secondary cases in the third generation.

That leads to a rough estimate of the reproduction number according to disease generation declining from 12 during the first generation, to approximately 0.4 during the second and third disease generations.

A reproductive number above 1.0 indicates that the disease has the potential to spread.

Recent estimates of the reproduction number for the ongoing Ebola epidemic in Sierra Leone and Liberia range between 1.5 and 2 (two new cases for each single case), indicating that the outbreak has yet to be brought under control.

The effectiveness of the Nigerian response, scientists say, is illustrated by a dramatic decrease in the number of secondary cases over time.

The success story for Nigeria, they maintain, sets a hopeful example for other countries, including the United States.

Co-authors of the Eurosurveillance paper are Gerardo Chowell, Arizona State University; Folorunso Oludayo Fasina, University of Pretoria, South Africa; Aminu Shittu, Usmanu Danfodiyo University, Nigeria; David Lazarus, National Veterinary Research Institute, Plateau State, Nigeria; Oyewale Tomori, Nigerian Academy of Science, University of Lagos, Lagos, Nigeria; Lone Simonsen, George Washington University, Washington, D. C.; and Cecile Viboud, National Institutes of Health, Bethesda, Md.

-- Cheryl Dybas, NSF (
-- Julie Newberg, ASU
Related Programs
Ecology and Evolution of Infectious Disease

FORMER DERIVATIVE TRADERS CHARGED FOR ALLEGED MANIPULATION OF U.S. DOLLAR, YEN LIBOR RATES

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, October 16, 2014

Two Former Rabobank Traders Indicted for Alleged Manipulation of U.S. Dollar, Yen Libor Interest Rates

Two former Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) derivative traders – including the bank’s former Global Head of Liquidity & Finance in London – have been charged in a superseding indictment for their alleged roles in a scheme to manipulate the U.S. Dollar (USD) and Yen London InterBank Offered Rate (LIBOR), a benchmark interest rate to which trillions of dollars in interest rate contracts were tied, the Justice Department announced today.  Six former Rabobank employees have now been charged in the Rabobank LIBOR investigation.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division and Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office made the announcement.

Earlier today, a federal grand jury in the Southern District of New York returned a superseding indictment charging Anthony Allen, 43, of Hertsfordshire, England; and Anthony Conti, 45, of Essex, England, with conspiracy to commit wire fraud and bank fraud and with substantive counts of wire fraud for their participation in a scheme to manipulate the USD and Yen LIBOR rate in a manner that benefitted their own or Rabobank’s  financial positions in derivatives that were linked to those benchmarks.

The indictment also charges Tetsuya Motomura, 42, of Tokyo, Japan, and Paul Thompson, 48, of Dalkeith, Australia, who were charged in a prior indictment with Paul Robson, a former Rabobank LIBOR submitter.  In addition to adding as defendants Allen and Conti, the superseding indictment alleges a broader conspiracy to manipulate both the USD LIBOR and the Yen LIBOR.

Robson and Takayuki Yagami, a former Rabobank derivatives trader, each pleaded guilty earlier this year to one count of conspiracy in connection with their roles in the scheme.

“Today, we have charged two more members of the financial industry with influencing Dollar LIBOR and Yen LIBOR to gain an illegal advantage in the market, unfairly benefitting their own trading positions in financial derivatives,” said Assistant Attorney General Caldwell.  “LIBOR is a key benchmark interest rate that is relied upon to be free of bias and self-dealing, but the conduct of these traders was as galling as it was greedy.  Today’s charges are just the latest installment in the Justice Department’s industry-wide investigation of financial institutions and individuals who manipulated global financial rates.”

“With today’s charges against Messrs. Allen and Conti, we continue to reinforce our message to the financial community that we will not allow the individuals who perpetrate these crimes to hide behind corporate walls,” said Deputy Assistant Attorney General Snyder.  “This superseding indictment, with its charges against Mr. Allen, makes an especially strong statement to managers in financial institutions who devise schemes to undermine fair and open markets but leave the implementation – and often the blame – with their subordinates.”

“With today’s indictments the FBI’s investigation into Rabobank’s manipulation of LIBOR benchmark rates expands in scope to include the U.S. Dollar,” said Assistant Director in Charge McCabe. “I would like to thank the special agents, forensic accountants, and analysts, as well as the prosecutors who have worked to identify and stop those who hide behind complex corporate and securities fraud schemes.”

According to the superseding indictment, at the time relevant to the charges, LIBOR was an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believed they would be charged if borrowing from other banks.   LIBOR was published by the British Bankers’ Association (BBA), a trade association based in London.  LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year.  The published LIBOR “fix” for U.S. Dollar and Yen currency for a specific maturity was the result of a calculation based upon submissions from a panel of 16 banks, including Rabobank.

LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products.

Rabobank entered into a deferred prosecution agreement with the Department of Justice on Oct. 29, 2013, and agreed to pay a $325 million penalty to resolve violations arising from Rabobank’s LIBOR submissions.

According to allegations in the superseding indictment, Allen, who was Rabobank’s Global Head of Liquidity & Finance and the manager of the company’s money market desk in London, put in place a system in which Rabobank employees who traded in derivative products linked to USD and Yen LIBOR regularly communicated their trading positions to Rabobank’s LIBOR submitters, who submitted Rabobank’s LIBOR contributions to the BBA.  Motomura, Thompson, Yagami and other traders entered into derivative contracts containing USD or Yen LIBOR as a price component and they asked Conti, Robson, Allen and others to submit LIBOR contributions consistent with the traders’ or the bank’s financial interests, to benefit the traders’ or the banks’ trading positions.  Conti, who was based in London and Utrecht, Netherlands, served as Rabobank’s primary USD LIBOR submitter and at times acted as Rabobank’s back-up Yen LIBOR submitter.  Robson, who was based in London, served as Rabobank’s primary submitter of Yen LIBOR.  Allen, in addition to supervising the desk in London and money market trading worldwide, occasionally acted as Rabobank’s backup USD and Yen LIBOR submitter.  Allen also served on a BBA Steering Committee that provided the BBA with advice on the calculation of LIBOR as well as recommendations concerning which financial institutions should sit on the LIBOR contributor panel.

The charges in the superseding indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The investigation is being conducted by special agents, forensic accountants and intelligence analysts in the FBI’s Washington Field Office.  The prosecution is being handled by Senior Litigation Counsel Carol L. Sipperly and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section and Trial Attorney Michael T. Koenig of the Antitrust Division.  The Criminal Division’s Office of International Affairs has provided assistance in this matter.

The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in the United States and abroad.  The Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the department and, along with the U.K. Financial Conduct Authority, has played a major role in the LIBOR investigation.  The Securities and Exchange Commission also has played a significant role in the LIBOR series of investigations, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation.   The department has worked closely with the Dutch Public Prosecution Service and the Dutch Central Bank in the investigation of Rabobank.  Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.

This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.

U.S. REP. TO UN SAMANTHA POWER'S REMARKS AT GOAL USA ANNUAL BENEFIT BALL

FROM:  U.S. STATE DEPARTMENT 

U.S. Mission to the United Nations: Remarks at the GOAL USA Annual Benefit Ball

Samantha Power

U.S. Permanent Representative to the United Nations 

New York, NY

October 18, 2014

AS DELIVERED

Thank you, everybody. Thank you, Barry, for that generous introduction. Let me also welcome Ambassador David Donoghue – my colleague and co-conspirator – the Irish Ambassador to the United Nations, who is here tonight.

I’m very honored to have been asked to join you for GOAL’s dinner. I’d like to begin, somewhat abruptly, by reading you an excerpt from a news story.

“And there I saw the dying, the living and the dead, lying indiscriminately upon the same floor, without anything between them and the earth, save a few miserable rags. To point to any particular house as a proof of this would be a waste of time as all were in the same state; and not a single house could boast of being free from death and fever, though several could be pointed out with the dead lying close to the living, without any effort being made to remove the bodies to a last resting place.”

Now, this could have been written today about a village or neighborhood in one of the countries most affected by the Ebola outbreak. But it was published in 1847 in the Illustrated London News. The author, a young journalist and artist from Cork, named James Mahoney, was describing the scene he witnessed upon arriving in the town of Bridgetown, in southern Ireland, during the famine.

I begin here because while GOAL is an international humanitarian organization, it is also an Irish organization. GOAL was started by an Irishman, a former sports journalist in fact; an Irish football fan who, like all Irish football fans, was doomed to a life of heartbreak and suffering.

But he decided to dedicate his life to alleviating even greater, truer, suffering around the world.

I begin with the snapshot of the famine because it is impossible to understand the proud tradition of Irish generosity or the passion for service that drives GOALies in the field, without understanding the history of the Irish people.

When people come through an experience as harrowing as the scene that Mahoney described in 1847, empathy is in the bloodstream - it’s in the genes. It was in the bloodstream of my greatest mentor and my best friend, my mother, who brought me to this country from Ireland when I was nine. And I trust and hope it will be in the bloodstream of my kids, Declan and Rian.

These days, people often tell me that my last name, Power, is an appropriate one for representing the United States. What they don’t know, but what probably many of the people in this room do know, is that the surname Power comes from the Irish, de Paor, which means “of the poor.”

With a name like this, and the responsibilities that go with it, how could I not join GOAL tonight, when so many here are gathering in support of an organization that does so much for the most vulnerable and the most poor around the world?

There are so many worthy humanitarian crises that GOAL works on, that the United Nations works on, that the United States government, the Irish government work on; any one of them I could choose to talk about tonight, but I want to focus on Ebola because despite growing international awareness of the outbreak’s severity and mounting commitments, it has to be said, during recent weeks, we are still far behind the terrifying curve of this deadly virus. And the longer we wait to scale up our response, the harder it is for us to bend the curve downward and to stop the exponential spread. That means the greater the risk that we all face, no matter where we live in the world.

GOAL’s experience responding to the outbreak on the ground underscores the extent of the challenges the entire international community faces – and most importantly the infected communities face in dealing with this epidemic. And the interventions by GOAL and partners show how local, targeted interventions can make a profound difference in slowing the spread of this deadly virus.

Let me just give you two examples from the town of Kenema, a district in eastern Sierra Leone. According to Sierra Leone’s Health Ministry, 429 cases of Ebola had been confirmed in Kenema by October 1st – the second highest number of any district in the country of Sierra Leone. More than 20 health care workers in the district had lost their lives treating waves of patients at Kenema’s hospital.

In Sierra Leone, the government tasked the police with taking the lead in maintaining quarantines of people suspected of having infections. However, as GOAL staff in Kenema observed, police had little idea how to quarantine properly. GOALie Gillian McKay wrote in mid-September from Kenema that, “In some cases, police officers can be found sitting on the terrace of a quarantined house, eating food that the family has cooked.” In other cases, she wrote, “Quarantined individuals may be permitted to fetch water or go to the market because as long as they do not run away, the quarantine is being observed in the eyes of the police.”

The consequences of this lack of knowledge were swift and devastating. Not only did the poorly imposed quarantines fail to keep the virus from spreading, but three police officers who were enforcing them were themselves infected and later died. Many more police in Kenema feared they would be next.

Overwhelmed, the local police chief asked GOAL to train his officers in how to safely and effectively implement the quarantine. GOAL developed a training module that balanced the need to prevent the Ebola’s spread with the need to treat possible victims with dignity, rather than as prisoners or pariahs. The training included health professionals as well as Ebola survivors, who could tell the police how it felt to be on the other side of a quarantine – a perspective too rarely taken into account.

The program trained over 2,400 police officers in a month. They in turn have trained other police officers. And since the training began, GOAL reports that no additional Kenema police officers have been infected, and that the quality of quarantines has dramatically improved.

A second example from Kenema of a challenge across the region is the danger of misinformation. Early in the outbreak, word spread through social media in Sierra Leone that washing with salt water could prevent and cure infections. Meanwhile, as more people died in Kenema’s government hospital, a rumor spread that the virus was a sham, and that victims’ bodies were being used for cannibalistic rituals. At the end of July, an angry mob of thousands of people marched on the hospital, threatening to remove patients and bodies and burn the building to the ground. This gives you some sense of the challenge that all who are trying to deal with this epidemic are facing. It is an uphill battle.

At the very least, rumors like these have hampered efforts to contain the virus; at worst, they left countless people more vulnerable to infection. Yet in a climate of growing fear and limited understanding, rumors are spreading as fast as the virus itself.

Interventions by humanitarian aid organizations show, though, how the swift dissemination of accurate, easy-to-understand information can help offset these rumors and undermine the harm that those rumors are causing. In Sierra Leone, for example, public service announcements on local radio stations are now helping to dispel the fiction around false cures. To raise awareness about the causes of infections and the risks of customary practices like hand-washing the bodies of deceased relatives, GOAL and others enlisted the help of community activists, who can build on existing trust and relationships to spread awareness from the grassroots up.

The lack of knowledge among police about how to carry out a safe, effective quarantine, and the spread of these rumors are just two of the many challenges that GOAL and others responding to the crisis have faced, in Kenema and well beyond. Sierra Leone still has only a quarter of the beds it needs for sick patients. Schools in the country have been closed since July. Burial teams continue to lack adequate protection and the protective gear that they need. The list goes on. Guinea and Liberia face many of the same problems, and new problems of their own.

Under President Obama’s leadership, the United States is stepping up to help to address these challenges. We have contributed more than $350 million in humanitarian assistance and deployed more than 600 U.S. government personnel from USAID, from the CDC, and from the Defense Department – it's the largest-ever U.S. response to a global health crisis. We’re committed to sending up to 3,900 U.S. forces to the region and the U.S. military is already overseeing the construction of up to 17 100-bed Ebola Treatment Units, and we’re establishing a training hub where we will train up to 500 health care workers each week on how to safely interact with patients who have contracted this virus.

Some governments in the United Nations are punching well above their weight. I'll give you a couple of examples: Cuba has sent 165 doctors to West Africa – to Sierra Leone, in fact; Timor-Leste has pledged $1 million to the effort, notwithstanding itself, not that long ago, having come out of its own conflict and having tremendous needs at home. Humanitarian organizations too are doing tremendous work. Medecins Sans Frontiers, International Medical Corps, the Red Cross, and GOAL – these are organizations that are on the front lines. These are individuals who comprise these organizations, who are putting themselves into the hot zone because they know that they can remain safe and they know that they can save countless lives; and that they will contribute to putting an end to one of the worst health crises the world has ever seen.

Yet much, much more is needed. According to the UN’s financial tracking service, only 25 counties have pledged $1 million or more to the effort. There are 193 in the United Nations – 25 just. The UN has only received a little more than a third of the funds that they currently need – and that’s just for right now. In Guinea and Sierra Leone, the number of infections is projected to double every three to four weeks; in Liberia, infections are projected to double every 2 weeks. This is bad.

The international community isn’t just losing the race to Ebola. We are getting lapped, at present.

And it’s not just governments and NGOs that have to do their part. It is the private sector and private institutions, philanthropies, and individual donors. Far too few are giving far too little, counting on others to step up. Those of us who have made announcements, like the United States government, have to keep looking to see what more, we too, can do. This is an all hands on deck operation – one in which everyone needs to do his or her part.

Interventions like the ones that I have described in Kenema show that, with the right information and resources, we can slow the spread of this deadly virus. According to data from Sierra Leone’s health ministry, the number of new infections in the Kenema district declined every week of September. This really, really matters.

It is easy to lose sight of what the downward curve really means. It means children, women, and men who – because they were never infected in the first place – have the rest of their lives ahead of them. It means that even in an environment of fear and distrust, people can learn how to keep themselves and their loved ones healthy.

This is an especially important lesson as we witness the spread of fear here in the United States. The fear is understandable. People don’t want hospitals to treat the infected if they believe that health workers at those hospitals will get sick and themselves help spread the virus.

But we know how to care for people with Ebola safely and with compassion. We can give patients a fighting chance of surviving. We just need to ensure that doctors, nurses, and other health professionals get the right training – the training that the doctors and the nurses at Emory and Nebraska had when they successfully adhered to CDC protocols and safely treated those who came from West Africa and nursed them back to health safely.

In closing, one of the most important facts about the famine is that up to a million lives could have been saved. Food was exported from Ireland as people starved. I don’t have to tell this audience that. As a relief inspector wrote in 1846, “A woman with a dead child in her arms was begging in the street yesterday and the Guard of the Mail told me he saw a man with three dead children lying by the roadside. Notwithstanding all this distress, there was a market, plentifully supplied with meat, bread, and fish, – in short, everything.”

Today too, our world has everything that we need to curb the spread of the deadly virus of Ebola. And while it may not be around the corner in a market, we can get the necessary supplies to the infected communities. We can build the Ebola treatment units. We can supply the beds. We can train nurses and manufacture protective gear so that providing help – nursing people back to health – is not itself a perilous endeavor. We just need to act. We need to act more robustly and we need to act far more swiftly. We have the knowledge, we have the resources, and we have the capacity. It is on all of us to marshal the will and conquer the fear to enable us to use them.

Now, as then, hundreds of thousands of people’s lives are at stake. We cannot fail them. We must not fail them.

Thank you so much and thank you GOAL for having me with you this evening. Thank you.

MAN CONVICTED FOR ROLE IN DEFRAUDING AND EXTORTING MONEY FROM SPANISH-SPEAKERS THROUGH CALL CENTERS

FROM:  U.S. JUSTICE DEPARTMENT

Friday, October 17, 2014

Jury Convicts Peruvian Man of Defrauding and Extorting Spanish-Speaking Customers through Fraudulent Call Centers

A jury in Miami convicted a Lima, Peru, man on 26 felony charges of conspiracy, fraud and attempted extortion arising from his operating call centers in Peru that lied to and threatened Spanish-speaking victims into paying fraudulent settlements, the Department of Justice announced today.

Juan Alejandro Rodriguez Cuya, 35, was convicted by a jury after less than two hours of deliberation following a two-week trial before U.S. District Court Judge Patricia A. Seitz in Miami federal court. His co-defendant at trial, Maria Luzula, 52, of Miami, pleaded guilty to all of the charges against her midway through the trial.  Luzula is Cuya’s mother.

Cuya and Luzula both face a statutory maximum of 20 years in prison on each count. Both defendants remain in custody pending their sentencing on Jan. 22, 2015, and Dec. 18, respectively.

“The defendants targeted and preyed upon the Spanish-speaking community – and the evidence of the harm that their fraud caused on individual victims is heart-wrenching,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “The Justice Department is committed to prosecuting those who defraud consumers for their own personal gain.”

According to evidence presented at trial, the defendants’ employees in Peru used Internet-based telephone calls to threaten Spanish-speaking victims in the United States.  The Peruvian callers falsely accused the victims of having refused delivery of certain products and claimed that the victims owed thousands of dollars in fines and that lawsuits would be brought against them.  In reality, the victims had never ordered these products and nothing had been delivered.

Additional evidence at trial established that Luzula’s and Cuya’s employees claimed that the consumers could resolve the fines if they immediately paid a “settlement fee.”  Consumers who contested these settlement fees were told that failure to pay could lead to arrest, deportation or forfeiture of property.  Thousands of victims succumbed to these threats and paid fees that they did not owe.  A phone room in Miami collected the fees.

Victims who testified at trial spoke of how anxious the calls made them.  The victims were so afraid of the threats that they paid fees they simply could not afford.

Acting Assistant Attorney General Branda commended the U.S. Postal Inspection Service for their investigative efforts and thanked the U.S. Attorney’s Office for the Southern District of Florida for their contributions to the case.  The case was prosecuted by Trial Attorney Phil Toomajian and Assistant Director Richard Goldberg of the Civil Division’s Consumer Protection Branch.

CDC VIDEO: CDC DISEASE DETECTIVES: LT. KELSEY MIRKOVIC

SECRETARY KERRY'S REMARKS WITH CHINESE STATE COUNCILOR JIECHI

FROM:  U.S. STATE DEPARTMENT 

Remarks With Chinese State Councilor Yang Jiechi Before Their Meeting

Remarks

John Kerry

Secretary of State

Taj Hotel

Boston, Massachusetts

October 18, 2014

SECRETARY KERRY: Good morning, everybody. I just want to say a couple things. First, my great pleasure to welcome the State Councilor of China Yang Jiechi to Boston. We have a great deal that we will be talking about and already began last night with a very informal and pleasant dinner. But there are many issues that China and the United States are cooperating on, even as we have some differences that we try to manage effectively. But right now, particularly on Ebola, on Afghanistan, on the Democratic Republic of North – of Korea, the North Korea nuclear situation, on Iran particularly, and on ISIL and counterterrorism, and on climate change. There are many areas where we are working hard.

So we look forward to some good discussions today. And on another note, I might just report we had a very positive step forward in Iraq today with the selection of a minister of the interior and a minister of defense. These were critical positions to be filled in order to assist with the organizing effort with respect to ISIL. So we’re very pleased. We congratulate Prime Minister Abadi and we look forward to working with them as we continue to grow the coalition and move forward.

So thank you for being here, State Councilor.

STATE COUNCILOR YANG: Well, friends from (inaudible), it’s a great pleasure to see you here today. (Inaudible) invitation of Secretary John Kerry, I have the great pleasure to visit this beautiful city of Boston. And the purpose of my visit to Boston and then to Washington is really to pave the ground for President Obama’s visit to China in November and also for participation of the President in the APEC informal leadership meeting to be hosted by China.

I think the Sunnylands meeting between President Xi Jinping and President Obama was very successful. Two countries have decided to work to build this new model of major country relationship between China and the United States. Since then, much progress has been made in our relationship. Lately, the Secretary himself went to China to participate in the S&ED discussion with the Chinese side. We believe that we should continue to work together to deepen our mutual trust and to put our efforts to the major areas of cooperation while on the basis of mutual respect we can properly handle any kind of difference between us.

I think the Asia Pacific region is a very important region. We need to work together to build up even more cooperation between China and the United States in the area because this is the area which has experienced robust economic development, and I’m sure that the APEC meeting will go further to bring about more connectivity, innovative development, and to shape a greater future for the region.

There are also quite a few issues in the world, as the Secretary State has mentioned. I believe that in terms of climate change, Ebola, and we have to address the (inaudible) issues and so on, so forth, China and the United States have a lot to discuss today and beyond.

I would like to thank the Secretary for his warm hospitality. I’m sure that our discussion will be both constructive and productive. I’m sure that China-U.S. relationship will be on the way up.

Thank you very much.

AG HOLDER ANNOUNCES RECOGNITION OF SAME-SEX MARRIAGES IN SEVEN STATES

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, October 17, 2014

After Supreme Court Declines to Hear Same-Sex Marriage Cases, Attorney General Holder Announces Federal Government to Recognize Couples in Seven New States

Attorney General Eric Holder announced today that the federal government will recognize same-sex marriages taking place in the states affected by the Supreme Court’s recent decision to decline to review rulings from three federal appeals courts that had struck down bans on same-sex marriage. The Attorney General added that the Department of Justice will work with agencies across the administration to ensure that all applicable federal benefits are extended to those couples as soon as possible.

“We will not delay in fulfilling our responsibility to afford every eligible couple, whether same-sex or opposite-sex, the full rights and responsibilities to which they are entitled. With their long-awaited unions, we are slowly drawing closer to full equality for lesbian, gay, bisexual, and transgender Americans nationwide,” Attorney General Holder said.

The complete text of the Attorney General’s video message is below:

“Last week, the Supreme Court declined to review rulings from three federal appeals courts that had struck down bans on same-sex marriage in five states across the country.  Going forward, marriage equality will be the law in those states.

“The practical consequences of the Court’s decision are profound for families throughout the nation.  Within hours of the decision, same-sex couples in Indiana, Oklahoma, Utah, Virginia, and Wisconsin were able to have their unions recognized in the states where they live—to stand with their partners, and with their children, as loving and committed families with the full protection of the law.

“I am pleased to announce that the federal government will recognize the same-sex marriages now taking place in the affected states, and I have directed lawyers here at the Department of Justice to work with our colleagues at agencies across the Administration to ensure that all applicable federal benefits are extended to those couples as soon as possible.  We will not delay in fulfilling our responsibility to afford every eligible couple, whether same-sex or opposite-sex, the full rights and responsibilities to which they are entitled.

“With their long-awaited unions, we are slowly drawing closer to full equality for lesbian, gay, bisexual, and transgender Americans nationwide.  By letting the lower-court decisions stand, the Supreme Court expanded the number of states allowing same-sex marriage from 19 to 24, along with the District of Columbia.  Just one day after the Supreme Court’s action, the U.S. Court of Appeals for the Ninth Circuit joined the other courts that have invalidated bans, extending marriage rights even further.  In the past eight days, at least half a dozen additional states have recognized marriage equality.  And even more states covered by the lower-court rulings will almost certainly be joining them in short order.

“The steady progress toward LGBT equality we’ve seen – and celebrated – is important and historic.  But there remain too many places in this country where men and women cannot visit their partners in the hospital, or be recognized as the rightful parents of their own adopted children; where people can be discriminated against just because they are gay.  Challenges to marriage restrictions are still being actively litigated in courts across the country.  And while federal appeals courts have so far been unanimous in finding that bans on same-sex marriage are unconstitutional, if a disagreement does arise, the Supreme Court may address the question head-on.  If that happens, the Justice Department is prepared to file a brief consistent with its past support for marriage equality.

“In the meantime, we will continue to extend federal benefits to same-sex couples to the fullest extent allowed by federal law.  And we will continue to work—to the very best of our ability—to bring about a more equal future for all Americans nationwide.”

DOJ SUES MOBILE HOME PARK FOR DISCRIMINATION AGAINST FAMILIES WITH CHILDREN

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, October 17, 2014

Justice Department Sues Wisconsin Mobile Home Park for Discriminating Against Families with Children

The Justice Department announced today that it has filed a lawsuit against the owners and operators of the Twin Oaks Mobile Home Park, a 230-lot mobile home park, in Whitewater, Wisconsin, for refusing to allow families with children to live in certain areas of the park, in violation of the Fair Housing Act.

The lawsuit, filed in U.S. District Court in Madison, Wisconsin, alleges that the owner of Twin Oaks, Twin Oaks Mobile Home Park, Inc. and its managers—Merrill Eugene Gutzmer and Dennis Hansen—violated the Fair Housing Act by maintaining and enforcing a policy of not allowing families with children to reside in an area that includes approximately 60 of the 230 lots within the park.  The park does not limit residency to older persons.  The complaint further alleges that, under the policy described above, the defendants refused to approve the application for residency of a single woman who planned to purchase the home of a former resident and live there with her then two-year-old child.  The single woman and the mobile home owner who was trying to sell her mobile home subsequently filed a complaint with the Department of Housing and Urban Development (“HUD”).  After conducting an investigation, HUD found that the defendants had violated the Fair Housing Act, and referred the matter to the Department of Justice.

“For over twenty-five years, the Fair Housing Act has prohibited housing providers from refusing to rent or sell housing to families with children,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division.  “Many parents are already struggling to find affordable housing for their families, and they should not also have to face discrimination because they have children.”

“This office is committed to ensuring that all residents in this district, including families with children, are afforded equal opportunity to rent and live where they choose under the Fair Housing Act,” said U.S. Attorney John W. Vaudreuil for the Western District of Wisconsin.  “Discrimination based on familial status will not be tolerated in this district.”          

“HUD and the Department of Justice will continue to enforce the Fair Housing Act to ensure that the housing options of families are not illegally limited because they have children,” said HUD Assistant Secretary Gustavo Velasquez for Fair Housing and Equal Opportunity.

The suit seeks a court order requiring the defendants to bring their policies and practices into compliance with the Fair Housing Act, as well as monetary damages for persons harmed and civil penalties to the United States.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status, and disability.  Among other things, the Fair Housing Act makes it illegal to refuse to rent housing and to discriminate in the terms or conditions of housing rentals because of familial status, except in specified categories of housing that are reserved for older persons.

SECRETARY KERRY'S REMARKS TO PLENIPOTENTIARY CONFERENCE

FROM:  U.S. STATE DEPARTMENT 

U.S. Delegation to the International Telecommunication Union Plenipotentiary Conference in Busan, Republic of Korea

Press Statement

John Kerry

Secretary of State

Washington, DC

October 16, 2014

In today’s world everyone is connected. With the touch of a button – or the swipe of a finger – we can talk to anyone, anywhere, anytime, about anything. And we can do it instantly. The communications revolution has radically changed how we live our lives, do business, choose our leaders, provide health care, and interact with other cultures.

Almost 150 years after its creation, the International Telecommunication Union remains critical to overseeing and advancing the extent and the efficiency of international communications. The Republic of Korea will host the ITU Plenipotentiary Conference 2014 in Busan from October 20 to November 7. This international gathering is an important opportunity for ITU Member States to review the work of the Union and prioritize programs, improve working methods, and increase collaboration with other institutions.

The U.S. delegation to Busan will be led by Ambassador Daniel Sepulveda and consist of nearly 130 government, private sector, and civil society representatives. They will work with our partners to ensure that the ITU is transparent and accountable, while remaining responsive to the evolution of technology. As the fast paced march of innovation continues, it is essential we meet the needs of all telecommunications users, especially those from underserved communities.

Telecommunications connect our societies, create shared prosperity, and facilitate the exchange of goods and services, as well as thoughts and ideas. We look forward to working with our friends and allies to ensure that the ITU continues to be a hub for open and broad-based global communications.

WEST WING WEEK 10/17/14