ED DEPT FACT SHEET ON MISLEADING CLAIMS BY CAREER COLLEGES

FROM:  U.S. EDUCATION DEPARTMENT
Fact Sheet: Protecting Students from Abusive Career Colleges
Administration outlines new debt relief process for Corinthian Colleges’ students

JUNE 8, 2015

Over the past six years, the Education Department has taken unprecedented steps to hold career colleges accountable for giving students what they deserve: a high-quality, affordable education that prepares them for their careers. The Department established tougher regulations targeting misleading claims by colleges and incentives that drove sales people to enroll students through dubious promises. The Department has cracked down on bad actors through investigations and enforcement actions. The Department also issued "gainful employment" regulations, which will help ensure that students at career colleges don't end up with debt they cannot repay. The Department will continue to hold institutions accountable in order to improve the value of their programs, protect students from abusive colleges, and safeguard the interests of taxpayers.

"While some for-profit career colleges play a critical role in helping students succeed in their educational and training pursuits, too often, bad actors in the sector have preyed on some of our nation's most vulnerable students and taken advantage of hard-working Americans who simply want a better future for themselves and their families," said U.S. Secretary of Education Arne Duncan. "I am committed to ensuring that every student has access to an education that will put them on solid footing for a career, and I will hold schools accountable for practices that undercut their students and taxpayers. Where students have been harmed by fraudulent practices, I am fully committed to making sure students receive every penny of relief they are entitled to under law. We will make this process as easy as possible for them, including by considering claims in groups wherever possible, and hold institutions accountable."

Today, the Education Department is announcing new steps in this work, particularly to address the concerns of students who attended schools owned by Corinthian Colleges Inc.

How debt relief will work for Corinthian students

The Department has worked to rapidly develop a streamlined process for getting debt relief to Corinthian students. The Department's aim is to make the process of forgiving loans fair, clear and efficient—and to ensure that students who are eligible to participate know about this opportunity.

Some Corinthian schools closed down, while others were sold but remain open under different ownership. The announcements today are for:

Corinthian students whose schools have closed down.
Corinthian students who believe they were victims of fraud, regardless of whether their school closed.
Helping Corinthian students whose schools have closed

In general, when a college closes, students are eligible to discharge their federal student loans if they were attending when the school closed or who withdrew from the school within 120 days of the closing date. Given the unique circumstances for former Corinthian students, the Department is expanding eligibility for students to apply for a closed school loan discharge, extending the window of time back to June 20, 2014, to capture students who attended the now-closed campuses after Corinthian entered into an agreement with the Department to terminate Corinthian's ownership of its schools.

The Department's Federal Student Aid office has been and will continue to contact potentially impacted student borrowers to provide clear information about their options, including loan discharge applications, in addition to providing enhanced information on the Department's website.

In addition, the Department has worked with a group of organizations and institutions—including those within the California State University system, led by CSU Fullerton and C-REAL, Beyond 12, and the National Association of Student Financial Aid Administrators and its California and Western region affiliates—as they have established an independent volunteer advising corps that will help students navigate their options. The resource is available at www.NextStepsEDU.org, where students can sign up and be connected to a volunteer advisor from the field who can help students determine which option is best suited to their situation. (Note that as the Department is not managing this initiative, it cannot endorse any advice that a student may receive.)

Helping students who believe they were victims of fraud, regardless of whether their school closed

Provisions in the law called "defense to repayment" or "borrower's defense" allow borrowers to seek loan forgiveness if they believe they were defrauded by their college under state law. This provision has rarely been used in the past. Now, the Department is taking unprecedented action to create a streamlined process that is fair to students who may have been victims of fraud and that holds colleges accountable to taxpayers.

In taking these actions, as Under Secretary Ted Mitchell outlined in a blog post today, the Department is committed to helping support affected students. Given the pressing need presented by the unique situation for students who attended colleges owned by Corinthian, the Department is today announcing specific steps for students who attended those campuses, as well as outlining broader processes for all students that will be established moving forward.

Extending debt relief eligibility to groups of students wherever possible: In order to receive loan forgiveness under a "defense to repayment," students must assert that a college's actions violated state law and affected their provision of educational services or their federal loans. Wherever possible, the Department will rely on evidence established by appropriate authorities in considering whether whole groups of students (for example, an entire academic program at a specific campus during a certain time frame) are eligible for borrower defense relief. This will simplify and expedite the relief process, reducing the burden on borrowers.
For example, after analyzing the Department's findings in its investigation of Heald College and relevant California law, the Department has determined that evidence of misrepresentation exists for students enrolled in a large majority of programs offered at Heald College campuses between 2010 and 2015. Specifically, the Department has determined that students who relied on misrepresentations found in published job placement rates for many Heald programs qualify to have their federal direct student loans discharged. Students can have their loans forgiven and receive refunds for amounts paid based on a simple attestation. More information about this process—including the attestation form—is available on studentaid.gov/Corinthian. Additional details will be posted on the website in the coming weeks.

Providing loan forbearance and pausing payments: All former Corinthian students who apply for borrower defense have the option of having their federal loans immediately placed into forbearance, which stops their monthly payments to ensure they do not fall behind or default on their loans while the Department works to resolve the claim. For such students who are already in default on their loans, the Department will immediately halt collection activity. Students will receive a notification from their loan servicer to confirm the change in status of their loans.
Appointing a Special Master dedicated to borrower defense issues: The Department will appoint a Special Master to oversee borrower defense issues and charge that person with ensuring the process is simple, streamlined, and fair to students and taxpayers. While the specific steps announced today are for former Corinthian students, the Special Master will help develop a broader system that will support students at other institutions who believe they have a defense to repayment. The Special Master will be named in the coming weeks.
Establishing a streamlined process: As noted above, the Department will work to provide debt relief to groups of students wherever possible, as we already have determined is possible for many Heald College students. For other Corinthian students, with the help of the Special Master, the Department will create a simple application for debt relief, which borrowers can complete online or by email or postal mail. Starting today, former Corinthian students can visit studentaid.gov/Corinthian to learn more, and in the coming weeks, the Department will have an online form available for these borrowers. In addition, students can call a special toll-free borrower defense hotline at (855) 279-6207 to ask about their options.
Building a better system for debt relief for the future: The Department will develop new regulations to clarify and streamline loan forgiveness under the defense to repayment provision, while maintaining or enhancing current consumer protection standards and strengthening those provisions that hold colleges accountable for actions that result in loan discharges. That process will begin later this year and will not slow down the loan discharge process for current applicants.
Calling on Congress to do its part

The Department continues to take aggressive action that ensures defrauded borrowers get the debt relief they are entitled to, steps up oversight and enforcement to identify colleges that present the greatest risk to students and taxpayers, and holds schools accountable for their actions. But to fully address these issues, Congress must also take action. Congress needs to strengthen both consumer protections for students and accountability for colleges to make sure there are better oversight and enforcement tools in place to prevent colleges from harming students and leaving taxpayers holding the bag. The Department looks forward to working with Congress on such efforts, including:

Congress should strengthen—not roll back—efforts to protect students and taxpayers from waste and fraud.
Congress needs to enact rules that hold colleges and their executives responsible for fraudulent acts, not taxpayers.
Students deserve truth in advertising. Congress needs to ensure students have access to meaningful information about college costs and outcomes and are not bombarded by aggressive and deceptive marketing.
Students deserve borrower protections. Congress should also consider preventative action to protect prospective and current students by ensuring that students are not pressured into enrolling and can get relief when the program they signed up for is not what they were promised.
Congress must protect our service members and veterans by eliminating loopholes that make them targets for aggressive marketing and recruitment by for-profit colleges.
Additional Administration efforts to strengthen consumer protections

The Obama Administration has moved swiftly to take action on some of the most problematic practices in the for-profit industry. The steps the Department announced today are part of the Administration's comprehensive approach to protecting students, eliminating bad actors, and encouraging behavior that improves student outcomes—especially in making it easier to afford and complete a degree.

Too often, students at some of the largest career colleges—many run by for-profit companies—enroll with hopes of finding a good job but instead are left saddled with debt in exchange for a worthless degree or certificate.

For-profit students pay more up front: On average, attending a two-year for-profit institution costs a student four times as much as attending a community college.
They borrow more often: More than 80 percent of students at for-profits borrow federal student loans to pay for college, while less than half of students at public institutions do.
And they default on their student loans at disproportionately high rates: Ultimately, students at for-profit colleges represent only about 11 percent of the total higher education population but 44 percent of all federal student loan defaults, a clear sign that some of these colleges were not preparing students for good jobs.
Today's announcement, coupled with the work over the past six years and upcoming efforts, aim to crack down on these abuses and to strengthen consumer protections. Some of the additional steps the Department has taken and updates on its ongoing work include:

Establishing Regulations to Protect Students from Poor-Performing Career Colleges

Last year, the Department published regulations that will eliminate the flow of federal student aid to career training programs that leave students buried in debt with few opportunities to repay it. Those regulations take effect on July 1, 2015.

To qualify for federal student aid, the law requires that for-profit programs and certificate programs at private non-profit and public institutions prepare students for "gainful employment in a recognized occupation." In May 2015, the U.S. District Court for the Southern District of New York upheld the Department's approach to the gainful employment regulations against a challenge from a for-profit industry trade association, saying the Department's regulations represented "reasoned decisionmaking."

Enforcing the Ban on Incentive Compensation

In 2010, the Obama Administration released a broad set of rules to: strengthen the Department's authority to protect students from aggressive recruiting practices fueled by incentive compensation; take action against colleges engaging in deceptive advertising, marketing and sales practices; and to clarify minimum requirements for states to oversee postsecondary programs and handle student complaints.

Under Secretary Mitchell recently issued a memo encouraging the Office of Federal Student Aid to recover funds from schools that are found to have violated the incentive compensation ban. The memo reverses a more lenient approach initiated in 2002 under the Bush Administration by Education Deputy Secretary Hansen, which both the Education Department Inspector General and the Government Accountability Office found to be a barrier to effective enforcement of the law.

Protecting military service members, veterans and their families

For-profit colleges can obtain no more than 90 percent of their revenue from Title IV federal student aid dollars, but federal education aid from programs like the Department of Defense Tuition Assistance and Department of Veterans Affairs GI Bill Benefits is not counted toward that limit. This has made service members and veterans particularly vulnerable to aggressive marketing and recruitment by for-profit colleges, which often pursue aid targeted to such individuals to make up the required 10 percent of their revenue.

In its FY 2016 budget proposal, the Department proposed to eliminate this loophole by including DOD's tuition assistance and GI Bill benefits into the 90 percent calculation. Now, it is up to Congress to act on this plan and protect our nation's military and their families.

In addition, through Executive Order 13607 (the Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members), the Administration has worked to protect our nation's military families by ensuring that federal military and veterans educational benefits programs are providing service members, veterans, spouses, and other family members with the information, support, and protections they deserve.

Strengthening accountability and oversight across the federal government through a career college task force

The Department has established an interagency task force, led by Under Secretary Ted Mitchell, to help ensure proper accountability for and oversight of career colleges and for-profit institutions. The task force will enhance the enforcement activity at the Department as well as at other federal and state agencies through tighter coordination of their activities and better information sharing to protect students from school practices and policies that are unfair, deceptive, and abusive, and that put taxpayer funds at risk.

The task force is building on efforts already under way among various federal agencies, and includes the Departments of Justice, Defense, Treasury, Veterans Affairs, and Labor, as well as the Consumer Financial Protection Bureau, Federal Trade Commission, Internal Revenue Service, and Securities and Exchange Commission. In addition, the federal partners will continue engaging with state Attorneys General and other stakeholders. The task force gathered for its first official meeting in May.

Given the important responsibilities each of these agencies has and the vital role that states play, this team will leverage their resources and expertise to continue to assist one another in the enforcement of federal criminal and civil laws and regulations, including against institutions and individuals who commit fraud or other criminal activity, thereby making the best use of scarce resources and better protecting the interests of students and taxpayers. And to allow for greater transparency and participation from the higher education community in these efforts—including institutions, consumer advocates and student groups—the task force will periodically organize opportunities for public discussions beginning this summer.

Holding Corinthian Colleges Accountable

In the case of Corinthian Colleges, the Department began tightening oversight of the college's practices and uncovered misrepresentation of its job placement rates. The Department acted to hold Corinthian accountable and ensured students pursuing their education did not face abrupt disruption while enforcement action was being undertaken.

Since that process began in 2014, the Department has taken a series of steps to protect students by requiring the company to sell or close all of its programs, ensuring students received more information about what was happening and their options, requiring expanded refund rights for students, and establishing an independent monitor under the leadership of former U.S. Attorney Patrick Fitzgerald, who ensured Corinthian remained accountable to students. Fitzgerald and his team ensured that students were made aware of their refund options, ensured that Corinthian's use of federal student aid was made in accordance with Department regulations, and ensured that students were provided correct information about the state of Corinthian's campuses and programs.

Most of Corinthian's campuses were acquired by the nonprofit Zenith Education Group, which agreed to provide a number of new consumer protections, such as providing refund and withdrawal opportunities to students in poorly-performing programs, and to take steps to strengthen programs and improve affordability, including by reducing tuition. The sale allowed most Corinthian students to continue pursuing their education and career goals without disruption, and the Department and the Consumer Financial Protection Bureau have worked together to provide more than $480 million in loan forgiveness for borrowers who took out Corinthian's high-cost private student loans.

In April 2015, the Department informed Corinthian that it was being fined about $30 million for misrepresenting job placement rates to current and prospective students in its Heald College system. Since then, Corinthian announced it was closing down the last of its remaining campuses. Recognizing the challenges and uncertainty facing students, the Department continues to provide information directly to Corinthian's students about their federal student aid and their options, including both transferring to another school to continue their education or discharging their loan.

Creating options that make it easier to repay federal student loans

The Department is helping more students manage their student debt through flexible repayment options such as the Pay As You Earn plan (PAYE), which caps student loan payments at 10 percent of a borrower's monthly income. The Department is also acting on President Obama's Student Aid Bill of Rights proposal from earlier this year to support more borrowers to help borrowers enroll and participate in PAYE.

In addition, the Administration is continuing outreach to help borrowers who may be struggling to repay their loans, ensuring that they have the information they need to select the best repayment option for them and avoid default. Thanks to these comprehensive efforts, there are now 3.8 million borrowers enrolled in income-driven repayment plans, up from 760,000 in 2012.

Providing families with clear information to make a smart college choice

The Department has provided a wealth of consumer tools designed to help students and families decide which college is right for them. In addition to requiring institutions to provide accurate information about their graduates' job placement success and the types of employment their graduates obtained, the Administration has created resources such as the College Scorecard and the Financial Aid Shopping Sheet, which can help families compare financial aid packages apples-to-apples. Since the launch of the Shopping Sheet in 2012, more than 3,000 institutions—representing more than two-thirds of the entire undergraduate population—have voluntarily adopted the Shopping Sheet to provide prospective students.

The Department also believes there is more to be done to help increase student access to affordable higher education and to improve student outcomes, and will continue to take action toward that goal.

DOD REPORTS ON ISIL OIL INFRASTRUCTURE DESTRUCTION

FROM:  U.S. DEFENSE DEPARTMENT
Airstrikes Destroy ISIL Oil Infrastructure, Tactical Vehicles
From a Combined Joint Task Force Operation Inherent Resolve News Release

SOUTHWEST ASIA, June 8, 2015 – U.S. and coalition military forces have continued to attack Islamic State of Iraq and the Levant terrorists in Syria and Iraq, Combined Joint Task Force Operation Inherent Resolve officials reported today.

Officials reported details of the latest strikes, which took place between 8 a.m. yesterday and 8 a.m. today, local time, noting that assessments of results are based on initial reports.

Airstrikes in Syria

Bomber, attack and fighter aircraft conducted seven airstrikes in Syria:

-- Near Dayr Az Zawr, two airstrikes struck two ISIL crude oil collection points.

-- Near Kobani, five airstrikes struck one large and two small ISIL tactical units, destroying seven ISIL fighting positions, two ISIL vehicles and an ISIL improvised explosive device facility.

Airstrikes in Iraq

Attack, bomber, fighter and remotely piloted aircraft conducted 14 airstrikes in Iraq, approved by the Iraqi Ministry of Defense:

-- Near Baghdadi, two airstrikes struck two ISIL tactical units, destroying an ISIL tanker and an ISIL vehicle.

-- Near Beiji, three airstrikes destroyed two ISIL staging positions and seven ISIL vehicles.

-- Near Hit, one airstrike struck an ISIL tactical unit, destroying an ISIL checkpoint.

-- Near Makhmur, one airstrike struck two ISIL mortar firing positions.

-- Near Mosul, three airstrikes struck an ISIL tactical unit and an ISIL staging area, destroying two ISIL vehicles.

-- Near Sinjar, two airstrikes struck an ISIL mortar system, destroying two ISIL buildings, an ISIL rocket-propelled grenade and an ISIL heavy machine gun.

-- Near Tal Afar, two airstrikes struck an ISIL mortar firing position, destroying an ISIL tunnel entrance.

Part of Operation Inherent Resolve

The strikes were conducted as part of Operation Inherent Resolve, the operation to eliminate the ISIL terrorist group and the threat they pose to Iraq, Syria, the region, and the wider international community. The destruction of ISIL targets in Syria and Iraq further limits the terrorist group's ability to project terror and conduct operations, officials said.

Coalition nations conducting airstrikes in Iraq include the United States, Australia, Belgium, Canada, Denmark, France, Jordan, the Netherlands and the United Kingdom. Coalition nations conducting airstrikes in Syria include the United States, Bahrain, Canada, Jordan, Saudi Arabia and the United Arab Emirates.

WHITE HOUSE VIDEO: 6/7/15: White House Press Briefing

WHITE HOUSE VIDEO: The President Delivers Remarks in Krün, Germany

U.S. CONGRATULATES PEOPLE OF PORTUGAL ON PORTUGAL DAY

FROM:  U.S. STATE DEPARTMENT
On the Occasion of Portugal Day
Press Statement
John Kerry
Secretary of State
Washington, DC
June 8, 2015

On behalf of President Obama and the people of the United States, I congratulate the Portuguese people as you celebrate Portugal Day on June 10.

Since the founding of the United States over two centuries ago, Portugal has been an important partner and ally. The relationship between our two countries, which spans the range of cultural, economic, and security ties, has strengthened the Atlantic community. Our two nations share a commitment to human rights, liberty, and democracy.

Portugal plays an important role in global affairs and international security through its commitments to NATO, the United Nations, and other multilateral organizations. The United States is proud to work with Portugal to defend freedom throughout the world. I enjoyed meeting with Foreign Minister Machete in April and look forward to continuing our work on important global issues in the year to come.

I wish the Portuguese people joy and continued success this Portugal Day as you celebrate your rich culture, history, and the life and work of Luís de Camões.

SOLDIERS TRAIN AT CHEMICAL, BIOLOGICAL, RADIOLOGICAL AND NUCLEAR DEFENSE CHAMBER

FROM:  U.S. DEFENSE DEPARTMENT 

Soldiers train chaplain candidates at the chemical, biological, radiological and nuclear defense chamber on Fort Jackson, S.C., May 27, 2015. The soldiers are chaplain candidates assigned to 104th Training Division. U.S. Army photo by Sgt. 1st Class Brian Hamilton.

A soldier prepares the CS gas, which is similar to tear gas, for the chaplain candidates at the chemical, biological, radiological and nuclear defense chamber on Fort Jackson, S.C., May 27, 2015. U.S. Army photo by Sgt. 1st Class Brian Hamilton. 

LABOR SECRETARY PEREZ LISTS 5 THINGS YOU SHOULD KNOW ABOUT EMPLOYMENT NUMBERS

FROM:  U.S. LABOR DEPARTMENT
Five things US Labor Secretary Thomas E. Perez says
you should know about the May employment numbers

WASHINGTON — With the release of the May 2015 Employment Situation Report today, U.S. Secretary of Labor Thomas E. Perez says there are five things you should know about its numbers:

Record streak continues: This is the best jobs report of 2015 so far. The economy added 280,000 jobs in May, bringing us to 12.6 million private-sector jobs over the last 63 months.

Low unemployment: The unemployment rate was essentially unchanged at 5.5 percent. It's the ninth straight month under 6 percent after 73 straight months above 6 percent. Over the last year, there has been a significant decrease in the unemployment rate for every demographic group except teens.

Meaningful progress on wages: Average hourly earnings for employees on private payrolls rose by 8 cents in May. The 2.3 percent increase from last May is the largest year-over-year increase since August 2013.

Long-term unemployment trending down: 28.6 percent of the unemployed have been out of work for 27 weeks or more — that's the lowest rate in six years. There are 849,000 fewer long-term unemployed people than a year ago.

The unfinished business: The recovery continues apace with strong and steady job growth. But the wind at our back isn't propelling everyone forward. From education and skills development to minimum wage and paid leave, the Obama administration continues to work every day to extend more opportunity to more people. We hope Congress will join us in our efforts to reward hard work and give everyone the chance to punch their ticket to the middle class.

TEXAN ARRESTED FOR ATTEMPTING TO JOIN THE TERRORIST GROUP ISIL

FROM:  U.S. JUSTICE DEPARTMENT
Friday, June 5, 2015
Texas Man Sentenced to 82 Months in Prison for Attempting to Travel to Syria to Join ISIL

Michael Todd Wolfe aka Faruq, 24, of Austin, Texas, was sentenced this afternoon by U.S. District Court Judge Sam Sparks of the Western District of Texas to serve 82 months in federal prison for attempting to provide material support to a designated foreign terrorist organization, announced Assistant Attorney General for National Security John Carlin, Acting U.S. Attorney Richard L. Durbin Jr. for the Western District of Texas and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division.

In June 2014, Wolfe pleaded guilty to the charge, admitting that from August 2013 to June 17, 2014, he planned to travel to the Middle East to provide material support to the Islamic State of Iraq and the Levant (ISIL).  Wolfe previously acknowledged that he applied for and acquired a U.S. passport, participated in physical fitness training, practiced military maneuvers and made efforts to conceal his communications about his plans to travel overseas to engage in violent jihad.  Wolfe also purchased airline tickets so that he could travel to Europe to meet an FBI undercover employee, whom the defendant then believed would facilitate travel to Syria through Turkey.  In furtherance of his attempt to provide material support to ISIL, Wolfe travelled to Houston and was apprehended on June 17, 2014, on the jet-way, as he attempted to board a flight to Toronto, Canada.  His ticketed itinerary had him traveling through Iceland and arriving in Copenhagen, Denmark, on June 18, 2014.  He then planned to make his way to Syria to join with ISIL and engage in the armed conflict.  Wolfe has remained in federal custody since his arrest.

The case was investigated by the agencies comprising the Central Texas JTTF, which include the FBI; Internal Revenue Service-Criminal Investigation; U.S. Citizenship and Immigration Services; U.S. Army Intelligence; Austin Police Department; Round Rock, Texas, Police Department; Killeen, Texas, Police Department; University of Texas Police Department; Travis County, Texas Sheriff's Office; Texas Department of Public Safety, Office of the Texas Attorney General and the Texas Alcoholic Beverage Commission.

The case was prosecuted by Assistant U.S. Attorneys Gregg N. Sofer and Michael Galdo of the Western District of Texas, and Trial Attorneys Josh Parecki and Michael Dittoe of the National Security Division’s Counterterrorism Section.

BUSINESSMAN ACCUSED OF BRIBING BANK OFFICIALS, SENTENCED TO PRISON

FROM:  U.S. JUSTICE DEPARTMENT
Thursday, June 4, 2015

Kentucky Businessman Sentenced in New York Federal Court for $53 Million Tax Scheme and Massive Fraud that Involved Bribery of Bank Officials
Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division and U.S. Attorney Preet Bharara of the Southern District of New York announced that a Kentucky businessman was sentenced today to serve 12 years in prison.

Wilbur Anthony Huff, 53, of Caneyville and Louisville, Kentucky, was also ordered to pay more than $108 million in restitution for committing various tax crimes that caused more than $50 million in losses to the Internal Revenue Service (IRS), and a massive fraud that involved the bribery of bank officials, the fraudulent purchase of an insurance company, and the defrauding of insurance regulators and an investment bank.  In December 2014, Huff pleaded guilty before U.S. District Judge Noemi Reice Buchwald of the Southern District of New York, who imposed today’s sentence.

“The department is committed to vigorously pursuing and prosecuting those individuals who violate the employment tax laws of the United States,” said Acting Assistant Attorney General Ciraolo.  “Today’s significant prison sentence sends a loud and clear message to those engaged in such criminal conduct, including owners and operators of professional employer organizations like Mr. Huff, who steal employment taxes collected from their business clients to line their own pockets, instead of paying over those funds to the IRS.”

“Anthony Huff and his co-conspirators stole millions of dollars from taxpayers and engaged in extensive frauds, all in the pursuit of additional property, luxury cars and the like,” said U.S. Attorney Bharara.  “His crimes have earned him 12 years in prison.  I would like to thank our law enforcement partners for their assistance on this case.”

According to the information, plea agreement, sentencing submissions and statements made during court proceedings:

Huff was a businessman who controlled numerous entities located throughout the United States (Huff-Controlled Entities).  Huff controlled the companies and their finances, using them to orchestrate a $53 million fraud on the IRS and other schemes that spanned four states, involving tax violations, bank bribery, fraud on bank regulators and the fraudulent purchase of an insurance company.  As part of his crimes, Huff concealed his control of the Huff-Controlled Entities by installing other individuals to oversee the companies’ day-to-day functions and to serve as the companies’ titular owners, directors, or officers.  Huff also maintained a corrupt relationship with Park Avenue Bank and Charles J. Antonucci Sr., the bank’s president and chief executive officer, and Matthew L. Morris, the bank’s senior vice president.

Tax Crimes

From 2008 to 2010, HUFF controlled O2HR, a professional employer organization (PEO) located in Tampa, Florida.  Like other PEOs, O2HR was paid to manage the payroll, tax and workers’ compensation insurance obligations of its client companies.  However, instead of paying $53 million in taxes that O2HR’s clients owed the IRS and $5 million to Providence Property and Casualty Insurance Company (Providence P&C) – an insurance company based in Oklahoma – for workers’ compensation coverage expenses for O2HR clients, Huff stole the money that his client companies had paid O2HR for those purposes.  Among other things, Huff diverted millions of dollars from O2HR to fund his investments in unrelated business ventures and pay his family members’ personal expenses.  The expenses included mortgages on Huff’s homes, rent payments for his children’s apartments, staff and equipment for Huff’s farm, designer clothing, jewelry and luxury cars.

Conspiracy to Commit Bank Bribery, Defraud Bank Regulators and Fraudulently Purchase an Oklahoma Insurance Company

From 2007 through 2010, Huff engaged in a massive multi-faceted conspiracy in which he schemed to bribe executives of Park Avenue Bank, defraud bank regulators and the board and shareholders of a publicly-traded company, and fraudulently purchase an Oklahoma insurance company.  As described in more detail below, Huff paid bribes totaling hundreds of thousands of dollars in cash and other items to Morris and Antonucci in exchange for their favorable treatment at Park Avenue Bank.

As part of the corrupt relationship between Huff and the bank executives, Huff, Morris, Antonucci and others conspired to defraud various entities and regulators during the relevant time period.  Specifically, Huff conspired with Morris and Antonucci to falsely bolster Park Avenue Bank’s capital by orchestrating a series of fraudulent transactions to make it appear that Park Avenue Bank had received an outside infusion of $6.5 million, and engaged in a series of further fraudulent actions to conceal from bank regulators the true source of the funds.

Huff further conspired with Morris, Antonucci and others to defraud Oklahoma insurance regulators and others by making material misrepresentations and omissions regarding the source of $37.5 million used to purchase Providence Property and Casualty Insurance Company, an insurance company based in Oklahoma that provided workers’ compensation insurance for O2HR’s clients and to whom O2HR owed a significant debt.

Bribery of Park Avenue Bank Executives

From 2007 to 2009, Huff paid Morris and Antonucci at least $400,000 in exchange for which they: provided Huff with fraudulent letters of credit obligating Park Avenue Bank to pay $1.75 million to an investor in one of Huff’s businesses if Huff failed to pay the investor back himself; allowed the Huff-Controlled Entities to accrue $9 million in overdrafts; facilitated intra-bank transfers in furtherance of Huff’s fraud; and fraudulently caused Park Avenue Bank to issue at least $4.5 million in loans to the Huff-Controlled Entities.

Fraud on Bank Regulators and a Publicly-Traded Company

From 2008 to 2009, Huff, Morris and Antonucci engaged in a scheme to prevent Park Avenue Bank from being designated as “undercapitalized” by regulators – a designation that would prohibit the bank from engaging in certain types of banking transactions and that would subject the bank to a range of potential enforcement actions by regulators.  Specifically, they engaged in a series of deceptive, “round-trip” financial transactions to make it appear that Antonucci had infused the bank with $6.5 million in new capital when, in actuality, the $6.5 million was part of the bank’s pre-existing capital.  Huff, Morris and Antonucci funneled the $6.5 million from the bank through accounts controlled by Huff to Antonucci.  This was done to make it appear as though Antonucci was helping to stabilize the bank’s capitalization problem, so that the bank could continue engaging in certain banking transactions that it would otherwise have been prohibited from doing, and to put the bank in a better posture to receive $11 million from the Troubled Asset Relief Program.  To conceal their unlawful financial maneuvering, Huff created, or directed the creation of, documents falsely suggesting that Antonucci had earned the $6.5 million through a bogus transaction involving another company Antonucci owned.  Huff, Morris and Antonucci further concealed their scheme by stealing $2.3 million from General Employment Enterprises Inc., a publicly-traded temporary staffing company, in order to pay Park Avenue Bank back for monies used in connection with the $6.5 million transaction.

Fraud on Insurance Regulators and the Investment Firm

From July 2008 to November 2009, Huff, Morris, Antonucci and Allen Reichman, an executive at an investment bank and financial services company headquartered in New York City (the Investment Firm), conspired to defraud Oklahoma insurance regulators into allowing Antonucci to purchase the assets of Providence P&C and defraud the Investment Firm into providing a $30 million loan to finance the purchase.  Specifically, Huff and Antonucci devised a scheme in which Antonucci would purchase Providence P&C’s assets by obtaining a $30 million loan from the Investment Firm, which used Providence P&C’s own assets as collateral for the loan.  However, because Oklahoma insurance regulators had to approve any sale of Providence P&C, and because Oklahoma law forbade the use of Providence P&C’s assets as collateral for such a loan, Huff, Morris, Antonucci and Reichman made and conspired to make a number of material misstatements and material omissions to the Investment Firm and Oklahoma insurance regulators concerning the true nature of the financing for Antonucci’s purchase of Providence P&C.  Among other things, Reichman directed Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan, and Huff, Morris and Antonucci conspired to falsely represent to Oklahoma insurance regulators that Park Avenue Bank – not the Investment Firm – was funding the purchase of Providence P&C.

After deceiving Oklahoma regulators into approving the sale of Providence P&C, Huff took $4 million of the company’s assets, which he used to continue the scheme to defraud O2HR’s clients.  Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after Huff, Morris and Antonucci had pilfered its remaining assets.

*                *                *

In addition to his prison sentence, Huff was sentenced to three years of supervised release, and ordered to forfeit $10.8 million to the United States and pay a total of more than $108 million in restitution to victims of his crimes, including, among others, the Federal Deposit Insurance Corporation (FDIC) and the IRS.

In imposing today’s sentence, Judge Buchwald said Huff’s crimes were “truly staggering” and “eye popping.”  Judge Buchwald described Huff’s conduct, which was preceded by a federal conviction and failure to pay millions in civil judgments, as “a living example” of “chutzpah,” which she defined as “shameless audacity and unmitigated gall.”

Morris and Reichman pleaded guilty for their roles in the above-described offenses on Oct. 17, 2013, and Feb. 20, 2015, respectively.  Reichman is scheduled to be sentenced before Judge Buchwald on July 15, and Morris is scheduled to be sentenced before Judge Buchwald on Aug. 19.

Antonucci pleaded guilty to his role in the crimes described above on Oct. 8, 2010, and is scheduled to be sentenced on Aug. 20, also before Judge Buchwald.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Bharara thanked the Special Inspector General for the Troubled Asset Relief Program, the FBI, IRS-Criminal Investigation, the New York State Department of Financial Services, Immigration and Customs Enforcement’s Homeland Security Investigations, and the Office of Inspector General of the FDIC, for their work in the investigation, and the Tax Division and the U.S. Attorney’s Office of the Southern District of Florida, for their assistance in the prosecution.

Today’s announcement is part of efforts underway by the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

The case is being handled by the U.S. Attorney’s Office of the Southern District of New York Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani and Special Assistant U.S. Attorney Tino Lisella of the Tax Division are in charge of the criminal case.

GEMINI IV EARTHVIEW

FROM:  NASA 

June 4, 1965, Earth Observations From Gemini IV

This photograph of the Florida Straits and Grand Bahama Bank was taken during the Gemini IV mission during orbit no. 19, on June 4, 1965, with a Hasselblad camera and a 70mm lens. The Gemini IV crew -- astronauts Jim McDivitt and Ed White -- conducted scientific experiments, including photography of Earth's weather and terrain, for the remainder of their four-day mission following White's historic first American spacewalk on June 3.

Astronauts have been photographing Earth from space since the early Mercury missions beginning in 1961. Today, they observe the Earth from their unique point of view aboard the International Space Station, providing researchers with key data and recording changes over time from human-caused changes like urban growth and reservoir construction, to natural dynamic events such as hurricanes, floods and volcanic eruptions.

Image Credit: NASA

U.S. CALLING FOR INVESTIGATION INTO REPORTS OF INTERNATIONAL SOLDIERS ABUSING CHILDREN IN CAR

FROM:  U.S. STATE DEPARTMENT
Samantha Power
U.S. Permanent Representative to the United Nations
New York, NY
June 5, 2015

FOR IMMEDIATE RELEASE

Since horrific allegations came to light that international soldiers may have abused children in the Central African Republic, the United States has been calling for a full and impartial investigation into these disturbing reports as well as into the manner in which they were handled. We thus welcome the Secretary General’s recent announcement of the establishment of an External Independent Review to examine the UN system’s response to the allegations.

The Secretary General’s establishment of this review is an opportunity for the UN to learn how it and member states can best safeguard the dignity and welfare of vulnerable people; ensure swift action to make certain potential abuses are investigated and halted; protect those who expose abuses; and provide appropriate privacy and other protection for witnesses who come forward with allegations of abuse. There are many questions that need to be answered, and we view this as an important opportunity for member states – and the people of the Central African Republic – to learn what went wrong at every point in this process.

Alongside this independent review, it is essential that all countries whose soldiers are alleged to have been involved in such abuses fully, urgently, and transparently investigate all claims to ensure that justice is served. Any individual found to have committed such heinous abuses must be held accountable.

The United States looks forward to reviewing the outcome of the Panel’s findings in a timely manner and working with all parties to prevent sexual exploitation and abuse.

U.S. PRESS STATEMENT ON ANNIVERSARY OF TIANANMEN SQUARE PROTESTS IN CHINA

FROM:  U.S. STATE DEPARTMENT
On the 26th Anniversary of Tiananmen Square
Press Statement
John Kirby
Department Spokesperson
Washington, DC
June 3, 2015

Twenty six years after the Chinese government’s violent suppression of peaceful protests in and around Tiananmen Square on June 4, 1989, the United States continues to call for an official accounting of the victims of these events, the release of those still serving Tiananmen-related sentences, and an end to the harassment and detention of those who wish to peacefully commemorate the anniversary.

While China has achieved social and economic progress since 1989, we remain concerned that human rights abuses continue. We are closely monitoring developments with respect to pending legislation in China relating to national security, counterterrorism, and the regulation of NGOs that appears to call into question China’s commitment to increased openness and could, if enacted in current form, result in rights abuses. On this twenty-sixth anniversary, the United States urges the Chinese government to uphold its international commitments to protect human rights and fundamental freedoms and to end the harassment, detention, and other mistreatment of individuals who peacefully seek justice and fairness, to practice their religion, or to express their views.

DOJ ANNOUNCES 27 CRIMINAL FOREIGN FUGITIVES ARRESTED IN U.S.

FROM:  U.S. JUSTICE DEPARTMENT

WASHINGTON — Twenty-seven criminal foreign fugitives with active Interpol alerts were arrested across the United States this week by U.S. Immigration and Customs Enforcement’s (ICE) Enforcement and Removal Operations (ERO) and the U.S. Marshals Service (USMS).

Those arrested are from 13 different countries and wanted for crimes abroad. Of the 27, five are wanted for homicide, two for kidnapping, one for raping a child and one for human sex trafficking.

“Criminals who create mayhem here in the United States or abroad should understand that law enforcement is a global partnership,” said ICE Director Sarah R. Saldaña. “We will find them, and we will bring them to justice.”

Arrests occurred nationwide in nine states during the three-day sweep, which took place Tuesday through Thursday. Those arrested fell squarely into the agency’s enforcement priorities, which ICE officers prioritize and enforce every day.

“The arrest of these foreign fugitives should send a strong message to anyone attempting to avoid prosecution for their crimes here in the U.S. or abroad,” said USMS Director Stacia Hylton. “Our men and women were relentless in their effort to locate and apprehend these criminals.  We hope our effort gives victims a sense of comfort in knowing these individuals are no longer on the streets.”

“Information-sharing 24 hours, seven days a week, 365 days a year among U.S. law enforcement agencies like ERO and the USMS, along with the 189 other Interpol member countries and Interpol Washington, ensures transnational criminals have no place to hide,” stated Interpol Washington Director Shawn A. Bray. “By facilitating the sharing of this information with our law enforcement partners, together, we will continue to enhance safety and security for U.S. citizens and the global community.”

Arrests included:

On June 2, ERO arrested Nelson Garcia Orellana, 30, and his brother Jorge Garcia Rivera, 23, both natives of El Salvador, in Trenton, New Jersey, and Alexandria, Virginia, respectively. They are wanted by authorities in their home country for kidnapping [external link] and are the subjects of Interpol Red Notices [external link].


On June 2, ERO arrested Gabriel Collado Gonzalez, 40, a native of Nicaragua, in Miami. Gonzalez is wanted by authorities in his home country for embezzlement and criminal conspiracy and is the subject of an Interpol Red Notice [external link].


On June 2, ERO arrested Raul Ortiz Henriquez, 40, a native of El Salvador, in Santa Fe Springs, California. Henriquez is wanted by authorities in his home country for rape of a minor. In November 2013, Henriquez grabbed his victim by her arms and forced her into a van he was driving while she was leaving school. He drove away, parked, beat her in the chest and raped her. He is the subject of an Interpol Red Notice [external link].
The following individuals are all the subject of Interpol Red Notices and remain at-large:

Juan Chicas Ramos, 56, a native of El Salvador, is wanted by authorities in his home country on an Interpol Red Notice [external link] for homicide


Lisandro Medina Gamez, 33, a native of El Salvador, is wanted by authorities in his home country on an Interpol Red Notice [external link] for fraud
The ICE National Criminal Analysis and Targeting Center (NCATC) provided critical investigative support for this operation, including criminal and intelligence analysis from a variety of sources. The NCATC provides comprehensive analytical support to aid the at-large enforcement efforts of all ICE components.

ICE credits the combined efforts of the U.S. National Central Bureau-Interpol Washington, the U.S. Marshals Service, the U.S. Department of State Diplomatic Security Service, U.S. Citizenship and Immigration Services, and U.S. Customs and Border Protection.

Members of the public who have information about these fugitives are urged to contact ICE by calling the toll-free ICE tip line at 1-866-347-2423 or internationally at 001-1802-872-6199. They can also file a tip online by completing ICE’s online tip form.

Since Oct. 1, 2009, ERO has removed more than 720 foreign fugitives from the United States who were sought in their native countries for serious crimes, including kidnapping, rape and murder. ERO works with HSI’s Office of International Operations, foreign consular offices in the United States, and Interpol to identify foreign fugitives illegally present in the United States.

REMARKS AT UN ON RECENT DEVELOPMENTS IN EASTERN UKRAINE

FROM:  U.S. STATE DEPARTMENT
Samantha Power
U.S. Permanent Representative to the United Nations
New York, NY
June 5, 2015

AS DELIVERED

Thank you, Mr. President, for organizing today’s meeting to speak to the recent developments in eastern Ukraine. And I join others in thanking our briefers, Under Secretary-General Feltman and OSCE Deputy Chief Monitor Hug, for providing the Security Council and the international community with the facts underlying the escalation in violence, which are critical in a conflict where some continue to try to obscure the truth.

On June 3rd, combined Russian-separatist forces launched multiple, coordinated attacks west of the Minsk line of contact in Donetsk. The attacks were concentrated on the towns of Marinka and Krasnohorivka.

The Russian Federation and its separatist allies have offered multiple – often conflicting – explanations for these attacks.

In some instances, Russia and the separatists have blamed Ukraine for inciting the attacks. For example, a Russian presidential spokesman attributed the violations of the ceasefire to the “provocative actions by the Ukrainian armed forces,” claiming, “the Ukrainian side has repeatedly taken similar efforts to escalate tensions against the backdrop of international operations.” Similarly, the so-called “Defense Minister” of the self-proclaimed Donetsk People’s Republic blamed Ukraine for “provocations” and, what he called, “a breach in the Minsk agreements,” which led to the fighting. Exactly what the so-called provocations are was never explained.

This argument, this set of arguments, have been undermined by some of the separatists themselves, who seem to have forgotten to run their tweets and their blog posts by Moscow. During the attacks, one tweeted, “Marinka is ours!” – posting a photo of armed soldiers atop a tank flying the separatists’ flag. A post on a separatist website said, “As a result of a massive attack by [DPR] armed forces, Marinka has been liberated.”

In other instances, Russia has argued that the attacks were justified because the areas that are actually part of the separatist-controlled territory under the Minsk agreements are these areas. They are not. This was the case Russia made about Marinka and Krasnohorivka yesterday, at a meeting of the OSCE. We’ve seen this tactic before; when combined Russian-separatist forces encircled and attacked Debaltseve immediately after signing the package of measures at Minsk on February 12th, 2015. As a separatist commander Eduard Basurin told Reuters on February 15th, “Of course we can open fire [on Debaltseve]…The territory is internal: ours. And internal is internal. But along the line of confrontation there is no shooting.”

The problem with this line of argument is, quite simply, that it is false. At no point did the Minsk Agreements recognize Marinka and Krasnohorivka as separatist-controlled territory. Nor did they grant the separatists control over Debaltseve or other areas combined Russian-separatist forces have seized, or tried to seize. Yet for Russia and the separatists, it seems the contact line can shift to include the territories that they feel they deserve.

The Kyiv-born surrealist master Mikhail Bulgakov put this problem a different way: “The tongue can conceal the truth, but the eyes, never!” In this case, the objective eyes in eastern Ukraine belong to the OSCE’s Special Monitoring Mission, the SMM. And what they tell us is that, on the evening of June 2nd and early morning of June 3rd, “SMM observed the movement of a large amount of heavy weapons in DPR-controlled areas – generally in a westerly direction toward the contact line – close to Marinka, preceding and during the fighting.” So, to repeat: according to the SMM, heavy weapons from the Russian-backed separatist side moved westward “preceding as well as during the fighting.”

The SMM tried to contact high-ranking DPR personnel over an hour-and-a-half period on the morning of June 3rd, but reported, “Either they were unavailable or did not wish to speak to the SMM.” The eyes do not conceal the truth. And the truth here is that the recent violence was rooted in a combined Russian-separatist assault.

These and other joint attacks by Russian-separatist forces have deadly consequences. At least 5 Ukrainian soldiers were killed, and 38 wounded, in the assault on the towns. The number of casualties is surely higher, but we do not, unfortunately, have reliable reports from the separatists’ side. That is because, as the UN’s Human Rights Monitoring Unit noted in its May 15th report, independent media have been prosecuted, threatened, and otherwise muzzled in separatist-controlled territory.

We also do not know how many Russian soldiers were killed in recent attacks – or in any of their operations in eastern Ukraine, for that matter. Russia continues – despite incidents such as the recent capture of two special operations Russian soldiers in Schastya last month – to deny any military involvement in eastern Ukraine.

And just last week, President Putin signed a decree classifying any death of Russian soldiers in “special operations” in peacetime a state secret, a policy which previously was limited to wartime only. Not content with denying their military service in life, Russia now denies their loved ones the respect and closure – not to mention social services – for their service in death. And it denies the Russian people knowledge to which they are entitled – of a conflict their government has been fueling with weapons, training, and soldiers. No matter what your opinion of the open secret that is Russia’s military involvement in eastern Ukraine and occupied Crimea, the dignified recognition of one’s dead should have primacy.

Of course, suffering is hardly limited to those involved in the fighting. Civilians living near and along the front lines continue to endure profound hardship. Approximately 1.3 million Ukrainians have been displaced by the fighting. Small children on the front lines have gotten used to going to school and sleeping in basements. Families live underground for months at a time. The elderly and disabled are trapped with little access to vital medicine and other forms of assistance. A health professional working in Debaltseve said, “I’ve met elderly people who say that they would just like to die. They don’t have depression; they just don’t want to be 80 years old and living in a basement.”

By now, the international community is quite familiar with Russia’s playbook when it comes to efforts to occupy the territory of its sovereign neighbors – as it did in Crimea, and before that in Transnistria, Abkhazia, and South Ossetia. The consensus here, and in the international community, remains that Minsk’s implementation is the only viable way out of this deadly conflict.

The Ukrainian government has made good faith efforts to honor that consensus – notwithstanding the seemingly endless violations by Russia and the separatists – and deliver on the commitments made at Minsk. Ukraine is holding direct dialogue with the separatists, a bitter pill to swallow, but one they have swallowed for the sake of peace and for the sake of the implementation of the Minsk Agreements. At the same time, Ukraine has undertaken critical efforts, with the participation of Ukrainian civil society, to address pervasive problems it inherited from its predecessors, like widespread corruption, as well as to pursue crucial reforms such as decentralization. Ukraine cooperates with the international monitors and bodies, and has committed to address identified areas of concern. The United States will continue to raise tough issues and these areas of concern, including some raised here today by the briefers, with the Government of Ukraine, and we will support the government and Ukrainian people as they continue their efforts toward meaningful reform.

Yet Russia – and the separatists it trains, arms, fights alongside, and with whom it shares command and control systems in eastern Ukraine – continues to ignore this consensus, flouting the commitments it made at Minsk. It goes right on applying its playbook in new territories – as though this Council and the world are too blind, or too easily deceived to notice.

We must not let ourselves be deceived. The consequences of Russia’s contempt for Minsk and the rules undergirding our international peace and security are too great – both for the integrity of the international system, and for the rights and welfare of the Ukrainian people. We cannot fail to see and fail to act. We must not stop applying pressure until Ukrainians get the stable democracy, the territorial integrity, and sovereignty they yearn for and deserve. Thank you.

VA SUBMITS PLAN TO MOVE FORWARD ON DENVER REPLACEMENT MEDICAL CENTER

FROM:  U.S. DEPARTMENT OF VETERANS AFFAIRS
VA moving Forward on Denver Replacement Facility, Transformational Plan
Plans submitted to Congress

 WASHINGTON – The Department of Veterans Affairs (VA) today submitted a plan to Congress to move forward on the Denver Replacement Medical Center.
"The delays and cost overruns that have plagued the Denver Replacement Medical Center campus are inexcusable," Secretary Robert A. McDonald wrote in his letter to Congress. "I respectfully request that Congress take action to allow us to move forward so that construction on the Denver Replacement Medical Center in Aurora does not shut down later this month."  The full text of the letter is included in the link below.

VA is committed to completing the construction of the Denver replacement hospital to serve the 390,000 Veterans and their families of the Colorado area.
In addition to detailed construction and funding plans for the Denver facility, VA also released updates outlining  progress made in areas such as accountability, access, homelessness and other priorities, as well as the MyVA Transformational Plan.

"VA is changing. It will take time to fully implement these changes, but we at VA are committed to work with Congress on this and many other challenges and opportunities as we transform VA into the Veteran-centric, customer service-oriented organization Veterans have earned and deserve," McDonald wrote.

RESEARCHERS SAY OCEAN WARMING WILL LEAD TO MARINE ANIMAL MIGRATION

FROM:  NATIONAL SCIENCE FOUNDATION
Warmer, lower-oxygen oceans will shift marine habitats

Changes will result in marine animals moving away from equator
Modern mountain climbers usually carry tanks of oxygen to help them reach the summit. The combination of physical exertion and lack of oxygen at high altitudes creates a major challenge for mountaineers.

Now, just in time for World Oceans Day on Monday, June 8, researchers have found that the same principle applies to marine species during climate change.

Warmer water temperatures will speed up the animals' metabolic need for oxygen, as also happens during exercise, but the warmer water will hold less of the oxygen needed to fuel their bodies, similar to what happens at high altitudes.

Results of the study are published in this week's issue of the journal Science.

"This work is important because it links metabolic constraints to changes in marine temperatures and oxygen supply," said Irwin Forseth, program director in the National Science Foundation's (NSF) Division of Integrative Organismal Systems, which funded the research along with NSF's Division of Ocean Sciences.

"Understanding connections such as this is essential to allow us to predict the effects of environmental changes on the distribution and diversity of marine life.”

Marine animals pushed away from equator

The scientists found that these changes will act to push marine animals away from the equator. About two thirds of the respiratory stress due to climate change is caused by warmer temperatures, while the rest is because warmer water holds less dissolved gases such as oxygen.

"If your metabolism goes up, you need more food and you need more oxygen," said lead paper author Curtis Deutsch of the University of Washington.

"Aquatic animals could become oxygen-starved in a warmer future, even if oxygen doesn't change. We know that oxygen levels in the ocean are going down now and will decrease more with climate warming."

Four Atlantic Ocean species studied

The study centered on four Atlantic Ocean species whose temperature and oxygen requirements are well known from lab tests: Atlantic cod in the open ocean; Atlantic rock crab in coastal waters; sharp snout seabream in the sub-tropical Atlantic; and common eelpout, a bottom-dwelling fish in shallow waters in high northern latitudes.

Deutsch and colleagues used climate models to see how projected temperature and oxygen levels by 2100 would affect the four species ability to meet their future energy needs.

The near-surface ocean is projected to warm by several degrees Celsius by the end of this century. Seawater at that temperature would hold 5-10 percent less oxygen than it does now.

Results show that future rock crab habitat, for example, would be restricted to shallower water, hugging the more oxygenated surface.

Equatorial part of animals' ranges uninhabitable

For all four species, the equatorial part of their ranges would become uninhabitable because peak oxygen demand would be greater than the supply.

Viable habitats would shift away from the equator, displacing from 14 percent to 26 percent of the current ranges.

The authors believe the results are relevant for all marine species that rely on aquatic oxygen as an energy source.

"The Atlantic Ocean is relatively well-oxygenated," Deutsch said. "If there's oxygen restriction in the Atlantic Ocean marine habitat, then it should be everywhere."

Climate models predict that the northern Pacific Ocean's relatively low oxygen levels will decline even more, making it the most vulnerable part of the seas to habitat loss.

"For aquatic animals that are breathing water, warming temperatures create a problem of limited oxygen supply versus higher demand," said co-author Raymond Huey, a University of Washington biologist who has studied metabolism in land animals and in human mountain climbers.

"This simple metabolic index seems to correlate with the current distributions of marine organisms," he said. "That means that it gives us the power to predict how range limits are going to shift with warming."

A day-to-day "dead zone"

Previously, marine scientists thought about oxygen more in terms of extreme events that could cause regional die-offs of marine animals, also known as dead zones.

"We found that oxygen is also a day-to-day restriction on where species will live," Deutsch said.

"The effect we're describing will be part of what's pushing species around in the future."

Other co-authors are Hans Otto-Portner of the Alfred Wegener Institute in Germany; Aaron Ferrel of the University of California, Los Angeles; and Brad Seibel at the University of Rhode Island.

The Gordon and Betty Moore Foundation and the Alfred Wegener Institute also funded the research.

-NSF-
Media Contacts
Cheryl Dybas, NSF

U.S. FDA PROGRAM TO EXPEDITE REVIEW FOR CERTAIN FOOD IMPORTERS

FROM:  U.S. FOOD AND DRUG ADMINISTRATION
New FDA Program Will Benefit Both Importers and Consumers
June 4, 2015

The U.S. Food and Drug Administration is establishing a voluntary, fee-based program for the expedited review and importation of foods into the United States from importers with a proven food safety track record. The FDA is publishing a draft guidance for industry to explain how this new program will work.

The Voluntary Qualified Importer Program (VQIP) will benefit both industry and consumers.

Importers with a robust system of supply-chain management will receive expedited entry for imported foods that are in the program.
Consumer protections are strengthened by enabling the FDA to focus its resources on food imports that are more likely to present a potential risk to public health.

The FDA Food Safety Modernization Act, signed into law in January 2011, provides the FDA with new authorities to ensure that foods imported into the United States meet the same safety standards as those set for domestically produced foods.

In addition to establishing mandatory standards for importers of food under the Foreign Supplier Verification Program (FSVP), FSMA also requires the FDA to establish VQIP for importers who achieve and maintain a high level of control over the safety and security of their supply chains.  This control includes importation of food from facilities that have been certified as following appropriate food safety practices under FDA’s Accredited Third-Party Certification regulations, also required by FSMA.

FDA is issuing a notice in the Federal Register announcing the availability of a draft guidance entitled “Draft Guidance for Industry on the Voluntary Qualified Importer Program for Food Importers and Guidelines in Consideration of the Burden of the VQIP Fee Amounts on Small Business.”

The draft guidance document outlines VQIP provisions and provides information on:

the benefits VQIP  importers can expect to receive;
eligibility criteria;
instructions for completing a VQIP application;
conditions that could result in revocation of VQIP participation; and
criteria for VQIP reinstatement following revocation.
In addition, the Notice of Availability provides a preliminary estimate of the fee for the program and requests comment on whether and how this amount would be a burden for small businesses.

There will be a public comment period of 75 days on the draft guidance and the guidelines related to the burden of fees on small businesses. After comments are considered and the guidance finalized, the program is expected to be open for applications in January 2018 to allow enough time for a facility to be certified under FDA’s Accredited Third Party Certification program.

WHITE HOUSE VIDEO: Weekly Address: Celebrating Immigrant Heritage Month

WHITE HOUSE VIDEO: 6/5/15: White House Press Briefing

READOUT: PRESIDENT OBAMA'S CALL WITH UKRAINIAN PRESIDENT POROSHENKO

FROM:  THE WHITE HOUSE
Readout of the President's Call with President Poroshenko of Ukraine

President Obama spoke today with Ukrainian President Petro Poroshenko about the conflict in eastern Ukraine and the upcoming discussions about Ukraine at the G-7 Summit.  The President and President Poroshenko expressed their deep concern about the recent assault by combined Russian-separatist forces across the current line of contact near Donetsk, Ukraine, and once more called on Russia and the separatists it backs to abide strictly by the terms of the February Minsk Implementation Plan.  The President reaffirmed the strong support of the United States for Ukraine’s sovereignty and territorial integrity, and reiterated his determination to continue working with international partners to provide the support Ukraine needs as it undertakes transformational reforms.  The President also underscored the commitment of the United States to supporting a diplomatic resolution to the conflict in eastern Ukraine and the need to maintain costs on  Russia and the separatists until they fulfill all provisions of the Minsk agreements.

NSF VIDEO: Interstellar, meet Large Hadron Collider (SPOILER ALERT!)

SEC FREEZES ASSETS OF BROKERAGES FOR ALLEGED SCHEMES TO MANIPULATE AVON STOCK

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION
06/04/2015 05:30 PM EDT

The Securities and Exchange Commission today announced an emergency asset freeze of two U.S. brokerage accounts connected to schemes to manipulate Avon and other stocks, thwarting any ability to cash in on ill-gotten proceeds.

According to an SEC complaint filed in federal court in Manhattan, the agency has tracked a filing on its EDGAR system last month about a false Avon tender offer to a foreign entity using an IP address located in Sofia, Bulgaria.  A Bulgarian trader named Nedko Nedev controlled at least one of the two now-frozen brokerage accounts, and his account held a substantial position in Avon contracts-for-difference (CFDs) that were losing value in recent months.  The SEC alleges that Nedev generated approximately $5,000 in excess profits by selling almost half of the account’s Avon CFDs at inflated prices after the EDGAR filing led to a 20-percent increase in the value of Avon stock on May 14.

The court issued an order at the SEC’s request freezing the two accounts, which contain approximately $2 million in assets.

“Only three weeks after the manipulation of Avon stock occurred, this emergency court order keeps not only the alleged illicit profits from being transferred offshore, but preserves the SEC’s ability to recover substantial penalties,” said Andrew Ceresney, Director of the SEC Enforcement Division.

In addition to Nedev, the SEC’s complaint charges Strategic Capital Partners Muster Ltd. and Strategic Wealth Investments Inc., which each own one of the brokerage accounts, and PTG Capital Partners LTD, which made the EDGAR filing containing the purported Avon tender offer.  Also charged is similarly named PST Capital Group LTD, which allegedly made a false EDGAR filing in a 2012 scheme involving the stock of Rocky Mountain Chocolate Factory.  The defendants also are charged with a similar scheme in 2014 involving Tower Group International Ltd., which involved a false press release instead of an EDGAR filing.  The schemes followed similar patterns where the accounts had substantial holdings in a company that had been losing value and the companies’ stock values substantially increased after a false filing or press release originating from Bulgaria.  The two accounts profited by more than $20,000 combined from the Tower Group alleged manipulation.

“We used parallel trading analysis to connect the dots and track down these defendants,” said Daniel M. Hawke, Chief of the SEC Enforcement Division’s Market Abuse Unit.  “Even when traders attempt to hide behind proxy servers, false filings, and phony foreign entities, we are able to quickly identify patterns and relationships to focus our investigation and identify who is behind the manipulative trading.”

The SEC’s complaint charges the defendants with violating antifraud provisions of the federal securities laws, including Section 17(a) of the Securities Act of 1933, Sections 10(b) and 14(e) of the Securities Exchange Act of 1934, and Rules 10b-5 and 14e-8.  The complaint also charges Nedev with control person and other secondary liability under Sections 20(a) and 20(b) of the Exchange Act.  The complaint seeks disgorgement, penalties, and other related relief.

The SEC’s investigation, which is continuing, is being conducted by David Snyder, Kelly Gibson, John Rymas, Patrick McCluskey, and Assunta Vivolo in the Market Abuse Unit.  The case is being supervised by Mr. Hawke and the unit’s co-deputy chiefs Robert Cohen and Joseph Sansone.  The litigation will be led by David Axelrod and John Donnelly of the SEC’s Philadelphia Regional Office.

CDC REPORTS ON HEPATITIS B SCREENING AMONG RESETTLED REFUGEES

FROM:  U.S. CENTERS FOR DISEASE CONTROL AND PREVENTION
Hepatitis B Screening and Prevalence Among Resettled Refugees — United States, 2006‒2011

Refugees are a heterogeneous population and hepatitis B prevalence is associated with country of origin and individual lived experience. Ongoing health surveillance activities focused on refugees are essential to ensuring appropriate assessment and treatment following resettlement. Hepatitis B is a viral disease that can be acute or chronic and is a significant public health concern both globally and in the United States. Refugees frequently emigrate from countries with high prevalence of active hepatitis B infection (≥2 percent), and/or are at higher risk of hepatitis B infection due to their lived experiences as refugees. However, refugees are a heterogeneous group and recent data are not available regarding prevalence of hepatitis B in recently resettled refugee communities. States, local health departments, healthcare providers, resettlement agencies, refugees, and other stakeholders may better target education and screening programs based on the prevalence of hepatitis B among the three refugee groups to have resettled in the greatest numbers over the last several years: Iraqis, Bhutanese, and Burmese.

SECRETARY KERRY'S STATEMENT ON NUCLEAR SECURITY TREATIES LEGISLATION

FROM:  U.S. STATE DEPARTMENT
Passage of Implementing Legislation for Nuclear Security Treaties
Press Statement
John Kerry
Secretary of State
Washington, DC
June 4, 2015

This week, President Obama signed into law implementing legislation for treaties that represent legal cornerstones of the global nuclear security architecture, the strengthening of which is a key goal of the Nuclear Security Summits. This legislation will also enhance protections against threats from nuclear, biological, and chemical weapons.

The legislation amends the Convention on the Physical Protection of Nuclear Material (CPPNM), the International Convention for the Suppression of Acts of Nuclear Terrorism (ICSANT), and two Protocols to the Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation (SUA). The Department of State is now preparing the instruments of ratification of these important treaties for the President’s signature.

I want to personally thank the U.S. Congress, particularly the House and Senate Judiciary Committees, for their efforts on this critically important legislation. It is a laudable example of the good we can accomplish when two branches of government and two parties come together to strengthen our nation’s security. It is also yet another indication that the United States is committed on a bipartisan basis to eliminating the greatest threat to global security: nuclear terrorism.

The CPPNM amendment establishes new international norms for the physical protection of nuclear materials and facilities, including protection from sabotage. It also provides for expanded cooperation among state parties and defines new criminal offenses that must be made punishable by state parties under their domestic law. Once our national ratification actions are completed, the United States will work with other countries to secure the 16 additional ratifications that are needed in order for the amendment to enter into force with the goal of achieving this by the end of the year.

The ICSANT provides a specific legal basis for international cooperation in the investigation, prosecution, and extradition of those who commit terrorist acts involving radioactive material or a nuclear device, or any device that may emit radiation or disperse radioactive material.

The SUA Protocols establish the first international treaty framework for criminalizing certain terrorist acts, including using a ship or fixed platform in a terrorist activity, transporting weapons of mass destruction or their delivery systems and related materials, and transporting terrorist fugitives.

U.S. ratification of these treaties will honor U.S. pledges made at the 2010 Nuclear Security Summit and at the Proliferation Security Initiative 10th Anniversary Meeting in 2013. We call on all countries who share our commitment to preventing nuclear terrorism to join and fully implement these treaties.

FORMER FBI AGENT INDICTED FOR ALLEGEDLY STEALING DRUG PROCEEDS AND OBSTRUCTING JUSTICE

FROM:  U.S. JUSTICE DEPARTMENT
Thursday, June 4, 2015
Former FBI Special Agent Indicted for Theft of Drug Proceeds and Obstruction of Justice

A former special agent of the FBI was indicted yesterday for allegedly stealing over $100,000 of drug proceeds seized during the execution of search warrants and obstructing justice by taking steps to hide his alleged theft.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Angel D. Gunn of the Justice Department’s Office of the Inspector General’s Los Angeles Field Office made the announcement.

“As alleged, former Agent Bowman put his own greed above the trust placed in him by the FBI and the American public,” said Assistant Attorney General Caldwell.  “Corrupt law enforcement agents not only compromise those investigations in which they are involved, but also damage the reputations of fellow law enforcement officers who are dedicated to public service and the protection of all Americans.”

Scott M. Bowman, 44, of Moreno Valley, California, was charged in the Central District of California with three counts of conversion of property by a federal employee, three counts of obstruction of justice, two counts of money laundering, one count of falsification of records and one count of witness tampering.

According to allegations in the indictment, which was unsealed today, Bowman misappropriated over $100,000 of drug proceeds seized in June and August 2014 during the execution of three search warrants.  The defendant allegedly misappropriated these funds after they were transferred to his custody in his official capacity as a federal law enforcement officer.

The indictment alleges that Bowman used the stolen money for his own purposes, including spending $43,850 in cash to purchase a 2012 Dodge Challenger coupe, $27,500 in cash to purchase a 2013 Toyota Scion FR-S coupe and approximately $26,612 in cash to outfit these vehicles with new equipment including speakers, rims and tires.  According to the allegations in the indictment, the defendant also used approximately $15,000 of the misappropriated cash to pay for cosmetic surgery for his spouse, and opened a checking account into which he deposited approximately $10,665 of the stolen funds, a portion of which he used to pay for a weekend stay at a luxury hotel, casino and resort in Las Vegas, Nevada.

According to the indictment, to conceal his misappropriation of the drug proceeds, Bowman allegedly falsified official FBI reports and other records.  Specifically, in connection with one of the seizures, Bowman allegedly endorsed an evidence receipt knowing that it did not accurately reflect the amount of cash seized and altered the same receipt by forging the signature of a police detective next to his own.

The indictment further alleges that Bowman made false representations to his colleagues regarding the disposition of certain seized drug proceeds.  In addition, Bowman allegedly sent an email to the detective whose signature Bowman had forged setting forth a detailed cover story that the detective should offer if asked about Bowman’s activities with respect to the seized drug proceeds.  According to the indictment, Bowman also allegedly provided the detective with a copy of the forged receipt so that the detective falsely could claim the forged signature as his own, if asked.

The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

This case was investigated by the Department of Justice Office of the Inspector General and is being prosecuted by Trial Attorneys Robert J. Heberle and Lauren Bell of the Criminal Division’s Public Integrity Section.

DOD REPORTS ON FIGHT AGAINST ISIL

FROM:  U.S. DEFENSE DEPARTMENT
Coalition Air Power Leads Fight Against ISIL, General Says
By Army Sgt. 1st Class Tyrone C. Marshall Jr.
DoD News, Defense Media Activity

WASHINGTON, June 5, 2015 – Despite facing one of the most complex operational environments in the fight against the Islamic State of Iraq and the Levant, coalition air power has enabled nearly every victory on the battlefield, a senior U.S. Central Command official said today.

During a telephonic call with Pentagon reporters, Air Force Lt. Gen. John W. Hesterman III, Combined Forces Air Component commander for Centcom, discussed the complexity and effectiveness of the air campaign against ISIL.

True Coalition Effort

Hesterman expressed pride in the multinational air coalition that formed “very quickly” demonstrating international commitment to defeating ISIL.

“The interoperability between our nations’ airmen validates years of combined training and multi-lateral exercises between our coalition partners,” he said.

Each nation brings capabilities, the general said, such as command and control, airlift, fire support and aerial refueling to a very complex operational environment creating a coalition greater than the sum of its parts.

“Our planning is a true coalition effort in the Combined Air Operations Center here,” Hesterman said, “and we’re flying side-by-side across the region in this fight against [ISIL].”

Airpower: Precise and Disciplined

The general said the air coalition is having a “profound” effect on the enemy.

“Our coalition airstrikes are the most precise and disciplined in the history of aerial warfare,” he said.

“We’ve been able to impact the enemy in a significant way, and we do it in a way that minimizes civilian casualties which our coalition nations, rightly, are very proud of,” Hesterman said.

Targeting ISIL, he said, is perhaps more challenging than ever before, but the coalition goes out of its way to protect innocent civilians, “because it’s the right thing to do, and it’s one of the things that separates us from the terrorists we’re fighting who kill anyone who isn’t them.”

ISIL can be targeted while still protecting civilians, Hesterman said.

Air Power’s Effectiveness

Hesterman noted coalition air power has not only been effective, but also has enabled “virtually every victory on the battlefield.”

It’s helped ground forces regain territory, he said, while removing more than 1,000 enemy fighters a month from the battlefield and eliminating the majority of ISIL’s oil refining capability.

More importantly, Hesterman said coalition air power is giving the Iraqi government and security forces the time necessary to prepare and execute sustained counter-ISIL offensives.

Coalition air power, he said, is giving all of the coalition nations the space and time to execute international lines of effort countering the flow of foreign fighters, ISIL financing and messaging, providing humanitarian assistance, and stabilizing liberated areas -- all necessary to defeat ISIL.

Different Type of Air Campaign

Hesterman emphasized the current air campaign is “a lot” different from previous campaigns.

“We’ve provided [an around-the-clock] presence over the battlefield to get after this enemy whenever we have the opportunity,” he said. “We go after this enemy wherever we find them.”

Hesterman added, “The comparisons being made to conflicts against field armies and nation-states don’t apply in this case, and the folks making them, frankly, haven’t been in a fight like the one that we’re in now.”

This enemy wrapped itself around a friendly population before the campaign even started, he said.

“There is no, and never has been, a well-developed target set for that which is necessary to do what we’ve done in the past,” Hesterman said. “It’s an order of magnitude more difficult than what we’ve done before. I can say that with a little bit of authority because I either participated in, or was well familiar with this, for about the last 32 years.”

Proud Coalition

The general lauded the “young men and women” of the multinational coalition risking their lives in the daily pursuit of ISIL “to give the world the time it needs” to galvanize the multiple lines of effort needed to ultimately defeat the terrorist group.

“They’re exceptionally proud of what they’re doing and their impact on the enemy,” he said. “I will tell you their superb ability to do it and the exceptionally limited civilian casualties are historic and [the operation] deserves the deep respect of every one of us.”

Hesterman said he’s proud of the coalition’s air team for what they’re accomplishing but noted this will be a “long fight.”

“There will be tactical setbacks that we should not give [ISIL] strategic victory credit for,” he said. “Be sure -- we in the coalition are fully committed to a strategic defeat of the … terrorists.”

NASA VIDEO: What's Up for June 2015

U.S. AND INDIA SIGN DEFENSE FRAMEWORK AGREEMENT

FROM:  U.S. DEFENSE DEPARTMENT

Right:  U.S. Defense Secretary Ash Carter arrives for a meeting with India's Minister of Defense Manohar Parrikar on the final day of his visit to New Delhi, India, June 3, 2015.  DoD photo by Glenn Fawcett.  

 U.S., India Sign 10-Year Defense Framework Agreement
By Jim Garamone
DoD News, Defense Media Activity

WASHINGTON, June 4, 2015 – In India, Defense Secretary Ash Carter and Indian Defense Minister Manohar Parrikar signed a 10-year defense framework agreement yesterday, highlighting the growth of defense cooperation between the two countries.

Carter is on a 10-day trip focused on the U.S. rebalance to the Asia-Pacific region.

The agreement signed in India yesterday is an outgrowth of a meeting that was held between President Barack Obama and Indian Prime Minister Narendra Modi in January.

Working Together

Out of that meeting grew the Defense Trade and Technology Initiative. The idea is for India and the United States to work closely together to develop military capabilities both can use.

Yesterday’s agreement included plans to cooperate in developing a mobile solar energy power source that could be used in remote areas and in developing a lightweight protective suit effective in chemical and biological hazard environments.

In India, Carter also met with Prime Minister Modi and External Affairs Minister Sushma Swaraj and National Security Adviser Ajit Doval. Carter also became the first U.S. defense secretary to visit an Indian operational military command -- the Eastern Naval Command in Visakhapatnam.

“This is just one more of many signs of what a positive trajectory we continue to be on with the defense community here in India,” Carter said during a media availability in New Delhi.

The secretary’s visit capitalizes on the convergence of India’s Act East policy and the U.S. rebalance to the Asia-Pacific region. Under the Act East policy, India will focus on improving relations with Association of Southeast Asian Nations and other East Asian countries. And the U.S. rebalance to the Asia-Pacific region recognizes the increasing importance of Asian nations to the global economy.

“These two things come together when it comes to maritime security, maritime domain awareness,” Carter said.

He also spoke of the convergence between Prime Minister Modi’s “Make In India” policy and the Defense Trade and Technology Initiative.

Cooperative Technology, Industrial Relationships

“The heart of that is to create cooperative technology and industrial relationships that are not just the buyer-seller kind,” the secretary said. “Both we and the Indians want to move beyond that, and there’s no reason why that can’t occur in the sense that industry wants to do it. We’re very willing to be flexible, creative. We are being that with a number of pathfinder projects.”

The agreement requires both countries to cut through the “historical burden of bureaucracy,” he said.

“It’s the burden that we carry forward from the fact that we were two separated industrial systems for so long during the Cold War,” Carter said. “It just takes time to get the two of them together.”

‘Everybody Wins, Everybody Rises’

The secretary reemphasized his message delivered at the Shangri-La Dialogue in Singapore earlier in the week -- the “everybody wins and everybody rises” approach to the Asian security architecture.

“That's what the United States believes in and is championing -- a vibrant Vietnam, it’s eager to do more, and we’re doing more with them,” the secretary said, “and India, an India that’s not only rising economically and militarily but is also a regional security provider now and in the future.”

The secretary expects the cooperation under the 10-year framework to increase. The nations are talking about cooperating on jet engines and aircraft carrier technology, he said.

“Some of the projects that we’re launching just now are, in part, intended to blaze a trail for things to come,” he said. “And the other thing to keep in mind is that the whole point is to make these industrially and economically successful projects. So they are not things that can be dictated by the governments; we try to involve industry.”