PORTRAIT OF SATURN LOOKING DOWN ON RINGS

FROM:  NASA 

This portrait looking down on Saturn and its rings was created from images obtained by NASA's Cassini spacecraft on Oct. 10, 2013. It was made by amateur image processor and Cassini fan Gordan Ugarkovic. This image has not been geometrically corrected for shifts in the spacecraft perspective and still has some camera artifacts.The mosaic was created from 12 image footprints with red, blue and green filters from Cassini's imaging science subsystem. Ugarkovic used full color sets for 11 of the footprints and red and blue images for one footprint. The Cassini-Huygens mission is a cooperative project of NASA, the European Space Agency and the Italian Space Agency. The Jet Propulsion Laboratory, a division of the California Institute of Technology in Pasadena, manages the mission for NASA's Science Mission Directorate, Washington, D.C. The Cassini orbiter and its two onboard cameras were designed, developed and assembled at JPL. The imaging operations center is based at the Space Science Institute in Boulder, Colo.

TAX RETURN PREPARERS FACE ADDITIONAL CHARGES IN OFFSHORE ACCOUNT SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 
Friday, October 18, 2013

Additional Charges Brought Against Tax Return Preparers Previously Charged with Helping Clients Hide Millions in Offshore Israeli Banks

David Kalai and  Nadav Kalai face additional charges after a federal grand jury in the Central District of California returned a second superseding indictment yesterday.  The  superseding indictment charged each with two counts of willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR).  In June 2012, the grand jury charged David Kalai, Nadav Kalai, and David Almog with conspiring to defraud the United States, the Department of Justice and Internal Revenue Service (IRS) announced today.

As alleged in the June 2012 superseding indictment, David Kalai and Nadav Kalai were principals of United Revenue Service Inc. (URS), a tax preparation business with 12 offices located throughout the United States.  David Kalai worked primarily at URS’ former headquarters in Newport Beach, Calif., and later at URS’ location in Costa Mesa, Calif.  Nadav Kalai, who is David Kalai’s son, worked out of URS’ headquarters in Bethesda, Md., as well as URS locations in Newport Beach and Costa Mesa. David Almog was the branch manager of the New York office of URS and supervised tax return preparers for URS East Coast locations.

U.S. citizens, resident aliens and legal permanent residents have an obligation to report to the IRS on Schedule B of the U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign country in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. They further have an obligation to report all income earned from the foreign financial account on the tax returns.  Separately, U.S. citizens, resident aliens and permanent legal residents with a foreign financial interest in, or signatory authority over, a foreign financial account worth more than $10,000 in a particular year, must also file a FBAR with the Treasury disclosing such an account by June 30 of the following year.

The superseding indictment further alleged that the co-conspirators prepared false individual income tax returns which did not disclose the clients’ foreign financial accounts nor report the income earned from those accounts.  In order to conceal the clients’ ownership and control of assets and conceal the clients’ income from the IRS, the co-conspirators incorporated offshore companies in Belize and elsewhere and helped clients open secret bank accounts at the Luxembourg locations of two Israeli banks referred to as Bank A and Bank B in court documents.  Bank A is a large financial institution headquartered in Tel-Aviv, Israel, with branches worldwide.  Bank B is a mid-size financial institution headquartered in Tel-Aviv, with a worldwide presence on four continents.
                                                                                                                     
The indictment also alleged, the co-conspirators incorporated offshore companies in Belize and elsewhere to act as named account holders on the secret accounts at the Israeli banks.  The co-conspirators then facilitated the transfer of client funds to the secret accounts and prepared and filed tax returns that falsely reported the money sent offshore as a false investment loss or a false business expense.  The co-conspirators also failed to disclose the existence of, and the clients’ financial interest in, and authority over, the clients’ secret accounts and caused the clients to fail to file FBARs with the Department of the Treasury.
                     
In addition to the earlier charges, yesterday’s superseding indictment alleges that David Kalai and Nadav Kalai each failed to file a FBAR for calendar years 2008 and 2009 concerning a foreign account held at Bank A in Luxembourg.  The second superseding indictment alleges that both David Kalai and Nadav Kalai had a financial interest, signature or other authority over a foreign financial account that had an aggregate value of more than $10,000 during 2008 and 2009.

If convicted, each defendant faces a maximum of five years in prison for each count and a maximum fine of $250,000 for each count. The charges contained in the indictment are only allegations. The defendants are presumed innocent and it is the government’s burden to prove guilt beyond a reasonable doubt.

Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked Tax Division Trial Attorneys Christopher S. Strauss and Ellen M. Quattrucci, who prosecuted the case, and Assistant U.S. Attorney Sandra A. Brown of the U.S. Attorney’s Office for the Central District of California, who assisted with the prosecution.  The case was investigated by special agents of IRS – Criminal Investigation.                                            

LOS ALAMOS CELEBRATES 50 YEARS SINCE LAUNCH OF 'WATCHMEN'

FROM:  LOS ALAMOS NATIONAL LABORATORY
A Golden Anniversary for Space-Based Treaty Verification
Los Alamos celebrates 50-year anniversary of launch of first pair of ‘Watchmen’

LOS ALAMOS, N.M., Oct. 22, 2013—Fifty years ago this month, Los Alamos National Laboratory sensor technology lifted off into space to help verify that world Superpowers were abiding by the newly signed Limited Test Ban Treaty—a pledge by the United States, the former Soviet Union and the United Kingdom to refrain from testing nuclear weapons in the atmosphere, underwater or in space.

“For the past 70 years, Los Alamos National Laboratory has serviced the country and provided technical solutions to the some of biggest national security challenges facing the nation,” said Terry Wallace, Principal Associate Director for Global Security at Los Alamos. “On October 4, 1957, the Soviets launched Sputnik, an event that changed the world. Space became a national-security concern; Los Alamos played the key role in providing a space platform to monitor nuclear weapons testing and treaties, and 50 years later the lab still has this role.

“As we celebrate our golden anniversary of space-based treaty verification, we remember not only our successes in our mission, but also how this mission has enabled scientific discovery,” Wallace said. “Without a focus on national security, we could not continue to produce cutting-edge science; without our commitment to scientific excellence, we could not succeed in our mission. It is this synergy that makes Los Alamos a truly unique national treasure.”

The first pair of Vela satellites launched on Oct. 17, 1963, just one week after the three nations had signed the historic treaty, and barely a year after the U.S. and Soviet Union had faced an extremely tense nuclear standoff during the Cuban Missile Crisis. With the launch of Vela—an abbreviated version of Velador, a colloquial New Mexican word for “night watchman”—a dangerous era of accelerated atmospheric and space-based nuclear weapons testing by the U.S. and Soviet Union subsided, thanks to collaboration between Los Alamos and Sandia national laboratories. One year later, China detonated its first nuclear weapon, underscoring the need for enhanced vigilance in a rapidly changing world.

The success of the Vela program marked the beginning of an enduring space-based treaty verification system that continues to enhance security for America and the rest of the world. Vela’s sensors focused on basic detection of electromagnetic- and energetic-particle emissions associated with open nuclear weapons detonations. But they also enabled serendipitous discoveries of remarkable natural phenomena such as cosmic gamma-ray bursts, X-ray novae and solar wind composition. Modern space-based verification systems rely on sophisticated sensors that have not only helped keep the peace, but also continue to help explain the origins of poorly understood natural events such as terrestrial lightning.

During the past 50 years, some 200 space vehicles have been launched with Los Alamos payloads aboard. Many of these support on-going treaty-monitoring missions, while others are experiments designed to push the boundaries of what is considered state-of-the-art. Notable Los Alamos experimental missions include:

 ALEXIS, the Array of Low-Energy X-ray Imaging Sensors, was Los Alamos’s first homemade satellite. Launched in April 1993, this small craft demonstrated and tested new X-ray and radio sensing technology. The satellite was controlled from inside a small room at the Laboratory and remains aloft today.

 The FORTÉ, Fast On-orbit Rapid Recording of Transient Events, satellite, launched in August 1997, was a satellite test-bed for nuclear-detonation-detection technologies. Weighing less than 100 pounds and built of graphite-reinforced epoxy (the first of its kind to go into space), the small, long craft was essentially an antenna attached to a capsule-shaped array of solar panels, giving the satellite a distinctive fish-skeleton appearance. The satellite was lauded by Discovery magazine as one of most innovative advancements in aerospace technology, and it explored a 30-year problem of discriminating between electro-magnetic pulses (EMPs) caused by nuclear explosions and those caused by other natural or manmade sources.

 The Cibola Flight Experiment, launched in March 2007, tested eight new technologies—among them whether a specially designed supercomputer could survive the rigors of space. Because spacecraft are constantly bombarded by high-energy particles trapped in Earth’s magnetic field, computers and computer equipment can fail in the harsh environment. Moreover, high-powered computing requires a lot of energy, yet space travel requires low weight and small packages. Cibola’s supercomputer is testing new power sources and new strategies for hardening crucial computer components as well as new treaty verification technologies.

 In December 2010 Los Alamos scientists launched four satellites known as “cubeSats,” each of which is tiny enough to be held in a human hand. These unique craft, part of the Perseus Program, demonstrated the ability to quickly build and launch a useful, low-cost satellite. They also helped validate a Los Alamos design methodology of using simple, off-the-shelf components to accomplish a specific mission. The tiny spacecraft showcased communication- and data-collection capabilities, as well as a major new space capability for the Laboratory.
In addition to these missions, Los Alamos space technology deployed on scientific satellites has helped scientists worldwide determine the elemental composition of the surface of the moon, including the presence of water; understand the structure and dynamics of the Van Allen radiation belts; characterize the moons of Saturn; study the origin of gamma ray bursts and supernovae; and, most recently, with key instruments aboard the Curiosity Rover, help characterize the Martian landscape.

“The capabilities and technologies we have developed and demonstrated in support of our treaty verification mission have also found wide application in basic space research, enabled our participation in multiple NASA projects and led to a number of important discoveries,” said Kevin Saeger, leader of Los Alamos’s Intelligence and Space Research Division. “It’s a source of great pride to ISR Division employees to be able to support national security and at the same time participate in the human quest for greater knowledge and understanding of the universe.”

An exhibit that includes highlights of Los Alamos National Laboratory’s 50 years of space-based treaty verification, starting with Vela, is on display at U.S. Department of Energy Headquarters in Washington, D.C. The exhibit will next go to the U.S. Air Force’s Space and Missile Systems Center in Los Angeles, and later to Patrick Air Force Base in Florida, key partners in the national program for space-based nuclear detonation detection.

DEFENSE BUILDING 'IRON MAN SUIT'

Right:  An artist's rendering of what the Tactical Assault Light Operator Suit might look like with its desired capabilities. Defense Advanced Research Projects Agency courtesy graphic.

FROM:  U.S. DEFENSE DEPARTMENT 
Special Ops Command Seeks Prototypes for 'Iron Man Suit'
By David Vergun
Army News Service

WASHINGTON, Oct. 18, 2013 - U.S. Special Operations Command wants its operators to be protected with what it informally calls an "Iron Man suit," named after the fictional superhero.

In September, Socom announced it is seeking proposal
As for prototypes of the Tactical Assault Light Operator Suit, or TALOS.
The goal of TALOS is to provide ballistic protection to Special Operations Forces, along with fire-retardant capability, said Michel Fieldson, TALOS lead for Socom.

"We sometimes refer to it as the 'Iron Man' suit, frankly, to attract the attention, imagination and excitement of industry and academia," Fieldson said. "We're hoping to take products we're developing in several technology areas and integrating them into a consolidated suit to provide more protection for the [special operations forces]."

Other technologies include sensors, communications, energy and material that can store and release energy to prevent injuries and increase performance.

Materials that can store and release energy might be similar to the Intrepid Dynamic Exoskeletal Orthosis, now used by some wounded warriors for lower-leg injuries. So TALOS could benefit wounded warriors too, Fieldson said.

The Homeland Security Department and firefighters have expressed an interest in this technology as well, he said, and it eventually might become available for other service members.

"Our goal right now is to try to get the word out and bring industry partners together," Fieldson said. The technologies that will go into the suit's development are varied, he said, so it is unlikely one contractor would be able to specialize in the entire ensemble.

The traditional approach, Fieldson said, was to pick a prime contractor, usually a traditional defense partner, give them the design requirements and let them come up with the solution. That would take a long time, he noted.

"In this case, the government will be the lead integrator, and we'll look to work with traditional or nontraditional partners in industry and academia who are innovative," he said. "We'll leave no stone unturned."

The goal, he said, is to begin integrating capabilities over the next 12 months and have the first suit ready for full field testing in four to five years.

Fieldson thinks TALOS will become a reality because it protects the warfighters and has the backing of Socom's commander, Navy Adm. William H. McRaven.

"I'm very committed to this," McRaven said to industry representatives at a July 8 TALOS demonstration in Tampa, Fla. "I'd like that last operator that we lost to be the last one we ever lose in this fight or the fight of the future, and I think we can get there.

"I'm committed to this," he continued. "At the end of the day, I need you and industry to figure out how you are going to partner with each other to do something that's right for America."

U.S. Department of Defense Armed with Science Update

U.S. Department of Defense Armed with Science Update

JUSTICE REPORTS SHUTDOWN OF TAX PREPARATION FIRM FOR IMPROPER REPORTING OF FINANCIAL LOSSES

FROM:  U.S. JUSTICE DEPARTMENT 
Friday, October 18, 2013
Columbus, Ohio, Tax Return Preparation Firm with Large Portion of Elderly Customers Shut Down

A federal court in Columbus, Ohio, has permanently barred Tobias Elsass and his companies, “Fraud Recovery Group Inc.” and “Sensible Tax Services Inc.,” from preparing federal tax returns, promoting the availability of theft loss deductions, or engaging in any other tax-related business in the future.  The Court found that Elsass and Fraud Recovery Group have continually and repeatedly promoted a nationwide scheme falsely informing their customers that they were entitled to claim large theft loss tax deductions, and then preparing the tax returns that improperly claimed such deductions.  The civil injunction order was signed yesterday by Judge Peter C. Economus of the U.S. District Court for the Southern District of Ohio.

Elsass serves as president and founder of Fraud Recovery Group and Sensible Tax Services. The district court found that Elsass and his companies promoted a scheme that preyed largely on elderly investors across the United States who had suffered financial losses.  Elsass and his companies told the investors that they could deduct their financial losses on their federal income tax returns in an advantaged way and receive large refunds. Under federal tax law, victims of truly fraudulent investment schemes, such as a Ponzi scheme, may properly deduct their financial losses as thefts only if they can substantiate that the losses were, among other things, the product of criminal conduct.

In its opinion, the court concluded that Elsass misled his elderly investor customers into believing that they had valid theft loss deductions, thereby inducing them to pay him and his companies to prepare and file amended tax returns.  The opinion notes that hundreds of theft loss deductions claimed on tax returns prepared by Elsass and his companies were improper, because the financial losses they sought to deduct were merely the result of company mismanagement instead of criminal conduct – as Elsass knew.  Elsass and his companies were also aware that the Internal Revenue Service (IRS) was disallowing such claims, but filed similar claims for other investor customers in any event, in the hope that the later filings would escape IRS scrutiny. The court found that, as a result of such egregious conduct, Elsass and his companies potentially left their investor customers subject “to audits and scrutiny from the IRS.”

The court also determined that Elsass had intentionally engaged in “incompetent or disreputable” behavior not becoming a tax professional.  Based on the record before it, the court found that Elsass seemed “perfectly willing to lie and deceive, even to the extent of possibly committing perjury, in order to advance his own interests.”  Accordingly, the “sheer magnitude and variety of the Defendants’ transgressions” made permanent injunctive relief appropriate.

The court directed that FRG be closed and its operations terminated.  The court’s injunction order permanently bars Elsass from engaging in any business relating to providing tax advice or the preparation of tax returns.  Elsass and his companies are also prohibited from owning any interest in, operating, incorporating, working for or having any other association with any tax-related business in the future, and they must immediately divest any ownership interest they presently have with any such entities.  The court’s order also requires Elsass and his companies to advise their existing customers of the injunction’s terms, and to provide the Government with a list of all current customers.

FORMER QUALCOMM EXECUTIVE CHARGED WITH INSIDER TRADING BY SEC

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION

SEC Charges Former Qualcomm Executive and His Financial Advisor with Insider Trading Through Secret Offshore Accounts

The Securities and Exchange Commission today charged a former executive vice president at Qualcomm Inc. and his former financial advisor with insider trading ahead of major announcements by the San Diego-based wireless technology company for more than a quarter-million dollars in profits.

The SEC alleges that Jing Wang, a former executive vice president and president of global business operations at Qualcomm, used a secret offshore brokerage account to make illegal trades based on confidential information that he learned on the job.  Gary Yin, a former registered representative at Merrill Lynch, helped Wang set up the account.  Yin also created a secret offshore account of his own and traded on the non-public information gleaned from Wang.  When Wang eventually realized that insider trading in the offshore accounts still may be discovered by the SEC or other regulators, he concocted a plan to conceal his trading activity by claiming the trades were made by his brother.  Wang even convinced Yin to travel to China and go over the account statements with Wang’s brother so he could explain the trades if asked by investigators.

In a parallel action, the U.S. Attorney’s Office for the Southern District of California today announced criminal charges against Wang and Yin.

According to the SEC’s complaint, Wang and Yin became friends in 2005 as members of the same church.  When Wang learned that Yin was a financial advisor at Merrill Lynch, he asked Yin to manage his money and opened a number of brokerage accounts at the firm’s San Diego branch office.  Each account was disclosed to Qualcomm because, as a company officer, Wang was restricted in his ability to trade Qualcomm stock and required to pre-clear all Qualcomm trades with the company.

The SEC alleges that in early 2006, Wang approached Yin about hiding cash transactions.  Yin suggested that Wang create an entity registered in the British Virgin Islands (BVI) and use the name of a non-U.S. citizen family member as the beneficial owner.  Then he could open a brokerage account in the newly created entity’s name.  Yin then helped Wang set up a secret account in the name of a BVI company called Unicorn Global Enterprises, and Wang’s older brother was listed as the owner.  Yin similarly created his own BVI-registered entity named Pacific Rim and put it in his mother-in-law’s name.  Yin opened a Merrill Lynch brokerage account for Pacific Rim and used it to hide funds that he was using for investments.

The SEC alleges that Wang and Yin used their secret offshore accounts to trade on material, non-public information that Wang learned as an executive at Qualcomm.  In early 2010, Wang was aware that Qualcomm executives were planning a board proposal to increase Qualcomm’s quarterly dividends and request authority to initiate a stock repurchase program.  Qualcomm informed Wang and all executives that they would not be permitted to trade Qualcomm stock.  On March 1, Wang attended a Qualcomm board meeting where the quarterly dividend increase and stock repurchase were approved.  Wang immediately instructed Yin to use all of the funds in the offshore Unicorn account to purchase Qualcomm stock.  Yin knew that Wang did not pre-clear these trades and realized that the purchase was out of character for Wang because he previously never purchased Qualcomm stock on the open market in his Merrill Lynch accounts.  Within the hour of executing the trades for Wang, Yin himself bought Qualcomm stock on the basis of the material, non-public information.  The stock price increased 6.7 percent after Qualcomm publicly announced the quarterly cash dividend and stock repurchase program.  Wang and Yin profited when they sold all of their shares.
 
According to the SEC’s complaint, Wang used the funds from that sale to conduct insider trading again – this time in the shares of San Jose-based Atheros Communications, which was the highly confidential target of a planned acquisition by Qualcomm. Wang was regularly briefed on the transaction internally tabbed as “Project Tango” to protect its confidentiality.  Wang instructed Yin to sell all of his Qualcomm stock in the Unicorn account on Dec. 2, 2010, and prepare to buy as many shares of Atheros stock as possible with the funds in that account.  He told Yin that he was leaving on a trip to China and would contact him to execute the Atheros trade.  On December 6, Wang attended a Qualcomm board meeting in Hong Kong and a resolution was passed to pursue the acquisition. Wang learned that Qualcomm planned to acquire Atheros at $45 per share.  Wang and Yin immediately communicated several times through phone calls and a text message, and Wang then purchased the maximum number of shares he could purchase with the existing funds in the Unicorn account at prices between $34 and $35 per share.  At Wang’s encouragement, Yin also purchased Atheros stock for himself in his offshore account.  When the news became public in early January, Atheros stock increased more than 20 percent.  Yin sold all of his Atheros shares in the Pacific Rim account on January 12, and Wang sold his Atheros shares in the Unicorn account on January 25.

According to the SEC’s complaint, Wang took his next insider trading step merely four minutes after selling the Atheros stock, using the proceeds to purchase Qualcomm shares in advance of a company announcement that it would raise its revenue and earnings guidance for the 2011 fiscal year.  Wang had learned the confidential information prior to the board meeting he attended in Hong Kong, where Qualcomm’s better-than-expected first quarter financial performance was further discussed.  Wang learned that Qualcomm planned to announce its earnings results on January 26, and thus purchased his Qualcomm shares the day before the announcement.  After Qualcomm issued a press release to announcing its positive first quarter results, Qualcomm’s stock increased 5.9 percent.

The SEC alleges that Wang made more than $244,000 in illegal profits through the insider trading scheme, and Yin realized gains of more than $27,000.  Wang eventually realized that his illegal trading may be detected by Merrill Lynch or others.  Wang first asked Yin to delete records of the trades in the Unicorn account, but because they were permanent records in Merrill Lynch’s systems they could not be erased.  Around January 2012, Wang directed Yin to establish a new BVI corporation named Clearview Resources and open a new account at Merrill Lynch to which they transferred the insider trading proceeds in the Unicorn account to further distance Wang from the suspicious trades.  A few months later, Wang informed Yin that the trades may have been detected because the SEC had subpoenaed his e-mails.  So Wang devised a cover story and convinced Yin if ever questioned to say that the Atheros trades were made by Wang’s brother.  Because Yin had never communicated with Wang’s brother, Wang instructed him to travel to China with the Unicorn account statements and review the trades with his brother so he could explain the trading if asked.  Yin did so in May 2012.  To further hide Wang’s ownership of the Unicorn account and his link to the Atheros trades, Yin removed the Unicorn account from Wang’s “household” in Merrill Lynch’s computer system in July 2012. “Householding” is a function used by Merrill Lynch to link related accounts.  

The SEC's complaint charges Wang, who lives in Del Mar, Calif., with violating Sections 10(b) and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5 and 16a-3.  Yin, who lives in San Diego, is charged with violating Section 10(b) of the Exchange Act and Rule 10b-5.  The SEC’s complaint seeks disgorgement of ill-gotten gains plus prejudgment interest, financial penalties, and permanent injunctions.  The SEC also seeks an officer-and-director bar against Wang.

The SEC’s investigation has been conducted by Ann C. Kim, Wendy E. Pearson, Nina Yamamoto, and Finola H. Manvelian of the Los Angeles Regional Office.  The SEC’s litigation will be led by Sam Puathasnanon.  The SEC appreciates the assistance of the Department of Justice’s Criminal Division, the U.S. Attorney’s Office for the Southern District of California, and the Federal Bureau of Investigation.

CDC OFFICIAL'S STATEMENT ON DEATH OF ANTI-SMOKING ACTIVIST NATHAN MOOSE

FROM:  CENTERS FOR DISEASE CONTROL AND PREVENTION

Statement from Tim McAfee, Director, CDC’s Office on Smoking and Health on the passing of Nathan Moose, former Tips campaign ad participant.

We are deeply saddened by the passing of Nathan Moose, a valued member of CDC's Tips family. Nathan’s selfless and courageous dedication to ensuring that others would not suffer as he did saved many lives. He was a victim of cigarette smoking, although he never smoked.

Nathan worked for 11 years in a casino that allowed smoking, and the exposure to secondhand smoke permanently damaged his lungs and led to his untimely death. His health problems inspired him to take action to help protect not only his fellow Oglala Sioux, but also all Americans, and he especially wanted his message to impact young people.

In addition to participating in the Tips campaign, Nathan spoke at Pow-Wows, conferences, and schools to make people aware of the dangers of smoking and exposure to secondhand smoke. Nathan was only 54 years old. Our thoughts and prayers go out to Nathan's wife, five children, and three grandchildren.

Tim McAfee, M.D., M.P.H.
Director, CDC’s Office on Smoking and Health