FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Former Envit Capital Boiler-Room Salesman Settles SEC Fraud Charges
The Securities and Exchange Commission announced today that on October 8, 2013, the federal court in Massachusetts entered a judgment against Jonathan Fraiman in a previously-filed case, arising from his alleged participation in a boiler room operated by Edward M. Laborio. Fraiman consented to the entry of the judgment.
On August 10, 2012, the Commission charged Fraiman, Laborio, Matthew K. Lazar, and seven entities owned and controlled by Laborio, including a non-existent hedge fund, (collectively, the "Envit Companies") with raising up to $5.7 million from more than 150 investors through the fraudulent sale of five unregistered offerings. The Complaint alleged that Laborio hired Fraiman in January 2008 to market Envit Capital Multi Strategy Mixed Investment Fund I LP, a purported hedge fund that in reality never conducted any business, and Laborio also named Fraiman as the Director and Chief Compliance Officer of Envit Capital Private Wealth Management, LLC, the purported investment adviser arm of the Envit Companies. Among other conduct, the Complaint alleged that Fraiman raised hundreds of thousands of dollars for Laborio by misrepresenting the historical returns and financial health of the Envit Companies, including that: (i) the non-existent hedge fund returned 42.9% in 2006 and 43.7% in 2007; (ii) shares in one of the unregistered offerings pay a 5% to 10% dividend; and (iii) the company had no debt and was cash flow positive.
On October 8, 2013, the Court entered a final judgment against Fraiman: (i) permanently enjoining him from violating Section 17(a)(2) of the Securities Act of 1933 (Securities Act); Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5(b) thereunder; and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 (Advisers Act) and Rule 206(4)-8 thereunder; (ii) barring him from participating in any offering of penny stock; (iii) finding him liable for disgorgement of $180,961.42 and prejudgment interest of $24,537.22, for a total of $205,498.66; and (iv) waiving payment of the disgorgement and prejudgment interest, and not imposing a civil penalty, based upon the representations in Fraiman's sworn statement of financial condition. Fraiman agreed to settle the Commission's charges without admitting or denying the allegations in the Complaint.
To settle the Commission's charges in related administrative proceedings that the Commission will separately institute, Fraiman has consented to be barred from any future association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, with the right to reapply after ten years.
The Commission's civil injunctive action against Laborio, Lazar, and the Envit Companies, SEC v Laborio et al., 1:12-cv-11489-MBB (D. Mass., Aug. 10, 2012), is still pending.
In conducting its investigation, the Commission acknowledges assistance from the U.S. Attorney's Office for the District of Massachusetts, the Federal Bureau of Investigation, the State of Florida Office of Financial Regulation, and the Financial Industry Regulatory Authority (FINRA).
Thursday, October 10, 2013
SECRETARY OF DEFENSE HAGEL APPOINTS PAUL M. LEWIS FOR CLOSURE OF GUANTANAMO FACILITY
FROM: U.S. DEFENSE DEPARTMENT
Hagel Appoints Special Envoy for Guantanamo Closure
American Forces Press Service
WASHINGTON, Oct. 8, 2013 - Defense Secretary Chuck Hagel today announced the appointment of Paul M. Lewis as special envoy for the closure of the detention facility at Guantanamo Bay, Cuba.
The announcement reflects the Defense Department's commitment to implementing President Barack Obama's directive to close the facility, Pentagon officials said.
Lewis brings experience from his previous position as the minority general counsel of the House Armed Services Committee, where he oversaw Guantanamo-related issues, officials said. In addition to facilitating transfer determinations for Guantanamo detainees, he will oversee efforts to transfer third-country nationals currently being held by the United States in Afghanistan, they added.
He also has served as the general counsel for the House Armed Services Committee, and previously served in the Office of Legislative Counsel in the Defense Department general counsel's office, where he became the director. Before his Defense Department appointment, he was the counsel to the chairman of the House Ethics Committee and a senior counsel for the House Armed Services Committee.
Lewis will begin his work at the Pentagon on Nov. 1.
Hagel Appoints Special Envoy for Guantanamo Closure
American Forces Press Service
WASHINGTON, Oct. 8, 2013 - Defense Secretary Chuck Hagel today announced the appointment of Paul M. Lewis as special envoy for the closure of the detention facility at Guantanamo Bay, Cuba.
The announcement reflects the Defense Department's commitment to implementing President Barack Obama's directive to close the facility, Pentagon officials said.
Lewis brings experience from his previous position as the minority general counsel of the House Armed Services Committee, where he oversaw Guantanamo-related issues, officials said. In addition to facilitating transfer determinations for Guantanamo detainees, he will oversee efforts to transfer third-country nationals currently being held by the United States in Afghanistan, they added.
He also has served as the general counsel for the House Armed Services Committee, and previously served in the Office of Legislative Counsel in the Defense Department general counsel's office, where he became the director. Before his Defense Department appointment, he was the counsel to the chairman of the House Ethics Committee and a senior counsel for the House Armed Services Committee.
Lewis will begin his work at the Pentagon on Nov. 1.
Wednesday, October 9, 2013
PRESIDENT OBAMA'S REMARKS DURING NOMINATION OF DR. YELLEN AS FED CHAIR
FROM: THE WHITE HOUSE
Remarks by the President in Nominating Dr. Janet Yellen as Chair of the Board of Governors of the Federal Reserve System
State Dining Room
3:16 P.M. EDT
THE PRESIDENT: Good afternoon. Over the past five years, America has fought its way back from the worst recession since the Great Depression. We passed historic reforms to prevent another crisis and to protect consumers. Over the past three and half years, our businesses have created 7.5 million new jobs. Our housing market is rebounding. Manufacturing is growing. The auto industry has come roaring back. And since I took office, we’ve cut the deficit in half.
I think everybody understands we’ve still got a lot of work to do to rebuild the middle class, but we've made progress. And we shouldn’t do anything to threaten that progress -- for these hard-won gains have made a difference to millions of Americans. And, in part, we can thank the extraordinary grit and resilience of the American people; in part, we can thank the dynamism of our businesses. But a lot of it also has to do with the choices we’ve made as a nation to create more jobs and more growth. And one of the most important contributors to this whole process has been the Federal Reserve, under the strong leadership of Ben Bernanke.
For nearly eight years, Ben has led the Fed through some of the most daunting economic challenges of our lifetime. For some time now he’s made it clear that he intends to finish his service as chairman at the end of his term, which is this January. So, today I just want to take a minute to pay tribute to Ben for his extraordinary service. But I also want to announce my choice for the next chair of the Federal Reserve, one of the nation’s foremost economists and policymakers -- current Vice Chairman Janet Yellen.
After I became President, I was proud to nominate Ben for a second term. And while the Fed is, and must always be, independent, I want you to know, Ben, I'm personally very grateful to you for being such a strong partner in helping America recover from recession.
Perhaps it’s no surprise -- as the son of a pharmacist and a school teacher -- that Ben Bernanke is the epitome of calm. And against the volatility of global markets, he’s been a voice of wisdom and a steady hand. At the same time, when faced with a potential global economic meltdown, he has displayed tremendous courage and creativity. He took bold action that was needed to avert another Depression -- helping us stop the free fall, stabilize financial markets, shore up our banks, get credit flowing again.
And all this has made a profound difference in the lives of millions of Americans. A lot of people aren't necessarily sure what the chairman of the Federal Reserve does, but thanks to this man to the left of me, more families are able to afford their own home; more small businesses are able to get loans to expand and hire workers; more folks can pay their mortgages and their car loans. It’s meant more growth and more jobs.
And I’d add that with his commitment to greater transparency and clarity, he’s also allowed us to better understand the work of the Fed. Ben has led a new era of “Fedspeak” and been a little more clear about how the system works. And that is good for our democracy.
And I have to tell you, as I travel around the world, the job of the Fed chair is not just our top monetary policymaker. The world looks to the American Fed chair for leadership and guidance. And the degree to which Ben is admired and respected, and the degree to which central bankers all across the world look to him for sound advice and smart policymaking is remarkable. He has truly been a stabilizing force not just for our country, but for the entire world. And I could not be more grateful for his extraordinary service.
And so, Ben, to you and your wife Anna, and your children Joel and Alyssa, I want to thank you for your outstanding service. Thank you so much. (Applause.)
Now, as I’ve said, the decision on who will succeed Ben is one of the most important economic decisions that I’ll make as President -- one of the most important appointments that any President can make -- because the chair of the Fed is one of the most important policymakers in the world, and the next chair will help guide our economy after I’ve left office.
I’ve considered a lot of factors. Foremost among them is an understanding of the Fed’s dual mandate -- sound monetary policy to make sure that we keep inflation in check, but also increasing employment and creating jobs, which remains our most important economic challenge right now.
And I’ve found these qualities in Janet Yellen. She’s a proven leader and she’s tough -- not just because she’s from Brooklyn. (Laughter.) Janet is exceptionally well-qualified for this role. She’s served in leadership positions at the Fed for more than a decade. As Vice Chair for the past three years, she’s been exemplary and a driving force of policies to help boost our economic recovery.
Janet is renowned for her good judgment. She sounded the alarm early about the housing bubble, about excesses in the financial sector, and about the risks of a major recession. She doesn’t have a crystal ball, but what she does have is a keen understanding about how markets and the economy work -- not just in theory but also in the real world. And she calls it like she sees it.
Janet also knows how to build consensus. She listens to competing views and brings people together around a common goal. And as one of her admirers says, “She’s the kind of person who makes everybody around her better.” Not surprisingly, she is held in high esteem by colleagues across the country and around the world who look to the United States, as I said, and the Fed for leadership.
Janet is committed to both sides of the Fed’s dual mandate, and she understands the necessity of a stable financial system where we move ahead with the reforms that we've begun -- to protect consumers, to ensure that no institution is too big to fail, and to make sure that taxpayers are never again left holding the bag because of the mistakes of the reckless few.
And at the same time, she’s committed to increasing employment, and she understands the human costs when Americans can’t find a job. She has said before, “These are not just statistics to me. The toll is simply terrible on the mental and physical health of workers, on their marriages, on their children.” So Janet understands this. And America’s workers and their families will have a champion in Janet Yellen.
So, Janet, I thank you for taking on this new assignment. And given the urgent economic challenges facing our nation, I urge the Senate to confirm Janet without delay. I am absolutely confident that she will be an exceptional chair of the Federal Reserve. I should add that she’ll be the first woman to lead the Fed in its 100-year history. And I know a lot of Americans -- men and women -- thank you for not only your example and your excellence, but also being a role model for a lot of folks out there.
It’s been said that Janet found love at the Federal Reserve -- literally. (Laughter.) This is where she met her husband George, a celebrated economist in his own right. And their son Robert is an economist as well. So you can imagine the conversations around the dinner table might be a little different than ours. (Laughter.) In fact, I’ve been told their idea of a great family vacation is the beach -- with a suitcase full of economics books. (Laughter.) But this is a family affair. We thank George and Robert for their support as Janet begins this journey.
Again, I want to thank Ben Bernanke for the outstanding work that he’s done, and obviously he will continue to help keep our economy moving forward during the remainder of his tenure here. So we'll probably have occasion for additional good-byes. And I know that Janet is very much counting on him to give some good advice as she moves into the chairman spot.
But with this, I’d like to give Janet a chance to say a few words. (Applause.)
DR. YELLEN: Thank you, Mr. President. I'm honored and humbled by the faith that you’ve placed in me. If confirmed by the Senate, I pledge to do my upmost to keep that trust and meet the great responsibilities that Congress has entrusted to the Federal Reserve -- to promote maximum employment, stable prices, and a strong and stable financial system.
I'd also like to thank my spouse, George, and my son, Robert. I couldn't imagine taking on this new challenge without their love and support.
The past six years have been tumultuous for the economy and challenging for many Americans. While I think we all agree, Mr. President, that more needs to be done to strengthen the recovery, particularly for those hardest hit by the Great Recession, we have made progress. The economy is stronger and the financial system sounder.
As you said, Mr. President, considerable credit for that goes to Chairman Bernanke, for his wise, courageous and skillful leadership. It has been my privilege to serve with him and learn from him.
While we have made progress, we have farther to go. The mandate of the Federal Reserve is to serve all the American people, and too many Americans still can't find a job and worry how they’ll pay their bills and provide for their families. The Federal Reserve can help if it does its job effectively. We can help ensure that everyone has the opportunity to work hard and build a better life. We can ensure that inflation remains in check and doesn’t undermine the benefits of a growing economy.
We can, and must, safeguard the financial system.
The Fed has powerful tools to influence the economy and the financial system. But I believe its greatest strength rests in its capacity to approach important decisions with expertise and objectivity, to vigorously debate diverse views and then to unite behind its response.
The Fed’s effectiveness depends on the commitment, ingenuity and integrity of the Fed staff and my fellow policymakers. They serve America with great dedication.
Mr. President, thank you for giving me this opportunity to continue serving the Federal Reserve and carrying out its important work on behalf of the American people. (Applause.)
Remarks by the President in Nominating Dr. Janet Yellen as Chair of the Board of Governors of the Federal Reserve System
State Dining Room
3:16 P.M. EDT
THE PRESIDENT: Good afternoon. Over the past five years, America has fought its way back from the worst recession since the Great Depression. We passed historic reforms to prevent another crisis and to protect consumers. Over the past three and half years, our businesses have created 7.5 million new jobs. Our housing market is rebounding. Manufacturing is growing. The auto industry has come roaring back. And since I took office, we’ve cut the deficit in half.
I think everybody understands we’ve still got a lot of work to do to rebuild the middle class, but we've made progress. And we shouldn’t do anything to threaten that progress -- for these hard-won gains have made a difference to millions of Americans. And, in part, we can thank the extraordinary grit and resilience of the American people; in part, we can thank the dynamism of our businesses. But a lot of it also has to do with the choices we’ve made as a nation to create more jobs and more growth. And one of the most important contributors to this whole process has been the Federal Reserve, under the strong leadership of Ben Bernanke.
For nearly eight years, Ben has led the Fed through some of the most daunting economic challenges of our lifetime. For some time now he’s made it clear that he intends to finish his service as chairman at the end of his term, which is this January. So, today I just want to take a minute to pay tribute to Ben for his extraordinary service. But I also want to announce my choice for the next chair of the Federal Reserve, one of the nation’s foremost economists and policymakers -- current Vice Chairman Janet Yellen.
After I became President, I was proud to nominate Ben for a second term. And while the Fed is, and must always be, independent, I want you to know, Ben, I'm personally very grateful to you for being such a strong partner in helping America recover from recession.
Perhaps it’s no surprise -- as the son of a pharmacist and a school teacher -- that Ben Bernanke is the epitome of calm. And against the volatility of global markets, he’s been a voice of wisdom and a steady hand. At the same time, when faced with a potential global economic meltdown, he has displayed tremendous courage and creativity. He took bold action that was needed to avert another Depression -- helping us stop the free fall, stabilize financial markets, shore up our banks, get credit flowing again.
And all this has made a profound difference in the lives of millions of Americans. A lot of people aren't necessarily sure what the chairman of the Federal Reserve does, but thanks to this man to the left of me, more families are able to afford their own home; more small businesses are able to get loans to expand and hire workers; more folks can pay their mortgages and their car loans. It’s meant more growth and more jobs.
And I’d add that with his commitment to greater transparency and clarity, he’s also allowed us to better understand the work of the Fed. Ben has led a new era of “Fedspeak” and been a little more clear about how the system works. And that is good for our democracy.
And I have to tell you, as I travel around the world, the job of the Fed chair is not just our top monetary policymaker. The world looks to the American Fed chair for leadership and guidance. And the degree to which Ben is admired and respected, and the degree to which central bankers all across the world look to him for sound advice and smart policymaking is remarkable. He has truly been a stabilizing force not just for our country, but for the entire world. And I could not be more grateful for his extraordinary service.
And so, Ben, to you and your wife Anna, and your children Joel and Alyssa, I want to thank you for your outstanding service. Thank you so much. (Applause.)
Now, as I’ve said, the decision on who will succeed Ben is one of the most important economic decisions that I’ll make as President -- one of the most important appointments that any President can make -- because the chair of the Fed is one of the most important policymakers in the world, and the next chair will help guide our economy after I’ve left office.
I’ve considered a lot of factors. Foremost among them is an understanding of the Fed’s dual mandate -- sound monetary policy to make sure that we keep inflation in check, but also increasing employment and creating jobs, which remains our most important economic challenge right now.
And I’ve found these qualities in Janet Yellen. She’s a proven leader and she’s tough -- not just because she’s from Brooklyn. (Laughter.) Janet is exceptionally well-qualified for this role. She’s served in leadership positions at the Fed for more than a decade. As Vice Chair for the past three years, she’s been exemplary and a driving force of policies to help boost our economic recovery.
Janet is renowned for her good judgment. She sounded the alarm early about the housing bubble, about excesses in the financial sector, and about the risks of a major recession. She doesn’t have a crystal ball, but what she does have is a keen understanding about how markets and the economy work -- not just in theory but also in the real world. And she calls it like she sees it.
Janet also knows how to build consensus. She listens to competing views and brings people together around a common goal. And as one of her admirers says, “She’s the kind of person who makes everybody around her better.” Not surprisingly, she is held in high esteem by colleagues across the country and around the world who look to the United States, as I said, and the Fed for leadership.
Janet is committed to both sides of the Fed’s dual mandate, and she understands the necessity of a stable financial system where we move ahead with the reforms that we've begun -- to protect consumers, to ensure that no institution is too big to fail, and to make sure that taxpayers are never again left holding the bag because of the mistakes of the reckless few.
And at the same time, she’s committed to increasing employment, and she understands the human costs when Americans can’t find a job. She has said before, “These are not just statistics to me. The toll is simply terrible on the mental and physical health of workers, on their marriages, on their children.” So Janet understands this. And America’s workers and their families will have a champion in Janet Yellen.
So, Janet, I thank you for taking on this new assignment. And given the urgent economic challenges facing our nation, I urge the Senate to confirm Janet without delay. I am absolutely confident that she will be an exceptional chair of the Federal Reserve. I should add that she’ll be the first woman to lead the Fed in its 100-year history. And I know a lot of Americans -- men and women -- thank you for not only your example and your excellence, but also being a role model for a lot of folks out there.
It’s been said that Janet found love at the Federal Reserve -- literally. (Laughter.) This is where she met her husband George, a celebrated economist in his own right. And their son Robert is an economist as well. So you can imagine the conversations around the dinner table might be a little different than ours. (Laughter.) In fact, I’ve been told their idea of a great family vacation is the beach -- with a suitcase full of economics books. (Laughter.) But this is a family affair. We thank George and Robert for their support as Janet begins this journey.
Again, I want to thank Ben Bernanke for the outstanding work that he’s done, and obviously he will continue to help keep our economy moving forward during the remainder of his tenure here. So we'll probably have occasion for additional good-byes. And I know that Janet is very much counting on him to give some good advice as she moves into the chairman spot.
But with this, I’d like to give Janet a chance to say a few words. (Applause.)
DR. YELLEN: Thank you, Mr. President. I'm honored and humbled by the faith that you’ve placed in me. If confirmed by the Senate, I pledge to do my upmost to keep that trust and meet the great responsibilities that Congress has entrusted to the Federal Reserve -- to promote maximum employment, stable prices, and a strong and stable financial system.
I'd also like to thank my spouse, George, and my son, Robert. I couldn't imagine taking on this new challenge without their love and support.
The past six years have been tumultuous for the economy and challenging for many Americans. While I think we all agree, Mr. President, that more needs to be done to strengthen the recovery, particularly for those hardest hit by the Great Recession, we have made progress. The economy is stronger and the financial system sounder.
As you said, Mr. President, considerable credit for that goes to Chairman Bernanke, for his wise, courageous and skillful leadership. It has been my privilege to serve with him and learn from him.
While we have made progress, we have farther to go. The mandate of the Federal Reserve is to serve all the American people, and too many Americans still can't find a job and worry how they’ll pay their bills and provide for their families. The Federal Reserve can help if it does its job effectively. We can help ensure that everyone has the opportunity to work hard and build a better life. We can ensure that inflation remains in check and doesn’t undermine the benefits of a growing economy.
We can, and must, safeguard the financial system.
The Fed has powerful tools to influence the economy and the financial system. But I believe its greatest strength rests in its capacity to approach important decisions with expertise and objectivity, to vigorously debate diverse views and then to unite behind its response.
The Fed’s effectiveness depends on the commitment, ingenuity and integrity of the Fed staff and my fellow policymakers. They serve America with great dedication.
Mr. President, thank you for giving me this opportunity to continue serving the Federal Reserve and carrying out its important work on behalf of the American people. (Applause.)
U.S. CYBER COMMAND CONCERNED OVER MORALE OF CYBERSECURITY WORKFORCE
FROM: U.S. DEFENSE DEPARTMENT
Shutdown Hurts Morale, Top Cyber Commander Says
By Claudette Roulo
American Forces Press Service
WASHINGTON, Oct. 8, 2013 - The morale of the cybersecurity workforce is being damaged by the government shutdown, the nation's top cyber commander said here today.
"What these people take an oath to do is to protect and defend this country and our civil liberties and privacy, and we're telling them to stay at home," said Army Gen. Keith B. Alexander, commander of U.S. Cyber Command and director of the National Security Agency.
"How do you get good talent to come to government when you treat them like that?" he asked an audience of cybersecurity professionals during a conference at the Newseum.
The NSA is still performing its most critical functions: terrorism-related missions and those that protect life and limb, the general said. But, he noted, due to the shutdown the agency risks losing some of its most vulnerable employees -- young people new to government service.
The loss of trust in the NSA caused by recent leaks has further damaged employee morale, Alexander said.
"We need the facts on the table so that we can make informed decisions about our future in defending our nation and protecting our civil liberties and privacy. ... We need to inform the debate," he said.
The general said that if Americans understood the oversight and compliance that governs NSA's collection of data, they would realize that the United States is better than any other country in the world at protecting civil liberties and privacy.
"Ours is a noble cause," he said.
Alexander said he believes it's in the nation's best interests to put phone data into a repository in such a way that Americans can be confident that the data isn't being misused – "that you have confidence that the oversight compliance and the ways that we look at it -- the auditing and the controls -- is exactly right," he said.
This type of bulk data collection is necessary to ensure that there won't be another terrorist attack on U.S. soil, Alexander said.
"We made a commitment that 9/11 would never happen again," he said. "And one of the reasons it happened is because we didn't have a database like this. We didn't have a repository that would allow us to connect the dots."
The intelligence community was found lacking by the 9/11 Commission, the general said, and in response it came up with the tools it needed to prevent it from happening again.
Alexander said he is open to the idea of an examination of the oversight and compliance controls on the NSA's collection and use of data. But, he said, it should be done carefully to prevent the nation from a painful re-learning of the lessons of 9/11.
"If we don't know there's a threat, we can't stop it," he said. "Don't put us back to the beginning."
Shutdown Hurts Morale, Top Cyber Commander Says
By Claudette Roulo
American Forces Press Service
WASHINGTON, Oct. 8, 2013 - The morale of the cybersecurity workforce is being damaged by the government shutdown, the nation's top cyber commander said here today.
"What these people take an oath to do is to protect and defend this country and our civil liberties and privacy, and we're telling them to stay at home," said Army Gen. Keith B. Alexander, commander of U.S. Cyber Command and director of the National Security Agency.
"How do you get good talent to come to government when you treat them like that?" he asked an audience of cybersecurity professionals during a conference at the Newseum.
The NSA is still performing its most critical functions: terrorism-related missions and those that protect life and limb, the general said. But, he noted, due to the shutdown the agency risks losing some of its most vulnerable employees -- young people new to government service.
The loss of trust in the NSA caused by recent leaks has further damaged employee morale, Alexander said.
"We need the facts on the table so that we can make informed decisions about our future in defending our nation and protecting our civil liberties and privacy. ... We need to inform the debate," he said.
The general said that if Americans understood the oversight and compliance that governs NSA's collection of data, they would realize that the United States is better than any other country in the world at protecting civil liberties and privacy.
"Ours is a noble cause," he said.
Alexander said he believes it's in the nation's best interests to put phone data into a repository in such a way that Americans can be confident that the data isn't being misused – "that you have confidence that the oversight compliance and the ways that we look at it -- the auditing and the controls -- is exactly right," he said.
This type of bulk data collection is necessary to ensure that there won't be another terrorist attack on U.S. soil, Alexander said.
"We made a commitment that 9/11 would never happen again," he said. "And one of the reasons it happened is because we didn't have a database like this. We didn't have a repository that would allow us to connect the dots."
The intelligence community was found lacking by the 9/11 Commission, the general said, and in response it came up with the tools it needed to prevent it from happening again.
Alexander said he is open to the idea of an examination of the oversight and compliance controls on the NSA's collection and use of data. But, he said, it should be done carefully to prevent the nation from a painful re-learning of the lessons of 9/11.
"If we don't know there's a threat, we can't stop it," he said. "Don't put us back to the beginning."
FISHER HOUSE TO AID IN PAYING DEATH BENEFITS FOR TROOPS
FROM: U.S. DEFENSE DEPARTMENT
Fisher House Steps Forward to Aid DOD in Paying Death Benefits
By Jim Garamone
American Forces Press Service
WASHINGTON, Oct. 9, 2013 - The Fisher House Foundation has stepped in to aid the Defense Department so families of fallen service members can receive the full set of benefits they have been promised, Defense Secretary Chuck Hagel said here today.
The Fisher House Foundation and DOD entered an agreement that includes the $100,000 death gratuity payment.
"I am offended, outraged, and embarrassed that the government shutdown had prevented the Department of Defense from fulfilling this most sacred responsibility in a timely manner," Hagel said in a written statement.
In the weeks before the shutdown, defense officials had warned Congress that the ability to pay death benefits to grieving families would run out when the appropriations lapsed.
"The Department of Defense informed Congress that the department would be legally unable to pay death benefits were there to be a lapse in DOD appropriations," White House press secretary Jay Carney said during his daily briefing today.
The issue was not explicitly addressed as part of the Pay Our Military Act. "The president was very disturbed to learn of this problem, and he directed the Department of Defense to work with the Office of Management and Budget and his lawyers to develop a possible solution and he expects this ... to be fixed today," Carney said.
Since the shutdown began Oct. 1, DOD budget officials looked at options to continue these benefits, Hagel said. "Even under the Pay Our Military Act, we found that we lacked the necessary authority to make payments to the families directly," the secretary said.
The Fisher House Foundation offered to make payments to these families from its own funds, and OMB officials determined DOD can enter into a contract with the Fisher House Foundation to provide these benefits.
"The Fisher House Foundation will provide the families of the fallen with the benefits they so richly deserve," Hagel said. "After the shutdown ends, DOD will reimburse the Fisher House for the costs it has incurred."
The Fisher House Foundation is best known for the houses built on the grounds of major military and VA medical centers nationwide and in Europe. Families of wounded or hospitalized service members stay at the houses as their loved ones undergo hospitalization for a combat injury, illness or disease.
A total of 26 service members have died since Oct. 1, including five killed in combat in Afghanistan. The $100,000 death gratuity comes from appropriated funds, and DOD could not obligate funds once the fiscal year 2013 appropriation ran out. The department also cannot pay the benefit that provides 12 months of basic allowance for housing, as that money also comes via appropriated funds.
"The department has no higher priority than taking care of our service members and their families," Hagel said. "Congress has responsibilities as well, and it has abdicated them.
"Along with the rest of the department's leaders," he continued, "I will continue to work every day to address the very real impact that the government shutdown is having on our people, and I once again call on Congress to fulfill its basic responsibilities and restore funding for the federal government."
Fisher House Steps Forward to Aid DOD in Paying Death Benefits
By Jim Garamone
American Forces Press Service
WASHINGTON, Oct. 9, 2013 - The Fisher House Foundation has stepped in to aid the Defense Department so families of fallen service members can receive the full set of benefits they have been promised, Defense Secretary Chuck Hagel said here today.
The Fisher House Foundation and DOD entered an agreement that includes the $100,000 death gratuity payment.
"I am offended, outraged, and embarrassed that the government shutdown had prevented the Department of Defense from fulfilling this most sacred responsibility in a timely manner," Hagel said in a written statement.
In the weeks before the shutdown, defense officials had warned Congress that the ability to pay death benefits to grieving families would run out when the appropriations lapsed.
"The Department of Defense informed Congress that the department would be legally unable to pay death benefits were there to be a lapse in DOD appropriations," White House press secretary Jay Carney said during his daily briefing today.
The issue was not explicitly addressed as part of the Pay Our Military Act. "The president was very disturbed to learn of this problem, and he directed the Department of Defense to work with the Office of Management and Budget and his lawyers to develop a possible solution and he expects this ... to be fixed today," Carney said.
Since the shutdown began Oct. 1, DOD budget officials looked at options to continue these benefits, Hagel said. "Even under the Pay Our Military Act, we found that we lacked the necessary authority to make payments to the families directly," the secretary said.
The Fisher House Foundation offered to make payments to these families from its own funds, and OMB officials determined DOD can enter into a contract with the Fisher House Foundation to provide these benefits.
"The Fisher House Foundation will provide the families of the fallen with the benefits they so richly deserve," Hagel said. "After the shutdown ends, DOD will reimburse the Fisher House for the costs it has incurred."
The Fisher House Foundation is best known for the houses built on the grounds of major military and VA medical centers nationwide and in Europe. Families of wounded or hospitalized service members stay at the houses as their loved ones undergo hospitalization for a combat injury, illness or disease.
A total of 26 service members have died since Oct. 1, including five killed in combat in Afghanistan. The $100,000 death gratuity comes from appropriated funds, and DOD could not obligate funds once the fiscal year 2013 appropriation ran out. The department also cannot pay the benefit that provides 12 months of basic allowance for housing, as that money also comes via appropriated funds.
"The department has no higher priority than taking care of our service members and their families," Hagel said. "Congress has responsibilities as well, and it has abdicated them.
"Along with the rest of the department's leaders," he continued, "I will continue to work every day to address the very real impact that the government shutdown is having on our people, and I once again call on Congress to fulfill its basic responsibilities and restore funding for the federal government."
MAN ADMITS TO CONSPIRING WITH ORGANIZED CRIME FAMILY
FROM: U.S. JUSTICE DEPARTMENT CONSPIRACY
Monday, September 30, 2013
Pennsylvania Man Admits Conspiring with Alleged Members of Organized Crime Family and Others in Fraud Scheme
A Pennsylvania man today admitted he conspired to defraud FIRSTPLUS Financial Group Inc. (FPFG), a Texas-based financial services company allegedly targeted for extortionate takeover and looting by a group led by alleged Lucchese organized crime family member Nicodemo S. Scarfo.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Paul J. Fishman of the District of New Jersey made the announcement.
Cory Leshner, 30, pleaded guilty before U.S. District Judge Robert B. Kugler in a federal court in Camden, N.J., to a superseding information charging him with conspiracy to commit wire fraud. He faces a maximum of five years in prison when he is sentenced on Jan. 17, 2014.
According to documents filed in this case and statements made in court, Leshner and 12 others – including Scarfo, an alleged member of the Lucchese La Cosa Nostra (LCN) crime family, and Salvatore Pelullo, an alleged associate of the Lucchese and Philadelphia LCN families – were variously charged in a November 2011 indictment with a racketeering conspiracy that included acts of securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering, money laundering and obstruction of justice. The indictment charged that FPFG was targeted for extortionate takeover and looting by a group of the conspirators. A substantial part of the enterprise’s activities occurred in New Jersey, including communications and the transfer of money into and out of the state. Cory Leshner admitted that he joined the conspiracy in April 2007.
Leshner admitted that he assisted Scarfo and Pelullo in managing family trusts and limited liability companies as part of the scheme to defraud FPFG. Pelullo directed Leshner in the use of various bank accounts through which Pelullo received hundreds of thousands of dollars between July 2007 and April 2008 as part of the scheme. The money involved proceeds of the fraud that Pelullo allegedly received as part of a fraudulent “consulting” agreement between his shell company, Seven Hills Management, and codefendant William Maxwell, a Texas attorney who served as “special counsel” to FPFG as part of the scheme. The money also involved proceeds received from the fraudulent sale of Scarfo and Pelullo’s worthless companies to FPFG in 2007. The receipt of the fraudulent proceeds often occurred in the form of wire transfers from accounts in Pennsylvania to accounts in New Jersey.
According to his court statements, Leshner was a law student during the scheme. Leshner graduated from law school in 2009 and became an attorney in Pennsylvania in 2011. As part of his plea agreement, Leshner agreed to notify the Pennsylvania Supreme Court of his guilty plea and to accept any disciplinary action brought by disciplinary officials as a result of the guilty plea and sentence. Leshner also agreed to not seek the reinstatement of his license to practice law while serving any sentence of imprisonment imposed in the case.
Scarfo, Pelullo, and five other defendants charged in November 2011 – including attorneys William Maxwell, David Adler, Gary McCarthy, and Donald Manno, as well as John Maxwell – are scheduled for trial beginning Oct. 28, 2013. Todd Stark, also charged in the indictment, previously pleaded guilty to providing ammunition to Scarfo and Pelullo, convicted felons.
This case was investigated by the FBI; the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance of the U.S. Securities and Exchange Commission. The case is being prosecuted by Trial Attorney Adam Small of the Organized Crime and Gang Section of the Justice Department’s Criminal Division and Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the New Jersey U.S. Attorney’s Office Organized Crime/Gangs Unit and Criminal Division in Camden.
With respect to the defendants awaiting trial, the charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Monday, September 30, 2013
Pennsylvania Man Admits Conspiring with Alleged Members of Organized Crime Family and Others in Fraud Scheme
A Pennsylvania man today admitted he conspired to defraud FIRSTPLUS Financial Group Inc. (FPFG), a Texas-based financial services company allegedly targeted for extortionate takeover and looting by a group led by alleged Lucchese organized crime family member Nicodemo S. Scarfo.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Paul J. Fishman of the District of New Jersey made the announcement.
Cory Leshner, 30, pleaded guilty before U.S. District Judge Robert B. Kugler in a federal court in Camden, N.J., to a superseding information charging him with conspiracy to commit wire fraud. He faces a maximum of five years in prison when he is sentenced on Jan. 17, 2014.
According to documents filed in this case and statements made in court, Leshner and 12 others – including Scarfo, an alleged member of the Lucchese La Cosa Nostra (LCN) crime family, and Salvatore Pelullo, an alleged associate of the Lucchese and Philadelphia LCN families – were variously charged in a November 2011 indictment with a racketeering conspiracy that included acts of securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering, money laundering and obstruction of justice. The indictment charged that FPFG was targeted for extortionate takeover and looting by a group of the conspirators. A substantial part of the enterprise’s activities occurred in New Jersey, including communications and the transfer of money into and out of the state. Cory Leshner admitted that he joined the conspiracy in April 2007.
Leshner admitted that he assisted Scarfo and Pelullo in managing family trusts and limited liability companies as part of the scheme to defraud FPFG. Pelullo directed Leshner in the use of various bank accounts through which Pelullo received hundreds of thousands of dollars between July 2007 and April 2008 as part of the scheme. The money involved proceeds of the fraud that Pelullo allegedly received as part of a fraudulent “consulting” agreement between his shell company, Seven Hills Management, and codefendant William Maxwell, a Texas attorney who served as “special counsel” to FPFG as part of the scheme. The money also involved proceeds received from the fraudulent sale of Scarfo and Pelullo’s worthless companies to FPFG in 2007. The receipt of the fraudulent proceeds often occurred in the form of wire transfers from accounts in Pennsylvania to accounts in New Jersey.
According to his court statements, Leshner was a law student during the scheme. Leshner graduated from law school in 2009 and became an attorney in Pennsylvania in 2011. As part of his plea agreement, Leshner agreed to notify the Pennsylvania Supreme Court of his guilty plea and to accept any disciplinary action brought by disciplinary officials as a result of the guilty plea and sentence. Leshner also agreed to not seek the reinstatement of his license to practice law while serving any sentence of imprisonment imposed in the case.
Scarfo, Pelullo, and five other defendants charged in November 2011 – including attorneys William Maxwell, David Adler, Gary McCarthy, and Donald Manno, as well as John Maxwell – are scheduled for trial beginning Oct. 28, 2013. Todd Stark, also charged in the indictment, previously pleaded guilty to providing ammunition to Scarfo and Pelullo, convicted felons.
This case was investigated by the FBI; the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance of the U.S. Securities and Exchange Commission. The case is being prosecuted by Trial Attorney Adam Small of the Organized Crime and Gang Section of the Justice Department’s Criminal Division and Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the New Jersey U.S. Attorney’s Office Organized Crime/Gangs Unit and Criminal Division in Camden.
With respect to the defendants awaiting trial, the charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
UPDATE ON GOVERNMENT SHUTDOWN FROM SERVICE LEADERS
FROM: U.S. DEFENSE DEPARTMENT
Hagel Receives Update on Shutdown From Service Leaders
American Forces Press Service
WASHINGTON, Oct. 8, 2013 - The Defense Department's top leadership, including the service secretaries and service chiefs, updated Defense Secretary Chuck Hagel yesterday on the impact of the ongoing government shutdown, Pentagon officials reported.
In a statement summarizing the meeting, officials said Hagel is pleased that most DOD civilians are returning to work this week, and that he thanked the service leadership for quickly implementing the guidance issued over the weekend regarding furloughs.
All of the leaders noted that despite the recall of most civilians and the resumption of many activities, critical programs and benefits remain halted, officials said. For example, they noted, the department does not have the authority to pay death gratuities for the survivors of service members killed in action -- typically, a cash payment of $100,000 paid within three days of the service member's death.
In addition, officials said, emergency funding that supports commanders on the ground and intelligence activities remains unavailable, and service leaders reported that they are further curtailing training for later deploying units -- an activity that already had been reduced due to sequestration spending cuts.
Hagel assured the service leaders that he would work closely with them to address these challenges, and support the service members and families affected by these disruptions, officials said. He expressed his continued concern for the morale and welfare of DOD's civilian employees, who have endured unprecedented uncertainty this year and suffered losses in pay, they added.
The secretary will continue to receive regular updates and review authorities to expend funds during this lapse in appropriations, the statement said.
Hagel Receives Update on Shutdown From Service Leaders
American Forces Press Service
WASHINGTON, Oct. 8, 2013 - The Defense Department's top leadership, including the service secretaries and service chiefs, updated Defense Secretary Chuck Hagel yesterday on the impact of the ongoing government shutdown, Pentagon officials reported.
In a statement summarizing the meeting, officials said Hagel is pleased that most DOD civilians are returning to work this week, and that he thanked the service leadership for quickly implementing the guidance issued over the weekend regarding furloughs.
All of the leaders noted that despite the recall of most civilians and the resumption of many activities, critical programs and benefits remain halted, officials said. For example, they noted, the department does not have the authority to pay death gratuities for the survivors of service members killed in action -- typically, a cash payment of $100,000 paid within three days of the service member's death.
In addition, officials said, emergency funding that supports commanders on the ground and intelligence activities remains unavailable, and service leaders reported that they are further curtailing training for later deploying units -- an activity that already had been reduced due to sequestration spending cuts.
Hagel assured the service leaders that he would work closely with them to address these challenges, and support the service members and families affected by these disruptions, officials said. He expressed his continued concern for the morale and welfare of DOD's civilian employees, who have endured unprecedented uncertainty this year and suffered losses in pay, they added.
The secretary will continue to receive regular updates and review authorities to expend funds during this lapse in appropriations, the statement said.
READOUT: SECRETARY OF DEFENCE HAGEL'S MEETING WITH ISRAELI DEFENSE MINISTER MOSHE YA'ALON
FROM: U.S. DEFENSE DEPARTMENT
Readout of Secretary Hagel's Meeting with Minister of Defense Moshe Ya'alon
Secretary Hagel met with Israeli Minister of Defense Moshe Ya'alon earlier today at the Pentagon for their third face to face meeting in the past six months. Both leaders expressed appreciation for the opportunity to frequently share views on the range of regional security challenges the United States and Israel are facing together.
On Iran, Secretary Hagel noted that while the United States intends to test the prospect for a diplomatic solution with Iran we remain clear eyed about the challenges ahead and will not waver from our firm policy to prevent Iran from obtaining nuclear weapons.
Secretary Hagel applauded the announcement by the Organization for the Prohibition of Chemical Weapons that the destruction of chemical weapons in Syria has started. While much works remains to be done, this recent progress is a step in the right direction to eliminating this threat.
The leaders also discussed progress on the United States effort to increase Israel's qualitative military edge with advanced capabilities that Secretary Hagel announced on his visit to Israel earlier this year.
Both Secretary Hagel and Minister Ya'alon thanked one another for continued unprecedented levels of security cooperation between the United States and Israel and pledged to remain in close touch.
Readout of Secretary Hagel's Meeting with Minister of Defense Moshe Ya'alon
Secretary Hagel met with Israeli Minister of Defense Moshe Ya'alon earlier today at the Pentagon for their third face to face meeting in the past six months. Both leaders expressed appreciation for the opportunity to frequently share views on the range of regional security challenges the United States and Israel are facing together.
On Iran, Secretary Hagel noted that while the United States intends to test the prospect for a diplomatic solution with Iran we remain clear eyed about the challenges ahead and will not waver from our firm policy to prevent Iran from obtaining nuclear weapons.
Secretary Hagel applauded the announcement by the Organization for the Prohibition of Chemical Weapons that the destruction of chemical weapons in Syria has started. While much works remains to be done, this recent progress is a step in the right direction to eliminating this threat.
The leaders also discussed progress on the United States effort to increase Israel's qualitative military edge with advanced capabilities that Secretary Hagel announced on his visit to Israel earlier this year.
Both Secretary Hagel and Minister Ya'alon thanked one another for continued unprecedented levels of security cooperation between the United States and Israel and pledged to remain in close touch.
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