FROM: U.S. DEPARTMENT OF HOMELAND SECURITY
Detecting Heartbeats in Rubble: DHS and NASA Team up to Save Victims of Disasters
In June 2013, Urban Search and Rescue team tested the FINDER’s human-finding abilities at the Fairfax County Fire Department training center.
When natural disasters or man-made catastrophes topple buildings, search and rescue teams immediately set out to recover victims trapped beneath the wreckage. During these missions, time is imperative, and quickly detecting living victims greatly increases chances for rescue and survival.
A new radar-based technology named Finding Individuals for Disaster and Emergency Response (FINDER) has been developed by the Department of Homeland Security’s Science and Technology Directorate (S&T) and the National Aeronautics Space Administration’s Jet Propulsion Laboratory (JPL) to detect a human heartbeat buried beneath 30 feet of crushed materials, hidden behind 20 feet of solid concrete, and from a distance of 100 feet in open spaces. In the past several months, S&T and JPL have been testing and developing several FINDER prototypes. Last June, DHS and first responders used the prototype to conduct more than 65 test searches with two Urban Search and Rescue (US&R) teams: the Virginia Task Force One (VA-TF1) at the Fairfax County Fire Department training center and Virginia Task Force Two (VA-TF2) in Virginia Beach, Va.
“Testing proved successful in locating a VA-TF1 member buried in 30 feet of mixed concrete, rebar, and gravel rubble from a distance of over 30 feet,” said John Price, S&T program manager. “This capability will complement the current Urban Search and Rescue tools such as canines, listening devices, and video cameras to detect the presence of living victims in rubble.”
Monday, September 16, 2013
MAN INDICTED IN $30 MILLION PONZI SCHEME THAT TARGETED HAITIAN-AMERICANS
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
SEC Defendant Indicted in $30 Million Ponzi Scheme and Affinity Fraud Targeting Haitian-American Investors
On July 2, 2013, the United States Attorney’s Office for the Southern District of Florida filed criminal charges against George Louis Theodule, a defendant in a now settled SEC action. The 40-count indictment charges Theodule with securities fraud, wire fraud, and money laundering. According to the indictment, Theodule, among other things, falsely presented himself as a financial expert who would double investors’ funds within three months by placing trades through their investment accounts. The indictment also alleges that Theodule operated a Ponzi scheme that raised more than $30 million from thousands of investors. Theodule allegedly perpetrated the fraud through Creative Capital Consortium, LLC and Creative Capital Concept$, LLC (the “Creative Capital entities”), among other entities he controlled.
In December 2008, the Commission halted Theodule’s on-going fraud at Creative Capital when it filed an emergency civil enforcement action against him and his companies. The SEC’s complaint alleged that the defendants had raised more than $23 million from thousands of mostly Haitian-American investors through a fraudulent, unregistered offering of securities nationwide, and operated a Ponzi scheme, having lost at least $18 million trading stocks and options through a network of purported investment clubs. The SEC obtained a restraining order to halt the fraudulent activity, and thereafter a receiver was appointed by the United States District Court for the Southern District of Florida to identify and trace assets. In October 2009, the Court entered a Judgment of Permanent Injunction and Other Relief against Theodule. The Judgment entered by consent, enjoined Theodule from violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, and also ordered Theodule to pay disgorgement with prejudgment interest and a civil penalty. In March 2010, the Court entered a Final Judgment ordering him to pay disgorgement in the amount of $5,099,512, prejudgment interest of $202,638 and imposed a civil penalty of $250,000.
The SEC's investigation was conducted by Linda S. Schmidt and Kathleen Strandell of the Miami Regional Office. The litigation was led by Amie Riggle Berlin and Robert K. Levenson. The SEC acknowledges the work of the United States Attorney’s Office for the Southern District of Florida, the Federal Bureau of Investigation, Miami Field Office, and the State of Florida’s Office of Financial Regulation this matter.
SEC Defendant Indicted in $30 Million Ponzi Scheme and Affinity Fraud Targeting Haitian-American Investors
On July 2, 2013, the United States Attorney’s Office for the Southern District of Florida filed criminal charges against George Louis Theodule, a defendant in a now settled SEC action. The 40-count indictment charges Theodule with securities fraud, wire fraud, and money laundering. According to the indictment, Theodule, among other things, falsely presented himself as a financial expert who would double investors’ funds within three months by placing trades through their investment accounts. The indictment also alleges that Theodule operated a Ponzi scheme that raised more than $30 million from thousands of investors. Theodule allegedly perpetrated the fraud through Creative Capital Consortium, LLC and Creative Capital Concept$, LLC (the “Creative Capital entities”), among other entities he controlled.
In December 2008, the Commission halted Theodule’s on-going fraud at Creative Capital when it filed an emergency civil enforcement action against him and his companies. The SEC’s complaint alleged that the defendants had raised more than $23 million from thousands of mostly Haitian-American investors through a fraudulent, unregistered offering of securities nationwide, and operated a Ponzi scheme, having lost at least $18 million trading stocks and options through a network of purported investment clubs. The SEC obtained a restraining order to halt the fraudulent activity, and thereafter a receiver was appointed by the United States District Court for the Southern District of Florida to identify and trace assets. In October 2009, the Court entered a Judgment of Permanent Injunction and Other Relief against Theodule. The Judgment entered by consent, enjoined Theodule from violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, and also ordered Theodule to pay disgorgement with prejudgment interest and a civil penalty. In March 2010, the Court entered a Final Judgment ordering him to pay disgorgement in the amount of $5,099,512, prejudgment interest of $202,638 and imposed a civil penalty of $250,000.
The SEC's investigation was conducted by Linda S. Schmidt and Kathleen Strandell of the Miami Regional Office. The litigation was led by Amie Riggle Berlin and Robert K. Levenson. The SEC acknowledges the work of the United States Attorney’s Office for the Southern District of Florida, the Federal Bureau of Investigation, Miami Field Office, and the State of Florida’s Office of Financial Regulation this matter.
Sunday, September 15, 2013
SECRETARY OF STATE KERRY AND ISRAELI PRIME MINISTER NETANYAHU MAKE REMARKS AFTER MEETING
FROM: U.S. STATE DEPARTMENT
Remarks With Israeli Prime Minister Benjamin Netanyahu After Their Meeting
Remarks
John Kerry
Secretary of State
Israeli Prime Minister Benjamin Netanyahu
Prime Minister's Office
Jerusalem
September 15, 2013
PRIME MINISTER NETANYAHU: Mr. Secretary, John, a pleasure to welcome you again in Jerusalem. I very much appreciate the fact that you’re here today. You’ve got a lot on your plate. Despite that busy schedule of yours, you took the time to come to Jerusalem. It’s deeply appreciated. I appreciate the fact that you’re making a great personal effort on matters of vital strategic importance for all of us.
We have been closely following and support your ongoing efforts to rid Syria of its chemical weapons. The Syrian regime must be stripped all its chemical weapons, and that would make our entire region a lot safer. The world needs to ensure that radical regimes don’t have weapons of mass destruction, because as we’ve learned once again in Syria, if rogue regimes have weapons of mass destruction, they will use them. The determination the international community shows regarding Syria will have a direct impact on the Syrian regime’s patron, Iran.
Iran must understand the consequences of its continual defiance of the international community by its pursuit towards nuclear weapons. What the past few days have showed is something that I’ve been saying for quite some time, that if diplomacy has any chance to work, it must be coupled with a credible military threat. What is true of Iran – or what is true of Syria is true of Iran, and by the way, vice versa.
John, I appreciate the opportunity we’ve had to discuss at some length our quest for peace with the Palestinians and the ongoing talks. We both know that this road is not an easy one, but we’ve embarked on this effort with you in order to succeed, to bring about a historic reconciliation between Israelis and Palestinians that ends the conflict once and for all. I want to welcome you once again to Jerusalem. I want to promise all of those who are seeing us now that this will not be our last long meeting.
SECRETARY KERRY: No. (Laughter.) Not by any means.
Mr. Prime Minister, my friend Bibi, thank you very much for one of your generous welcomes here again. I’m very appreciative, very happy to be back here in Israel, and only sorry that it’s a short time and a short visit. I thank you for your generous hospitality and I pick up on your comments that the road ahead is not easy. If it were easy, peace would have been achieved a long time ago. But what is clearer than ever today is that this is a road worth traveling. And so I’m delighted to have spent a good period of time – (clears throat) – excuse me, folks, the benefits of a lot of travel. (Laughter.)
I’m really happy to have spent a serious amount of time with the Prime Minister this afternoon talking in some depth about the challenges of the particular road that we are on. This is a follow-up to a very productive meeting that I had in London last week with President Abbas, so I am talking to both presidents directly as we agreed --
PRIME MINISTER NETANYAHU: Don’t elevate me to the role of president.
SECRETARY KERRY: President – Prime Minister and President, I apologize.
PRIME MINISTER NETANYAHU: I can’t reach those heights --
SECRETARY KERRY: (Laughter.) Both leaders.
PRIME MINISTER NETANYAHU: -- and I respect Mr. Peres greatly and --
SECRETARY KERRY: I am talking to both leaders directly. And everybody, I think, understands the goal that we are working for. It is two states living side by side in peace and in security. Two states because there are two proud peoples, both of whom deserve to fulfill their legitimate national aspirations in a homeland of their own, and two states because today, as we commemorate the 40th anniversary of the Yom Kippur War, I think everybody is reminded significantly of the costs of conflict and the price, certainly, that Israelis have paid in the quest for their security and identity.
The Prime Minister and I and all of the parties involved have agreed that we will not discuss details at any point in time. We are convinced that the best way to try to work through the difficult choices that have to be made is to do so privately with confidence that everybody will respect that process. And since I have asked for that from all the parties, I’m not going to break it now or at any other time. We will not discuss the substance of what we are working on.
I do want to comment, however, as the Prime Minister has, on the challenge of the region and what we have just been doing in the last few days of negotiations in Geneva. And that is, as the Prime Minister has said, an issue that directly affects the stability of this entire region, and ultimately, weapons of mass destruction, which are at stake in this issue, are a challenge to everybody on this planet. So this is a global issue, and that is the focus that we have tried to give it in the talks in Geneva in the last days, but we want to make sure people understand exactly what we are trying to achieve and how.
The ongoing conflict in Syria has enormous implications for all of the neighbors – the press of refugees, the fact of weapons of mass destruction having been used against the people of their own state. These are crimes against humanity, and they cannot be tolerated, and they are a threat to the capacity of the global community to be able to live by standards of rules of law and the highest standards of human behavior.
So I want people to understand the key elements of what we agreed to in Geneva. It is a framework, not a final agreement. It is a framework that must be put into effect by the United Nations now. But it is a framework that, with the Russian and U.S. agreement, it has the full ability to be able to, as the Prime Minister said, strip all of the chemical weapons from Syria. The Russians have agreed, they state, that the Assad regime has agreed to make its declaration within one week of the location and the amount of those weapons. And then we will put in place what we hope to put in place through the United Nations, what Russia and the United States agreed on, which is the most far-reaching chemical weapons removal effort well beyond the CWC that has been designed.
Now this will only be as effective as its implementation will be, and President Obama has made it clear that to accomplish that, the threat of force remains. The threat of force is real, and the Assad regime and all those taking part need to understand that President Obama and the United States are committed to achieve this goal. We cannot have hollow words in the conduct of international affairs because that affects all other issues, whether Iran or North Korea or any other.
The core principles with respect to the removal of these weapons and the containment of these weapons, which we want to achieve, as we said in the document, in the soonest, fastest, most effective way possible – if we achieve that, we will have set a marker for the standard of behavior with respect to Iran and with respect to North Korea and any other state, rogue state, group that decide to try to reach for these kinds of weapons.
The core principles will have the full backing of the international community through the UN Security Council. And Russia agreed that any breach of compliance, according to standards already set out in the CWC, any breach of the specifics of this agreement or any use of chemical weapons by anyone in Syria will result in immediate referral and action by the Security Council for measures under Chapter 7, which means what they select, up to and including the possibility of the use of force.
So again, I reiterate diplomacy has always been the preferred path of the President of the United States, and I think is any peace-loving nation’s preferred choice. But make no mistake, we’ve taken no options off the table. President Obama’s been absolutely clear about the remainder of the potential of use of force if there is noncompliance or refusal to take part, because the egregious use of chemical weapons by the Assad regime against innocent men, women, children, their own citizens all indiscriminately murdered in the dead of night, is unacceptable. And we have said in no uncertain terms that this should never happen again. This country understands the words, “Never again,” perhaps better than any other.
I’ve been in contact with many of my counterparts, with Foreign Secretary Hague of the United Kingdom, Foreign Minister Laurent Fabius. Their partnership on these issues has been essential. And I will see both of them tomorrow and Foreign Minister Davutoglu of Turkey in Paris, where I’ll also meet Foreign Minister Saud Faisal of Saudi Arabia in order to talk about the road ahead to achieve our goals.
Our attention and our efforts will now shift to the Organization of the Prohibition of Chemical Weapons and the UN Security Council, and the international community expects the Assad regime to live up to its commitments, and we expect Russia to join with us in holding them accountable.
I also want to make clear this effort is not just about securing chemical weapons in Syria. We are not just standing up for a redline that the world drew some 100 years ago, and which is worth standing up for. Our focus now must remain on ending the violence, ending the indiscriminate killing, ending the creation of more and more refugees that is not only tearing Syria apart, but threatens the region itself.
As President Obama has said, and I have said many times, there is no military solution to this conflict. We don’t want to create more and more extremist elements and we don’t want to see the implosion of the state of Syria. So our overall objective is to find a political solution through diplomacy, and that needs to happen at the negotiating table, and we will stay engaged with a sense of urgency. And I say to the Syrian opposition and all those in Syria who recognize that just removing the chemical weapons doesn’t do the job, we understand that, and that is not all we are going to seek to do. But it is one step forward, and it eliminates that weapon from the arsenal of a man who has proven willing to do anything to his own people to hold onto power.
Foreign Minister Lavrov and I met with Special Envoy Brahimi yesterday. We will meet again in New York. We are committed to continue to work towards the Geneva 2. And we have made clear that our support to the opposition in an effort to get there will continue unabated.
So, Mr. Prime Minister, I know you and I are both clear-eyed about the challenges ahead. We have to summon the grit and the determination to stay at this, to make the tough decisions – tough decisions about eliminating weapons of mass destruction and tough decisions about making peace between Israel and the Palestinians. We will not lose sight of the end game. I know that from talking with the Prime Minister today. And I think both of us remain deeply committed, and we hope very much with our partners in the region, to doing our best to try to make this journey towards peace get to its destination.
Thank you, Mr. Prime Minister.
PRIME MINISTER NETANYAHU: John, another sound bite. (Laughter.)
Remarks With Israeli Prime Minister Benjamin Netanyahu After Their Meeting
Remarks
John Kerry
Secretary of State
Israeli Prime Minister Benjamin Netanyahu
Prime Minister's Office
Jerusalem
September 15, 2013
PRIME MINISTER NETANYAHU: Mr. Secretary, John, a pleasure to welcome you again in Jerusalem. I very much appreciate the fact that you’re here today. You’ve got a lot on your plate. Despite that busy schedule of yours, you took the time to come to Jerusalem. It’s deeply appreciated. I appreciate the fact that you’re making a great personal effort on matters of vital strategic importance for all of us.
We have been closely following and support your ongoing efforts to rid Syria of its chemical weapons. The Syrian regime must be stripped all its chemical weapons, and that would make our entire region a lot safer. The world needs to ensure that radical regimes don’t have weapons of mass destruction, because as we’ve learned once again in Syria, if rogue regimes have weapons of mass destruction, they will use them. The determination the international community shows regarding Syria will have a direct impact on the Syrian regime’s patron, Iran.
Iran must understand the consequences of its continual defiance of the international community by its pursuit towards nuclear weapons. What the past few days have showed is something that I’ve been saying for quite some time, that if diplomacy has any chance to work, it must be coupled with a credible military threat. What is true of Iran – or what is true of Syria is true of Iran, and by the way, vice versa.
John, I appreciate the opportunity we’ve had to discuss at some length our quest for peace with the Palestinians and the ongoing talks. We both know that this road is not an easy one, but we’ve embarked on this effort with you in order to succeed, to bring about a historic reconciliation between Israelis and Palestinians that ends the conflict once and for all. I want to welcome you once again to Jerusalem. I want to promise all of those who are seeing us now that this will not be our last long meeting.
SECRETARY KERRY: No. (Laughter.) Not by any means.
Mr. Prime Minister, my friend Bibi, thank you very much for one of your generous welcomes here again. I’m very appreciative, very happy to be back here in Israel, and only sorry that it’s a short time and a short visit. I thank you for your generous hospitality and I pick up on your comments that the road ahead is not easy. If it were easy, peace would have been achieved a long time ago. But what is clearer than ever today is that this is a road worth traveling. And so I’m delighted to have spent a good period of time – (clears throat) – excuse me, folks, the benefits of a lot of travel. (Laughter.)
I’m really happy to have spent a serious amount of time with the Prime Minister this afternoon talking in some depth about the challenges of the particular road that we are on. This is a follow-up to a very productive meeting that I had in London last week with President Abbas, so I am talking to both presidents directly as we agreed --
PRIME MINISTER NETANYAHU: Don’t elevate me to the role of president.
SECRETARY KERRY: President – Prime Minister and President, I apologize.
PRIME MINISTER NETANYAHU: I can’t reach those heights --
SECRETARY KERRY: (Laughter.) Both leaders.
PRIME MINISTER NETANYAHU: -- and I respect Mr. Peres greatly and --
SECRETARY KERRY: I am talking to both leaders directly. And everybody, I think, understands the goal that we are working for. It is two states living side by side in peace and in security. Two states because there are two proud peoples, both of whom deserve to fulfill their legitimate national aspirations in a homeland of their own, and two states because today, as we commemorate the 40th anniversary of the Yom Kippur War, I think everybody is reminded significantly of the costs of conflict and the price, certainly, that Israelis have paid in the quest for their security and identity.
The Prime Minister and I and all of the parties involved have agreed that we will not discuss details at any point in time. We are convinced that the best way to try to work through the difficult choices that have to be made is to do so privately with confidence that everybody will respect that process. And since I have asked for that from all the parties, I’m not going to break it now or at any other time. We will not discuss the substance of what we are working on.
I do want to comment, however, as the Prime Minister has, on the challenge of the region and what we have just been doing in the last few days of negotiations in Geneva. And that is, as the Prime Minister has said, an issue that directly affects the stability of this entire region, and ultimately, weapons of mass destruction, which are at stake in this issue, are a challenge to everybody on this planet. So this is a global issue, and that is the focus that we have tried to give it in the talks in Geneva in the last days, but we want to make sure people understand exactly what we are trying to achieve and how.
The ongoing conflict in Syria has enormous implications for all of the neighbors – the press of refugees, the fact of weapons of mass destruction having been used against the people of their own state. These are crimes against humanity, and they cannot be tolerated, and they are a threat to the capacity of the global community to be able to live by standards of rules of law and the highest standards of human behavior.
So I want people to understand the key elements of what we agreed to in Geneva. It is a framework, not a final agreement. It is a framework that must be put into effect by the United Nations now. But it is a framework that, with the Russian and U.S. agreement, it has the full ability to be able to, as the Prime Minister said, strip all of the chemical weapons from Syria. The Russians have agreed, they state, that the Assad regime has agreed to make its declaration within one week of the location and the amount of those weapons. And then we will put in place what we hope to put in place through the United Nations, what Russia and the United States agreed on, which is the most far-reaching chemical weapons removal effort well beyond the CWC that has been designed.
Now this will only be as effective as its implementation will be, and President Obama has made it clear that to accomplish that, the threat of force remains. The threat of force is real, and the Assad regime and all those taking part need to understand that President Obama and the United States are committed to achieve this goal. We cannot have hollow words in the conduct of international affairs because that affects all other issues, whether Iran or North Korea or any other.
The core principles with respect to the removal of these weapons and the containment of these weapons, which we want to achieve, as we said in the document, in the soonest, fastest, most effective way possible – if we achieve that, we will have set a marker for the standard of behavior with respect to Iran and with respect to North Korea and any other state, rogue state, group that decide to try to reach for these kinds of weapons.
The core principles will have the full backing of the international community through the UN Security Council. And Russia agreed that any breach of compliance, according to standards already set out in the CWC, any breach of the specifics of this agreement or any use of chemical weapons by anyone in Syria will result in immediate referral and action by the Security Council for measures under Chapter 7, which means what they select, up to and including the possibility of the use of force.
So again, I reiterate diplomacy has always been the preferred path of the President of the United States, and I think is any peace-loving nation’s preferred choice. But make no mistake, we’ve taken no options off the table. President Obama’s been absolutely clear about the remainder of the potential of use of force if there is noncompliance or refusal to take part, because the egregious use of chemical weapons by the Assad regime against innocent men, women, children, their own citizens all indiscriminately murdered in the dead of night, is unacceptable. And we have said in no uncertain terms that this should never happen again. This country understands the words, “Never again,” perhaps better than any other.
I’ve been in contact with many of my counterparts, with Foreign Secretary Hague of the United Kingdom, Foreign Minister Laurent Fabius. Their partnership on these issues has been essential. And I will see both of them tomorrow and Foreign Minister Davutoglu of Turkey in Paris, where I’ll also meet Foreign Minister Saud Faisal of Saudi Arabia in order to talk about the road ahead to achieve our goals.
Our attention and our efforts will now shift to the Organization of the Prohibition of Chemical Weapons and the UN Security Council, and the international community expects the Assad regime to live up to its commitments, and we expect Russia to join with us in holding them accountable.
I also want to make clear this effort is not just about securing chemical weapons in Syria. We are not just standing up for a redline that the world drew some 100 years ago, and which is worth standing up for. Our focus now must remain on ending the violence, ending the indiscriminate killing, ending the creation of more and more refugees that is not only tearing Syria apart, but threatens the region itself.
As President Obama has said, and I have said many times, there is no military solution to this conflict. We don’t want to create more and more extremist elements and we don’t want to see the implosion of the state of Syria. So our overall objective is to find a political solution through diplomacy, and that needs to happen at the negotiating table, and we will stay engaged with a sense of urgency. And I say to the Syrian opposition and all those in Syria who recognize that just removing the chemical weapons doesn’t do the job, we understand that, and that is not all we are going to seek to do. But it is one step forward, and it eliminates that weapon from the arsenal of a man who has proven willing to do anything to his own people to hold onto power.
Foreign Minister Lavrov and I met with Special Envoy Brahimi yesterday. We will meet again in New York. We are committed to continue to work towards the Geneva 2. And we have made clear that our support to the opposition in an effort to get there will continue unabated.
So, Mr. Prime Minister, I know you and I are both clear-eyed about the challenges ahead. We have to summon the grit and the determination to stay at this, to make the tough decisions – tough decisions about eliminating weapons of mass destruction and tough decisions about making peace between Israel and the Palestinians. We will not lose sight of the end game. I know that from talking with the Prime Minister today. And I think both of us remain deeply committed, and we hope very much with our partners in the region, to doing our best to try to make this journey towards peace get to its destination.
Thank you, Mr. Prime Minister.
PRIME MINISTER NETANYAHU: John, another sound bite. (Laughter.)
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today charged the operator of the largest hospital in Miami-Dade County with misleading investors about the extent of its deteriorating financial condition prior to an $83 million bond offering.
An SEC investigation found that the Public Health Trust, which is the governing authority for Jackson Health System, misstated present and future revenues due to breakdowns in a new billing system that inaccurately recorded revenue and patient accounts receivable. The Public Health Trust projected a non-operating loss in the official statement accompanying the bond offering in August 2009, but reported a figure that was more than four times lower than what was ultimately reported at the end of the 2009 fiscal year. The Public Health Trust also failed to properly account for an adverse arbitration award, and misrepresented that its financial statements were prepared according to U.S. Generally Accepted Accounting Principles (GAAP).
The Public Health Trust has agreed to settle the SEC’s charges.
“The Public Health Trust fell short in its obligation to maintain adequate accounting systems and controls that ensure truthful disclosures to investors about its financial condition,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “The Public Health Trust used stale numbers to calculate its revenue figures and lacked any reasonable basis for projecting losses that were far less than reality.”
Mark Zehner, Deputy Chief of the SEC Enforcement Division’s Municipal Securities and Public Pensions Unit, added, “Investors must be able to rely on the financial information accompanying municipal bond offerings. We will continue to scrutinize financial statements provided to investors and pursue municipal issuers who aren’t providing accurate information to the public.”
According to the SEC’s order instituting settled administrative proceedings, the official statement accompanying the bond offering represented that the Public Health Trust (PHT) projected a $56 million non-operating loss for its fiscal year ending Sept. 30, 2009. Several months after the bonds were sold, external auditors discovered problems with the PHT’s patient accounts receivable valuation. This discovery required a large accounting adjustment to the reported net income, and the PHT ultimately reported a non-operating loss of $244 million for fiscal year 2009 – more than four times the projection made to bond investors.
The SEC’s order found that the PHT was aware of the rising level of patient accounts receivable and declining cash-on-hand prior to the bond offering, which caused concern among trustees and executive management. They raised questions about the accounts receivable amounts and collection rates that were used to calculate the PHT’s revenue figures. The $56 million non-operating loss amount included in the bond offering’s official statement was generated by the budget department using stale cash collection numbers amid the known problems with the new billing system. The budget department was not updating its collection rates in a timely fashion due to a lack of adequate communication among departments. Therefore, the PHT lacked a reasonable basis for its loss projection, and the official statement was materially misleading.
The SEC’s order also found that the PHT failed to properly account for a December 2008 arbitration award that negatively impacted patient accounts receivable in its 2008 audited financial statements that were attached to the bond offering’s official statement. The arbitration award required the PHT to pay a third-party receivables company $3.9 million in cash, and transfer to the company $360 million face amount of existing accounts receivable and $250 million face amount of future accounts receivable. The PHT failed to perform an analysis to determine the value of the replacement accounts receivable awarded to the third-party company. The analysis is required under the relevant accounting standards in order to evaluate whether to accrue an expense related to the arbitration award or disclose the arbitration award in the notes to its financial statements. Without the proper analysis, the PHT failed to accurately account for the arbitration award in the audited financial statements.
The SEC’s order directs the PHT to cease and desist from committing or causing any violations of Sections 17(a)(2) and (3) of the Securities Act of 1933. The PHT neither admitted nor denied the SEC’s findings. The Commission determined not to impose a monetary penalty due to the PHT’s current financial condition. The Commission also considered the PHT’s cooperation with the investigation and the remedial measures undertaken.
The SEC’s investigation, which is continuing, has been conducted in the Miami office by members of the Municipal Securities and Public Pensions Unit, including Brian P. Knight, Sean M. O’Neill, and Fernando Torres under the supervision of Jason R. Berkowitz. The investigation followed an examination conducted by Paul Anderson under the supervision of Nicholas A. Monaco and the oversight of John C. Mattimore.
The Securities and Exchange Commission today charged the operator of the largest hospital in Miami-Dade County with misleading investors about the extent of its deteriorating financial condition prior to an $83 million bond offering.
An SEC investigation found that the Public Health Trust, which is the governing authority for Jackson Health System, misstated present and future revenues due to breakdowns in a new billing system that inaccurately recorded revenue and patient accounts receivable. The Public Health Trust projected a non-operating loss in the official statement accompanying the bond offering in August 2009, but reported a figure that was more than four times lower than what was ultimately reported at the end of the 2009 fiscal year. The Public Health Trust also failed to properly account for an adverse arbitration award, and misrepresented that its financial statements were prepared according to U.S. Generally Accepted Accounting Principles (GAAP).
The Public Health Trust has agreed to settle the SEC’s charges.
“The Public Health Trust fell short in its obligation to maintain adequate accounting systems and controls that ensure truthful disclosures to investors about its financial condition,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “The Public Health Trust used stale numbers to calculate its revenue figures and lacked any reasonable basis for projecting losses that were far less than reality.”
Mark Zehner, Deputy Chief of the SEC Enforcement Division’s Municipal Securities and Public Pensions Unit, added, “Investors must be able to rely on the financial information accompanying municipal bond offerings. We will continue to scrutinize financial statements provided to investors and pursue municipal issuers who aren’t providing accurate information to the public.”
According to the SEC’s order instituting settled administrative proceedings, the official statement accompanying the bond offering represented that the Public Health Trust (PHT) projected a $56 million non-operating loss for its fiscal year ending Sept. 30, 2009. Several months after the bonds were sold, external auditors discovered problems with the PHT’s patient accounts receivable valuation. This discovery required a large accounting adjustment to the reported net income, and the PHT ultimately reported a non-operating loss of $244 million for fiscal year 2009 – more than four times the projection made to bond investors.
The SEC’s order found that the PHT was aware of the rising level of patient accounts receivable and declining cash-on-hand prior to the bond offering, which caused concern among trustees and executive management. They raised questions about the accounts receivable amounts and collection rates that were used to calculate the PHT’s revenue figures. The $56 million non-operating loss amount included in the bond offering’s official statement was generated by the budget department using stale cash collection numbers amid the known problems with the new billing system. The budget department was not updating its collection rates in a timely fashion due to a lack of adequate communication among departments. Therefore, the PHT lacked a reasonable basis for its loss projection, and the official statement was materially misleading.
The SEC’s order also found that the PHT failed to properly account for a December 2008 arbitration award that negatively impacted patient accounts receivable in its 2008 audited financial statements that were attached to the bond offering’s official statement. The arbitration award required the PHT to pay a third-party receivables company $3.9 million in cash, and transfer to the company $360 million face amount of existing accounts receivable and $250 million face amount of future accounts receivable. The PHT failed to perform an analysis to determine the value of the replacement accounts receivable awarded to the third-party company. The analysis is required under the relevant accounting standards in order to evaluate whether to accrue an expense related to the arbitration award or disclose the arbitration award in the notes to its financial statements. Without the proper analysis, the PHT failed to accurately account for the arbitration award in the audited financial statements.
The SEC’s order directs the PHT to cease and desist from committing or causing any violations of Sections 17(a)(2) and (3) of the Securities Act of 1933. The PHT neither admitted nor denied the SEC’s findings. The Commission determined not to impose a monetary penalty due to the PHT’s current financial condition. The Commission also considered the PHT’s cooperation with the investigation and the remedial measures undertaken.
The SEC’s investigation, which is continuing, has been conducted in the Miami office by members of the Municipal Securities and Public Pensions Unit, including Brian P. Knight, Sean M. O’Neill, and Fernando Torres under the supervision of Jason R. Berkowitz. The investigation followed an examination conducted by Paul Anderson under the supervision of Nicholas A. Monaco and the oversight of John C. Mattimore.
DEPUTY SECRETARY CARTER VISITS HERAT, AFGHANISTAN CONSULATE TWO DAYS AFTER ATTACK
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| Deputy Defense Secretary Ash Carter addresses service members as he surveys the damage to the U.S. Consulate in Herat, Afghanistan, Sept. 14, 2013. A day earlier, troops fought off a Taliban attack. DOD photo by Glenn Fawcett |
Carter Visits Herat Consulate, Praises Defeat of Attackers
By Claudette Roulo
American Forces Press Service
KABUL, Afghanistan, Sept. 14, 2013 - On the second day of his trip to Afghanistan to assess the progress of the retrograde, Deputy Defense Secretary Ash Carter visited the U.S. Consulate in Herat, which was attacked yesterday morning.
Following a stop at Camp Leatherneck for a briefing by Marine Corps Maj. Gen. Lee Miller, commander of Regional Command Southwest, Miller and Carter flew to Herat aboard a V-22 Osprey.
Two Afghan police officers and a security guard were killed in a complex early morning assault that involved armed Taliban fighters and a vehicle bomb. About 20 people were injured and the consulate building was damaged, and all seven of the Taliban attackers were killed.
"Now, the individuals that attacked here yesterday did what they did because they wanted to get headlines," Carter told the U.S., Afghan and coalition forces at Herat. But they didn't get the headlines they expected, the deputy defense secretary added.
"The headline they're getting is that they were defeated," he said. "They were defeated in just a few minutes. And not only were they defeated, but there was an overwhelming and incredibly confident American, Afghan and coalition response ... ready to deal with the situation."
Carter told the troops that he and Defense Secretary Chuck Hagel were incredibly impressed with their efforts. "You should be very proud," he added.
After a brief stop at the Shindand air base, where Afghan air force pilots and aircraft maintainers are trained, Carter returned to Kabul for meetings with Afghan Defense Minister Bismullah Khan Mohammadi and Interior Minister Umar Daudzai.
EXECUTIVE INDICTED IN AUTO PARTS PRICE FIXING AND BID RIGGING CASE
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, September 11, 2013
G.S. Electech Inc. Executive Indicted for Role in Bid Rigging and Price Fixing on Automobile Parts Installed in U.S. Cars
A federal grand jury in Covington, Ky., has returned an indictment against G.S. Electech Inc. executive, Shingo Okuda for his role in an international conspiracy to fix prices and rig bids of auto parts used on antilock brake systems installed in U.S. cars, the Department of Justice announced today. Today’s charge is the first to be filed in Kentucky in the department’s ongoing investigation into anticompetitive conduct in the automotive parts industry.
The indictment, filed today in the U.S. District Court for the Eastern District of Kentucky, charges Okuda, a Japanese national, with engaging in a conspiracy to rig bids for, and to fix, stabilize, and maintain the prices of speed sensor wire assemblies, which are installed in automobiles with an antilock brake system (ABS), sold to Toyota Motor Corp. and Toyota Motor Engineering and Manufacturing North America Inc. (collectively Toyota) in the United States and elsewhere.
G.S. Electech Inc. manufactures, assembles and sells a variety of automotive electrical parts, including speed sensor wire assemblies. The speed sensor wire assemblies connect a sensor on each wheel to the ABS to instruct it when to engage.
According to the charge, Okuda and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate bids and fix prices of automotive parts submitted to Toyota. According to the charge, Okuda’s involvement in the conspiracy lasted from at least as early as January 2003 until at least February 2010.
“ Today’s indictment marks the 16th executive to be charged in the Antitrust Division’s continuing investigation of price fixing in the auto parts industry,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “Holding individuals accountable for their actions is the surest way to deter executives from choosing to collude rather than to compete for business.”
“Those who engage in price fixing, bid rigging and other fraudulent schemes harm the automotive industry by driving up costs for vehicle makers and buyers,” said John Robert Shoup, Acting Special Agent in Charge, FBI Detroit Division. “The FBI is committed to pursuing and prosecuting these individuals for their crimes.”
Okuda is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence for individuals of 10 years in prison and a criminal fine of $1 million. The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Okuda, 11 companies and 16 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. To date, more than $874 million in criminal fines have been imposed and 14 individuals have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each. One other executive has agreed to serve time in prison and is scheduled to be sentenced on Sept. 25, 2013.
In May 2012, G.S. Electech Inc. pleaded guilty and was sentenced to pay a $2.75 million criminal fine for its role in the conspiracy related to speed sensor wire assemblies.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit.
Wednesday, September 11, 2013
G.S. Electech Inc. Executive Indicted for Role in Bid Rigging and Price Fixing on Automobile Parts Installed in U.S. Cars
A federal grand jury in Covington, Ky., has returned an indictment against G.S. Electech Inc. executive, Shingo Okuda for his role in an international conspiracy to fix prices and rig bids of auto parts used on antilock brake systems installed in U.S. cars, the Department of Justice announced today. Today’s charge is the first to be filed in Kentucky in the department’s ongoing investigation into anticompetitive conduct in the automotive parts industry.
The indictment, filed today in the U.S. District Court for the Eastern District of Kentucky, charges Okuda, a Japanese national, with engaging in a conspiracy to rig bids for, and to fix, stabilize, and maintain the prices of speed sensor wire assemblies, which are installed in automobiles with an antilock brake system (ABS), sold to Toyota Motor Corp. and Toyota Motor Engineering and Manufacturing North America Inc. (collectively Toyota) in the United States and elsewhere.
G.S. Electech Inc. manufactures, assembles and sells a variety of automotive electrical parts, including speed sensor wire assemblies. The speed sensor wire assemblies connect a sensor on each wheel to the ABS to instruct it when to engage.
According to the charge, Okuda and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate bids and fix prices of automotive parts submitted to Toyota. According to the charge, Okuda’s involvement in the conspiracy lasted from at least as early as January 2003 until at least February 2010.
“ Today’s indictment marks the 16th executive to be charged in the Antitrust Division’s continuing investigation of price fixing in the auto parts industry,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “Holding individuals accountable for their actions is the surest way to deter executives from choosing to collude rather than to compete for business.”
“Those who engage in price fixing, bid rigging and other fraudulent schemes harm the automotive industry by driving up costs for vehicle makers and buyers,” said John Robert Shoup, Acting Special Agent in Charge, FBI Detroit Division. “The FBI is committed to pursuing and prosecuting these individuals for their crimes.”
Okuda is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence for individuals of 10 years in prison and a criminal fine of $1 million. The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Okuda, 11 companies and 16 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. To date, more than $874 million in criminal fines have been imposed and 14 individuals have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each. One other executive has agreed to serve time in prison and is scheduled to be sentenced on Sept. 25, 2013.
In May 2012, G.S. Electech Inc. pleaded guilty and was sentenced to pay a $2.75 million criminal fine for its role in the conspiracy related to speed sensor wire assemblies.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit.
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