FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today sanctioned a computer programmer for operating two online venues that traded securities using virtual currencies Bitcoin or Litecoin without registering the venues as broker-dealers or stock exchanges.
The programmer, Ethan Burnside, also was sanctioned for conducting unregistered offerings. He significantly cooperated with the SEC’s investigation and agreed to settle the case by paying more than $68,000 comprising his profits from the unregistered venues plus interest and a penalty. He also is barred from the securities industry.
According to the SEC’s order instituting a settled administrative proceeding, Burnside and his company BTC Trading Corp. operated two online enterprises – BTC Virtual Stock Exchange and LTC-Global Virtual Stock Exchange – from August 2012 to October 2013. These exchanges provided account holders the ability to use Bitcoin or Litecoin to buy, sell, and trade securities of businesses (primarily virtual currency-related entities) listed on the exchanges’ websites. The venues weren’t registered as broker-dealers despite soliciting the public to open accounts and trade securities. The venues weren’t registered as stock exchanges despite enlisting issuers to offer securities for the public to buy and sell. The SEC’s order also finds that Burnside conducted separate transactions in which he offered investors the opportunity to use virtual currencies to buy or sell shares in the LTC-Global exchange itself and a separate Litecoin mining venture he owned and operated. These offerings were not registered with the SEC as required under the federal securities laws.
“Burnside operated two online enterprises that weren’t properly registered to engage in the securities business they were conducting,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office. “The registration rules are vitally important investor protection provisions, and no exemption applies simply because an entity is operating on the Internet or using a virtual currency in securities transactions.”
According to the SEC’s order, Burnside and BTC Trading Corp. actively solicited the public to open accounts by advertising the websites for both of his stock exchanges on the Bitcoin Forum and other websites dedicated to virtual currency. The solicitation efforts resulted in approximately 2,655 users opening online accounts with LTC-Global exchange and executing approximately 60,496 trades through the website, paying a total of 12,081 litecoins in transaction-based compensation. Approximately 7,959 users opened online accounts with the BTC exchange and executed approximately 366,490 trades through the website, paying a total of 2,141 bitcoins in transaction-based compensation. The SEC’s order finds that in this line of business, Burnside and BTC Trading Corp. were required to register their online enterprises with the SEC as brokers or dealers.
The SEC’s order further finds that Burnside and BTC Trading Corp. failed to register the LTC-Global exchange or the BTC exchange as exchanges despite providing issuers a platform to create and list initial and secondary offerings of securities in exchange for a listing fee. A total of 52 issuers paid BTC Trading Corp. 11,450 litecoins in listing fees to list their shares with the LTC-Global exchange, and 69 issuers paid 210 bitcoins in listing fees to list their shares with the BTC exchange.
The SEC’s order finds that Burnside willfully violated Sections 5(a) and 5(c) of the Securities Act of 1933, and that Burnside and BTC Trading Corp. willfully violated Sections 5 and 15(a) of the Securities Exchange Act of 1934. Without admitting or denying the SEC’s findings, Burnside and BTC Trading Corp. consented to cease and desist from committing or causing any future violations of the registration provisions. Burnside agreed to be barred from the securities industry with the right to reapply after two years, and he must pay $58,387.07 in disgorgement and prejudgment interest plus a penalty of $10,000. The penalty amount reflects prompt remedial acts taken by Burnside as he cooperated with the SEC’s investigation.
The SEC’s investigation was conducted in coordination with the agency’s Digital Currency Working Group by New York Regional Office staff Daphna A. Waxman, Daphne P. Downes, Philip R. Moustakis, and Valerie A. Szczepanik. The case was supervised by Amelia A. Cottrell.
Monday, December 8, 2014
CFTC ANNOUNCES COURT ORDERED SANCTIONS AGAINST PRECOCIOUS METALS COMPANY
FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
Federal Court Orders More than $1.3 Million in Sanctions and Enters a Default Judgment Order against Florida-Based Gold Distributors, Inc. and Its Owner, Jordan Cain, for Engaging in Illegal, Off-Exchange Commodity Transactions
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge William J. Zloch of the U.S. District Court for the Southern District of Florida entered an Order of default judgment against Defendants Gold Distributors, Inc. (GDI) of Hallandale Beach, Florida, and its sole owner Jordan Cain of Miami, Florida. The Order requires the Defendants to pay restitution in the amount of $337,266 and a civil monetary penalty of $1,011,800. The Order also imposes permanent trading, solicitation, and registration bans against the Defendants and prohibits them from violating provisions of the Commodity Exchange Act (CEA), as charged.
The Order, entered on November 24, 2014, stems from a CFTC Complaint filed on March 19, 2014, that charged the Defendants with engaging in illegal, off-exchange transactions in precious metals with retail customers on a leveraged, margined, or financed basis (see CFTC Press Release 6884-14).
Specifically, the Order finds that between January 2012 and February 2013, the Defendants offered to enter into, executed, and confirmed the execution of financed gold and silver transactions with persons who were not eligible contract participants as defined by the CEA. The Order further finds that the Defendants introduced 27 customers to AmeriFirst Management, LLC (AmeriFirst), a precious metals wholesaler and clearing firm that financed and purported to confirm the execution of customer precious metals transactions. The Defendants transferred at least $797,577 to AmeriFirst for the purchase of precious metals and received commissions and fees totaling at least $337,266 for the retail financed precious metals transactions executed through AmeriFirst, according to the Order. The Order also finds that Cain was liable, as GDI’s controlling person, for GDI’s violations of the CEA.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, financed transactions such as those conducted by GDI, are illegal off-exchange transactions unless they result in actual delivery of metal within 28 days. According to the Order, the Defendants and AmeriFirst never actually delivered any precious metals to any of the Defendants’ customers.
The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
On July 29, 2013, the CFTC, in a separate action in the U.S. District Court for the Southern District of Florida, charged AmeriFirst and its principals with fraud and other violations of the CEA. On September 18, 2013, the court found AmeriFirst and its principals liable for illegal, off-exchange precious metals transactions and fraud, and on, July 24, 2014, the court imposed sanctions of over $35 million against AmeriFirst and its principals (see CFTC Press Releases 6655-13 and 6973-14).
Federal Court Orders More than $1.3 Million in Sanctions and Enters a Default Judgment Order against Florida-Based Gold Distributors, Inc. and Its Owner, Jordan Cain, for Engaging in Illegal, Off-Exchange Commodity Transactions
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge William J. Zloch of the U.S. District Court for the Southern District of Florida entered an Order of default judgment against Defendants Gold Distributors, Inc. (GDI) of Hallandale Beach, Florida, and its sole owner Jordan Cain of Miami, Florida. The Order requires the Defendants to pay restitution in the amount of $337,266 and a civil monetary penalty of $1,011,800. The Order also imposes permanent trading, solicitation, and registration bans against the Defendants and prohibits them from violating provisions of the Commodity Exchange Act (CEA), as charged.
The Order, entered on November 24, 2014, stems from a CFTC Complaint filed on March 19, 2014, that charged the Defendants with engaging in illegal, off-exchange transactions in precious metals with retail customers on a leveraged, margined, or financed basis (see CFTC Press Release 6884-14).
Specifically, the Order finds that between January 2012 and February 2013, the Defendants offered to enter into, executed, and confirmed the execution of financed gold and silver transactions with persons who were not eligible contract participants as defined by the CEA. The Order further finds that the Defendants introduced 27 customers to AmeriFirst Management, LLC (AmeriFirst), a precious metals wholesaler and clearing firm that financed and purported to confirm the execution of customer precious metals transactions. The Defendants transferred at least $797,577 to AmeriFirst for the purchase of precious metals and received commissions and fees totaling at least $337,266 for the retail financed precious metals transactions executed through AmeriFirst, according to the Order. The Order also finds that Cain was liable, as GDI’s controlling person, for GDI’s violations of the CEA.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, financed transactions such as those conducted by GDI, are illegal off-exchange transactions unless they result in actual delivery of metal within 28 days. According to the Order, the Defendants and AmeriFirst never actually delivered any precious metals to any of the Defendants’ customers.
The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
On July 29, 2013, the CFTC, in a separate action in the U.S. District Court for the Southern District of Florida, charged AmeriFirst and its principals with fraud and other violations of the CEA. On September 18, 2013, the court found AmeriFirst and its principals liable for illegal, off-exchange precious metals transactions and fraud, and on, July 24, 2014, the court imposed sanctions of over $35 million against AmeriFirst and its principals (see CFTC Press Releases 6655-13 and 6973-14).
MAN SENTENCED TO 10 YEAR PRISON TERM FOR FILING LIENS AGAINST FEDERAL OFFICIALS
FROM: U.S. JUSTICE DEPARTMENT
Thursday, December 4, 2014
Georgia Resident Sentenced in Nebraska for Filing False Liens Against Federal Officials
A Pelham, Georgia, man was sentenced on Dec. 2 in the U.S. District Court for the District of Nebraska to serve 10 years in prison followed by three years of supervised release for filing false retaliatory liens against federal government officials, announced Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division.
On Sept. 4, David Randall Due was convicted by a jury on all seven counts charged in the superseding indictment.
At trial, the evidence showed that David Randall Due and Donna Kozak, a resident of La Vista, Nebraska, and member of the sovereign citizen group “Republic for the united States of America,” conspired and agreed to retaliate against several federal officials in Nebraska by filing false liens claiming false interests in the officials’ property for millions of dollars. Due prepared the false liens in Georgia and Kozak filed them in Nebraska counties. Kozak and Due filed the liens in retaliation for the federal criminal tax prosecution and trial convictions of associates David and Bernita Kleensang. Each targeted federal official had some connection to either a tax prosecution of David and Bernita Kleensang in June 2012 or the subsequent indictment of Kozak for tax offenses.
In September 2012, Kozak and Due filed one $19 million false lien in Boyd County, Nebraska, on property owned by the federal U.S. District Court judge who presided over the Kleensang trial. Kozak was subsequently indicted by a federal grand jury for filing the false lien and for other tax-related charges. While she was on release pending trial, Due provided her with five more false liens, which she filed in Washington County, Nebraska, on properties owned by a second federal U.S. District Court judge, the U.S. Attorney, two Assistant U.S. Attorneys, and an Internal Revenue Service-Criminal Investigation (IRS-CI) special agent.
On Aug. 1, Kozak was tried and convicted by a jury in the U.S. District Court for the District of Nebraska. Her sentencing is scheduled for Jan. 6, 2015.
This case was investigated by special agents of the FBI and IRS-CI, and was prosecuted by trial attorneys from the Tax Division.
Thursday, December 4, 2014
Georgia Resident Sentenced in Nebraska for Filing False Liens Against Federal Officials
A Pelham, Georgia, man was sentenced on Dec. 2 in the U.S. District Court for the District of Nebraska to serve 10 years in prison followed by three years of supervised release for filing false retaliatory liens against federal government officials, announced Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division.
On Sept. 4, David Randall Due was convicted by a jury on all seven counts charged in the superseding indictment.
At trial, the evidence showed that David Randall Due and Donna Kozak, a resident of La Vista, Nebraska, and member of the sovereign citizen group “Republic for the united States of America,” conspired and agreed to retaliate against several federal officials in Nebraska by filing false liens claiming false interests in the officials’ property for millions of dollars. Due prepared the false liens in Georgia and Kozak filed them in Nebraska counties. Kozak and Due filed the liens in retaliation for the federal criminal tax prosecution and trial convictions of associates David and Bernita Kleensang. Each targeted federal official had some connection to either a tax prosecution of David and Bernita Kleensang in June 2012 or the subsequent indictment of Kozak for tax offenses.
In September 2012, Kozak and Due filed one $19 million false lien in Boyd County, Nebraska, on property owned by the federal U.S. District Court judge who presided over the Kleensang trial. Kozak was subsequently indicted by a federal grand jury for filing the false lien and for other tax-related charges. While she was on release pending trial, Due provided her with five more false liens, which she filed in Washington County, Nebraska, on properties owned by a second federal U.S. District Court judge, the U.S. Attorney, two Assistant U.S. Attorneys, and an Internal Revenue Service-Criminal Investigation (IRS-CI) special agent.
On Aug. 1, Kozak was tried and convicted by a jury in the U.S. District Court for the District of Nebraska. Her sentencing is scheduled for Jan. 6, 2015.
This case was investigated by special agents of the FBI and IRS-CI, and was prosecuted by trial attorneys from the Tax Division.
CHIROPRACTOR SENT TO PRISON FOR FRAUD
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, December 3, 2014
Former New Jersey Chiropractor Sentenced to Prison for Fraud
A man formerly of Neptune, New Jersey, was sentenced today in the U.S. District Court for the District of New Jersey to serve 54 months in prison to be followed by five years of supervised release, the Justice Department and the Internal Revenue Service (IRS) announced.
In February 2014, a jury convicted David Moleski, a pilot and former chiropractor, of 14 counts of mail fraud, one count of wire fraud, one count of corruptly endeavoring to obstruct and impede Internal Revenue laws and three counts of submitting false claims for tax refunds. Moleski was sentenced by U.S. District Judge Freda L. Wolfson, who also ordered that Moleski pay a $10,000 fine and, as a condition of release, $48,199 in restitution.
According to the evidence presented in court, Moleski submitted three false tax returns in 2009 for tax years 2006 through 2008 that collectively requested more than $1.3 million in income tax refunds to which he was not entitled. Prior to filing these returns, Moleski failed to file tax returns from 1999 through 2005, even though he was legally required to file. When the IRS assessed taxes for those years and began collecting, Moleski obstructed the collection efforts and demanded that a third-party financial institution not comply with an IRS levy. In addition, Moleski attempted to pay credit card bills and other debts with fake financial instruments that claimed to draw on an account at the U.S. Treasury that did not actually exist. For instance, Moleski sent a fake financial instrument for $500,000 in alleged payment of a mortgage debt.
The case was investigated by special agents of IRS-Criminal Investigation. Trial Attorneys Tino M. Lisella and Yael T. Epstein of the Tax Division prosecuted the case, with the assistance of the U.S. Attorney’s Office for the District of New Jersey.
Wednesday, December 3, 2014
Former New Jersey Chiropractor Sentenced to Prison for Fraud
A man formerly of Neptune, New Jersey, was sentenced today in the U.S. District Court for the District of New Jersey to serve 54 months in prison to be followed by five years of supervised release, the Justice Department and the Internal Revenue Service (IRS) announced.
In February 2014, a jury convicted David Moleski, a pilot and former chiropractor, of 14 counts of mail fraud, one count of wire fraud, one count of corruptly endeavoring to obstruct and impede Internal Revenue laws and three counts of submitting false claims for tax refunds. Moleski was sentenced by U.S. District Judge Freda L. Wolfson, who also ordered that Moleski pay a $10,000 fine and, as a condition of release, $48,199 in restitution.
According to the evidence presented in court, Moleski submitted three false tax returns in 2009 for tax years 2006 through 2008 that collectively requested more than $1.3 million in income tax refunds to which he was not entitled. Prior to filing these returns, Moleski failed to file tax returns from 1999 through 2005, even though he was legally required to file. When the IRS assessed taxes for those years and began collecting, Moleski obstructed the collection efforts and demanded that a third-party financial institution not comply with an IRS levy. In addition, Moleski attempted to pay credit card bills and other debts with fake financial instruments that claimed to draw on an account at the U.S. Treasury that did not actually exist. For instance, Moleski sent a fake financial instrument for $500,000 in alleged payment of a mortgage debt.
The case was investigated by special agents of IRS-Criminal Investigation. Trial Attorneys Tino M. Lisella and Yael T. Epstein of the Tax Division prosecuted the case, with the assistance of the U.S. Attorney’s Office for the District of New Jersey.
U.S. OFFICIALS REPORT ON CREATING A POWER GRID ACROSS CENTRAL AMERICA
FROM: U.S. STATE DEPARTMENT
Investing in a Power Grid to Connect Communities Across Central America
Bureau of Energy Resources
December 3, 2014
Investing in a Power Grid to Connect Communities Across Central America
By Roberta S. Jacobson, Assistant Secretary of State for Western Hemisphere Affairs; Amos J Hochstein, Acting Special Envoy and Coordinator for International Energy Affairs; and Scott Nathan, Special Representative for Commercial and Business Affairs, United States Department of State
Western Hemisphere energy markets are in a period of profound transformation, as the United States and partners throughout the region seize opportunities to reform and expand energy production, integrate economies, create jobs, and enhance stability and citizen security. U.S. leadership in the energy sector is helping to catalyze and support more sustained and equitable economic growth.
Nowhere does this prospect of energy-led economic growth offer greater potential than in Central America’s electricity sector, where countries have the opportunity to build a future of clean, reliable, and affordable electricity by connecting power grids across borders and developing a regional electricity market.
Those of us who enjoy reliable access to affordable electricity are prone to take it for granted. However, without it, businesses of all sizes cannot compete in today’s global economy, pushing prosperity out of reach for too many workers and their families.
With this in mind, President Obama, Colombia’s President Santos and the region’s other leaders agreed at the 2012 Summit of the Americas to make electricity supplies cleaner, more reliable, and affordable by expanding electrical interconnections and scaling up low-carbon power generation. They set a ten-year deadline under the initiative Connecting the Americas 2022, or Connect 2022.
In the two years since, the United States, Central American countries, Colombia, and Mexico have worked to advance the Connect 2022 vision. President Obama and Vice President Biden have engaged the region’s leaders to build support for energy integration, especially in Central America and the Caribbean. As President Obama told leaders in Costa Rica last year, everybody stands to benefit from a more free flow of electricity across borders.
Through our energy diplomacy, we have brought Central American policymakers together with the private sector to identify a clear path forward. Through U.S.-funded technical assistance, we are helping Central American regulators and grid operators meet their power sector investment requirements and clean energy goals.
The results are promising. Last year, the Central American Electricity Interconnection System (SIEPAC) adopted rules for cross-border power trade that unleashed impressive growth in the regional electricity market. A more active market will make it easier to replace expensive, dirty oil-fired generation with cleaner, cheaper sources of power, whether renewable energy or natural gas.
And last month, the final stretch of the SIEPAC regional transmission line was completed. This is a milestone achievement that links six Central American countries and forms the backbone of the regional market. Countries have already used the SIEPAC line to swap power in times of shortage, keeping schools and businesses open, instead of suffering through blackouts due to droughts.
As a result of these efforts, power infrastructure is now connected from Canada to Panama.
Yet there is more to be done. Central Americans still pay the second highest electricity rates in the Americas, second only to the Caribbean. These high prices constrain needed economic development and direct foreign investment that can create new opportunities for families and businesses alike.
Central America needs to upgrade and better integrate national and regional transmission capacity, improve market rules, and attract investment. If Colombia and Panama move forward with the planned interconnection, Andean markets would connect to Central America, increasing the market size and investment opportunity for all. If the region introduces natural gas, it will need to set clear and predictable rules.
These changes are not easy; some will require tough political decisions. But the result will be worth it: greater competition, increased efficiency, and reduced prices for consumers. It will create attractive new opportunities for investment and increase overall competitiveness.
It will also affect millions of lives throughout the region in real and immediate ways. Children will be able to do school work or read at night by electric light. Once towns are connected to the power grid, those children will be able to teach their parents how to use a computer and introduce them to the limitless opportunities of the internet. Health clinics will maintain cold chains for vaccines, and electric cooking will improve indoor air quality and the health of families.
On November 4, President Otto Perez Molina of Guatemala hosts energy policymakers, regulators, and private sector representatives at the Connect 2022 Mesoamerican Energy Investment Summit in Guatemala City.
The United States strongly supports this Investment Summit, in collaboration with the Inter-American Development Bank and World Bank. We urge policymakers from the region to use the Summit to demonstrate progress on regional integration and showcase the opportunities that are emerging as a result of increased electricity trade and new interconnections. We encourage the private sector to convey clearly what policymakers and regulators still need to do to attract private capital. We look forward to a successful Investment Summit that motivates all who participate to work hard to advance Connect 2022 goals and give Central America’s citizens the opportunity for prosperity that we all deserve.
Central America has set a strong example for the hemisphere by completing the SIEPAC line. Now it must take the next steps to allow energy to flow across the line in ways that reduce prices, spur economic growth, attract needed investment, and lead to broader regional integration. We congratulate the region and look forward to working together to achieve our Presidents’ vision for Connecting the Americas by 2022.
Investing in a Power Grid to Connect Communities Across Central America
Bureau of Energy Resources
December 3, 2014
Investing in a Power Grid to Connect Communities Across Central America
By Roberta S. Jacobson, Assistant Secretary of State for Western Hemisphere Affairs; Amos J Hochstein, Acting Special Envoy and Coordinator for International Energy Affairs; and Scott Nathan, Special Representative for Commercial and Business Affairs, United States Department of State
Western Hemisphere energy markets are in a period of profound transformation, as the United States and partners throughout the region seize opportunities to reform and expand energy production, integrate economies, create jobs, and enhance stability and citizen security. U.S. leadership in the energy sector is helping to catalyze and support more sustained and equitable economic growth.
Nowhere does this prospect of energy-led economic growth offer greater potential than in Central America’s electricity sector, where countries have the opportunity to build a future of clean, reliable, and affordable electricity by connecting power grids across borders and developing a regional electricity market.
Those of us who enjoy reliable access to affordable electricity are prone to take it for granted. However, without it, businesses of all sizes cannot compete in today’s global economy, pushing prosperity out of reach for too many workers and their families.
With this in mind, President Obama, Colombia’s President Santos and the region’s other leaders agreed at the 2012 Summit of the Americas to make electricity supplies cleaner, more reliable, and affordable by expanding electrical interconnections and scaling up low-carbon power generation. They set a ten-year deadline under the initiative Connecting the Americas 2022, or Connect 2022.
In the two years since, the United States, Central American countries, Colombia, and Mexico have worked to advance the Connect 2022 vision. President Obama and Vice President Biden have engaged the region’s leaders to build support for energy integration, especially in Central America and the Caribbean. As President Obama told leaders in Costa Rica last year, everybody stands to benefit from a more free flow of electricity across borders.
Through our energy diplomacy, we have brought Central American policymakers together with the private sector to identify a clear path forward. Through U.S.-funded technical assistance, we are helping Central American regulators and grid operators meet their power sector investment requirements and clean energy goals.
The results are promising. Last year, the Central American Electricity Interconnection System (SIEPAC) adopted rules for cross-border power trade that unleashed impressive growth in the regional electricity market. A more active market will make it easier to replace expensive, dirty oil-fired generation with cleaner, cheaper sources of power, whether renewable energy or natural gas.
And last month, the final stretch of the SIEPAC regional transmission line was completed. This is a milestone achievement that links six Central American countries and forms the backbone of the regional market. Countries have already used the SIEPAC line to swap power in times of shortage, keeping schools and businesses open, instead of suffering through blackouts due to droughts.
As a result of these efforts, power infrastructure is now connected from Canada to Panama.
Yet there is more to be done. Central Americans still pay the second highest electricity rates in the Americas, second only to the Caribbean. These high prices constrain needed economic development and direct foreign investment that can create new opportunities for families and businesses alike.
Central America needs to upgrade and better integrate national and regional transmission capacity, improve market rules, and attract investment. If Colombia and Panama move forward with the planned interconnection, Andean markets would connect to Central America, increasing the market size and investment opportunity for all. If the region introduces natural gas, it will need to set clear and predictable rules.
These changes are not easy; some will require tough political decisions. But the result will be worth it: greater competition, increased efficiency, and reduced prices for consumers. It will create attractive new opportunities for investment and increase overall competitiveness.
It will also affect millions of lives throughout the region in real and immediate ways. Children will be able to do school work or read at night by electric light. Once towns are connected to the power grid, those children will be able to teach their parents how to use a computer and introduce them to the limitless opportunities of the internet. Health clinics will maintain cold chains for vaccines, and electric cooking will improve indoor air quality and the health of families.
On November 4, President Otto Perez Molina of Guatemala hosts energy policymakers, regulators, and private sector representatives at the Connect 2022 Mesoamerican Energy Investment Summit in Guatemala City.
The United States strongly supports this Investment Summit, in collaboration with the Inter-American Development Bank and World Bank. We urge policymakers from the region to use the Summit to demonstrate progress on regional integration and showcase the opportunities that are emerging as a result of increased electricity trade and new interconnections. We encourage the private sector to convey clearly what policymakers and regulators still need to do to attract private capital. We look forward to a successful Investment Summit that motivates all who participate to work hard to advance Connect 2022 goals and give Central America’s citizens the opportunity for prosperity that we all deserve.
Central America has set a strong example for the hemisphere by completing the SIEPAC line. Now it must take the next steps to allow energy to flow across the line in ways that reduce prices, spur economic growth, attract needed investment, and lead to broader regional integration. We congratulate the region and look forward to working together to achieve our Presidents’ vision for Connecting the Americas by 2022.
Sunday, December 7, 2014
SECRETARY KERRY'S STATEMENT ON THE CHARGES IN IRAN AGAINST WP REPORTER JASON REZAIAN
FROM: U.S. STATE DEPARTMENT
Charges in Iran Against U.S. Citizen Jason Rezaian
Press Statement
John Kerry
Secretary of State
Washington, DC
December 7, 2014
The United States is deeply disappointed and concerned by reports that the Iranian judiciary has charged Washington Post journalist Jason Rezaian with unspecified charges, and that the judge denied his request to be released on bail. We are also distressed by reports that Jason was not allowed access to an attorney, which is a clear violation of Iran’s own laws and international norms. I am personally dismayed and disturbed at these reports as I have repeatedly raised Jason's case, and the other cases of detained or missing U.S. citizens, directly with Iranian officials.
We share the concerns of Mr. Rezaian’s family regarding reports that he is under physical and psychological distress, and is not receiving proper medical care. The Iranian government continues to deny our repeated requests for Consular Access to Jason by our Protecting Power, the Swiss, so we are unable to check on his condition or ensure adequate legal representation.
Jason poses no threat to the Iranian government or to Iran’s national security. We call on the Iranian government to drop any and all charges against Jason and release him immediately so that he can be reunited with his family.
Likewise, we again call for the release of U.S. citizens Amir Hekmati and Saeed Abedini, and ask for the Iranian government's cooperation in locating Robert Levinson, so that all may be returned to their families.
Charges in Iran Against U.S. Citizen Jason Rezaian
Press Statement
John Kerry
Secretary of State
Washington, DC
December 7, 2014
The United States is deeply disappointed and concerned by reports that the Iranian judiciary has charged Washington Post journalist Jason Rezaian with unspecified charges, and that the judge denied his request to be released on bail. We are also distressed by reports that Jason was not allowed access to an attorney, which is a clear violation of Iran’s own laws and international norms. I am personally dismayed and disturbed at these reports as I have repeatedly raised Jason's case, and the other cases of detained or missing U.S. citizens, directly with Iranian officials.
We share the concerns of Mr. Rezaian’s family regarding reports that he is under physical and psychological distress, and is not receiving proper medical care. The Iranian government continues to deny our repeated requests for Consular Access to Jason by our Protecting Power, the Swiss, so we are unable to check on his condition or ensure adequate legal representation.
Jason poses no threat to the Iranian government or to Iran’s national security. We call on the Iranian government to drop any and all charges against Jason and release him immediately so that he can be reunited with his family.
Likewise, we again call for the release of U.S. citizens Amir Hekmati and Saeed Abedini, and ask for the Iranian government's cooperation in locating Robert Levinson, so that all may be returned to their families.
ATTORNEY SENT TO PRISON FOR ROLE IN PUMP-AND-DUMP STOCK FRAUD
FROM: U.S. JUSTICE DEPARTMENT
Friday, December 5, 2014
Attorney Sentenced to 17 Years in Prison for Multi-Million Dollar Stock Fraud
A California attorney was sentenced to serve 17 years in prison today in the Southern District of Florida for operating a five-year, multi-million dollar market manipulation and fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.
Mitchell J. Stein, 53, of Hidden Hills, California, was convicted by a jury on May 20, 2013, of conspiracy to commit mail and wire fraud, three counts of wire fraud, three counts of securities fraud, three counts of money laundering, and one count of conspiracy to obstruct justice. In addition to the prison sentence, U.S. District Judge Kenneth A. Marra of the Southern District of Florida ordered Stein to forfeit $5.3 million. Restitution will be determined at a later date.
“Lawyers for companies are supposed to guide their clients through the important reporting and regulatory requirements that ensure the integrity of our financial markets,” said Assistant Attorney General Caldwell. “Stein abdicated his responsibility, and instead abused his position of trust to defraud a public company, its shareholders, and the investing public of millions of dollars.”
“The ‘pump and dump’ scheme orchestrated by Stein and his co-conspirators was extremely elaborate,” said U.S. Attorney Ferrer. “In an effort to conceal his fraudulent financial scheme, Stein falsely testified before the SEC and used his position of trust to arrange for others to do the same. The sentencing announced today underscores the department's commitment to hold liable those individuals who profit from manipulating the financial markets and violating securities and other laws that are intended to protect investors and markets.”
According to evidence presented at trial, Stein’s wife held a controlling majority interest in Signalife Inc., a publicly-traded company currently known as Heart Tronics that purportedly sold electronic heart monitoring devices. While acting as Signalife’s outside legal counsel, Stein engaged in a scheme to artificially inflate the price of Signalife stock by creating the false impression of sales activity at the company. Specifically, the evidence at trial showed that Stein and his co-conspirators created fake purchase orders and related documents from fictitious customers, then caused Signalife to issue press releases and file documents with the Securities and Exchange Commission (SEC) trumpeting these fictitious sales. Evidence at trial also proved that in a further effort to create the false appearance of sales activity, Stein arranged to have Signalife products shipped to and temporarily stored with an individual who had not purchased any products.
Evidence at trial further proved that Stein disguised his selling of Signalife stock at artificially inflated prices by placing shares in purportedly blind trusts, and having a co-conspirator sell the shares after Stein caused the false sales information to be disseminated to the public. Stein also caused Signalife to issue shares to third parties so that those third parties could sell the shares and remit the proceeds to Stein. From one co-conspirator alone, Stein received illicit gains of over $1.8 million from those sales.
In addition, evidence at trial proved that Stein conspired to obstruct the SEC investigation into Heart Tronics by testifying falsely and arranging for others to testify falsely in an effort to conceal the fraud scheme.
This case was investigated by the U.S. Postal Inspection Service, with assistance from the Office of the Special Inspector General for the Troubled Asset Relief Program. The SEC referred this matter to the Justice Department, conducted a parallel investigation resulting in a civil enforcement action against Stein and others, and provided substantial assistance in this investigation. The Financial Industry Regulatory Authority’s Criminal Prosecution Assistance Group likewise provided substantial assistance in this matter.
This case was prosecuted by Assistant Chief Albert B. Stieglitz Jr., Assistant Chief Kevin B. Muhlendorf, and Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section and Assistant Chief Darrin McCullough of the Criminal Division’s Asset Forfeiture and Money Laundering Section.
Friday, December 5, 2014
Attorney Sentenced to 17 Years in Prison for Multi-Million Dollar Stock Fraud
A California attorney was sentenced to serve 17 years in prison today in the Southern District of Florida for operating a five-year, multi-million dollar market manipulation and fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.
Mitchell J. Stein, 53, of Hidden Hills, California, was convicted by a jury on May 20, 2013, of conspiracy to commit mail and wire fraud, three counts of wire fraud, three counts of securities fraud, three counts of money laundering, and one count of conspiracy to obstruct justice. In addition to the prison sentence, U.S. District Judge Kenneth A. Marra of the Southern District of Florida ordered Stein to forfeit $5.3 million. Restitution will be determined at a later date.
“Lawyers for companies are supposed to guide their clients through the important reporting and regulatory requirements that ensure the integrity of our financial markets,” said Assistant Attorney General Caldwell. “Stein abdicated his responsibility, and instead abused his position of trust to defraud a public company, its shareholders, and the investing public of millions of dollars.”
“The ‘pump and dump’ scheme orchestrated by Stein and his co-conspirators was extremely elaborate,” said U.S. Attorney Ferrer. “In an effort to conceal his fraudulent financial scheme, Stein falsely testified before the SEC and used his position of trust to arrange for others to do the same. The sentencing announced today underscores the department's commitment to hold liable those individuals who profit from manipulating the financial markets and violating securities and other laws that are intended to protect investors and markets.”
According to evidence presented at trial, Stein’s wife held a controlling majority interest in Signalife Inc., a publicly-traded company currently known as Heart Tronics that purportedly sold electronic heart monitoring devices. While acting as Signalife’s outside legal counsel, Stein engaged in a scheme to artificially inflate the price of Signalife stock by creating the false impression of sales activity at the company. Specifically, the evidence at trial showed that Stein and his co-conspirators created fake purchase orders and related documents from fictitious customers, then caused Signalife to issue press releases and file documents with the Securities and Exchange Commission (SEC) trumpeting these fictitious sales. Evidence at trial also proved that in a further effort to create the false appearance of sales activity, Stein arranged to have Signalife products shipped to and temporarily stored with an individual who had not purchased any products.
Evidence at trial further proved that Stein disguised his selling of Signalife stock at artificially inflated prices by placing shares in purportedly blind trusts, and having a co-conspirator sell the shares after Stein caused the false sales information to be disseminated to the public. Stein also caused Signalife to issue shares to third parties so that those third parties could sell the shares and remit the proceeds to Stein. From one co-conspirator alone, Stein received illicit gains of over $1.8 million from those sales.
In addition, evidence at trial proved that Stein conspired to obstruct the SEC investigation into Heart Tronics by testifying falsely and arranging for others to testify falsely in an effort to conceal the fraud scheme.
This case was investigated by the U.S. Postal Inspection Service, with assistance from the Office of the Special Inspector General for the Troubled Asset Relief Program. The SEC referred this matter to the Justice Department, conducted a parallel investigation resulting in a civil enforcement action against Stein and others, and provided substantial assistance in this investigation. The Financial Industry Regulatory Authority’s Criminal Prosecution Assistance Group likewise provided substantial assistance in this matter.
This case was prosecuted by Assistant Chief Albert B. Stieglitz Jr., Assistant Chief Kevin B. Muhlendorf, and Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section and Assistant Chief Darrin McCullough of the Criminal Division’s Asset Forfeiture and Money Laundering Section.
NSF SUPPORTS SCIENCE BIG DATA SHARING THROUGH SCISERVER
FROM: NATIONAL SCIENCE FOUNDATION
SciServer: Big Data infrastructure for science
Research team from Johns Hopkins extends tools from Sloan Digital Sky Survey to new scientific communities
Big Data comes naturally to science. Every year, scientists in every field, from astronomy to zoology, make tremendous leaps in their ability to generate valuable data.
But all of this information comes at a price. As datasets grow exponentially, so do the problems and costs associated with accessing, reading, sharing and processing them.
A new project called SciServer, supported by the National Science Foundation (NSF), aims to build a long-term, flexible ecosystem to provide access to the enormous data sets from observations and simulation.
"SciServer will help meet the challenges of Big Data," said Alex Szalay of Johns Hopkins University, the principal investigator of the five-year NSF-funded project and the architect for the Science Archive of the Sloan Digital Sky Survey. "By building a common infrastructure, we can create data access and analysis tools useful to all areas of science."
SciServer's heritage: Big Data in astronomy
SciServer grew out of work with the Sloan Digital Sky Survey (SDSS), an ambitious, ongoing project to map the entire universe.
"When the SDSS began in 1998, astronomers had data for less than 200,000 galaxies," said Ani Thakar, an astronomer at Johns Hopkins who is part of the SciServer team. "Within five years after SDSS began, we had nearly 200 million galaxies in our database. Today, the SDSS data exceeds 70 terabytes, covering more than 220 million galaxies and 260 million stars."
The Johns Hopkins team created several online tools for accessing SDSS data. For instance, using the SkyServer website, anyone with a web browser can navigate through the sky, getting detailed information about stars or searching for objects using multiple criteria. The site also includes classroom-ready educational activities that allow students to learn science using cutting-edge data.
To allow users--scientists, citizen scientists, students--to run longer-term analyses of the Sloan data, they created CasJobs, an online workbench where registered users can run queries for up to eight hours and store results in a personal "MyDB" database for later analysis.
With each new tool, the community of users grew, leading to more and more scientific discoveries.
The problem: data without infrastructure
One major challenge in managing and extracting value from Big Data is simply preserving the data as file formats change and scientists retire. Another challenge is that most datasets are stored in an ad hoc manner with insufficient metadata for describing how the data should be interpreted and used. Yet another challenge is unequal access to data and expertise among researchers.
Even when individual datasets are well-preserved, the difficulty of combining data for joint analysis means that researchers miss opportunities for new insights. The result is that scientists work inefficiently and miss chances to grow their research projects in new directions.
A variety of projects have developed approaches to preserving and managing datasets, but providing easy access so all researchers can compare, analyze and share them remains a problem. The SciServer team has spent the last two decades addressing these problems, first in astronomy and then in other areas of science.
From SkyServer to SciServer: the new approach
Led by Szalay, the team began work on SciServer in 2013 with funding from NSF's Data Infrastructure Building Blocks program.
Set to launch in phases over the next four years, SciServer will deliver significant benefits to the scientific community by extending the infrastructure developed for SDSS astronomy data to many other areas of science.
"Our approach in designing SciServer is to bring the analysis to the data. This means that scientists can search and analyze Big Data without downloading terabytes of data, resulting in much faster processing times," Szalay said. "Bringing the analysis to the data also makes it much easier to compare and combine datasets, allowing researchers to discover new and surprising connections between them."
Szalay and his team are working in close collaboration with research partners to specify real-world use cases to ensure that the system will be most helpful to working scientists. In fact, they have already made significant progress in two fields: soil ecology and fluid dynamics.
To help ease the burden on researchers, the team developed "SciDrive," a cloud data storage system for scientific data that allows scientists to upload and share data using a Dropbox-like interface. The interface automatically reads the data into a database, and one can search online and cross-correlate with other data sources.
SciServer will extend this capability to a new citizen science project called GLUSEEN (Global Urban Soil Ecological & Educational Network), which aims to gather worldwide distributed data on soil ecology across a range of climatic conditions. SciDrive will offer extensive new collaborative features and will allow individuals to connect remote sensor measurements to weather and other datasets that are available from external worldwide providers.
"Our approach with SciDrive and citizen science immediately will be useful to many other areas of science where datasets managed by individual researchers must be combined with larger publicly-available datasets," said Szalay.
SciServer also has a major initiative underway to develop an "open numerical laboratory" for the access and processing of large simulation databases. Working with the Turbulence Simulation group at Johns Hopkins, they are developing a pilot system to integrate data sets and processing workflows from simulation of turbulence into SciServer.
As the SciServer system becomes more mature, the team will expand to benefit other areas of science including genomics--where researchers must cross-correlate petabytes of data to understand entire genomes--and connectomics--where researchers explore cellular connections across the entire structure of the brain. These collaborations will be spread over a five-year period from 2013 to 2018, and will allow SciServer to be incrementally architected and developed to support its growing capabilities.
"Our conscious strategy of 'going from working to working'--building tools by adapting existing, working tools--is a key factor in ensuring the success of our project," Szalay said. "The tools we build will create a fully-functional, user-driven system from the beginning, making SciServer an indispensable tool for doing science in the 21st century."
-- Mike Rippin, Johns Hopkins University (202) 431-7217 mike.rippin@jhu.edu
-- Aaron Dubrow, NSF (703) 292-4489 adubrow@nsf.gov
Investigators
Alexander Szalay
Randal Burns
Michael Rippin
Steven Salzberg
Aniruddha Thakar
Charles Meneveau
Related Institutions/Organizations
Johns Hopkins University
SciServer: Big Data infrastructure for science
Research team from Johns Hopkins extends tools from Sloan Digital Sky Survey to new scientific communities
Big Data comes naturally to science. Every year, scientists in every field, from astronomy to zoology, make tremendous leaps in their ability to generate valuable data.
But all of this information comes at a price. As datasets grow exponentially, so do the problems and costs associated with accessing, reading, sharing and processing them.
A new project called SciServer, supported by the National Science Foundation (NSF), aims to build a long-term, flexible ecosystem to provide access to the enormous data sets from observations and simulation.
"SciServer will help meet the challenges of Big Data," said Alex Szalay of Johns Hopkins University, the principal investigator of the five-year NSF-funded project and the architect for the Science Archive of the Sloan Digital Sky Survey. "By building a common infrastructure, we can create data access and analysis tools useful to all areas of science."
SciServer's heritage: Big Data in astronomy
SciServer grew out of work with the Sloan Digital Sky Survey (SDSS), an ambitious, ongoing project to map the entire universe.
"When the SDSS began in 1998, astronomers had data for less than 200,000 galaxies," said Ani Thakar, an astronomer at Johns Hopkins who is part of the SciServer team. "Within five years after SDSS began, we had nearly 200 million galaxies in our database. Today, the SDSS data exceeds 70 terabytes, covering more than 220 million galaxies and 260 million stars."
The Johns Hopkins team created several online tools for accessing SDSS data. For instance, using the SkyServer website, anyone with a web browser can navigate through the sky, getting detailed information about stars or searching for objects using multiple criteria. The site also includes classroom-ready educational activities that allow students to learn science using cutting-edge data.
To allow users--scientists, citizen scientists, students--to run longer-term analyses of the Sloan data, they created CasJobs, an online workbench where registered users can run queries for up to eight hours and store results in a personal "MyDB" database for later analysis.
With each new tool, the community of users grew, leading to more and more scientific discoveries.
The problem: data without infrastructure
One major challenge in managing and extracting value from Big Data is simply preserving the data as file formats change and scientists retire. Another challenge is that most datasets are stored in an ad hoc manner with insufficient metadata for describing how the data should be interpreted and used. Yet another challenge is unequal access to data and expertise among researchers.
Even when individual datasets are well-preserved, the difficulty of combining data for joint analysis means that researchers miss opportunities for new insights. The result is that scientists work inefficiently and miss chances to grow their research projects in new directions.
A variety of projects have developed approaches to preserving and managing datasets, but providing easy access so all researchers can compare, analyze and share them remains a problem. The SciServer team has spent the last two decades addressing these problems, first in astronomy and then in other areas of science.
From SkyServer to SciServer: the new approach
Led by Szalay, the team began work on SciServer in 2013 with funding from NSF's Data Infrastructure Building Blocks program.
Set to launch in phases over the next four years, SciServer will deliver significant benefits to the scientific community by extending the infrastructure developed for SDSS astronomy data to many other areas of science.
"Our approach in designing SciServer is to bring the analysis to the data. This means that scientists can search and analyze Big Data without downloading terabytes of data, resulting in much faster processing times," Szalay said. "Bringing the analysis to the data also makes it much easier to compare and combine datasets, allowing researchers to discover new and surprising connections between them."
Szalay and his team are working in close collaboration with research partners to specify real-world use cases to ensure that the system will be most helpful to working scientists. In fact, they have already made significant progress in two fields: soil ecology and fluid dynamics.
To help ease the burden on researchers, the team developed "SciDrive," a cloud data storage system for scientific data that allows scientists to upload and share data using a Dropbox-like interface. The interface automatically reads the data into a database, and one can search online and cross-correlate with other data sources.
SciServer will extend this capability to a new citizen science project called GLUSEEN (Global Urban Soil Ecological & Educational Network), which aims to gather worldwide distributed data on soil ecology across a range of climatic conditions. SciDrive will offer extensive new collaborative features and will allow individuals to connect remote sensor measurements to weather and other datasets that are available from external worldwide providers.
"Our approach with SciDrive and citizen science immediately will be useful to many other areas of science where datasets managed by individual researchers must be combined with larger publicly-available datasets," said Szalay.
SciServer also has a major initiative underway to develop an "open numerical laboratory" for the access and processing of large simulation databases. Working with the Turbulence Simulation group at Johns Hopkins, they are developing a pilot system to integrate data sets and processing workflows from simulation of turbulence into SciServer.
As the SciServer system becomes more mature, the team will expand to benefit other areas of science including genomics--where researchers must cross-correlate petabytes of data to understand entire genomes--and connectomics--where researchers explore cellular connections across the entire structure of the brain. These collaborations will be spread over a five-year period from 2013 to 2018, and will allow SciServer to be incrementally architected and developed to support its growing capabilities.
"Our conscious strategy of 'going from working to working'--building tools by adapting existing, working tools--is a key factor in ensuring the success of our project," Szalay said. "The tools we build will create a fully-functional, user-driven system from the beginning, making SciServer an indispensable tool for doing science in the 21st century."
-- Mike Rippin, Johns Hopkins University (202) 431-7217 mike.rippin@jhu.edu
-- Aaron Dubrow, NSF (703) 292-4489 adubrow@nsf.gov
Investigators
Alexander Szalay
Randal Burns
Michael Rippin
Steven Salzberg
Aniruddha Thakar
Charles Meneveau
Related Institutions/Organizations
Johns Hopkins University
PHARMACY SETTLES ALLEGATIONS IT USED GIFT CARDS AS INDUCEMENTS FOR MEDICARE, MEDICAID PATIENTS
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, December 3, 2014
Rite Aid Corporation Pays $2.99 Million for Alleged Use of Gift Cards to Induce Medicare and Medicaid Business
Rite Aid Corporation, a Delaware corporation and national retail drugstore chain with its principal place of business in Camp Hill, Pennsylvania, has paid the United States $2.99 million to resolve allegations that it violated the False Claims Act by inappropriately using gift cards as inducements, the Department of Justice announced today.
The settlement resolves allegations that Rite Aid offered illegal inducements to Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies. The government alleged that from 2008 to 2010, Rite Aid had knowingly and improperly influenced the decisions of Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies by offering them gift cards in exchange for their business.
“This case demonstrates the government's ongoing commitment to enforcing accountability, transparency and fairness in the retail pharmacy industry,” said Acting Assistant Attorney General Joyce R. Branda for the Civil Division. “The government will continue to advocate for the best interests of Medicare and Medicaid patients, and prevent pharmacies from improperly manipulating their healthcare choices.”
“This settlement holds Rite Aid accountable for exerting undue influence on individuals when they make important healthcare decisions about where and when to fill prescriptions,” said Acting U.S. Attorney Stephanie Yonekura for the Central District of California. “Corporate profit should never steer an individual away from making the right healthcare decision.”
“Pharmacies are not allowed to improperly influence the decision-making of Medicare and Medicaid patients about where to fill prescriptions,” said Special Agent in Charge Glenn R. Ferry for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Pharmacy chains that manipulate patient choices in this way will be held accountable.”
The settlement resolves allegations filed by Jack Chin under the qui tam, or whistleblower provisions of the False Claims Act, which authorizes private parties to sue for fraud on behalf of the United States and share in the recovery. Chin will receive approximately $508,300 of the settlement.
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 $23.2 billion through False Claims Act cases, with more than $14.9 billion of that amount recovered in cases involving fraud against federal health care programs.
This case was investigated jointly by the Commercial Litigation Branch of the Civil Division, the U.S. Attorney’s Office for the Central District of California, the National Association of Medicaid Fraud Control Units and HHS-OIG.
The claims settled by today’s agreement are allegations only and there has been no determination of liability.
Wednesday, December 3, 2014
Rite Aid Corporation Pays $2.99 Million for Alleged Use of Gift Cards to Induce Medicare and Medicaid Business
Rite Aid Corporation, a Delaware corporation and national retail drugstore chain with its principal place of business in Camp Hill, Pennsylvania, has paid the United States $2.99 million to resolve allegations that it violated the False Claims Act by inappropriately using gift cards as inducements, the Department of Justice announced today.
The settlement resolves allegations that Rite Aid offered illegal inducements to Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies. The government alleged that from 2008 to 2010, Rite Aid had knowingly and improperly influenced the decisions of Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies by offering them gift cards in exchange for their business.
“This case demonstrates the government's ongoing commitment to enforcing accountability, transparency and fairness in the retail pharmacy industry,” said Acting Assistant Attorney General Joyce R. Branda for the Civil Division. “The government will continue to advocate for the best interests of Medicare and Medicaid patients, and prevent pharmacies from improperly manipulating their healthcare choices.”
“This settlement holds Rite Aid accountable for exerting undue influence on individuals when they make important healthcare decisions about where and when to fill prescriptions,” said Acting U.S. Attorney Stephanie Yonekura for the Central District of California. “Corporate profit should never steer an individual away from making the right healthcare decision.”
“Pharmacies are not allowed to improperly influence the decision-making of Medicare and Medicaid patients about where to fill prescriptions,” said Special Agent in Charge Glenn R. Ferry for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Pharmacy chains that manipulate patient choices in this way will be held accountable.”
The settlement resolves allegations filed by Jack Chin under the qui tam, or whistleblower provisions of the False Claims Act, which authorizes private parties to sue for fraud on behalf of the United States and share in the recovery. Chin will receive approximately $508,300 of the settlement.
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 $23.2 billion through False Claims Act cases, with more than $14.9 billion of that amount recovered in cases involving fraud against federal health care programs.
This case was investigated jointly by the Commercial Litigation Branch of the Civil Division, the U.S. Attorney’s Office for the Central District of California, the National Association of Medicaid Fraud Control Units and HHS-OIG.
The claims settled by today’s agreement are allegations only and there has been no determination of liability.
ASSISTANT AG CALDWELL SPEAKS REGARDING FOREIGN BRIBERY REPORT
FROM: U.S. JUSTICE DEPARTMENT
Assistant Attorney General Leslie R. Caldwell Speaks at the Launch of the Organisation for Economic Co-operation and Development Foreign Bribery Report
ParisFrance ~ Tuesday, December 2, 2014
Thank you for that kind introduction, and thank you [Organisation for Economic Co-operation and Development (OECD)] Secretary-General [Angel] Gurria for inviting me to be part of this important day. I want to commend you and your team for your work in compiling this significant Foreign Bribery Report, and I am honored to be here to celebrate its release. Together, your team and the members of the Working Group on Bribery play a vital role in the global fight against corruption.
As you all know, this year marks the twentieth anniversary of the formation of the OECD Working Group on Bribery and the fifteenth anniversary of the entry into force of the OECD Anti-Bribery Convention. Since their inception, the Working Group and the Convention have played a pivotal role in the worldwide battle against bribery. By requiring countries to criminalize bribery of foreign officials in international business transactions and creating a peer-driven monitoring mechanism to ensure the robust enforcement of those laws, the Convention has helped to bring about an international approach to rooting out a global problem.
This international approach has dramatically advanced our collective efforts to uncover, punish, and deter foreign corruption. We in the United States are committed to continuing to work together with our Working Group partners to hold to account individuals and companies who engage in corruption, regardless of where they operate or reside.
The fight against transnational bribery is incredibly important. As we all know, bribery creates an unlevel playing field for honest businesses and threatens good governance, sustainable development and democratic processes. Corruption also corrodes public trust in countries both rich and poor, and inflicts particular harm on emerging economies.
And corruption can create national security concerns. It undermines the rule of law, facilitates organized crime, empowers authoritarian rulers and can threaten the stability of entire regions. For these reasons, fighting foreign bribery is a significant part of the mission of the Criminal Division of the Department of Justice.
The United States began its fight against transnational bribery in the late 1970s when the U.S. Congress enacted our foreign bribery statute – the Foreign Corrupt Practices Act – which is often referred to as the FCPA. Rigorous enforcement of the FCPA is one of the Department of Justice’s core priorities.
As the Assistant Attorney General for the Department of Justice’s Criminal Division, I have the privilege of leading 600 talented lawyers who prosecute crimes and promote the rule of law abroad. We have a specific group of prosecutors in our FCPA Unit in the Fraud Section who are dedicated to investigating and prosecuting foreign bribery cases.
In the United States, we are vigorously employing proactive investigative tools to expose foreign bribery. For instance, we conduct undercover operations with confidential informants and cooperating witnesses, using body wires, recordings, and surveillance. We have had significant success in using these tools to gather evidence in corruption cases.
The department’s commitment to the fight against foreign bribery is demonstrated by our enforcement record. Since 2009, we have convicted more than 50 individuals in FCPA and FCPA-related cases, and resolved criminal cases against more than 50 companies with penalties and forfeiture of approximately $3 billion. And, during this same time, the U.S. Securities and Exchange Commission has resolved civil actions against more than 65 companies and 25 individuals. Those cases result in total combined FCPA penalties and forfeiture by the DOJ and the SEC of approximately $4.5 billion.
These successes are the product of the skill, hard work, and determination of prosecutors in the Criminal Division, as well as our talented colleagues at the SEC. In addition to working with SEC attorneys, our prosecutors work in tandem with our partners at the FBI and other law enforcement agencies, and, importantly, our foreign partners, including our partners in the Working Group on Bribery.
The Working Group has been, and continues to be, a critical vehicle through which we, as an international community, work together to strengthen enforcement efforts across the globe. Through the Working Group, we are now more effectively able to share information, refer leads to one another, and coordinate investigations against individuals and entities that seek to obtain business overseas through bribery. All countries, though, must contribute to this international effort if we are going to meaningfully deter and root out global corruption.
The Convention’s mutual legal assistance framework – and member states’ compliance with it – is key to effective international collaboration. The framework enables member states to share with one another important evidence in a prompt and efficient way. The Criminal Division’s Office of International Affairs coordinates all international evidence gathering and extradition of international fugitives. We stand ready to assist other countries with your requests for evidence located in the United States. We are encouraged by the responses we have received to many of our requests for mutual legal assistance, and we hope that the trend toward increased assistance and cooperation among member states will continue.
Bribery schemes often span the globe without regard to country borders. A coordinated response by international law enforcement is necessary to ensure that all of the culpable individuals are held to account and to deter future would-be wrongdoers.
I’d like to discuss with you one case that shows the successful results of international cooperation. Earlier this year, countries around the world worked together to bring to justice individuals and companies engaged in a scheme to bribe government officials in Indonesia. Executives of Marubeni Corporation, a Japanese trading company; Alstom, a French energy company; corporate executives and others engaged in a multi-year scheme to pay millions of dollars to a high ranking member of the Indonesian Parliament and other Indonesian officials in exchange for assistance in securing a $118 million contract to provide power-related services in Indonesia. Participants in the scheme met in the United States to discuss the bribery and paid bribes from the United States to a corrupt intermediary with U.S. bank accounts.
In the United States, we charged Marubeni Corporation for its participation in the scheme. Marubeni pleaded guilty and paid an $88 million penalty. We also charged four Alstom executives for their roles, three of whom have pleaded guilty and one of whom is awaiting trial. We are actively continuing to investigate and anticipate additional law enforcement actions in the near future.
Meanwhile, the former Indonesian Parliament member was charged in Indonesia. He was found guilty of accepting bribes and was sentenced to three years in prison.
These actions, and others that were brought against Alstom by authorities in Switzerland, the United Kingdom, and the World Bank for additional corrupt conduct, were made possible by international cooperation. These coordinated global actions are a powerful demonstration of the successes we can achieve when we work together.
This is but one example of collaboration among Working Group and international partners in combating corruption that led to significant results. There are many other examples, and many more are in the pipeline.
On behalf of the Department of Justice, I applaud the work of the Secretary-General, the Working Group on Bribery, and the Secretariat in launching this important Report and for the role they played in the successes detailed in the Report. As the Report shows, together we have made significant progress in the battle against corruption – but our work is far from done.
I look forward to our continued collaboration and our continued success in rooting out and deterring the scourge that is foreign bribery.
Thank you.
Assistant Attorney General Leslie R. Caldwell Speaks at the Launch of the Organisation for Economic Co-operation and Development Foreign Bribery Report
ParisFrance ~ Tuesday, December 2, 2014
Thank you for that kind introduction, and thank you [Organisation for Economic Co-operation and Development (OECD)] Secretary-General [Angel] Gurria for inviting me to be part of this important day. I want to commend you and your team for your work in compiling this significant Foreign Bribery Report, and I am honored to be here to celebrate its release. Together, your team and the members of the Working Group on Bribery play a vital role in the global fight against corruption.
As you all know, this year marks the twentieth anniversary of the formation of the OECD Working Group on Bribery and the fifteenth anniversary of the entry into force of the OECD Anti-Bribery Convention. Since their inception, the Working Group and the Convention have played a pivotal role in the worldwide battle against bribery. By requiring countries to criminalize bribery of foreign officials in international business transactions and creating a peer-driven monitoring mechanism to ensure the robust enforcement of those laws, the Convention has helped to bring about an international approach to rooting out a global problem.
This international approach has dramatically advanced our collective efforts to uncover, punish, and deter foreign corruption. We in the United States are committed to continuing to work together with our Working Group partners to hold to account individuals and companies who engage in corruption, regardless of where they operate or reside.
The fight against transnational bribery is incredibly important. As we all know, bribery creates an unlevel playing field for honest businesses and threatens good governance, sustainable development and democratic processes. Corruption also corrodes public trust in countries both rich and poor, and inflicts particular harm on emerging economies.
And corruption can create national security concerns. It undermines the rule of law, facilitates organized crime, empowers authoritarian rulers and can threaten the stability of entire regions. For these reasons, fighting foreign bribery is a significant part of the mission of the Criminal Division of the Department of Justice.
The United States began its fight against transnational bribery in the late 1970s when the U.S. Congress enacted our foreign bribery statute – the Foreign Corrupt Practices Act – which is often referred to as the FCPA. Rigorous enforcement of the FCPA is one of the Department of Justice’s core priorities.
As the Assistant Attorney General for the Department of Justice’s Criminal Division, I have the privilege of leading 600 talented lawyers who prosecute crimes and promote the rule of law abroad. We have a specific group of prosecutors in our FCPA Unit in the Fraud Section who are dedicated to investigating and prosecuting foreign bribery cases.
In the United States, we are vigorously employing proactive investigative tools to expose foreign bribery. For instance, we conduct undercover operations with confidential informants and cooperating witnesses, using body wires, recordings, and surveillance. We have had significant success in using these tools to gather evidence in corruption cases.
The department’s commitment to the fight against foreign bribery is demonstrated by our enforcement record. Since 2009, we have convicted more than 50 individuals in FCPA and FCPA-related cases, and resolved criminal cases against more than 50 companies with penalties and forfeiture of approximately $3 billion. And, during this same time, the U.S. Securities and Exchange Commission has resolved civil actions against more than 65 companies and 25 individuals. Those cases result in total combined FCPA penalties and forfeiture by the DOJ and the SEC of approximately $4.5 billion.
These successes are the product of the skill, hard work, and determination of prosecutors in the Criminal Division, as well as our talented colleagues at the SEC. In addition to working with SEC attorneys, our prosecutors work in tandem with our partners at the FBI and other law enforcement agencies, and, importantly, our foreign partners, including our partners in the Working Group on Bribery.
The Working Group has been, and continues to be, a critical vehicle through which we, as an international community, work together to strengthen enforcement efforts across the globe. Through the Working Group, we are now more effectively able to share information, refer leads to one another, and coordinate investigations against individuals and entities that seek to obtain business overseas through bribery. All countries, though, must contribute to this international effort if we are going to meaningfully deter and root out global corruption.
The Convention’s mutual legal assistance framework – and member states’ compliance with it – is key to effective international collaboration. The framework enables member states to share with one another important evidence in a prompt and efficient way. The Criminal Division’s Office of International Affairs coordinates all international evidence gathering and extradition of international fugitives. We stand ready to assist other countries with your requests for evidence located in the United States. We are encouraged by the responses we have received to many of our requests for mutual legal assistance, and we hope that the trend toward increased assistance and cooperation among member states will continue.
Bribery schemes often span the globe without regard to country borders. A coordinated response by international law enforcement is necessary to ensure that all of the culpable individuals are held to account and to deter future would-be wrongdoers.
I’d like to discuss with you one case that shows the successful results of international cooperation. Earlier this year, countries around the world worked together to bring to justice individuals and companies engaged in a scheme to bribe government officials in Indonesia. Executives of Marubeni Corporation, a Japanese trading company; Alstom, a French energy company; corporate executives and others engaged in a multi-year scheme to pay millions of dollars to a high ranking member of the Indonesian Parliament and other Indonesian officials in exchange for assistance in securing a $118 million contract to provide power-related services in Indonesia. Participants in the scheme met in the United States to discuss the bribery and paid bribes from the United States to a corrupt intermediary with U.S. bank accounts.
In the United States, we charged Marubeni Corporation for its participation in the scheme. Marubeni pleaded guilty and paid an $88 million penalty. We also charged four Alstom executives for their roles, three of whom have pleaded guilty and one of whom is awaiting trial. We are actively continuing to investigate and anticipate additional law enforcement actions in the near future.
Meanwhile, the former Indonesian Parliament member was charged in Indonesia. He was found guilty of accepting bribes and was sentenced to three years in prison.
These actions, and others that were brought against Alstom by authorities in Switzerland, the United Kingdom, and the World Bank for additional corrupt conduct, were made possible by international cooperation. These coordinated global actions are a powerful demonstration of the successes we can achieve when we work together.
This is but one example of collaboration among Working Group and international partners in combating corruption that led to significant results. There are many other examples, and many more are in the pipeline.
On behalf of the Department of Justice, I applaud the work of the Secretary-General, the Working Group on Bribery, and the Secretariat in launching this important Report and for the role they played in the successes detailed in the Report. As the Report shows, together we have made significant progress in the battle against corruption – but our work is far from done.
I look forward to our continued collaboration and our continued success in rooting out and deterring the scourge that is foreign bribery.
Thank you.
Saturday, December 6, 2014
U.S. DOD REPORTS REACTION TO LUKE SOMERS DEATH
FROM: THE WHITE HOUSE
Senior U.S. Leaders Condemn Murder of Luke Somers
DoD News, Defense Media Activity
WASHINGTON, Dec. 6, 2014 – President Barack Obama, Secretary of State John F. Kerry and Defense Secretary Chuck Hagel condemned yesterday’s murder of U.S. photojournalist Luke Somers in Yemen by al Qaeda terrorists as U.S. and Yemeni commandos attempted a rescue.
Somers, 33, was taken hostage in Yemen in September 2013 by al Qaeda in the Arabian Peninsula, an al Qaeda splinter group.
Somers, who reportedly held U.S. and British citizenship, was shot by the terrorists as Special Operations forces moved in. Another hostage, South African teacher Pierre Korkie, was also fatally shot during the rescue attempt.
A Nov. 25 raid by U.S. special operations forces to rescue Somers freed some other al Qaeda-held hostages, but Somers wasn’t present.
President’s Statement
“The United States strongly condemns the barbaric murder of Luke Somers at the hands of al Qaeda terrorists during a rescue operation conducted by U.S. forces in Yemen in partnership with the Yemeni government,” Obama said in a statement issued today. “On behalf of the American people, I offer my deepest condolences to Luke’s family and to his loved ones. I also offer my thoughts and prayers to the family of a non-U.S. citizen hostage who was also murdered by these terrorists during the rescue operation. Their despair and sorrow at this time are beyond words.”
The president added, “It is my highest responsibility to do everything possible to protect American citizens. As this and previous hostage rescue operations demonstrate, the United States will spare no effort to use all of its military, intelligence, and diplomatic capabilities to bring Americans home safely, wherever they are located. And terrorists who seek to harm our citizens will feel the long arm of American justice.”
After Somers was captured in Yemen, Obama said, “the United States has been using every tool at our disposal to secure his release. Earlier this week, a video released by his terrorist captors announced that Luke would be killed within 72 hours. Other information also indicated that Luke’s life was in imminent danger. Based on this assessment, and as soon as there was reliable intelligence and an operational plan, I authorized a rescue attempt yesterday. I also authorized the rescue of any other hostages held in the same location as Luke.”
Obama described Somers as “a photojournalist who sought through his images to convey the lives of Yemenis to the outside world. He came to Yemen in peace and was held against his will and threatened by a despicable terrorist organization. The callous disregard for Luke’s life is more proof of the depths of AQAP’s depravity, and further reason why the world must never cease in seeking to defeat their evil ideology.”
The president expressed his gratitude “to the U.S. forces who carried out this mission as well as the previous attempt to rescue Luke, and to the dedicated intelligence, law enforcement, and diplomatic professionals who supported their efforts. I also deeply appreciate the support and assistance provided by President Hadi and the Yemeni government, and reiterate our strong commitment to combating the shared threat posed by AQAP.
“We remember Luke and his family, as well as the families of those Americans who are still being held captive overseas and those who have lost loved ones to the brutality of these and other terrorists,” Obama added. “We remain determined to do our utmost to bring them home, and to hold those who have done them harm accountable.”
Secretary of State’s Statement
Somers’ murder “is a reminder of the brutality of the terrorists of al Qaeda in the Arabian Peninsula. They have again demonstrated their cruelty and their disdain for human life, freedom, and the Yemeni people whom they terrorize daily,” Secretary of State Kerry said in a statement issued today.
There was reason to believe that Somers’ life was in immediate danger, Kerry said, “and so we recommended that the president authorize an attempt to rescue Luke. Tragically, Luke and a foreign national hostage were killed by their captors during the course of that operation.”
Kerry said he’s “proud of the brave men and women of the U.S. military who twice risked their lives in operations to try and bring Luke home safely. We also appreciate the efforts of the dedicated intelligence, law enforcement, and diplomatic professionals who supported these operations, and we are particularly grateful to the Yemeni government, under the leadership of President Hadi, for their critical and supportive role in trying to liberate this young American from unfathomable captivity, and for their enduring partnership in combating the scourge of AQAP.”
The AWAP terrorists know “how to hate, they know how to murder, and now they have robbed a family of an idealistic young photojournalist who went to Yemen to practice his calling and document the lives of ordinary Yemenis,” Kerry said.
“As a parent, I know there are no words that can assuage the loss that Luke's family has suffered, or the anguish of the family of the second hostage who was killed,” the secretary of state said. “There's no way to wipe away their pain. But Teresa and I both pray that they can find some small solace in knowing that the United States government and all of our people grieve with them, and that there were brave Americans in uniform willing to lay down their own lives so that they had a chance to live.
“We also pray for the families of all the innocents who are held against their will, whose safe return we work towards every day,” Kerry said.
Secretary of Defense's Statement
There were “compelling reasons to believe Mr. Somers' life was in imminent danger,” Defense Secretary Hagel said in a statement issued today. Somers and a second non-U.S. citizen hostage, he said, “were murdered by the AQAP terrorists during the course of the operation. On behalf of the men and women of the U.S. armed forces, I extend our condolences, thoughts, and prayers to their families and loved ones.”
Several of the AQAP terrorists holding the hostages captive were killed in the mission, Hagel said, who noted yesterday’s rescue attempt took place in central Yemen and was conducted in partnership with the government of Yemen.
“I thank President Hadi, the Yemeni government, and Yemen security forces for their assistance and cooperation,” the defense secretary said. “Yesterday's mission is a reminder of America's unrelenting commitment to the safety of our fellow citizens -- wherever they might be around the world.
“I commend the troops who undertook this dangerous mission,” Hagel said. “Their service and valor are an inspiration to all of us.”
Senior U.S. Leaders Condemn Murder of Luke Somers
DoD News, Defense Media Activity
WASHINGTON, Dec. 6, 2014 – President Barack Obama, Secretary of State John F. Kerry and Defense Secretary Chuck Hagel condemned yesterday’s murder of U.S. photojournalist Luke Somers in Yemen by al Qaeda terrorists as U.S. and Yemeni commandos attempted a rescue.
Somers, 33, was taken hostage in Yemen in September 2013 by al Qaeda in the Arabian Peninsula, an al Qaeda splinter group.
Somers, who reportedly held U.S. and British citizenship, was shot by the terrorists as Special Operations forces moved in. Another hostage, South African teacher Pierre Korkie, was also fatally shot during the rescue attempt.
A Nov. 25 raid by U.S. special operations forces to rescue Somers freed some other al Qaeda-held hostages, but Somers wasn’t present.
President’s Statement
“The United States strongly condemns the barbaric murder of Luke Somers at the hands of al Qaeda terrorists during a rescue operation conducted by U.S. forces in Yemen in partnership with the Yemeni government,” Obama said in a statement issued today. “On behalf of the American people, I offer my deepest condolences to Luke’s family and to his loved ones. I also offer my thoughts and prayers to the family of a non-U.S. citizen hostage who was also murdered by these terrorists during the rescue operation. Their despair and sorrow at this time are beyond words.”
The president added, “It is my highest responsibility to do everything possible to protect American citizens. As this and previous hostage rescue operations demonstrate, the United States will spare no effort to use all of its military, intelligence, and diplomatic capabilities to bring Americans home safely, wherever they are located. And terrorists who seek to harm our citizens will feel the long arm of American justice.”
After Somers was captured in Yemen, Obama said, “the United States has been using every tool at our disposal to secure his release. Earlier this week, a video released by his terrorist captors announced that Luke would be killed within 72 hours. Other information also indicated that Luke’s life was in imminent danger. Based on this assessment, and as soon as there was reliable intelligence and an operational plan, I authorized a rescue attempt yesterday. I also authorized the rescue of any other hostages held in the same location as Luke.”
Obama described Somers as “a photojournalist who sought through his images to convey the lives of Yemenis to the outside world. He came to Yemen in peace and was held against his will and threatened by a despicable terrorist organization. The callous disregard for Luke’s life is more proof of the depths of AQAP’s depravity, and further reason why the world must never cease in seeking to defeat their evil ideology.”
The president expressed his gratitude “to the U.S. forces who carried out this mission as well as the previous attempt to rescue Luke, and to the dedicated intelligence, law enforcement, and diplomatic professionals who supported their efforts. I also deeply appreciate the support and assistance provided by President Hadi and the Yemeni government, and reiterate our strong commitment to combating the shared threat posed by AQAP.
“We remember Luke and his family, as well as the families of those Americans who are still being held captive overseas and those who have lost loved ones to the brutality of these and other terrorists,” Obama added. “We remain determined to do our utmost to bring them home, and to hold those who have done them harm accountable.”
Secretary of State’s Statement
Somers’ murder “is a reminder of the brutality of the terrorists of al Qaeda in the Arabian Peninsula. They have again demonstrated their cruelty and their disdain for human life, freedom, and the Yemeni people whom they terrorize daily,” Secretary of State Kerry said in a statement issued today.
There was reason to believe that Somers’ life was in immediate danger, Kerry said, “and so we recommended that the president authorize an attempt to rescue Luke. Tragically, Luke and a foreign national hostage were killed by their captors during the course of that operation.”
Kerry said he’s “proud of the brave men and women of the U.S. military who twice risked their lives in operations to try and bring Luke home safely. We also appreciate the efforts of the dedicated intelligence, law enforcement, and diplomatic professionals who supported these operations, and we are particularly grateful to the Yemeni government, under the leadership of President Hadi, for their critical and supportive role in trying to liberate this young American from unfathomable captivity, and for their enduring partnership in combating the scourge of AQAP.”
The AWAP terrorists know “how to hate, they know how to murder, and now they have robbed a family of an idealistic young photojournalist who went to Yemen to practice his calling and document the lives of ordinary Yemenis,” Kerry said.
“As a parent, I know there are no words that can assuage the loss that Luke's family has suffered, or the anguish of the family of the second hostage who was killed,” the secretary of state said. “There's no way to wipe away their pain. But Teresa and I both pray that they can find some small solace in knowing that the United States government and all of our people grieve with them, and that there were brave Americans in uniform willing to lay down their own lives so that they had a chance to live.
“We also pray for the families of all the innocents who are held against their will, whose safe return we work towards every day,” Kerry said.
Secretary of Defense's Statement
There were “compelling reasons to believe Mr. Somers' life was in imminent danger,” Defense Secretary Hagel said in a statement issued today. Somers and a second non-U.S. citizen hostage, he said, “were murdered by the AQAP terrorists during the course of the operation. On behalf of the men and women of the U.S. armed forces, I extend our condolences, thoughts, and prayers to their families and loved ones.”
Several of the AQAP terrorists holding the hostages captive were killed in the mission, Hagel said, who noted yesterday’s rescue attempt took place in central Yemen and was conducted in partnership with the government of Yemen.
“I thank President Hadi, the Yemeni government, and Yemen security forces for their assistance and cooperation,” the defense secretary said. “Yesterday's mission is a reminder of America's unrelenting commitment to the safety of our fellow citizens -- wherever they might be around the world.
“I commend the troops who undertook this dangerous mission,” Hagel said. “Their service and valor are an inspiration to all of us.”
SECRETARY KERRY'S REMARKS ON DEATH OF LUKE SOMERS DURING ATTEMPTED RESCUE
FROM: U.S. STATE DEPARTMENT
Death of Luke Somers
Press Statement
John Kerry
Secretary of State
Washington, DC
December 6, 2014
The murder of Luke Somers by his captors during a rescue operation is a reminder of the brutality of the terrorists of Al-Qa’ida in the Arabian Peninsula (AQAP). They have again demonstrated their cruelty and their disdain for human life, freedom, and the Yemeni people whom they terrorize daily.
Earlier this week, AQAP released a video announcing that Luke would be murdered within 72 hours. Along with other information, there was a compelling indication that Luke’s life was in immediate danger, and so we recommended that the President authorize an attempt to rescue Luke. Tragically, Luke and a foreign national hostage were killed by their captors during the course of that operation.
Even in our grief, we couldn't be more proud of the brave men and women of the U.S. military who twice risked their lives in operations to try and bring Luke home safely. We also appreciate the efforts of the dedicated intelligence, law enforcement, and diplomatic professionals who supported these operations, and we are particularly grateful to the Yemeni government, under the leadership of President Hadi, for their critical and supportive role in trying to liberate this young American from unfathomable captivity, and for their enduring partnership in combating the scourge of AQAP.
AQAP knows how to hate, they know how to murder, and now they have robbed a family of an idealistic young photojournalist who went to Yemen to practice his calling and document the lives of ordinary Yemenis. As a parent, I know there are no words that can assuage the loss that Luke's family has suffered, or the anguish of the family of the second hostage who was killed. There's no way to wipe away their pain. But Teresa and I both pray that they can find some small solace in knowing that the United States government and all of our people grieve with them, and that there were brave Americans in uniform willing to lay down their own lives so that they had a chance to live. We also pray for the families of all the innocents who are held against their will, whose safe return we work towards every day.
Death of Luke Somers
Press Statement
John Kerry
Secretary of State
Washington, DC
December 6, 2014
The murder of Luke Somers by his captors during a rescue operation is a reminder of the brutality of the terrorists of Al-Qa’ida in the Arabian Peninsula (AQAP). They have again demonstrated their cruelty and their disdain for human life, freedom, and the Yemeni people whom they terrorize daily.
Earlier this week, AQAP released a video announcing that Luke would be murdered within 72 hours. Along with other information, there was a compelling indication that Luke’s life was in immediate danger, and so we recommended that the President authorize an attempt to rescue Luke. Tragically, Luke and a foreign national hostage were killed by their captors during the course of that operation.
Even in our grief, we couldn't be more proud of the brave men and women of the U.S. military who twice risked their lives in operations to try and bring Luke home safely. We also appreciate the efforts of the dedicated intelligence, law enforcement, and diplomatic professionals who supported these operations, and we are particularly grateful to the Yemeni government, under the leadership of President Hadi, for their critical and supportive role in trying to liberate this young American from unfathomable captivity, and for their enduring partnership in combating the scourge of AQAP.
AQAP knows how to hate, they know how to murder, and now they have robbed a family of an idealistic young photojournalist who went to Yemen to practice his calling and document the lives of ordinary Yemenis. As a parent, I know there are no words that can assuage the loss that Luke's family has suffered, or the anguish of the family of the second hostage who was killed. There's no way to wipe away their pain. But Teresa and I both pray that they can find some small solace in knowing that the United States government and all of our people grieve with them, and that there were brave Americans in uniform willing to lay down their own lives so that they had a chance to live. We also pray for the families of all the innocents who are held against their will, whose safe return we work towards every day.
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