FROM: U.S. STATE DEPARTMENT
Solidarity March in Tunis, Tunisia
Press Statement
John Kerry
Secretary of State
Washington, DC
March 28, 2015
On behalf of President Obama, I would like to express the United States’ solidarity with the Tunisian people as they march tomorrow in Tunis in defiance of the shocking and grotesque terrorist attack at the National Bardo Museum on March 18. The U.S. Ambassador to Tunisia, Jake Walles, will represent the United States at tomorrow’s event.
We join all those gathered from Tunisia and around the world in rejecting every form of terrorism. We commend Tunisians’ resolve, in the wake of this tragedy, to stand up for the ideals of their hard-fought, democratic revolution and applaud their efforts to build a free, secure, and prosperous future.
Deputy Secretary of State Tony Blinken looks forward to visiting Tunisia in early April to reaffirm our strong support for Tunisia and to discuss ways to expand our strategic partnership.
Saturday, March 28, 2015
WHITE HOUSE STATEMENT ON SENATE BUDGET
FROM: THE WHITE HOUSE
March 27, 2015
Statement by the Press Secretary on the Passage of the Senate Budget
Following in the footsteps of their House colleagues, Senate Republicans today voted in favor of a budget that relies on top-down economics and gimmicks. The Senate Republican budget refuses to ask the wealthy to contribute a single dollar to deficit reduction, putting the entire burden on the middle-class, seniors, low-income children and families, and national security. Senate Republicans voted in favor of locking in draconian sequestration cuts to investments in the middle class like education, job training and manufacturing and also failed to responsibly fund our national security, opting instead for budget gimmicks, an approach that now faces procedural hurdles put in place by their own party.
Meanwhile, the President has a plan to bring middle class economics into the 21st Century. The President’s Budget builds on the progress we’ve made and shows what we can do if we invest in America's future, and end sequestration, by cutting inefficient spending and reforming our broken tax code to make sure everyone pays their fair share. It lays out a strategy to strengthen our middle class with investments in research, education, training, and infrastructure, while also fulfilling our most basic responsibility to keep Americans safe.
In 2013 Republicans came to the negotiating table and ultimately chose the responsible path by supporting the Murray-Ryan agreement, which reversed harmful sequestration cuts to both defense and non-defense equally, dollar for dollar. Last night, Senators from both parties came together to call for building on that approach this year and to support paying for sequester relief with both spending and tax reforms. The President has been clear that he will not accept a budget that locks in sequestration or one that increases funding for our national security without providing matching increases in funding for our economic security. The Administration will continue to abide by these principles moving forward.
March 27, 2015
Statement by the Press Secretary on the Passage of the Senate Budget
Following in the footsteps of their House colleagues, Senate Republicans today voted in favor of a budget that relies on top-down economics and gimmicks. The Senate Republican budget refuses to ask the wealthy to contribute a single dollar to deficit reduction, putting the entire burden on the middle-class, seniors, low-income children and families, and national security. Senate Republicans voted in favor of locking in draconian sequestration cuts to investments in the middle class like education, job training and manufacturing and also failed to responsibly fund our national security, opting instead for budget gimmicks, an approach that now faces procedural hurdles put in place by their own party.
Meanwhile, the President has a plan to bring middle class economics into the 21st Century. The President’s Budget builds on the progress we’ve made and shows what we can do if we invest in America's future, and end sequestration, by cutting inefficient spending and reforming our broken tax code to make sure everyone pays their fair share. It lays out a strategy to strengthen our middle class with investments in research, education, training, and infrastructure, while also fulfilling our most basic responsibility to keep Americans safe.
In 2013 Republicans came to the negotiating table and ultimately chose the responsible path by supporting the Murray-Ryan agreement, which reversed harmful sequestration cuts to both defense and non-defense equally, dollar for dollar. Last night, Senators from both parties came together to call for building on that approach this year and to support paying for sequester relief with both spending and tax reforms. The President has been clear that he will not accept a budget that locks in sequestration or one that increases funding for our national security without providing matching increases in funding for our economic security. The Administration will continue to abide by these principles moving forward.
WHITE HOUSE FACT SHEET ON POWER INITIATIVE
FROM: THE WHITE HOUSE
March 27, 2015
FACT SHEET: The Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative
The United States is undergoing a rapid energy transformation, particularly in the power sector. Booming natural gas production, declining costs for renewable energy, increases in energy efficiency, flattening electricity demand, and updated clean air standards are changing the way electricity is generated and used across the country. These trends are producing cleaner air and healthier communities, and spurring new jobs and industries. At the same time, they are impacting workers and communities who have relied on the coal industry as a source of good jobs and economic prosperity, particularly in Appalachia, where competition with other coal basins provides additional pressure.
To help these communities adapt to the changing energy landscape and build a better future, the President’s FY 2016 Budget proposed the POWER+ Plan. The POWER+ Plan invests in workers and jobs, addresses important legacy costs in coal country, and drives development of coal technology.
This year, the Administration will make a down payment on the POWER+ Plan by beginning implementation of a key part of the Plan - the Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) initiative. POWER will be a coordinated effort, involving multiple federal agencies, with the goal of effectively aligning, leveraging, and targeting a range of federal economic and workforce development programs and resources to assist communities negatively impacted by changes in the coal industry and power sector. The POWER initiative will coordinate use of appropriated FY 2015 funds from a range of federal programs, while following the relevant statutory and regulatory requirements for each program.
The POWER initiative will award grants on two parallel tracks to partnerships anchored in impacted communities. These grants will help communities organize themselves to respond on behalf of affected workers and businesses, develop comprehensive strategic plans that chart their economic future, and execute coordinated economic and workforce development activities based on their strategic plans. These activities will seek to: (1) diversify economies; (2) create jobs in new or existing industries; (3) attract new sources of job-creating investment; (4) and provide a range of workforce services and skills training, including work-based learning opportunities, resulting in industry-recognized credentials for high-quality, in-demand jobs.
These efforts in FY 2015 will lay the groundwork for a multi-year initiative with grants awarded in future years based on the availability of appropriations. The President’s FY 2016 Budget includes over $55 million for economic and workforce development strategies across a number of federal programs, which would be used to continue and expand the POWER initiative after it begins this year.
POWER Funding and Administrative Structure
POWER will award grants using $28-$38 million in FY 2015 funds from the Department of Commerce (DOC), Department of Labor (DOL), Small Business Administration (SBA), and the Appalachian Regional Commission (ARC). The grants will be designed to assist communities regardless of their different levels of capacity, planning and preparation. A two-track grant-making process is described below, with an understanding that some communities will require some form of pre-planning technical assistance in order to effectively apply for either planning or implementation grants.
Track #1: Planning Grants
DOC and DOL will award planning grants to communities that have been or will be impacted by coal mining and coal power plant employment loss (or layoffs in the manufacturing or transportation logistics supply chains of either) and that do not have robust and/or recent comprehensive and integrated economic development strategic plans in place. Grant funds would be available to help organize community stakeholders, analyze and inventory community assets, evaluate needs and resources, and develop comprehensive economic development strategic plans. Grants would also go to State Workforce Agencies for in-depth labor market analysis and workforce development and dislocated worker planning connected with the provision of training and employment services.
Funding Sources:
DOC – Economic Development Administration (EDA), Assistance to Coal Communities, Economic Adjustment Assistance, and Partnership Planning
DOL – Employment and Training Administration (ETA), Dislocated Worker National Emergency Grants [1]
Track #2: Implementation Grants
DOC, DOL, SBA, and ARC will award implementation grants to communities that have been impacted by coal mining and coal power plant employment loss (or layoffs in the manufacturing or transportation logistics supply chains of either) and that have already done robust strategic planning. Grants would support the implementation of linked economic and workforce development strategies to develop high-potential industry clusters, assist impacted communities to accelerate job creation by leveraging local assets, train and place workers in family-supporting, high-demand jobs (including Registered Apprenticeship and other on-the-job training models), and to create linkages that drive regional economic growth.
Funding Sources:
DOC -- EDA, Assistance to Coal Communities, Economic Adjustment Assistance, and Partnership Planning (up to $15 million total for both grant making tracks)
DOL – Employment and Training Administration (ETA), Dislocated Worker National Emergency Grants (up to $10-20 million total for both grant making tracks)
SBA, Regional Innovation Clusters and Growth Accelerators (up to $3 million combined[2])
ARC, Technical Assistance and Demonstration Projects (up to $500 thousand for applicants from its region)
The implementation grants will be awarded through a single POWER Federal Funding Opportunity (FFO) announcement that combines funding opportunities and activities and services from different programs and agencies but maintains the eligibility rules, permitted activities, and reporting requirements of the originating program and funding. Partnerships will be encouraged to apply for more than one funding source where appropriate, but that will not be required.
Additional Federal Agency Participation
A number of other federal agencies will also participate in the POWER initiative by providing technical assistance and education and outreach to POWER partnerships, coordination with existing resources, and/or preference points for agency funding for applications from the partnerships. The additional agencies will include:
USDA-Rural Business Cooperative Service
Environmental Protection Agency, Office of Solid Waste and Emergency Response
Department of Energy
Department of Treasury, Community Development Financial Institutions (CDFI) Fund
DOC, SelectUSA
DOC, NIST-Manufacturing Extension Partnerships
Corporation for National and Community Service
Department of Interior, Office of Surface Mining Reclamation and Enforcement
Administration
EDA will be the administrative home for POWER given the economic development thrust of this initiative. EDA will manage the joint FFO announcement and overall process of competitive solicitation, provide a single staff point of federal contact (with staffing assistance from other participating agencies when needed) for the selected partnerships, and coordinate cross-agency activities at the regional level that direct additional federal resources to impacted communities. Grant selection, awards and execution will be managed by each authorized agency, with EDA playing a coordination role.
POWER Partnerships
Eligibility for applicants for POWER awards will be dictated by the sources of the funds. Regardless of the primary applicant for Implementation Grants, POWER will encourage a broader partnership to participate, including (but not limited to) representatives from government, economic development organizations, workforce development boards, community and technical colleges, businesses, labor unions, and community groups.
Timeline
April/May, 2015: Track #1 POWER Planning Grant announcement issued
April/May, 2015: Track #2 POWER Implementation Grant FFO issued
July/August, 2015: POWER Planning and Implementation Grant awards ready to announce
[1] The DOL-ETA will solicit applications for planning activities with implementation activities as part of the combined Implementation Grant FFO
[2] Regional Innovation Clusters funding will be $500,000 for the first year for one partnership, with an option to extend funding by another $2 million over the next four years.
March 27, 2015
FACT SHEET: The Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative
The United States is undergoing a rapid energy transformation, particularly in the power sector. Booming natural gas production, declining costs for renewable energy, increases in energy efficiency, flattening electricity demand, and updated clean air standards are changing the way electricity is generated and used across the country. These trends are producing cleaner air and healthier communities, and spurring new jobs and industries. At the same time, they are impacting workers and communities who have relied on the coal industry as a source of good jobs and economic prosperity, particularly in Appalachia, where competition with other coal basins provides additional pressure.
To help these communities adapt to the changing energy landscape and build a better future, the President’s FY 2016 Budget proposed the POWER+ Plan. The POWER+ Plan invests in workers and jobs, addresses important legacy costs in coal country, and drives development of coal technology.
This year, the Administration will make a down payment on the POWER+ Plan by beginning implementation of a key part of the Plan - the Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) initiative. POWER will be a coordinated effort, involving multiple federal agencies, with the goal of effectively aligning, leveraging, and targeting a range of federal economic and workforce development programs and resources to assist communities negatively impacted by changes in the coal industry and power sector. The POWER initiative will coordinate use of appropriated FY 2015 funds from a range of federal programs, while following the relevant statutory and regulatory requirements for each program.
The POWER initiative will award grants on two parallel tracks to partnerships anchored in impacted communities. These grants will help communities organize themselves to respond on behalf of affected workers and businesses, develop comprehensive strategic plans that chart their economic future, and execute coordinated economic and workforce development activities based on their strategic plans. These activities will seek to: (1) diversify economies; (2) create jobs in new or existing industries; (3) attract new sources of job-creating investment; (4) and provide a range of workforce services and skills training, including work-based learning opportunities, resulting in industry-recognized credentials for high-quality, in-demand jobs.
These efforts in FY 2015 will lay the groundwork for a multi-year initiative with grants awarded in future years based on the availability of appropriations. The President’s FY 2016 Budget includes over $55 million for economic and workforce development strategies across a number of federal programs, which would be used to continue and expand the POWER initiative after it begins this year.
POWER Funding and Administrative Structure
POWER will award grants using $28-$38 million in FY 2015 funds from the Department of Commerce (DOC), Department of Labor (DOL), Small Business Administration (SBA), and the Appalachian Regional Commission (ARC). The grants will be designed to assist communities regardless of their different levels of capacity, planning and preparation. A two-track grant-making process is described below, with an understanding that some communities will require some form of pre-planning technical assistance in order to effectively apply for either planning or implementation grants.
Track #1: Planning Grants
DOC and DOL will award planning grants to communities that have been or will be impacted by coal mining and coal power plant employment loss (or layoffs in the manufacturing or transportation logistics supply chains of either) and that do not have robust and/or recent comprehensive and integrated economic development strategic plans in place. Grant funds would be available to help organize community stakeholders, analyze and inventory community assets, evaluate needs and resources, and develop comprehensive economic development strategic plans. Grants would also go to State Workforce Agencies for in-depth labor market analysis and workforce development and dislocated worker planning connected with the provision of training and employment services.
Funding Sources:
DOC – Economic Development Administration (EDA), Assistance to Coal Communities, Economic Adjustment Assistance, and Partnership Planning
DOL – Employment and Training Administration (ETA), Dislocated Worker National Emergency Grants [1]
Track #2: Implementation Grants
DOC, DOL, SBA, and ARC will award implementation grants to communities that have been impacted by coal mining and coal power plant employment loss (or layoffs in the manufacturing or transportation logistics supply chains of either) and that have already done robust strategic planning. Grants would support the implementation of linked economic and workforce development strategies to develop high-potential industry clusters, assist impacted communities to accelerate job creation by leveraging local assets, train and place workers in family-supporting, high-demand jobs (including Registered Apprenticeship and other on-the-job training models), and to create linkages that drive regional economic growth.
Funding Sources:
DOC -- EDA, Assistance to Coal Communities, Economic Adjustment Assistance, and Partnership Planning (up to $15 million total for both grant making tracks)
DOL – Employment and Training Administration (ETA), Dislocated Worker National Emergency Grants (up to $10-20 million total for both grant making tracks)
SBA, Regional Innovation Clusters and Growth Accelerators (up to $3 million combined[2])
ARC, Technical Assistance and Demonstration Projects (up to $500 thousand for applicants from its region)
The implementation grants will be awarded through a single POWER Federal Funding Opportunity (FFO) announcement that combines funding opportunities and activities and services from different programs and agencies but maintains the eligibility rules, permitted activities, and reporting requirements of the originating program and funding. Partnerships will be encouraged to apply for more than one funding source where appropriate, but that will not be required.
Additional Federal Agency Participation
A number of other federal agencies will also participate in the POWER initiative by providing technical assistance and education and outreach to POWER partnerships, coordination with existing resources, and/or preference points for agency funding for applications from the partnerships. The additional agencies will include:
USDA-Rural Business Cooperative Service
Environmental Protection Agency, Office of Solid Waste and Emergency Response
Department of Energy
Department of Treasury, Community Development Financial Institutions (CDFI) Fund
DOC, SelectUSA
DOC, NIST-Manufacturing Extension Partnerships
Corporation for National and Community Service
Department of Interior, Office of Surface Mining Reclamation and Enforcement
Administration
EDA will be the administrative home for POWER given the economic development thrust of this initiative. EDA will manage the joint FFO announcement and overall process of competitive solicitation, provide a single staff point of federal contact (with staffing assistance from other participating agencies when needed) for the selected partnerships, and coordinate cross-agency activities at the regional level that direct additional federal resources to impacted communities. Grant selection, awards and execution will be managed by each authorized agency, with EDA playing a coordination role.
POWER Partnerships
Eligibility for applicants for POWER awards will be dictated by the sources of the funds. Regardless of the primary applicant for Implementation Grants, POWER will encourage a broader partnership to participate, including (but not limited to) representatives from government, economic development organizations, workforce development boards, community and technical colleges, businesses, labor unions, and community groups.
Timeline
April/May, 2015: Track #1 POWER Planning Grant announcement issued
April/May, 2015: Track #2 POWER Implementation Grant FFO issued
July/August, 2015: POWER Planning and Implementation Grant awards ready to announce
[1] The DOL-ETA will solicit applications for planning activities with implementation activities as part of the combined Implementation Grant FFO
[2] Regional Innovation Clusters funding will be $500,000 for the first year for one partnership, with an option to extend funding by another $2 million over the next four years.
DOJ ANNOUNCES CONVICTION OF OXYWATER MAKERS WITH FRAUD, MONEY LAUNDERING, TAX CRIMES
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, March 25, 2015
Jury Convicts Makers of OXYwater for Wire Fraud, Money Laundering and Tax Crimes
Today, a federal jury convicted a man from Lewis Center, Ohio, and his business partner of Powell, Ohio, of defrauding their company’s investors and diverting investors’ funds for their own personal use. Preston Harrison and his wife, Lovena E. Harrison, 42, were also both convicted of conspiracy to defraud the United States and filing a false income tax return, and Lovena Harrison was convicted of structuring financial transactions to evade currency reporting requirements.
Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent in Charge Kathy Enstrom of Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Field Division announced the verdict reached today, which was returned following a trial that began on March 16 before U.S. District Judge Gregory L. Frost.
According to court testimony, Thomas E. Jackson, 40, of Powell, and Preston J. Harrison, 43, of Lewis Center, operated Westerville, Ohio, based Imperial Integrated Health Research and Development LLC and developed a product called OXYwater, a beverage that promoters claimed was an all-natural, vitamin-enhanced sports drink that contained added oxygen for improved physical performance.
The defendants engaged in a scheme to deceive the investors in their company about the structure, composition, finances, sales and profits of OXYwater in order to make the company appear to be a lucrative and profitable financial investment. Jackson and Harrison produced and sent false and fraudulent documents intended to deceive investors, the ultimate purpose of such false statements being for Jackson and Preston Harrison to obtain money invested in the company. They then misappropriated that money for their own personal use and household expenditures including the purchase of jewelry, a Cadillac Escalade, a BMW, weapons, clothing, home improvements and a swimming pool.
“This case was about the millions of dollars that the defendants stole from investors to fuel their lavish lifestyle,” said Assistant U.S. Attorney Jessica Kim in court.
Jackson and Harrison misappropriated approximately $2 million of the investors’ funds between August 2010 and spring 2013. The defendants’ scheme caused investors to suffer substantial losses when the corporation was forced to declare bankruptcy with no assets. As a result of the defendants’ conduct, investors lost approximately $9 million.
Jackson and Preston Harrison were each convicted of one count of conspiracy to commit wire fraud, for which they face a statutory maximum sentence of 20 years in prison, and one count of conspiracy to commit money laundering, for which they face a statutory maximum sentence of 10 years in prison. Jackson was convicted of eight counts of wire fraud, which carries a statutory maximum sentence of 20 years in prison, and 12 counts of money laundering, which carries a statutory maximum sentence of 10 years in prison. Harrison was convicted of 12 counts of money laundering, for which he faces a statutory maximum sentence of 10 years in prison.
Preston and Lovena Harrison were both convicted of conspiracy to defraud the United States and with filing a false tax return. Preston Harrison misappropriated approximately $1.1 million in 2011 from his company, which he and his wife, Lovena Harrison, placed in an account in the name of her daycare business. They used the money for personal expenses and did not report the money as income on their 2011 income tax return. Lovena Harrison was also convicted of one count of structuring financial transactions to evade currency reporting requirements. Conspiracy to defraud the United States and structuring financial transactions to evade currency reporting requirements are each crimes with a statutory maximum sentence of five years in prison, and filing a false tax return carries a statutory maximum sentence of three years in prison.
Preston Harrison and Jackson also face potential forfeiture of $1.1 million, including two vehicles, eight weapons, cash and the contents of a bank account.
The three defendants were indicted by a grand jury on May 20, 2014.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Stewart commended the cooperative investigation by the IRS-CI and FBI, as well as Assistant U.S. Attorney Jessica Kim and Trial Attorneys Andrew Young and Jason Scheff of the Tax Division, who prosecuted the case.
Wednesday, March 25, 2015
Jury Convicts Makers of OXYwater for Wire Fraud, Money Laundering and Tax Crimes
Today, a federal jury convicted a man from Lewis Center, Ohio, and his business partner of Powell, Ohio, of defrauding their company’s investors and diverting investors’ funds for their own personal use. Preston Harrison and his wife, Lovena E. Harrison, 42, were also both convicted of conspiracy to defraud the United States and filing a false income tax return, and Lovena Harrison was convicted of structuring financial transactions to evade currency reporting requirements.
Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent in Charge Kathy Enstrom of Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Field Division announced the verdict reached today, which was returned following a trial that began on March 16 before U.S. District Judge Gregory L. Frost.
According to court testimony, Thomas E. Jackson, 40, of Powell, and Preston J. Harrison, 43, of Lewis Center, operated Westerville, Ohio, based Imperial Integrated Health Research and Development LLC and developed a product called OXYwater, a beverage that promoters claimed was an all-natural, vitamin-enhanced sports drink that contained added oxygen for improved physical performance.
The defendants engaged in a scheme to deceive the investors in their company about the structure, composition, finances, sales and profits of OXYwater in order to make the company appear to be a lucrative and profitable financial investment. Jackson and Harrison produced and sent false and fraudulent documents intended to deceive investors, the ultimate purpose of such false statements being for Jackson and Preston Harrison to obtain money invested in the company. They then misappropriated that money for their own personal use and household expenditures including the purchase of jewelry, a Cadillac Escalade, a BMW, weapons, clothing, home improvements and a swimming pool.
“This case was about the millions of dollars that the defendants stole from investors to fuel their lavish lifestyle,” said Assistant U.S. Attorney Jessica Kim in court.
Jackson and Harrison misappropriated approximately $2 million of the investors’ funds between August 2010 and spring 2013. The defendants’ scheme caused investors to suffer substantial losses when the corporation was forced to declare bankruptcy with no assets. As a result of the defendants’ conduct, investors lost approximately $9 million.
Jackson and Preston Harrison were each convicted of one count of conspiracy to commit wire fraud, for which they face a statutory maximum sentence of 20 years in prison, and one count of conspiracy to commit money laundering, for which they face a statutory maximum sentence of 10 years in prison. Jackson was convicted of eight counts of wire fraud, which carries a statutory maximum sentence of 20 years in prison, and 12 counts of money laundering, which carries a statutory maximum sentence of 10 years in prison. Harrison was convicted of 12 counts of money laundering, for which he faces a statutory maximum sentence of 10 years in prison.
Preston and Lovena Harrison were both convicted of conspiracy to defraud the United States and with filing a false tax return. Preston Harrison misappropriated approximately $1.1 million in 2011 from his company, which he and his wife, Lovena Harrison, placed in an account in the name of her daycare business. They used the money for personal expenses and did not report the money as income on their 2011 income tax return. Lovena Harrison was also convicted of one count of structuring financial transactions to evade currency reporting requirements. Conspiracy to defraud the United States and structuring financial transactions to evade currency reporting requirements are each crimes with a statutory maximum sentence of five years in prison, and filing a false tax return carries a statutory maximum sentence of three years in prison.
Preston Harrison and Jackson also face potential forfeiture of $1.1 million, including two vehicles, eight weapons, cash and the contents of a bank account.
The three defendants were indicted by a grand jury on May 20, 2014.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Stewart commended the cooperative investigation by the IRS-CI and FBI, as well as Assistant U.S. Attorney Jessica Kim and Trial Attorneys Andrew Young and Jason Scheff of the Tax Division, who prosecuted the case.
FTC PUTS STOP TO 'YELLOW PAGES' SCAM
FROM: U.S. FEDERAL TRADE COMMISSION
FTC Halts Online ‘Yellow Pages’ Scammers
Canada-Based Schemes Targeted Small Businesses, Nonprofits in U.S.
The Federal Trade Commission has halted two Canada-based schemes that defrauded small businesses and nonprofits in the United States by billing them for unwanted listings in online “yellow pages” business directories.
OnlineYellowPagesToday.com
The owner of a Montreal-based operation that bilked millions of dollars from businesses, churches, nonprofits and local governments will be banned from the business-directory industry under a settlement with the FTC.
In June 2014, the FTC charged Oni Nathifa Julien and several of her companies with contacting organizations under the guise of confirming contact information in a directory in which their organization already appeared. The defendants billed organizations $479.95 or more, using invoices with the walking fingers image often associated with local yellow page directories. If the recipients disputed the invoices, the defendants used deceptive collection tactics, such as playing altered or incomplete audio recordings to give the false impression that an employee of the organization had authorized a directory listing.
Under the settlement order, Julien is prohibited from misrepresenting any good or service, including that organizations have a preexisting business relationship with her or anyone else, that they have agreed to buy something, or that they owe money. She is also barred from continuing to collect money from past customers or profiting from or keeping their personal information. The order imposes a $3,081,969 judgment that will be suspended due to Julien’s inability to pay. The full judgment will become due immediately if she is found to have misrepresented her financial condition.
The Commission vote approving the proposed stipulated order for permanent injunction and monetary judgment was 5-0. The order was entered by the U.S. District Court for the Western District of Washington at Seattle on March 10, 2015.
NOTE: Stipulated orders have the force of law when approved and signed by the District Court judge.
Medical Yellow Directories
At the FTC’s request, a federal court has halted a Quebec-based scheme that allegedly defrauded medical practices, churches, and retirement homes, generating more than 1,800 complaints from consumers. The FTC seeks to stop the illegal practices permanently.
According to a complaint filed by the FTC, the defendants used a variety of business names, typically including the words “American” and “Yellow,” to send consumers unsolicited invoices bearing the well-known “walking fingers” image and seeking $480.95 or a similar amount for a one-year directory listing. Consumers were directed to send checks to U.S. addresses that are really commercial mail receiving agencies that forward mail to Quebec.
The invoices named someone from the targeted organization and showed the listing as it purportedly would appear in a directory, suggesting that someone previously agreed to buy a listing. Those who ignored the invoices received more of them with statements such as “COLLECTION WARNING” and “LAST CHANCE TO PROTECT YOUR CREDIT SCORE IN GOOD STANDING!!!” and demands for larger payments, such as $2,385.95, with no explanation for the higher amount.
When consumers still refused to pay, the defendants sent dunning notices, posing as a third-party debt collector, General Credit Protection Inc.-Credit Bureau Recovery. Although they told Better Business Bureaus and state attorneys general that they would stop demanding payment and remove complaining consumers from their customer lists, the defendants kept sending invoices demanding payment.
The defendants are American Yellow Browser Inc.; American Yellow Group Inc.; Distribution H.E.P. Inc., also doing business as American Yellow Distribution and Medical Yellow Directories Inc.; Official Yellow Guide Inc.; Publication A.A.P. Inc., also d/b/a All American Pages and Official Yellow Guide; Publication A.Y.B. Inc., also d/b/a American Yellow Browser Inc., American Yellow Group Inc., and All American Pages Inc.; Publications A.Y.D. Inc.; Ivan Chernev, also d/b/a American Yellow Corporation Inc., General Credit Protection Inc., and Credit Bureau Recovery; and German Lebedev, also d/b/a American Yellow Directories Inc.
The complaint alleges that the defendants misrepresent that consumers have agreed to buy a business directory listing and owe them money, in violation of the FTC Act.
The Commission vote authorizing the staff to file the complaint in the U.S. District Court for the Northern District of Illinois, Eastern Division, was 5-0.
FTC Halts Online ‘Yellow Pages’ Scammers
Canada-Based Schemes Targeted Small Businesses, Nonprofits in U.S.
The Federal Trade Commission has halted two Canada-based schemes that defrauded small businesses and nonprofits in the United States by billing them for unwanted listings in online “yellow pages” business directories.
OnlineYellowPagesToday.com
The owner of a Montreal-based operation that bilked millions of dollars from businesses, churches, nonprofits and local governments will be banned from the business-directory industry under a settlement with the FTC.
In June 2014, the FTC charged Oni Nathifa Julien and several of her companies with contacting organizations under the guise of confirming contact information in a directory in which their organization already appeared. The defendants billed organizations $479.95 or more, using invoices with the walking fingers image often associated with local yellow page directories. If the recipients disputed the invoices, the defendants used deceptive collection tactics, such as playing altered or incomplete audio recordings to give the false impression that an employee of the organization had authorized a directory listing.
Under the settlement order, Julien is prohibited from misrepresenting any good or service, including that organizations have a preexisting business relationship with her or anyone else, that they have agreed to buy something, or that they owe money. She is also barred from continuing to collect money from past customers or profiting from or keeping their personal information. The order imposes a $3,081,969 judgment that will be suspended due to Julien’s inability to pay. The full judgment will become due immediately if she is found to have misrepresented her financial condition.
The Commission vote approving the proposed stipulated order for permanent injunction and monetary judgment was 5-0. The order was entered by the U.S. District Court for the Western District of Washington at Seattle on March 10, 2015.
NOTE: Stipulated orders have the force of law when approved and signed by the District Court judge.
Medical Yellow Directories
At the FTC’s request, a federal court has halted a Quebec-based scheme that allegedly defrauded medical practices, churches, and retirement homes, generating more than 1,800 complaints from consumers. The FTC seeks to stop the illegal practices permanently.
According to a complaint filed by the FTC, the defendants used a variety of business names, typically including the words “American” and “Yellow,” to send consumers unsolicited invoices bearing the well-known “walking fingers” image and seeking $480.95 or a similar amount for a one-year directory listing. Consumers were directed to send checks to U.S. addresses that are really commercial mail receiving agencies that forward mail to Quebec.
The invoices named someone from the targeted organization and showed the listing as it purportedly would appear in a directory, suggesting that someone previously agreed to buy a listing. Those who ignored the invoices received more of them with statements such as “COLLECTION WARNING” and “LAST CHANCE TO PROTECT YOUR CREDIT SCORE IN GOOD STANDING!!!” and demands for larger payments, such as $2,385.95, with no explanation for the higher amount.
When consumers still refused to pay, the defendants sent dunning notices, posing as a third-party debt collector, General Credit Protection Inc.-Credit Bureau Recovery. Although they told Better Business Bureaus and state attorneys general that they would stop demanding payment and remove complaining consumers from their customer lists, the defendants kept sending invoices demanding payment.
The defendants are American Yellow Browser Inc.; American Yellow Group Inc.; Distribution H.E.P. Inc., also doing business as American Yellow Distribution and Medical Yellow Directories Inc.; Official Yellow Guide Inc.; Publication A.A.P. Inc., also d/b/a All American Pages and Official Yellow Guide; Publication A.Y.B. Inc., also d/b/a American Yellow Browser Inc., American Yellow Group Inc., and All American Pages Inc.; Publications A.Y.D. Inc.; Ivan Chernev, also d/b/a American Yellow Corporation Inc., General Credit Protection Inc., and Credit Bureau Recovery; and German Lebedev, also d/b/a American Yellow Directories Inc.
The complaint alleges that the defendants misrepresent that consumers have agreed to buy a business directory listing and owe them money, in violation of the FTC Act.
The Commission vote authorizing the staff to file the complaint in the U.S. District Court for the Northern District of Illinois, Eastern Division, was 5-0.
FTC GRANTS SUMMARY DECISION AGAINST OWNER OF "THE ANTI-SOCIAL NETWORK"
FROM: U.S. FEDERAL TRADE COMMISSION
Order Requires Deletion of All Consumer Data, Prohibits Further Deception
The Federal Trade Commission has granted summary decision against the operators of Jerk.com, a website that billed itself as “the anti-social network,” for deceiving users about the source of content on the website. The Commission found that the operators – Jerk, LLC (“Jerk”) and John Fanning – misled consumers by claiming that content on the website was posted by other users. Instead, most of the content came from Facebook profiles mined by the operators.
The Commission also found that the company and Fanning misrepresented the benefits of a paid membership which, for $30, purportedly allowed consumers to update information in their Jerk.com profiles. In fact, consumers who paid for the membership were unable to correct information about them on the site, and did not receive anything of value for their “membership.”
The final order and an accompanying opinion resulted from an administrative complaint the FTC staff filed in 2014 against Jerk and Fanning. The summary decision was requested by FTC staff trying the case.
The order requires the company and Fanning to delete all personal and customer information collected during the operation of the now-defunct website within 30 days, and prohibits them from selling or disclosing any of that information. The order also prohibits them from misrepresenting the source of any content on a website, including personal information, and from misrepresenting the benefits of joining any service.
The Commission vote to issue the opinion granting summary decision and the final order was 5-0.
The company or Fanning may file a petition for review of the Commission Opinion and Final Order with a U.S. Circuit Court of Appeals within 60 days after service of the Final Order.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.
Order Requires Deletion of All Consumer Data, Prohibits Further Deception
The Federal Trade Commission has granted summary decision against the operators of Jerk.com, a website that billed itself as “the anti-social network,” for deceiving users about the source of content on the website. The Commission found that the operators – Jerk, LLC (“Jerk”) and John Fanning – misled consumers by claiming that content on the website was posted by other users. Instead, most of the content came from Facebook profiles mined by the operators.
The Commission also found that the company and Fanning misrepresented the benefits of a paid membership which, for $30, purportedly allowed consumers to update information in their Jerk.com profiles. In fact, consumers who paid for the membership were unable to correct information about them on the site, and did not receive anything of value for their “membership.”
The final order and an accompanying opinion resulted from an administrative complaint the FTC staff filed in 2014 against Jerk and Fanning. The summary decision was requested by FTC staff trying the case.
The order requires the company and Fanning to delete all personal and customer information collected during the operation of the now-defunct website within 30 days, and prohibits them from selling or disclosing any of that information. The order also prohibits them from misrepresenting the source of any content on a website, including personal information, and from misrepresenting the benefits of joining any service.
The Commission vote to issue the opinion granting summary decision and the final order was 5-0.
The company or Fanning may file a petition for review of the Commission Opinion and Final Order with a U.S. Circuit Court of Appeals within 60 days after service of the Final Order.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.
Friday, March 27, 2015
PRESIDENT OBAMA'S STATEMENT ON SENATOR HARRY REID'S RETIREMENT
FROM: THE WHITE HOUSE PRESIDENT
March 27, 2015
Statement by the President on the Retirement of Senator Harry Reid
Harry Reid is a fighter. In his five terms as a U.S. Senator, Harry has fought for good jobs, a safer environment for our kids, and affordable health care for all. He's never backed down from a tough decision, or been afraid to choose what is right over what is easy. Time and time again, Harry stood up to special interests and made sure every one of his constituents had a voice in their nation's capital.
Above all else, Harry has fought for the people of his beloved state of Nevada. The son of a miner and a maid from the tiny town of Searchlight, he never forgot where he came from, and he never stopped working to give everyone who works hard the same shot at success that he had.
As the leader of the Senate Democrats during my time in office, Harry has become not only an ally, but a friend. I'm proud of all we have accomplished together, and I know the Senate will not be the same without him. I look forward to working with him to keep fighting for every American over the next two years, and Michelle and I wish him and Landra well in whatever the future holds.
March 27, 2015
Statement by the President on the Retirement of Senator Harry Reid
Harry Reid is a fighter. In his five terms as a U.S. Senator, Harry has fought for good jobs, a safer environment for our kids, and affordable health care for all. He's never backed down from a tough decision, or been afraid to choose what is right over what is easy. Time and time again, Harry stood up to special interests and made sure every one of his constituents had a voice in their nation's capital.
Above all else, Harry has fought for the people of his beloved state of Nevada. The son of a miner and a maid from the tiny town of Searchlight, he never forgot where he came from, and he never stopped working to give everyone who works hard the same shot at success that he had.
As the leader of the Senate Democrats during my time in office, Harry has become not only an ally, but a friend. I'm proud of all we have accomplished together, and I know the Senate will not be the same without him. I look forward to working with him to keep fighting for every American over the next two years, and Michelle and I wish him and Landra well in whatever the future holds.
SECRETARY CARTER CALLS FOR "FULL-COURT PRESS" TO ADDRESS NATIONAL SECURITY ISSUES
Right: Defense Secretary Ash Carter provides remarks on the national security budget and the relationship between the Defense and State departments at the Global Chiefs of Mission conference at the U.S. State Department in Washington, D.C., March 26, 2015. DoD screen shot.
Carter Calls for ‘Full-Court Press’ on Security Challenges
By Jim Garamone
DoD News, Defense Media Activity
WASHINGTON, March 26, 2015 – Defense Secretary Ash Carter called for a “full-court press” within government to tackle the pressing national security issues of the day.
Carter spoke today at the State Department’s Global Chiefs of Mission Conference. He is the first defense secretary to address the conference.
Carter called on Congress to put money into the effort. “We can’t just theorize and strategize,” he said. “We have to invest in the whole-of-government way.”
Sequestration Would Harm Defense, Partner Agencies
The secretary said he and other military leaders “have been vocal and specific about the damage that sequestration-level budgets would inflict on the need to restore readiness, on badly needed technological modernization, and on keeping faith with troops and their families.
“And I want to emphasize that current proposals to shoe-horn DoD’s base budget funds into our contingency accounts would fail to solve the problem, while also undermining basic principles of accountability and responsible long-term planning,” Carter said.
And, as the defense secretary, Carter said he cannot ignore cuts in partner agencies such as State, Homeland Security and Treasury.
“I cannot be indifferent to the vital national security responsibilities across our government, just as I cannot be indifferent to my own at DoD,” he said.
‘Whole-of-Government’ Approach
The secretary stressed that most of the national security issues facing America require resources from a number of different agencies working together.
Diplomatic, economic, information and military aspects must be fully integrated for U.S. policies to succeed, he said. Cuts in the State Department budget, for example, affect the Defense Department and vice versa, Carter added.
In recent years, many have been calling for “whole-of-government” approaches to world problems. They also talk about “smart power” -- meaning using more than just the military to effect change. These terms, Carter said, are relatively new, but the basic concept has “been around from Sung China to the Holy Roman Empire -- the idea of leveraging all resources of state is an enduring principle of strategy and statecraft.”
The United States used the whole-of-government approach in crafting and executing the Marshall Plan after World War II, Carter said. That plan, he added, laid the foundation for the Common Market and now the European Union.
Interagency Operations Vital
But harnessing the power of the government has not always been easy, Carter said. Since World War II, State and Defense have often been working at cross purposes, he said, but that has changed.
“We work with a generation of national-security professionals in both agencies, who are actually steeped in interagency cooperation,” the secretary said. “Most of today’s senior officials cut their teeth in the multidimensional policy challenges we faced in Haiti and the Balkans in the 1990s, and the wars in Iraq and Afghanistan and against terror brought even closer interagency cooperation.”
Carter noted that then-Defense Secretary Robert M. Gates testified before Congress in 2010 in support of the State Department’s budget request, and he has done the same.
“Senior Defense Department officials have become some of the most vocal constituents for greater civilian involvement not just in conflict zones but … also in what I have called ‘preventive defense,’ or the influencing of the strategic environment to prevent and deter conflict in the first place,” he said.
Military personnel also recognize that ensuring victory requires much more than guns and steel, the secretary said.
“In conflict zones, it requires good governance, reconciliation, education and the rule of law,” he said. “And in addressing the wider catalog of strategic challenges, it requires marrying the threat of force with financial and diplomatic leverage.”
Coalition ‘Putting ISIL on the Defensive’
Operations against the Islamic State of Iraq and the Levant are a case in point, Carter said. “Today, our global coalition's military campaign is putting ISIL on the defensive,” he said. “Just yesterday [in Iraq] the coalition that many of you in this room have built began conducting airstrikes around Tikrit. But we know that lasting defeat of ISIL requires an integrated campaign with equally potent political and economic maneuvers.”
A lasting defeat of ISIL, he said, requires DoD to work closely with the State Department to support the government of Iraq and the nascent Syrian opposition, and to assemble and then fully leverage the commitment and resources of a vast coalition. It also requires the U.S. Agency for International Development to work closely with regional and global partners, as refugees continue flowing into Jordan and Turkey, he added.
Defeating ISIL requires the U.S. Treasury to choke off the terror group’s resources, “while Homeland Security, the intelligence community and law enforcement together keep watch on our borders” and deter attacks on the United States and its friends and allies, Carter said.
Unified Approach Needed for Diverse Challenges
The same whole-of-government effort is needed against Iran’s nuclear program, he said, and against Russia’s illegal annexation of Crimea from Ukraine and continued operations inside Eastern Ukraine.
A full-court press also is needed in the aftermath of disasters, he said. “We’ve worked across our government, demonstrating that in an hour of need, the United States shows up for our closest allies and friends,” Carter said.
The secretary pointed to the U.S. response to the earthquake, tsunami and nuclear reactor accident in Japan as an example. “This effort powerfully reinforced the U.S.-Japan alliance, demonstrating to Japanese citizens just how deep and broad that alliance really is,” he said.
Securing cyberspace requires the efforts of many U.S. agencies and international partners, Carter said. DoD is working with the National Institutes of Standards and Technology, the Department of Commerce and the Department of Homeland Security on protecting this new domain. The State Department is leading an effort to build international agreements on norms of state conduct in cyber space, he said.
“To pack the fullest strategic punch, we need to do a better job developing joint strategies and pooling our resources to execute them,” Carter said to the State Department audience. “We need to adequately fund and empower your mission as our nation's top envoys.”
Those in national security, the secretary said, need to “think big and anew, even re-imagining the future of our national security machinery to address classic strategic challenges, such as those in Asia, alongside campaigns that we’re conducting in the Middle East, while also tackling transnational challenges like global health security and the proliferation of weapons of mass destruction.”
The full-court press needs to be applied not only to challenges, but to opportunities as well, he said.
“We need to put a whole-of-government muscle not only behind our challenges, but also behind our beckoning opportunities, from strengthening and modernizing our longstanding alliances to advancing our shared prosperity through new trade agreements with Europe and Asia, to building new partnerships with rising powers like India,” Carter said.
STUDY SUGGESTS HABITAT FRAGMENTATION HAS WORLDWIDE NEGATIVE IMPACT
FROM: NATIONAL SCIENCE FOUNDATION
Shrinking habitats have adverse effects on world ecosystems--and ultimately people
Extensive study of global habitat fragmentation points to major trouble ahead
An extensive study of global habitat fragmentation--the division of habitats into smaller and more isolated patches--points to major trouble for the world's ecosystems.
The study shows that 70 percent of existing forest lands are within a half-mile of forest edges, where encroaching urban, suburban and agricultural influences can cause harmful effects such as losses of plant and animal species.
Five continents of habitat fragmentation
The research also tracks seven major experiments on five continents that examine habitat fragmentation and finds that fragmented habitats reduce the diversity of plants and animals by 13 to 75 percent.
The largest effects are found in the smallest and most isolated fragments of habitat.
Results of the study, which involved two dozen researchers across the globe, are reported in a new paper published in Science Advances.
The work is funded by the National Science Foundation (NSF).
"The results are stark," said Doug Levey, program director in NSF's Division of Environmental Biology and a co-author of the paper. "No matter the place, habitat or species, habitat fragmentation has large effects, which grow worse over time."
The scientists assembled a map of global forest cover and found very few forest lands unencumbered by some type of human development.
World's forests shrinking
"It's no secret that the world's forests are shrinking, so we asked about the effects of this habitat loss and fragmentation on the remaining forests," said Nick Haddad, a biologist at North Carolina State University and corresponding author of the paper.
"The results were astounding," he said.
"Nearly 20 percent of the world's remaining forests are the distance of a football field--or about 100 meters--away from forest edges. Seventy percent of forest lands are within a half-mile of forest edges. That means almost no forests can really be considered wilderness."
Covering many ecosystems, from forests to savannahs to grasslands, the experiments combined to show a disturbing trend.
Fragmentation changes how ecosystems function, reduces the amounts of nutrients retained and the amount of carbon sequestered and has other deleterious effects.
Negative effects of fragmentation and help for the forest
"The initial effects were unsurprising," Haddad said. "But I was blown away by the fact that these negative effects became even more negative with time. Some results showed a 50 percent or higher decline in plant and animal species over an average of just 20 years.
"And the trajectory is still spiraling downward."
Haddad points to some possible ways of mitigating the effects of fragmentation: conserving and maintaining larger areas of habitat; using landscape corridors, or connected fragments that are effective in maintaining higher biodiversity and better ecosystem function; increasing agricultural efficiency; and focusing on urban design efficiencies.
"Ultimately, habitat fragmentation has harmful effects that will also hurt people," said Haddad.
"This study is a wake-up call to how much we're affecting ecosystems--including areas we think we're conserving."
-- Cheryl Dybas, NSF
Shrinking habitats have adverse effects on world ecosystems--and ultimately people
Extensive study of global habitat fragmentation points to major trouble ahead
An extensive study of global habitat fragmentation--the division of habitats into smaller and more isolated patches--points to major trouble for the world's ecosystems.
The study shows that 70 percent of existing forest lands are within a half-mile of forest edges, where encroaching urban, suburban and agricultural influences can cause harmful effects such as losses of plant and animal species.
Five continents of habitat fragmentation
The research also tracks seven major experiments on five continents that examine habitat fragmentation and finds that fragmented habitats reduce the diversity of plants and animals by 13 to 75 percent.
The largest effects are found in the smallest and most isolated fragments of habitat.
Results of the study, which involved two dozen researchers across the globe, are reported in a new paper published in Science Advances.
The work is funded by the National Science Foundation (NSF).
"The results are stark," said Doug Levey, program director in NSF's Division of Environmental Biology and a co-author of the paper. "No matter the place, habitat or species, habitat fragmentation has large effects, which grow worse over time."
The scientists assembled a map of global forest cover and found very few forest lands unencumbered by some type of human development.
World's forests shrinking
"It's no secret that the world's forests are shrinking, so we asked about the effects of this habitat loss and fragmentation on the remaining forests," said Nick Haddad, a biologist at North Carolina State University and corresponding author of the paper.
"The results were astounding," he said.
"Nearly 20 percent of the world's remaining forests are the distance of a football field--or about 100 meters--away from forest edges. Seventy percent of forest lands are within a half-mile of forest edges. That means almost no forests can really be considered wilderness."
Covering many ecosystems, from forests to savannahs to grasslands, the experiments combined to show a disturbing trend.
Fragmentation changes how ecosystems function, reduces the amounts of nutrients retained and the amount of carbon sequestered and has other deleterious effects.
Negative effects of fragmentation and help for the forest
"The initial effects were unsurprising," Haddad said. "But I was blown away by the fact that these negative effects became even more negative with time. Some results showed a 50 percent or higher decline in plant and animal species over an average of just 20 years.
"And the trajectory is still spiraling downward."
Haddad points to some possible ways of mitigating the effects of fragmentation: conserving and maintaining larger areas of habitat; using landscape corridors, or connected fragments that are effective in maintaining higher biodiversity and better ecosystem function; increasing agricultural efficiency; and focusing on urban design efficiencies.
"Ultimately, habitat fragmentation has harmful effects that will also hurt people," said Haddad.
"This study is a wake-up call to how much we're affecting ecosystems--including areas we think we're conserving."
-- Cheryl Dybas, NSF
DOJ REPORTS SCHLUMBERGER OILFIELD HOLDINGS LTD. TO PAY ALMOST $232.7 MILLION FOR FACILITATING TRADE WITH IRAN AND SUDAN
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, March 25, 2015
Schlumberger Oilfield Holdings Ltd. Agrees to Plead Guilty and Pay Over $232.7 Million for Violating US Sanctions by Facilitating Trade with Iran and Sudan
Parent Company, Schlumberger Ltd., Also Agrees to Continue Cooperation With U.S. Authorities and To Hire an Independent Consultant to Review Its Sanctions Policies, Procedures and Internal Sanctions Audits
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Ronald C. Machen Jr. of the District of Columbia and Under Secretary Eric L. Hirschhorn of the U.S. Commerce Department’s Bureau of Industry and Security announced today that Schlumberger Oilfield Holdings Ltd. (SOHL), a wholly-owned subsidiary of Schlumberger Ltd., has agreed to enter a guilty plea and to pay a $232,708,356 penalty to the United States for conspiring to violate the International Emergency Economic Powers Act (IEEPA) by willfully facilitating illegal transactions and engaging in trade with Iran and Sudan.
The plea agreement, which is contingent upon the court’s approval, also requires SOHL to submit to a three-year period of corporate probation and agree to continue to cooperate with the government and not commit any additional felony violations of U.S. federal law. In addition to SOHL’s commitments, under the plea agreement, SOHL’s parent company, Schlumberger Ltd., has also agreed to the following additional terms during the three-year term of probation, inter alia: (1) maintaining its cessation of all operations in Iran and Sudan, (2) reporting on the parent company’s compliance with sanctions, (3) responding to requests to disclose information and materials related to the parent company’s compliance with U.S. sanctions laws when requested by U.S. authorities, and (4) hiring an independent consultant to review the parent company’s internal sanctions policies and procedures and the parent company’s internal audits focused on sanctions compliance. The guilty plea concludes a joint investigation commenced in 2009 and led by the Justice Department’s National Security Division, the U.S. Attorney’s Office for the District of Columbia and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) Dallas Field Office.
“Over a period of years, Schlumberger Oilfield Holdings Ltd. conducted business with Iran and Sudan from the United States and took steps to disguise those business dealings, thereby willfully violating the U.S. economic sanctions against those regimes,” said Assistant Attorney General Carlin. “The International Emergency Economic Powers Act is an essential tool that the United States uses to address foreign threats to national security through the regulation of commerce. Knowingly circumventing sanctions undermines their efficacy and has the potential to harm both U.S. national security and foreign policy objectives. The guilty plea and significant financial penalty in this case underscore that skirting sanctions for financial gain is a risk corporations ought not take.”
“This is a landmark case that puts global corporations on notice that they must respect our trade laws when on American soil,” said U.S. Attorney Machen. “Even if you don’t directly ship goods from the United States to sanctioned countries, you violate our laws when you facilitate trade with those countries from a U.S.-based office building. For years, in a variety of ways, this foreign company facilitated trade with Iran and Sudan from Sugar Land, Texas. Today’s announcement should send a clear message to all global companies with a U.S. presence: whether your employees are from the U.S. or abroad, when they are in the United States, they will abide by our laws or you will be held accountable.”
“Today's criminal guilty plea demonstrates the Commerce Department’s commitment to aggressively prosecute multinational corporations for violations involving embargoed destinations,” said Under Secretary Hirschhorn. “We will continue to pursue violators wherever they are located and whatever their size. I commend the Office of Export Enforcement and the Department of Justice for their outstanding efforts to investigate and prosecute this case.”
A criminal information was filed today in federal court in the District of Columbia charging SOHL with one count of knowingly and willfully conspiring to violate IEEPA. SOHL waived the requirement of being charged by way of federal Indictment, agreed to the filing of the information, and has accepted responsibility for its criminal conduct and that of its employees by entering into a plea agreement with the government. The plea agreement, which is contingent upon the court’s approval, requires that SOHL pay the U.S. government $232,708,356 and enter into a three-year period of corporate probation. SOHL’s monetary penalty includes a $77,569,452 criminal forfeiture and an additional $155,138,904 criminal fine. The criminal fine represents the largest criminal fine in connection with an IEEPA prosecution.
In addition to SOHL’s agreement to continue its cooperation with U.S. authorities throughout the three-year period of probation and not to engage in any felony violation of U.S. federal law, SOHL’s parent company, Schlumberger Ltd., also has agreed to continue its cooperation with U.S. authorities during the three-year period of probation, and hire an independent consultant who will review the parent company’s internal sanctions policies, procedures and company-generated sanctions audit reports.
Summary of the Criminal Conduct
According to court documents, starting on or about early 2004 and continuing through June 2010, Drilling & Measurements (D&M), a United States-based Schlumberger business segment, provided oilfield services to Schlumberger customers in Iran and Sudan through non-U.S. subsidiaries of SOHL. Although SOHL, as a subsidiary of Schlumberger Ltd., had policies and procedures designed to ensure that D&M did not violate U.S. sanctions, SOHL failed to train its employees adequately to ensure that all U.S. persons, including non-U.S. citizens who resided in the United States while employed at D&M, complied with Schlumberger Ltd.’s sanctions policies and compliance procedures. As a result of D&M’s lack of adherence to U.S. sanctions combined with SOHL’s failure to train properly U.S. persons and to enforce fully its policies and procedures, D&M, through the acts of employees residing in the United States, violated U.S. sanctions against Iran and Sudan by: (1) approving and disguising the company’s capital expenditure requests from Iran and Sudan for the manufacture of new oilfield drilling tools and for the spending of money for certain company purchases; (2) making and implementing business decisions specifically concerning Iran and Sudan; and (3) providing certain technical services and expertise in order to troubleshoot mechanical failures and to sustain expensive drilling tools and related equipment in Iran and Sudan.
The Illegal Schemes
Illegal U.S. Person Approval of Capital Expenditures. According to court documents, one of the important functions of D&M management personnel was the supervision of D&M’s capital expenditure (CAPEX) process. The CAPEX process was a forecasting mechanism enabling oilfield locations to predict what tools and equipment they would need to meet anticipated demand for oilfield services. Oilfield personnel worldwide made requests through an automated system for the manufacture of new tools and for permission to spend money for certain purchases in order to support oilfield operations. Once approved by the D&M Global Asset Manager in the United States, a request for new equipment was transmitted to one of three manufacturing centers for the production of new tools and other assets. The spending of funds for large-scale purchases was authorized once the request was approved by the D&M Global Asset Manager. Under the CAPEX process in place during the relevant time period, approval by the D&M Global Asset Manager, a U.S. person, was required for every CAPEX request, including requests submitted by or for the benefit of D&M oilfields in Iran and Sudan.
Consequently, D&M’s CAPEX process violated sanctions with Iran and Sudan in a number of ways. Although CAPEX approvals were ordinarily sought through an automated computer system, D&M personnel outside the United States frequently sent emails to the D&M Global Asset Manager in the United States justifying particular requests, many of which related to requests submitted by or on behalf of Iran and Sudan. Furthermore, in these email communications, D&M personnel outside the United States referred to Iran as “Northern Gulf” and Sudan as “Southern Egypt” or “South Egypt” in email communications with D&M personnel in the United States.
In addition, D&M personnel outside the United States implemented a process designed to disguise the identities of the embargoed locations in the automated computer system in order to obtain approval from the D&M Global Asset Manager in the United States. Orders entered into the automated computer system were identified by a series of numbers and letters. Typically, the alpha-numeric identifier included a two or three-letter code indicating the country that placed the order. Instead of entering the country code for Iran or Sudan, D&M personnel entered non-embargoed country codes for embargoed location orders. Specifically, the code “BGM,” which identified a bonded-goods warehouse in Jebel Ali, United Arab Emirates, was used in place of the Iran and Sudan country codes in order to disguise the true locations. These efforts were deliberately taken and demonstrate the company’s involvement in contriving ways intended to evade restrictions imposed by U.S. sanctions.
D&M Headquarters Involvement in Iran and Sudan. According to court documents, separate and apart from the illegal CAPEX approval process that violated U.S. sanctions, D&M headquarters personnel made and implemented business decisions involving D&M operations in Iran and Sudan—again, all in violation of U.S. sanctions’ restrictions on the facilitation of trade with Iran and Sudan. D&M’s illegal involvement in the day-to-day operations in Iran and Sudan, through U.S. persons working at D&M headquarters, occurred with D&M’s knowledge and understanding of the applicability of U.S. sanctions laws to the company.
Technical Services. According to court documents, when technical problems arose in oilfield locations related to the operation of drilling tools, D&M personnel would enter relevant information about the technical issue into an automated computer system. D&M’s automated computer system would generally route the query to a technical expert who could assist the oilfield location in addressing the technical issue. If the technical issue was sufficiently complex, the query would ordinarily be routed to the technical experts located at the product center that manufactured the tool. At times, queries entered by, or on behalf of, D&M personnel in Iran and Sudan were addressed by D&M personnel located in the United States. The technical services provided to Iranian and Sudanese operations, by U.S. persons, violated the prohibitions of trade with Iran and Sudan required by U.S. sanctions.
SOHL and Schlumberger’s Remediation Efforts
In 2009, in consultation with the U.S. Department of State, Schlumberger agreed to no longer pursue new oilfield contracts in Iran. In 2011, Schlumberger voluntarily decided to cease providing oilfield services in Iran and the Republic of the Sudan (North Sudan). As of June 30, 2013, Schlumberger ceased providing oilfield services in Iran, and presently, Schlumberger has ceased providing oilfield services in North Sudan as well.
In announcing the plea, Assistant Attorney General Carlin and U.S. Attorney Machen commended the work of Special Agent Troy Shaffer from BIS’s Dallas Field Office. They also acknowledged the work of those who handled the case from the National Security Division and the U.S. Attorney’s Office, including former Trial Attorney Ryan Fayhee and former Assistant U.S. Attorneys John Borchert and Ann H. Petalas.
The case is being prosecuted by Trial Attorney Casey Arrowood of the National Security Division, Assistant U.S. Attorney Maia L. Miller of the National Security Section and Assistant U.S. Attorney Zia Faruqui of the Asset Forfeiture and Money Laundering Section.
Wednesday, March 25, 2015
Schlumberger Oilfield Holdings Ltd. Agrees to Plead Guilty and Pay Over $232.7 Million for Violating US Sanctions by Facilitating Trade with Iran and Sudan
Parent Company, Schlumberger Ltd., Also Agrees to Continue Cooperation With U.S. Authorities and To Hire an Independent Consultant to Review Its Sanctions Policies, Procedures and Internal Sanctions Audits
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Ronald C. Machen Jr. of the District of Columbia and Under Secretary Eric L. Hirschhorn of the U.S. Commerce Department’s Bureau of Industry and Security announced today that Schlumberger Oilfield Holdings Ltd. (SOHL), a wholly-owned subsidiary of Schlumberger Ltd., has agreed to enter a guilty plea and to pay a $232,708,356 penalty to the United States for conspiring to violate the International Emergency Economic Powers Act (IEEPA) by willfully facilitating illegal transactions and engaging in trade with Iran and Sudan.
The plea agreement, which is contingent upon the court’s approval, also requires SOHL to submit to a three-year period of corporate probation and agree to continue to cooperate with the government and not commit any additional felony violations of U.S. federal law. In addition to SOHL’s commitments, under the plea agreement, SOHL’s parent company, Schlumberger Ltd., has also agreed to the following additional terms during the three-year term of probation, inter alia: (1) maintaining its cessation of all operations in Iran and Sudan, (2) reporting on the parent company’s compliance with sanctions, (3) responding to requests to disclose information and materials related to the parent company’s compliance with U.S. sanctions laws when requested by U.S. authorities, and (4) hiring an independent consultant to review the parent company’s internal sanctions policies and procedures and the parent company’s internal audits focused on sanctions compliance. The guilty plea concludes a joint investigation commenced in 2009 and led by the Justice Department’s National Security Division, the U.S. Attorney’s Office for the District of Columbia and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) Dallas Field Office.
“Over a period of years, Schlumberger Oilfield Holdings Ltd. conducted business with Iran and Sudan from the United States and took steps to disguise those business dealings, thereby willfully violating the U.S. economic sanctions against those regimes,” said Assistant Attorney General Carlin. “The International Emergency Economic Powers Act is an essential tool that the United States uses to address foreign threats to national security through the regulation of commerce. Knowingly circumventing sanctions undermines their efficacy and has the potential to harm both U.S. national security and foreign policy objectives. The guilty plea and significant financial penalty in this case underscore that skirting sanctions for financial gain is a risk corporations ought not take.”
“This is a landmark case that puts global corporations on notice that they must respect our trade laws when on American soil,” said U.S. Attorney Machen. “Even if you don’t directly ship goods from the United States to sanctioned countries, you violate our laws when you facilitate trade with those countries from a U.S.-based office building. For years, in a variety of ways, this foreign company facilitated trade with Iran and Sudan from Sugar Land, Texas. Today’s announcement should send a clear message to all global companies with a U.S. presence: whether your employees are from the U.S. or abroad, when they are in the United States, they will abide by our laws or you will be held accountable.”
“Today's criminal guilty plea demonstrates the Commerce Department’s commitment to aggressively prosecute multinational corporations for violations involving embargoed destinations,” said Under Secretary Hirschhorn. “We will continue to pursue violators wherever they are located and whatever their size. I commend the Office of Export Enforcement and the Department of Justice for their outstanding efforts to investigate and prosecute this case.”
A criminal information was filed today in federal court in the District of Columbia charging SOHL with one count of knowingly and willfully conspiring to violate IEEPA. SOHL waived the requirement of being charged by way of federal Indictment, agreed to the filing of the information, and has accepted responsibility for its criminal conduct and that of its employees by entering into a plea agreement with the government. The plea agreement, which is contingent upon the court’s approval, requires that SOHL pay the U.S. government $232,708,356 and enter into a three-year period of corporate probation. SOHL’s monetary penalty includes a $77,569,452 criminal forfeiture and an additional $155,138,904 criminal fine. The criminal fine represents the largest criminal fine in connection with an IEEPA prosecution.
In addition to SOHL’s agreement to continue its cooperation with U.S. authorities throughout the three-year period of probation and not to engage in any felony violation of U.S. federal law, SOHL’s parent company, Schlumberger Ltd., also has agreed to continue its cooperation with U.S. authorities during the three-year period of probation, and hire an independent consultant who will review the parent company’s internal sanctions policies, procedures and company-generated sanctions audit reports.
Summary of the Criminal Conduct
According to court documents, starting on or about early 2004 and continuing through June 2010, Drilling & Measurements (D&M), a United States-based Schlumberger business segment, provided oilfield services to Schlumberger customers in Iran and Sudan through non-U.S. subsidiaries of SOHL. Although SOHL, as a subsidiary of Schlumberger Ltd., had policies and procedures designed to ensure that D&M did not violate U.S. sanctions, SOHL failed to train its employees adequately to ensure that all U.S. persons, including non-U.S. citizens who resided in the United States while employed at D&M, complied with Schlumberger Ltd.’s sanctions policies and compliance procedures. As a result of D&M’s lack of adherence to U.S. sanctions combined with SOHL’s failure to train properly U.S. persons and to enforce fully its policies and procedures, D&M, through the acts of employees residing in the United States, violated U.S. sanctions against Iran and Sudan by: (1) approving and disguising the company’s capital expenditure requests from Iran and Sudan for the manufacture of new oilfield drilling tools and for the spending of money for certain company purchases; (2) making and implementing business decisions specifically concerning Iran and Sudan; and (3) providing certain technical services and expertise in order to troubleshoot mechanical failures and to sustain expensive drilling tools and related equipment in Iran and Sudan.
The Illegal Schemes
Illegal U.S. Person Approval of Capital Expenditures. According to court documents, one of the important functions of D&M management personnel was the supervision of D&M’s capital expenditure (CAPEX) process. The CAPEX process was a forecasting mechanism enabling oilfield locations to predict what tools and equipment they would need to meet anticipated demand for oilfield services. Oilfield personnel worldwide made requests through an automated system for the manufacture of new tools and for permission to spend money for certain purchases in order to support oilfield operations. Once approved by the D&M Global Asset Manager in the United States, a request for new equipment was transmitted to one of three manufacturing centers for the production of new tools and other assets. The spending of funds for large-scale purchases was authorized once the request was approved by the D&M Global Asset Manager. Under the CAPEX process in place during the relevant time period, approval by the D&M Global Asset Manager, a U.S. person, was required for every CAPEX request, including requests submitted by or for the benefit of D&M oilfields in Iran and Sudan.
Consequently, D&M’s CAPEX process violated sanctions with Iran and Sudan in a number of ways. Although CAPEX approvals were ordinarily sought through an automated computer system, D&M personnel outside the United States frequently sent emails to the D&M Global Asset Manager in the United States justifying particular requests, many of which related to requests submitted by or on behalf of Iran and Sudan. Furthermore, in these email communications, D&M personnel outside the United States referred to Iran as “Northern Gulf” and Sudan as “Southern Egypt” or “South Egypt” in email communications with D&M personnel in the United States.
In addition, D&M personnel outside the United States implemented a process designed to disguise the identities of the embargoed locations in the automated computer system in order to obtain approval from the D&M Global Asset Manager in the United States. Orders entered into the automated computer system were identified by a series of numbers and letters. Typically, the alpha-numeric identifier included a two or three-letter code indicating the country that placed the order. Instead of entering the country code for Iran or Sudan, D&M personnel entered non-embargoed country codes for embargoed location orders. Specifically, the code “BGM,” which identified a bonded-goods warehouse in Jebel Ali, United Arab Emirates, was used in place of the Iran and Sudan country codes in order to disguise the true locations. These efforts were deliberately taken and demonstrate the company’s involvement in contriving ways intended to evade restrictions imposed by U.S. sanctions.
D&M Headquarters Involvement in Iran and Sudan. According to court documents, separate and apart from the illegal CAPEX approval process that violated U.S. sanctions, D&M headquarters personnel made and implemented business decisions involving D&M operations in Iran and Sudan—again, all in violation of U.S. sanctions’ restrictions on the facilitation of trade with Iran and Sudan. D&M’s illegal involvement in the day-to-day operations in Iran and Sudan, through U.S. persons working at D&M headquarters, occurred with D&M’s knowledge and understanding of the applicability of U.S. sanctions laws to the company.
Technical Services. According to court documents, when technical problems arose in oilfield locations related to the operation of drilling tools, D&M personnel would enter relevant information about the technical issue into an automated computer system. D&M’s automated computer system would generally route the query to a technical expert who could assist the oilfield location in addressing the technical issue. If the technical issue was sufficiently complex, the query would ordinarily be routed to the technical experts located at the product center that manufactured the tool. At times, queries entered by, or on behalf of, D&M personnel in Iran and Sudan were addressed by D&M personnel located in the United States. The technical services provided to Iranian and Sudanese operations, by U.S. persons, violated the prohibitions of trade with Iran and Sudan required by U.S. sanctions.
SOHL and Schlumberger’s Remediation Efforts
In 2009, in consultation with the U.S. Department of State, Schlumberger agreed to no longer pursue new oilfield contracts in Iran. In 2011, Schlumberger voluntarily decided to cease providing oilfield services in Iran and the Republic of the Sudan (North Sudan). As of June 30, 2013, Schlumberger ceased providing oilfield services in Iran, and presently, Schlumberger has ceased providing oilfield services in North Sudan as well.
In announcing the plea, Assistant Attorney General Carlin and U.S. Attorney Machen commended the work of Special Agent Troy Shaffer from BIS’s Dallas Field Office. They also acknowledged the work of those who handled the case from the National Security Division and the U.S. Attorney’s Office, including former Trial Attorney Ryan Fayhee and former Assistant U.S. Attorneys John Borchert and Ann H. Petalas.
The case is being prosecuted by Trial Attorney Casey Arrowood of the National Security Division, Assistant U.S. Attorney Maia L. Miller of the National Security Section and Assistant U.S. Attorney Zia Faruqui of the Asset Forfeiture and Money Laundering Section.
CHAIRMAN JOINT CHIEFS MAKES REMARKS ON U.S-JAPAN ALLIANCE
FROM: U.S. DEFENSE DEPARTMENT
In Tokyo, Dempsey Reinforces U.S.-Japan Alliance
By Lisa Ferdinando
DoD News, Defense Media Activity
TOKYO, March 25, 2015 – The chairman of the Joint Chiefs of Staff today underscored the importance of the U.S.-Japanese alliance as he met here with Japan's senior military and political leaders.
Army Gen. Martin E. Dempsey thanked Japan for its strong partnership with the United States, as well as its contributions to global security and commitment in the fight against terrorism.
Dempsey met at the Ministry of Defense with his counterpart, Adm. Katsutoshi Kawano, and Defense Minister Gen Nakatani. He paid a visit later in the day to Prime Minister Shinzo Abe.
Dempsey complimented the prime minister for all he has done to improve the posture of Japan in a complex security environment.
"The kizuna between us has never been stronger," the chairman said, using the Japanese word for bonds or connections between people.
He said he looks forward to working with Japan under the new defense guidelines that Japan and the United States are developing to define their bilateral defense relationship.
The prime minister, who is to meet with President Barack Obama in Washington next month, said the alliance between the United States and Japan has contributed to the peace and security in the Asia-Pacific region.
More Complicated World
Extremism is a common challenge faced by the United States and Japan, Dempsey said at the Ministry of Defense. Terrorists in Syria killed two Japanese hostages earlier this year, he said, and three Japanese tourists were killed when gunmen opened fire in a Tunisia museum last week.
The global security environment has "clearly become more complicated" in the last few years, the chairman said. In that time, the relationship between the United States and Japan has strengthened, he added.
"We're fortunate to have Japan as an ally and honored to have you as a friend," Dempsey told his counterpart.
Dempsey, the highest-ranking U.S. military officer, thanked Japan for its efforts for missile defense interoperability, noting that a strong deterrent is needed in the face of North Korean provocations.
Dempsey Honors Fallen Troops
In a ceremony before the talks at the Ministry of Defense, Dempsey took part in a wreath-laying ceremony to honor fallen Japanese and U.S. troops. He said he was honored to have been invited to pay tribute to the men and women of both nations' armed forces.
Then, before entering the Ministry of Defense, Dempsey attended an honor cordon, where he reviewed the Japanese troops who were assembled in perfect order outside the building.
Additionally, in an evening event, Nakatani presented Dempsey with a medal on behalf of Japan's emperor to honor the chairman's service, the United States military and the strong U.S.-Japanese alliance.
Dempsey accepted the award, as he told the prime minister earlier in the day, on behalf of the men and women of the United States armed forces who have "benefited so much and enjoyed the relationship" with Japan.
Pacific Rebalance
The chairman said the purpose of his visit to Japan and his next stop in South Korea is to further strengthen ties and reinforce the U.S. commitment to the region as the U.S. military continues its Pacific rebalance.
Other topics in South Korea are expected to include transferring control of allied forces on the Korean Peninsula to South Korea during wartime, as well as integrated air and missile defense, training exercises and options for responding to North Korean provocations.
In Tokyo, Dempsey Reinforces U.S.-Japan Alliance
By Lisa Ferdinando
DoD News, Defense Media Activity
TOKYO, March 25, 2015 – The chairman of the Joint Chiefs of Staff today underscored the importance of the U.S.-Japanese alliance as he met here with Japan's senior military and political leaders.
Army Gen. Martin E. Dempsey thanked Japan for its strong partnership with the United States, as well as its contributions to global security and commitment in the fight against terrorism.
Dempsey met at the Ministry of Defense with his counterpart, Adm. Katsutoshi Kawano, and Defense Minister Gen Nakatani. He paid a visit later in the day to Prime Minister Shinzo Abe.
Dempsey complimented the prime minister for all he has done to improve the posture of Japan in a complex security environment.
"The kizuna between us has never been stronger," the chairman said, using the Japanese word for bonds or connections between people.
He said he looks forward to working with Japan under the new defense guidelines that Japan and the United States are developing to define their bilateral defense relationship.
The prime minister, who is to meet with President Barack Obama in Washington next month, said the alliance between the United States and Japan has contributed to the peace and security in the Asia-Pacific region.
More Complicated World
Extremism is a common challenge faced by the United States and Japan, Dempsey said at the Ministry of Defense. Terrorists in Syria killed two Japanese hostages earlier this year, he said, and three Japanese tourists were killed when gunmen opened fire in a Tunisia museum last week.
The global security environment has "clearly become more complicated" in the last few years, the chairman said. In that time, the relationship between the United States and Japan has strengthened, he added.
"We're fortunate to have Japan as an ally and honored to have you as a friend," Dempsey told his counterpart.
Dempsey, the highest-ranking U.S. military officer, thanked Japan for its efforts for missile defense interoperability, noting that a strong deterrent is needed in the face of North Korean provocations.
Dempsey Honors Fallen Troops
In a ceremony before the talks at the Ministry of Defense, Dempsey took part in a wreath-laying ceremony to honor fallen Japanese and U.S. troops. He said he was honored to have been invited to pay tribute to the men and women of both nations' armed forces.
Then, before entering the Ministry of Defense, Dempsey attended an honor cordon, where he reviewed the Japanese troops who were assembled in perfect order outside the building.
Additionally, in an evening event, Nakatani presented Dempsey with a medal on behalf of Japan's emperor to honor the chairman's service, the United States military and the strong U.S.-Japanese alliance.
Dempsey accepted the award, as he told the prime minister earlier in the day, on behalf of the men and women of the United States armed forces who have "benefited so much and enjoyed the relationship" with Japan.
Pacific Rebalance
The chairman said the purpose of his visit to Japan and his next stop in South Korea is to further strengthen ties and reinforce the U.S. commitment to the region as the U.S. military continues its Pacific rebalance.
Other topics in South Korea are expected to include transferring control of allied forces on the Korean Peninsula to South Korea during wartime, as well as integrated air and missile defense, training exercises and options for responding to North Korean provocations.
ASSISTANT AG CRUDEN MAKES REMARKS ON ILLEGAL WILDLIFE TRADE
FROM: U.S. JUSTICE DEPARTMENT
Assistant Attorney General John C. Cruden Delivers Remarks at the Kasane Conference on the Illegal Wildlife Trade
KasaneBotswana ~ Wednesday, March 25, 2015
Remarks as prepared for delivery
I am honored to represent the United States here today, along with my colleagues from the United States Department of State and the Department of the Interior. It is a privilege to join you here to discuss the work we are all doing to combat the increasing global crisis posed by international wildlife trafficking.
Last year’s London Conference, the predecessor to this meeting, coincided with the release of the U.S. National Strategy for Combating Wildlife Trafficking. The U.S. National Strategy set forth a robust, whole-of-government approach that focused on three strategic priorities: strengthening domestic and global enforcement; reducing demand for illegally traded wildlife; and building international cooperation and commitment to combat wildlife trafficking.
Since the London Conference, the United States has been working to implement our Strategy, turning written commitments into concrete steps and real action. In February of this year, the United States released an Implementation Plan for the National Strategy.
The Implementation Plan builds upon the Strategy and reaffirms our commitment to work in partnership with other governments, local communities, nongovernmental organizations, and the private sector to end the pernicious illegal trade in wildlife.
The United States recognizes that we, like all nations engaged in this fight, must have strong and effective criminal enforcement to stop those who kill and traffic in protected species. Prosecutors in the United States work closely with investigators around the country and around the world to bring strong cases. We are looking to take the profit out of wildlife trafficking.
In 2014, the United States prosecuted and secured convictions in numerous cases involving international trafficking in protected species, including rhinoceros horn, elephant ivory, and narwhal tusks. Defendants in these cases have received significant jail terms and have forfeited many millions of dollars in cash, gold bars, rhino horn, ivory, and luxury vehicles and jewelry.
In 2014, the United States took several administrative actions to strengthen domestic controls over import, export, and sale of African elephant ivory, rhino horn and other protected species. This included a ban on all commercial imports of elephant ivory. This is just one of many steps that we will take to reduce demand for illegally traded wildlife, demand that continues to escalate and is driving many species to the brink of extinction.
Within the framework of the National Strategy, we are working across the U.S. government to focus our international investments to combat wildlife trafficking in the most strategic and effective way possible.
In 2014 alone, the United States invested approximately $60 million to support international programs aimed at stopping wildlife trafficking. This investment supports a number of important efforts, including: increased use of the Spatial Monitoring and Reporting Tool (SMART) – a system of improved technology for wildlife law enforcement and monitoring – that is now widely used in many nations here in Africa; ecoguards in the northern Republic of Congo, who contributed to more effective cross-border patrols and coordination with Cameroon and the Central African Republic in a key landscape for elephants and great apes; in Kenya, Northern Rangelands Trust community conservancies, which recorded a 22% decrease in illegally killed elephants in FY 2014 as compared to FY 2013; and expansion of programming in wildlife investigative training at the International Law Enforcement Academy (ILEA) Programs in Bangkok and Gaborone, providing training to more than 500 law enforcement officials in 2014. We will continue to invest in such training and capacity-building efforts in 2015.
Over the past year the United States has also maintained our commitment to raise this issue at the highest levels of our diplomatic engagement, in bilateral and multilateral fora. For example, the White House selected wildlife trafficking as one of only six Signature Events featured at the U.S-Africa Leaders’ Summit, held in Washington last August. This event brought together the U.S. Secretary of the Interior with African Heads of State and Foreign and Environment Ministers for a frank dialogue on combating wildlife trafficking.
And, building on our July 2014 Strategic and Economic Dialogue, during the President’s November 2014 trip to China, China and the United States agreed to work together to stop the trade in illegal wildlife products.
At the London Conference, we spoke to the urgent need for a global response to the global wildlife trafficking crisis. We are encouraged that this issue has received increasing and sustained high-level attention, both in the United States and around the world.
Ending the illegal trade in wildlife will require a significant and sustained effort from all nations, whether we are sources, transit points, or destinations for illegally traded wildlife and wildlife products.
Assistant Attorney General John C. Cruden Delivers Remarks at the Kasane Conference on the Illegal Wildlife Trade
KasaneBotswana ~ Wednesday, March 25, 2015
Remarks as prepared for delivery
I am honored to represent the United States here today, along with my colleagues from the United States Department of State and the Department of the Interior. It is a privilege to join you here to discuss the work we are all doing to combat the increasing global crisis posed by international wildlife trafficking.
Last year’s London Conference, the predecessor to this meeting, coincided with the release of the U.S. National Strategy for Combating Wildlife Trafficking. The U.S. National Strategy set forth a robust, whole-of-government approach that focused on three strategic priorities: strengthening domestic and global enforcement; reducing demand for illegally traded wildlife; and building international cooperation and commitment to combat wildlife trafficking.
Since the London Conference, the United States has been working to implement our Strategy, turning written commitments into concrete steps and real action. In February of this year, the United States released an Implementation Plan for the National Strategy.
The Implementation Plan builds upon the Strategy and reaffirms our commitment to work in partnership with other governments, local communities, nongovernmental organizations, and the private sector to end the pernicious illegal trade in wildlife.
The United States recognizes that we, like all nations engaged in this fight, must have strong and effective criminal enforcement to stop those who kill and traffic in protected species. Prosecutors in the United States work closely with investigators around the country and around the world to bring strong cases. We are looking to take the profit out of wildlife trafficking.
In 2014, the United States prosecuted and secured convictions in numerous cases involving international trafficking in protected species, including rhinoceros horn, elephant ivory, and narwhal tusks. Defendants in these cases have received significant jail terms and have forfeited many millions of dollars in cash, gold bars, rhino horn, ivory, and luxury vehicles and jewelry.
In 2014, the United States took several administrative actions to strengthen domestic controls over import, export, and sale of African elephant ivory, rhino horn and other protected species. This included a ban on all commercial imports of elephant ivory. This is just one of many steps that we will take to reduce demand for illegally traded wildlife, demand that continues to escalate and is driving many species to the brink of extinction.
Within the framework of the National Strategy, we are working across the U.S. government to focus our international investments to combat wildlife trafficking in the most strategic and effective way possible.
In 2014 alone, the United States invested approximately $60 million to support international programs aimed at stopping wildlife trafficking. This investment supports a number of important efforts, including: increased use of the Spatial Monitoring and Reporting Tool (SMART) – a system of improved technology for wildlife law enforcement and monitoring – that is now widely used in many nations here in Africa; ecoguards in the northern Republic of Congo, who contributed to more effective cross-border patrols and coordination with Cameroon and the Central African Republic in a key landscape for elephants and great apes; in Kenya, Northern Rangelands Trust community conservancies, which recorded a 22% decrease in illegally killed elephants in FY 2014 as compared to FY 2013; and expansion of programming in wildlife investigative training at the International Law Enforcement Academy (ILEA) Programs in Bangkok and Gaborone, providing training to more than 500 law enforcement officials in 2014. We will continue to invest in such training and capacity-building efforts in 2015.
Over the past year the United States has also maintained our commitment to raise this issue at the highest levels of our diplomatic engagement, in bilateral and multilateral fora. For example, the White House selected wildlife trafficking as one of only six Signature Events featured at the U.S-Africa Leaders’ Summit, held in Washington last August. This event brought together the U.S. Secretary of the Interior with African Heads of State and Foreign and Environment Ministers for a frank dialogue on combating wildlife trafficking.
And, building on our July 2014 Strategic and Economic Dialogue, during the President’s November 2014 trip to China, China and the United States agreed to work together to stop the trade in illegal wildlife products.
At the London Conference, we spoke to the urgent need for a global response to the global wildlife trafficking crisis. We are encouraged that this issue has received increasing and sustained high-level attention, both in the United States and around the world.
Ending the illegal trade in wildlife will require a significant and sustained effort from all nations, whether we are sources, transit points, or destinations for illegally traded wildlife and wildlife products.
SEC ANNOUNCES $17 MILLION COURT ORDER AGAINST COMPANY THAT ALLEGEDLY MADE MISREPRESENTATIONS TO INVESTORS
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23220 / March 25, 2015
Securities and Exchange Commission v. BioChemics, Inc., et al., Civil Action No. 12-12324-MLW (United States District Court for the District of Massachusetts, Complaint filed Decmber 14, 2012)
Federal Court Orders Massachusetts Company to Pay Over $17 Million in SEC Fraud Case
The Securities and Exchange Commission ("Commission") announced today that on March 25, 2015, the Honorable Mark L. Wolf, United States District Court for the District of Massachusetts, entered a judgment against BioChemics, Inc. ("BioChemics"), a biopharmaceutical company based in Danvers, Massachusetts, in a Commission enforcement action filed in December 2012. Among other things, the judgment orders BioChemics to pay a total of over $17 million. This judgment supplements a prior judgment entered against BioChemics on March 18, 2015, that enjoined the company from violating the antifraud provisions of the federal securities laws.
The Commission originally filed its enforcement action on December 14, 2012, against BioChemics and three individuals affiliated with the company: (i) John J. Masiz ("Masiz"), the company's founder and, until January 2014, its President, CEO, and Chairman of its Board of Directors; (ii) Gregory S. Kroning ("Kroning"), a promoter (someone paid by BioChemics to solicit investors); and a (iii) Craig Medoff, another promoter and, at one point, BioChemics' interim director of Finance ("Medoff," and, collectively, the "Individual Defendants").
The Commission's Complaint alleged that from 2009 until mid-2012, BioChemics and the Individual Defendants raised at least $9,000,000 from approximately 70 investors by misrepresenting, among other things: (a) that BioChemics had ongoing research and development collaborations with certain pharmaceutical companies when in fact the collaborations with those companies had either never begun or had ended; (b) that BioChemics had two drugs currently under FDA review, when in fact it had no products under any type of FDA review; (c) the status and results of clinical trials for BioChemics' drugs; and (d) that certain purported valuations of BioChemics at between $500 million and $2 billion were independent and reliable when they were not. The Complaint also alleged that BioChemics and the Individual Defendants misrepresented Masiz's background and use of investor proceeds--for example, they failed to disclose to investors that Masiz was the subject of a prior Commission securities fraud action that resulted in a final judgment against him in 2004, and that BioChemics' investor funds were used to pay for Kroning and Masiz's personal expenses.
In February 2014, BioChemics agreed to a partial settlement with the Commission, consenting to the entry of a judgment permanently enjoining it, without admitting or denying the substantive allegations in the Complaint, from violating Section 17(a) of the Securities Act ("Securities Act") of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder (the antifraud provisions), and leaving disgorgement, prejudgment interest, and civil penalties to be decided by the Court. On March 18, 2015, the Court entered this consented-to judgment permanently enjoining BioChemics from violating the antifraud provisions of the securities laws.
The judgment entered on March 25, 2015, supplements the March 18, 2015 judgment, and requires BioChemics to disgorge $15,105,325 in ill-gotten gains plus prejudgment interest of $2,042,559, and pay a civil penalty of $750,000. The civil penalty is a "third tier" penalty. Under the Securities Act and the Exchange Act, a third tier penalty is one where the violation involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement, and such violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons.
Litigation Release No. 23220 / March 25, 2015
Securities and Exchange Commission v. BioChemics, Inc., et al., Civil Action No. 12-12324-MLW (United States District Court for the District of Massachusetts, Complaint filed Decmber 14, 2012)
Federal Court Orders Massachusetts Company to Pay Over $17 Million in SEC Fraud Case
The Securities and Exchange Commission ("Commission") announced today that on March 25, 2015, the Honorable Mark L. Wolf, United States District Court for the District of Massachusetts, entered a judgment against BioChemics, Inc. ("BioChemics"), a biopharmaceutical company based in Danvers, Massachusetts, in a Commission enforcement action filed in December 2012. Among other things, the judgment orders BioChemics to pay a total of over $17 million. This judgment supplements a prior judgment entered against BioChemics on March 18, 2015, that enjoined the company from violating the antifraud provisions of the federal securities laws.
The Commission originally filed its enforcement action on December 14, 2012, against BioChemics and three individuals affiliated with the company: (i) John J. Masiz ("Masiz"), the company's founder and, until January 2014, its President, CEO, and Chairman of its Board of Directors; (ii) Gregory S. Kroning ("Kroning"), a promoter (someone paid by BioChemics to solicit investors); and a (iii) Craig Medoff, another promoter and, at one point, BioChemics' interim director of Finance ("Medoff," and, collectively, the "Individual Defendants").
The Commission's Complaint alleged that from 2009 until mid-2012, BioChemics and the Individual Defendants raised at least $9,000,000 from approximately 70 investors by misrepresenting, among other things: (a) that BioChemics had ongoing research and development collaborations with certain pharmaceutical companies when in fact the collaborations with those companies had either never begun or had ended; (b) that BioChemics had two drugs currently under FDA review, when in fact it had no products under any type of FDA review; (c) the status and results of clinical trials for BioChemics' drugs; and (d) that certain purported valuations of BioChemics at between $500 million and $2 billion were independent and reliable when they were not. The Complaint also alleged that BioChemics and the Individual Defendants misrepresented Masiz's background and use of investor proceeds--for example, they failed to disclose to investors that Masiz was the subject of a prior Commission securities fraud action that resulted in a final judgment against him in 2004, and that BioChemics' investor funds were used to pay for Kroning and Masiz's personal expenses.
In February 2014, BioChemics agreed to a partial settlement with the Commission, consenting to the entry of a judgment permanently enjoining it, without admitting or denying the substantive allegations in the Complaint, from violating Section 17(a) of the Securities Act ("Securities Act") of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder (the antifraud provisions), and leaving disgorgement, prejudgment interest, and civil penalties to be decided by the Court. On March 18, 2015, the Court entered this consented-to judgment permanently enjoining BioChemics from violating the antifraud provisions of the securities laws.
The judgment entered on March 25, 2015, supplements the March 18, 2015 judgment, and requires BioChemics to disgorge $15,105,325 in ill-gotten gains plus prejudgment interest of $2,042,559, and pay a civil penalty of $750,000. The civil penalty is a "third tier" penalty. Under the Securities Act and the Exchange Act, a third tier penalty is one where the violation involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement, and such violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons.
Thursday, March 26, 2015
WHITE HOUSE READOUT: PRESIDENT OBAMA'S CALL WITH PRESIDENT OF TURKEY TAYYIP ERDOGAN
FROM: THE WHITE HOUSE
March 26, 2015
Readout of the President’s Call with President Recep Tayyip Erdogan of Turkey
The President spoke with Turkish President Recep Tayyip Erdogan today to discuss ongoing cooperation in the fight against ISIL and common efforts to bring security and stability to Iraq and Syria. The two leaders reviewed the train and equip program for vetted members of the moderate Syrian opposition. They discussed efforts to deepen cooperation to stem the flow of foreign fighters, and the President appreciated positive efforts in Turkey on this issue. The President expressed appreciation for Turkey’s continuing support to nearly two million refugees from Iraq and Syria. The leaders also discussed the latest developments in Yemen and Ukraine and in negotiations over Iran’s nuclear program, and pledged to continue to work closely on these and other regional issues.
March 26, 2015
Readout of the President’s Call with President Recep Tayyip Erdogan of Turkey
The President spoke with Turkish President Recep Tayyip Erdogan today to discuss ongoing cooperation in the fight against ISIL and common efforts to bring security and stability to Iraq and Syria. The two leaders reviewed the train and equip program for vetted members of the moderate Syrian opposition. They discussed efforts to deepen cooperation to stem the flow of foreign fighters, and the President appreciated positive efforts in Turkey on this issue. The President expressed appreciation for Turkey’s continuing support to nearly two million refugees from Iraq and Syria. The leaders also discussed the latest developments in Yemen and Ukraine and in negotiations over Iran’s nuclear program, and pledged to continue to work closely on these and other regional issues.
U.S. IS NOW SUPPORTING OPERATIONS IN TIKRIT
FROM: U.S. DEFENSE DEPARTMENT
Coalition Operations Against ISIL since March 2, 2015.
Coalition Forces Begin Operations in Tikrit
By Cheryl Pellerin
DoD News, Defense Media Activity
WASHINGTON, March 25, 2015 – U.S. and coalition military forces have begun operations in support of Iraqi security forces in Tikrit after a request from the Iraqi government, officials from Combined Joint Task Force Operation Inherent Resolve announced this afternoon.
According to a task force news release, the coalition is now providing direct support to Iraqi security forces conducting operations to expel the Islamic State of Iraq and the Levant from the city. The joint, combined task force is providing air strikes, airborne intelligence capabilities, and advise and assist support to Iraqi security force headquarters elements to enhance their ability to defeat ISIL, officials said.
Destroying ISIL Strongholds
"These strikes are intended to destroy ISIL strongholds with precision, thereby saving innocent Iraqi lives while minimizing collateral damage to infrastructure,” said Army Lt. Gen. James L. Terry, task force commanding general. “This will further enable Iraqi forces under Iraqi command to maneuver and defeat ISIL in the vicinity of Tikrit."
At the Pentagon this morning, Defense Department spokesman Army Col. Steve Warren confirmed that the United States is providing intelligence, surveillance and reconnaissance support over Tikrit, and from these operations providing intelligence to Iraqi security forces.
"At the request of the government of Iraq, coalition forces are providing support to Iraqi security forces as they combat ISIL in and around Tikrit," said Col. Patrick Ryder, a U.S. Central Command spokesman. "To be clear, the coalition is only coordinating with the government of Iraq and the Iraqi security forces; we do not coordinate our operations in any way with Iran or Iranian-backed militias."
Although there's been significant media attention on the stalled Tikrit operation which began March 2, coalition forces have continued to actively make progress against ISIL throughout the area of operations in Iraq and Syria, according to Centcom officials, adding that coalition forces are completing these operations simultaneously and in close coordination with the Iraqis.
Destroying ISIL’s Combat Capability
"Since the beginning of March, coalition forces have conducted more than 300 airstrikes against ISIL targets in support of five separate Iraqi-led operations as well as counter-ISIL operations in Syria,” Ryder said. “We have destroyed a significant portion of ISIL’s combat capability during this period, to include the elimination of more than 800 ISIL fighters, two tanks, 15 armored personnel carriers, 11 indirect fire systems and 10 anti-aircraft systems from the battlefield."
Centcom officials assess that the number of ISIL forces and amount of equipment destroyed over the last three weeks is much larger than what ISIL currently maintains in Tikrit. Through these operations, coalition forces have continued to degrade ISIL's command and control capability, its ability to project combat power, and its ability to resource itself, officials said.
"Coalition airstrikes will provide a unique and decisive enabler for the Iraqi Security Forces as they have elsewhere in Iraq," Ryder said. "We know that ISIL’s position in Tikrit is not going to improve."
Critical Training for Iraqi Forces
In addition to airstrikes, coalition forces also continue to provide critical training to Iraqi security forces, according to Centcom officials. There are currently 4,800 Iraqi troops in training at four building partner capacity sites in Iraq, with 3,000 of those troops entering training three weeks ago.
"We are building their capacity while enabling and supporting their operations throughout the country," Ryder said. "So we are doing a lot, especially in the past three weeks. And we are doing all of this simultaneously and in close coordination with our Iraqi partners."
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