FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Remarks at the 26th Annual Corporate Law Institute, Tulane University Law School: Federal Preemption of State Corporate Governance
Commissioner Daniel M. Gallagher
New Orleans, LA
March 27, 2014
Thank you, David [Katz], for that kind introduction. I’m very pleased to be here with you this afternoon.
In April 2010, when my friend and former colleague Troy Paredes spoke at this conference, he expressed his misgivings about the draft legislation moving through Congress that ultimately became the Dodd-Frank Act.[i] Today, nearly four years after its enactment, the fundamentally flawed nature of the Act has become clear—or, to those of us who recognized its many faults from the start, clearer.
Title I of Dodd-Frank, for example, created the apparently unaccountable and inherently politicized Financial Stability Oversight Council, or FSOC. The FSOC is dominated by bank regulators, and Title I authorizes it to designate non-bank financial services companies as systemically important financial institutions, thereby making them subject to prudential regulation. This can happen without regard for whether that regulatory paradigm is appropriate for non-bank entities operating in the capital markets—or, as I like to call them, the “non-centrally controlled” markets.
I believe it is important for the SEC and other capital markets regulators to openly debate and resist where necessary the encroachment of the bank regulatory paradigm into the capital markets. I hope that market participants and lawmakers will join the debate about the proper regulatory framework for non-bank markets. To be clear, this is not a partisan issue. The structure of FSOC vests tremendous authority to appointees from the President’s party. Those who enthusiastically support FSOC today may well be singing a different tune upon a change in administration.
I should also make clear that I’m not motivated by turf wars or empire building. In fact, I believe the SEC should be willing to recognize areas where we should be the ones to stand down in favor of an alternative legal regime that is a better fit.
And so today I’d like to focus on an area where the SEC should be taking less of a role: the regulation of corporate governance.
I. Federalization of Corporate Governance
Unfortunately, the trend towards increased federalization of corporate governance law seems well-entrenched.[ii] The Sarbanes-Oxley Act included significant incursions into state corporate governance regulation, but Title IX of Dodd-Frank may cause some of you to long for the simpler days of SOX § 404.
Title IX mandates an array of new federal regulations relating to matters traditionally left to state corporate governance law, the most infamous being a requirement to hold a shareholder vote on executive compensation, or “say on pay.” Concerns that a negative vote may harm a company’s reputation or encourage litigation can lead companies to expend significant resources to guarantee passage of the vote. Even more concerning, boards of directors could substitute proxy advisors’ views on pay for their own judgment as a means of minimizing potential conflict.
And that’s just one of the new Dodd-Frank requirements encroaching on corporate governance. Others include the politically-motivated pay ratio disclosure requirement, proposed by a majority of the Commission in September 2013,[iii] as well as mandated rules micromanaging certain incentive-based compensation structures, which were proposed jointly with other regulators, again by a majority of the Commission, in March 2011.[iv] In addition, Dodd-Frank calls for rules regarding compensation clawbacks in the event of an accounting restatement, pay for performance, and employee and director hedging of company stock.
Some of these requirements unashamedly interfere in corporate governance matters traditionally and appropriately left to the states. Others masquerade as disclosure, but are in reality attempts to affect substantive behavior through disclosure regulation. This mandated intrusion into corporate governance will impose substantial compliance costs on companies, along with a one-size-fits-all approach that will likely result in a one-size-fits-none model instead. This stands in stark contrast with the flexibility traditionally achieved through private ordering under more open-ended state legal regimes.
II. Shareholder Proposals
One area where the SEC’s incursions into corporate governance have had a particularly negative effect is shareholder proposals.
1. The Problem
While the conduct of the annual shareholder meeting is generally governed by state law, the process of communicating with shareholders to solicit proxies for voting at that meeting is regulated by the Commission. The Commission’s rules have for decades permitted qualifying shareholders to require the company to publish certain proposals in the company’s proxy statement, which are then voted upon at the annual meeting.
Unfortunately, the Commission has never adequately assessed the costs and benefits of this process. Currently, a proponent can bring a shareholder proposal if he or she has owned $2,000 or 1% of the company’s stock for one year, so long as the proposal complies with a handful of substantive—but in some cases discretionary—requirements. Activist investors and corporate gadflies have used these loose rules to hijack the shareholder proposal system.
The data and statistics are striking. In 2013, the number of shareholder proposals rose,[v] with an amazing 41% of those proposals addressing social and environmental issues.[vi] And while proposals calling for disclosure of political contributions or lobbying activities continued to predominate,[vii] these proposals received particularly poor support from shareholders.[viii] Overall, only 7% of shareholder proposals received majority support in 2013.[ix]
These proposals are not coming from ordinary shareholders concerned with promoting shareholder value for all investors. Rather, they are predominantly from organized labor, including union pension funds, which brought approximately 34% of last year’s shareholder proposals, as well as social or policy investors and religious institutions, which accounted for about 25% of 2013’s proposals. Approximately 40% were brought by an array of corporate gadflies, with a staggering 24% of those proposals brought by just two individuals.[x]
In other words, the vast majority of proposals are brought by individuals or institutions with idiosyncratic and often political agendas that are often unrelated to, or in conflict with, the interests of other shareholders. I find it particularly notable that corporations that donated more funds to Republicans than to Democrats were more than twice as likely to be targeted with political spending disclosure proposals sponsored by labor-affiliated funds.[xi]
Astonishingly, only 1% of proposals are brought by ordinary institutional investors—including hedge funds. As you all know, hedge funds are not shy about elbowing their way into the boardroom when they believe a shake-up is overdue. The low level of hedge fund activism here implies that their concerns with corporate management are being addressed using avenues other than shareholder proposals—as most legitimate concerns can be.[xii]
Given all of this, it’s time we asked whether the shareholder proposal system as currently designed is a net negative for the average investor.[xiii]
2. Needed Reforms
a. Who should be able to bring a proposal?
All of this isn’t to condemn shareholder activism per se. I’ll leave that debate to Marty Lipton and Lucian Bebchuk. But existing shareholders who are unhappy with management have a range of well-accepted responses other than proposals. Given the depth and liquidity of today’s markets, passive investors can simply sell their position—taking the s0-called “Wall Street Walk.” Activist investors can threaten to take this Walk as a means of influencing management. Investors can also vote against directors who are not sufficiently overseeing management—this strategy doesn’t have a clever name, but perhaps “vote the bums out” will do.
And, of course, where management is breaching its fiduciary duties, investors can have recourse to the courts. This “see you in court” strategy is particularly viable given the outstanding job the Delaware courts do, day in and day out, in refereeing disputes between shareholders and management. Given these and other strategies, I’m not sure we need shareholder proposals at all.
But if we must have shareholder proposals, the SEC’s rules can and should do a better job ensuring that activist investors don’t crowd out everyday and long-term investors—and that their causes aren’t inconsistent with the promotion of shareholder value.
One thing is clear: we can’t continue to take the approach of our current regulatory program, especially the all too liberal program of the last five years, and simply err on the side of over-inclusion. It is enormously expensive for companies to manage shareholder proposals. They must negotiate with proponents, seek SEC no-action to exclude improper ones, form and articulate views in support or opposition in the proxy, include the proposal and the statement in the proxy itself, then take the vote on it at the annual meeting. Conversely, companies can simply fold and acquiesce to the activists’ demands. Both approaches are costly, and these costs are borne by all shareholders. Taking money out of the pocket of someone investing for retirement or their child’s education and using it instead to subsidize activist agendas is simply inexcusable. It is incumbent on the Commission to create a regulatory environment that promotes shareholder value over special interest agendas. I have a few suggestions.
First, the holding requirement to submit proxies should be updated. $2,000 is absurdly low, and was not subject to meaningful economic analysis when adopted.[xiv] The threshold should be substantially more, by orders of magnitude: perhaps $200,000 or even better, $2 million. But I don’t believe that this is actually the right fix: a flat number is inherently over- or under-inclusive, depending on the company’s size. A percentage threshold by contrast is scalable, varies less over time, better aligns with the way that many companies manage their shareholder relations, and is more consistent with the Commission’s existing requirements. Therefore, I believe the flat dollar test should be dropped, leaving only a percentage test.
Of course, we’d have to make sure we get the percentage holding requirement right. Requiring a sufficient economic stake in the company could lead to proposals that focus on promoting shareholder value rather than those championed by gadflies with only a nominal stake in the company. We would need to apply rigorous economic analysis to determine what percentage would be an appropriate default, as well as what factors should be taken into account when deviating from that default. This could be an opportunity to address the practice of “proposal by proxy,” where the proponent of a resolution—typically one of the corporate gadflies—has no skin in the game, but rather receives permission to act “on behalf” of a shareholder that meets the threshold. While I would support banning proposal by proxy, we could also consider alternatives such as requiring a proponent acting on behalf of one or more shareholders to meet a higher percentage threshold of outstanding shares than would be the case for a proponent who owns the shares directly.
I also think we need to take another look at the length of the holding requirement. A one-year holding period is hardly a serious impediment to some activists, who can easily buy into a company solely for the purpose of bringing a proposal. All that’s needed is a bit of patience, and perhaps a hedge. A longer investment period could help curtail some of this gamesmanship.
Making adjustments along these lines will go a long way towards ensuring that the proposals that make it onto the proxy are brought by shareholders concerned first and foremost about the company—and the value of their investments in that company—not their pet projects.
b. What issues should proponents be able to raise?
I also believe that we need to do a better job setting requirements as to the substance of proposals. While I don’t think a complete reevaluation of the existing categories for exclusion is necessary, we do need to re-think their application.
For example, the “ordinary business” criterion for exclusion in our rules has been perennially problematic.[xv] This provision permits exclusion of a proposal that deals with the company’s “ordinary business operations,” unless it raises “significant policy issues.” However, these terms are not defined and the Commission has given no guidance, leaving the Staff to fend for itself in determining whether to issue no-action relief pursuant to the provision.
As a result, we have seen a number of dubious “significant policy issue” proposals. For example, in 2013 the Staff denied no-action relief to PNC Bank with respect to a proposal requesting a report on greenhouse gas emissions resulting from its lending portfolio, on the grounds that climate change is a significant policy issue—arguably a reversal of a prior Staff position.[xvi] And, in 2012, Staff denials of no-action relief forced AT&T, Verizon, and Sprint to include a net neutrality proposal, even though proposals on that same topic were excludable in prior years as ordinary business. That year, 94% of AT&T shareholders voted “no” on the net neutrality proposal despite the best efforts of Michael Diamond, who some of you will know as Mike D. of the Beastie Boys—who, by helping to bring the proposal to a vote, at least succeeded in his fight for the right to proxy.[xvii]
It is a disservice to the Staff—and, more importantly to investors—when the Commission promulgates a discretion-based rule for the Staff to administer without providing guidance as to how to exercise that discretion. In addition to providing better guidance, the Commission needs to become more involved in the administration of this rule. In particular, I believe that the Commission should be the final arbiter on the types of proposals for which the Staff proposes to deny no-action relief on “significant policy issue” grounds. The Presidential appointees should vote on these often-thorny policy issues and not hide behind the Staff.
We also need to take another look at the rule which permits the exclusion of proposals that are contrary to the Commission’s proxy rules—including proposals that are materially false and misleading or that are overly vague.[xviii] In Staff Legal Bulletin 14B, issued in 2004,[xix] the Staff curtailed the use of this ground for exclusion in light of the extensive Staff resources that were being consumed in their line-by-line review of shareholder proposals, instead forcing issuers to use their statement in opposition to take issue with factual inaccuracies or vagueness.[xx] I believe issuers have raised some legitimate concerns with this approach. For example, while issuers are not legally responsible for the proposals or statements in support, they are still being forced to publish, in their proxy, statements they believe are false or misleading. Moreover, use of the statement in opposition is sometimes an incomplete remedy. Taking valuable space to correct misstatements distracts from a substantive discussion about the proposal itself, and proposals that are overly vague make it difficult to draft a sensible rebuttal.
In light of these competing concerns, I believe the pendulum has swung too far in the direction of non-intervention. And I’m not alone in this belief. Recently, a district court in Missouri granted summary judgment to Express Scripts, permitting it to exclude a proposal that contained four separate misstatements.[xxi] While I support companies exercising their right to take matters to the court system,[xxii] which can serve as a useful external check on the SEC’s no-action process, companies shouldn’t have to go through the time and expense of litigation to vindicate their substantive rights under our rules. The burden to ensure that a submission is clear and factually accurate should be placed on the proponent, not the company. I believe that the Staff should take a more aggressive posture toward proponents that fail to meet that burden. And I hope issuers would refrain from using our rule to quibble over minutiae. If this happy medium is not achievable, I believe the SEC needs to revisit our rules: we as a Commission either need to give the Staff the capacity to enforce the rule as it is currently written, or craft a rule that is enforceable.
c. How many times may a proposal be repeated?
The final issue I want to raise today with respect to the shareholder proposal process is the frequency of reproposals. Currently, once a proposal is required to be included in the proxy, it can be resubmitted for years to come, even if it never comes close to commanding majority support. Proposals need only 3, 6, or 10% of votes in support to stay alive, depending on whether the proposal has been brought once, twice, or three times or more in the past five years.[xxiii] So a proposal that gets a bare 10% of the votes, year after year, is not excludable on that basis under our current rules. Such proposals are an enormous waste of time and shareholder money.
We need to substantially strengthen the resubmission thresholds, perhaps by taking a “three strikes and you’re out” policy. That is, if a proposal fails in its third year to garner majority support, the proposal should be excludable for the following 5 years. The thresholds for the prior 2 years should be high enough to demonstrate that the proposal is realistically on the path toward 50%, for example, 5% and 20%.
3. Conclusion
Implementing these kinds of reforms can, I believe, help provide some much-needed improvement to the shareholder proposal system. I hope the Commission can consider such common-sense issues in the near future. These are real and substantial issues, and the Commission has the authority to effectuate needed change. We should not dare Congress to intervene due to our inaction, as it had to with the JOBS Act.
III. Remaining the Right Regulator
Finally, I want to return to my original theme: good government requires that, when we must regulate, we should do so in the most efficient manner possible. This means assigning the right regulator to the issue and minimizing unnecessary regulatory overlap. And of course, the Commission must continue to ensure that its regulatory approach advances its core goals of investor protection and the promotion of efficiency, competition, and capital formation.
That means, for example, pressing ahead with much-needed reforms to our corporate disclosure requirements to ensure that our filings provide investors with the information they need to make informed investment decisions and are not overwhelmed by extraneous information—like conflict minerals reports.
We must also take exception to efforts by third parties that attempt to prescribe what should be in corporate filings. It is the Commission’s responsibility to set the parameters of required disclosure.
The somewhat confusingly-named Sustainability Accounting Standards Board provides a good example of an outside party attempting to prescribe disclosure standards. I say “confusingly-named” because the SASB does not actually promulgate accounting standards, nor does it limit itself to sustainability topics, although I suppose it is in fact a Board. The SASB argues that its disclosure standards elicit material information that management should assess for inclusion in companies’ periodic filings with the Commission.[xxiv]
I don’t mean to single out the SASB, but it’s important to stress that, with the sole exception of financial accounting—where the Commission, as authorized by Congress, has recognized the standards of the Financial Accounting Standards Board as generally accepted, and therefore required under Regulation S‑X—the Commission does not and should not delegate to outside, non-governmental bodies the responsibility for setting disclosure requirements. So while companies are free to make whatever disclosures they choose on their own time, so to speak, it is important to remember that groups like SASB have no role in the establishment of mandated disclosure requirements.
With respect to information that the Commission requires to be included in filings, we need to be sure that our requirements are eliciting decision-useful and up-to-date information. We should be willing to reexamine all of our disclosure requirements. Indeed, the Commission should be engaged in a comprehensive program of periodic re-assessment of its disclosure rules to ensure that the benefits of disclosure continue to justify its often-substantial costs.
This is of course a tall order, but I know the fine men and women who serve the public at the Commission are up for the challenge.
* * *
Thank you all for your time and attention today, and I hope you enjoy the rest of the conference.
[i] See Troy A. Paredes, Speech by SEC Commissioner: Remarks at the 22nd Annual Tulane Corporate Law Institute (Apr. 15, 2010), available at http://www.sec.gov/news/speech/2010/spch041510tap.htm.
[ii] See Daniel M. Gallagher, Speech, Remarks before the Corporate Directors Forum (Jan. 29, 2013), available at www.sec.gov/News/Speech/Detail/Speech/1365171492142; see also, e.g., J. Robert Brown, Jr., The Politicization of Corporate Governance: Bureaucratic Discretion, the SEC, and Shareholder Ratification of Auditors, 2 Harv. Bus. L. Rev. 61, 62 (2012).
[iii] Rel. 33-9452, Pay Ratio Disclosure (Sept. 18, 2013).
[iv] Rel. 34-64140, Incentive-based Compensation Arrangements (Mar. 29, 2011).
[v] James R. Copeland & Margaret M. O’Keefe, Proxy Monitor 2013: A Report on Corporate Governance and Shareholder Activism (Manhattan Institute, Fall 2013) at 2 (average Fortune 250 company faced 1.26 proposals in 2013 versus 1.22 in 2012); Gibson, Dunn & Crutcher LLP, Shareholder Proposal Developments During the 2013 Proxy Season (July 9, 2013) at 1 (noting more proposals in 2013 (~820) than 2012 (~739)).
[vi] Proxy Monitor 2013 at 7.
[vii] Proxy Monitor 2013 at 12 (“[P]roposals related to corporate political spending or lobbying have been more numerous than any other class of proposal in each of the last two years.”).
[viii] ISS reports political contribution/lobbying activity approval percentage at 29%, an increase of 7.3% over 2012. See Gibson Dunn at 6. However, Proxy Monitor finds the opposite trend, at least with respect to the Fortune 250 companies. See Proxy Monitor 2013 at 2. Specifically, disaggregating lobbying and political spending proposals shows a decline in y-o-y support for both proposal classes: 22% in 2012 to 20% in 2013 for lobbying, and 17% to 16% for political spending. Id. But a change in the mix of proposals—there were more lobbying-related proposals, which typically garner higher support, given that 2013 is a non-election year—creates the impression of an increasing overall rate.
[ix] Proxy Monitor 2013 at 2 (contrasting with 9% in 2012).
[x] Proxy Monitor 2013 at 6–7.
[xi] Proxy Monitor 2013 at 8 (“Those companies [giving at least $1.5 million to candidates or PACs], as a group, were much more likely to be targeted by shareholder proposals introduced by labor-affiliated pension funds in 2013: 44 percent of these politically most active companies faced a labor-sponsored proposal, as opposed to only 18 percent of all other companies. What’s more, those corporations that gave at least half of their donations to support Republicans were more than twice as likely to be targeted by shareholder proposals sponsored by labor-affiliated funds as those companies that gave a majority of their politics-related contributions on behalf of Democrats.”).
[xii] James R. Copeland, Proxy Monitor 2011: A Report on Corporate Governance and Shareholder Activism (Manhattan Institute, Sept. 2011) at 4.
[xiii] Allan T. Ingraham & Anna Koyfman, Analysis of the Wealth Effects of Shareholder Proposals–Vol. III (U.S. Chamber of Commerce, May 2, 2013).
[xiv] See Rel. 34-40018, Amendments to Rules on Shareholder Proposals (May 21, 1998) (describing the change from $1,000 to $2,000 as an adjustment for inflation).
[xv] Exchange Act Rule 14a‑8(i)(7).
[xvi] See, e.g., Hunton & Williams, Client Alert, SEC Refused to Allow Bank to Omit Climate Change Proposal from Proxy Materials (Mar. 2013). It has been argued, however, that PNC was not a reversal, but rather was driven by some substantive differences with PNC’s lending portfolio. See Gibson Dunn at 9–10 (citing a “SEC spokesman” commenting to that effect). This may indicate a need for the Staff to provide fuller statements of their reasoning in no-action letters, so as to avoid confusion among practitioners and the public.
[xvii] See Larry Downes, AT&T, Verizon, and Sprint Net Neutrality Proposals: Simply Awful, Forbes.com (Apr. 12, 2012, updated Apr. 27, 2012), at http://www.forbes.com/sites/larrydownes/2012/04/12/att-verizon-and-sprint-net-neutrality-proposals-simply-awful/.
[xviii] Exchange Act Rule 14a‑8(i)(3).
[xix] See SLB 14B (2004).
[xx] Of 90 denials of exclusion during the 2013 proxy season, 63% of them had raised (i)(3) arguments. Gibson Dunn at 2. While there could be several reasons for this trend, it calls for further examination.
[xxi] Express Scripts Holding Co. v. Chevedden, No. 4:13-CV-2520-JAR (E.D. Mo., Feb. 18, 2014).
[xxii] See Waste Connections v. Chevedden, No. 13-20336, slip op. (5th Cir., Feb. 13, 2014) (affirming court’s subject matter jurisdiction over company’s declaratory judgment action despite Chevedden’s promise not to sue if company excluded the proposal).
[xxiii] See Exchange Act Rule 14a‑8(i)(12).
[xxiv] See, e.g., SASB, Commercial Banks Sustainability Accounting Standard, Provisional Version (Feb. 2014) (“SASB Standards are comprised of (1) disclosure guidance and (2) accounting standards on sustainability topics for use by U.S. and foreign public companies in their annual filings (Form 10-K or 20-F) with the U.S. Securities and Exchange Commission (SEC). To the extent relevant, SASB Standards may also be applicable to other periodic mandatory fillings with the SEC, such as the Form 10-Q, Form S-1, and Form 8-K. SASB’s disclosure guidance identifies sustainability topics at an industry level, which may be material—depending on a company’s specific operating context—to a company within that industry. Each company is ultimately responsible for determining which information is material and is therefore required to be included in its Form 10-K or 20-F and other periodic SEC filings.”).
Sunday, March 30, 2014
PRESIDENT OBAMA'S REMARKS IN PRESENTING 2014 WOMEN OF COURAGE AWARD
FROM: THE WHITE HOUSE
REMARKS BY THE PRESIDENT
IN PRESENTING STATE DEPARTMENT’S 2014 WOMEN OF COURAGE AWARD
TO DR. MAHA AL MUNEEF
Ritz Carlton
Riyadh, Saudi Arabia
THE PRESIDENT: For the press, I just wanted to let everybody know Dr. Al Muneef was a recipient of the International Women of Courage Award that the State Department annually presents to women who are doing extraordinary work around the world advocating on behalf of women, children, and families. She was not able to attend because of family health issues, but we were aware of the fact that we’d be able to see her here today to personally present the award.
I’m doing this on behalf of Michelle Obama, who normally is the presenter, and I know that Dr. Al Muneef is disappointed that it’s me instead of Michelle -- appropriately so. (Laughter.) But Dr. Maha Al Muneef has been able to not only set up services here in the kingdom, but also, more importantly in some ways, been able to pass laws providing protections for women and children for domestic abuse and to provide a safe space and shelter for those who are suffering from domestic abuses.
And so to see the kind of progress that’s been made, her ability to work with the kingdom to persuade many that this is an issue that’s going to be important to the society over the long term, I think makes this award fully justified. And so we’re very, very proud of you and grateful for all the work you’re doing here and I’m looking forward to seeing you do even more wonderful things in the future.
DR. AL MUNEEF: Thank you. (Inaudible.)
THE PRESIDENT: Thank you so much. And she has wonderful children who are over there taking pictures. She’s very proud of them.
RECENT U.S. MARINE CORPS PHOTOS
FROM: U.S. MARINE CORPS
Mar 21, 2014
Fort Hunter Liggett, CA - Marines with the tank platoon, Battalion Landing Team 2nd Battalion, 1st Marines, part of the 11th Marine Expeditionary Unit, fire the M256 smoothbore gun of four M1A1 Abrams tanks during a live-fire training exercise at Fort Hunter Liggett, Calif., March 20. Realistic Urban Training Marine Expeditionary Unit Exercise 14-1 allows the Marines and sailors of the 11th MEU the opportunity to employ techniques and tactics applicable to their future deployment. RUTMEUEX incorporates the majority of the ground combat element, aviation combat element, logistics combat element and command element of the MEU for the first time in the predeployment cycle. 140320-M-RR352-001.JPG Photo By: Sgt. Melissa Wenger.
Mar 29, 2014
Pohang, Gyeongsangbuk province, South Korea - Republic of Korea and U.S. Marines assault the beach March 29 during a rehearsal of the amphibious landing portion of Ssang Yong 2014 at Doksoek-ri in Pohang, Republic of Korea. More than 20 U.S. Navy and ROK ships are supporting the amphibious landing. This exercise demonstrates the unique ability of a Marine Expeditionary Brigade headquarters to composite multiple Marine Air Ground Task Forces arriving in theatre via amphibious shipping, along with a ROK Regimental Landing Team, into an amphibious combined MEB. (U.S. Marine Corps photo by Lance Cpl. Cedric R. Haller II/RELEASED)
REPORTS RELEASED ON DISEASES THREATENING HOSPITAL PATIENTS
FROM: CENTERS FOR DISEASE CONTROL AND PREVENTION
Despite Progress, Ongoing Efforts Needed to Combat Infections Impacting Hospital Patients
National and state data detail threat of healthcare-associated infections and opportunities for further improvements
On any given day, approximately one in 25 U.S. patients has at least one infection contracted during the course of their hospital care, adding up to about 722,000 infections in 2011, according to new data from the Centers for Disease Control and Prevention. This information is an update to previous CDC estimates of healthcare-associated infections.
The agency released two reports today – one, a New England Journal of MedicineExternal Web Site Icon article detailing 2011 national healthcare-associated infection estimates from a survey of hospitals in ten states, and the other a 2012 annual report on national and state-specific progress toward U.S. Health and Human Services HAI prevention goalsExternal Web Site Icon. Together, the reports show that progress has been made in the effort to eliminate infections that commonly threaten hospital patients, but more work is needed to improve patient safety.
"Although there has been some progress, today and every day, more than 200 Americans with healthcare-associated infections will die during their hospital stay,” said CDC Director Tom Frieden, M.D., M.P.H. “The most advanced medical care won’t work if clinicians don’t prevent infections through basic things such as regular hand hygiene. Health care workers want the best for their patients; following standard infection control practices every time will help ensure their patients’ safety."
The CDC Multistate Point-Prevalence Survey of Health Care-Associated Infections, published in NEJM, used 2011 data from 183 U.S. hospitals to estimate the burden of a wide range of infections in hospital patients. That year, about 721,800 infections occurred in 648,000 hospital patients. About 75,000 patients with healthcare-associated infections died during their hospitalizations. The most common healthcare-associated infections were pneumonia (22 percent), surgical site infections (22 percent), gastrointestinal infections (17 percent), urinary tract infections (13 percent), and bloodstream infections (10 percent).
The most common germs causing healthcare-associated infections were C. difficile (12 percent), Staphylococcus aureus, including MRSA (11 percent), Klebsiella (10 percent), E. coli (9 percent), Enterococcus (9 percent), and Pseudomonas (7 percent). Klebsiella and E. coli are members of the Enterobacteriaceae bacteria family, which has become increasingly resistant to last-resort antibiotics known as carbapenems.
Tracking National Progress
The second report, CDC’s National and State Healthcare-associated Infection Progress Report, includes a subset of infection types that are commonly required to be reported to CDC. On the national level, the report found a:
44 percent decrease in central line-associated bloodstream infections between 2008 and 2012
20 percent decrease in infections related to the 10 surgical procedures tracked in the report between 2008 and 2012
four percent decrease in hospital-onset MRSA between 2011 and 2012
two percent decrease in hospital-onset C. difficile infections between 2011 and 2012
“Our nation is making progress in preventing healthcare-associated infections through three main mechanisms: financial incentives to improve quality, performance measures and public reporting to improve transparency, and the spreading and scaling of effective interventions,” said Patrick Conway, M.D.,External Web Site Icon Deputy Administrator for Innovation and Quality for Centers for Medicare & Medicaid Services (CMS) and CMS chief medical officer. “This progress represents thousands of lives saved, prevented patient harm, and the associated reduction in costs across our nation.”
The federal government considers elimination of health care-associated infections a top priority and has a number of ongoing efforts to protect patients and improve health care quality. In addition to CDC’s expertise and leadership in publishing evidence-based infection prevention guidelines, housing the nation’s healthcare-associated infection laboratories, responding to health care facility outbreaks and tracking infections in these facilities, other federal and non-federal partners are actively working to accelerate the prevention progress that is happening across the country. These initiatives are coordinated through the National Action Plan to Prevent Healthcare-Associated Infections and include CMS’ Partnership for PatientsExternal Web Site Icon, CMS Quality Improvement OrganizationsExternal Web Site Icon, and the Agency for Healthcare Research and Quality’sExternal Web Site Icon Comprehensive Unit-based Safety ProgramExternal Web Site Icon.
State Data
The Progress Report looked at data submitted to CDC’s National Healthcare Safety Network (NHSN), the nation’s healthcare-associated infection tracking system, which is used by more than 12,600 health care facilities across all 50 states, Washington, D.C., and Puerto Rico. Not all states reported or had enough data to calculate valid infection information on every infection in this report. The number of infections reported was compared to a national baseline.
In the report, none of the 50 states, Washington, D.C., or Puerto Rico performed better than the nation on all four infection types tracked by state (CLABSI, CAUTI, and infections after colon surgery and abdominal hysterectomy). Sixteen states performed better than the nation on two infections, including two states performing better on three infections. In addition, 16 states performed worse than the nation on two infections, with seven states performing worse on at least three infections.
FY15 President’s Budget
Expanding upon current patient safety goals, the FY 2015 President’s Budget requests funding for CDC to increase the detection of antibiotic resistant infections and improve efforts to protect patients from infections, including those detailed in today’s CDC reports. Additionally the President’s Budget requests an increase for the National Healthcare Safety Network to fully implement tracking of antibiotic use and antibiotic resistance threats in U.S. hospitals.
Despite Progress, Ongoing Efforts Needed to Combat Infections Impacting Hospital Patients
National and state data detail threat of healthcare-associated infections and opportunities for further improvements
On any given day, approximately one in 25 U.S. patients has at least one infection contracted during the course of their hospital care, adding up to about 722,000 infections in 2011, according to new data from the Centers for Disease Control and Prevention. This information is an update to previous CDC estimates of healthcare-associated infections.
The agency released two reports today – one, a New England Journal of MedicineExternal Web Site Icon article detailing 2011 national healthcare-associated infection estimates from a survey of hospitals in ten states, and the other a 2012 annual report on national and state-specific progress toward U.S. Health and Human Services HAI prevention goalsExternal Web Site Icon. Together, the reports show that progress has been made in the effort to eliminate infections that commonly threaten hospital patients, but more work is needed to improve patient safety.
"Although there has been some progress, today and every day, more than 200 Americans with healthcare-associated infections will die during their hospital stay,” said CDC Director Tom Frieden, M.D., M.P.H. “The most advanced medical care won’t work if clinicians don’t prevent infections through basic things such as regular hand hygiene. Health care workers want the best for their patients; following standard infection control practices every time will help ensure their patients’ safety."
The CDC Multistate Point-Prevalence Survey of Health Care-Associated Infections, published in NEJM, used 2011 data from 183 U.S. hospitals to estimate the burden of a wide range of infections in hospital patients. That year, about 721,800 infections occurred in 648,000 hospital patients. About 75,000 patients with healthcare-associated infections died during their hospitalizations. The most common healthcare-associated infections were pneumonia (22 percent), surgical site infections (22 percent), gastrointestinal infections (17 percent), urinary tract infections (13 percent), and bloodstream infections (10 percent).
The most common germs causing healthcare-associated infections were C. difficile (12 percent), Staphylococcus aureus, including MRSA (11 percent), Klebsiella (10 percent), E. coli (9 percent), Enterococcus (9 percent), and Pseudomonas (7 percent). Klebsiella and E. coli are members of the Enterobacteriaceae bacteria family, which has become increasingly resistant to last-resort antibiotics known as carbapenems.
Tracking National Progress
The second report, CDC’s National and State Healthcare-associated Infection Progress Report, includes a subset of infection types that are commonly required to be reported to CDC. On the national level, the report found a:
44 percent decrease in central line-associated bloodstream infections between 2008 and 2012
20 percent decrease in infections related to the 10 surgical procedures tracked in the report between 2008 and 2012
four percent decrease in hospital-onset MRSA between 2011 and 2012
two percent decrease in hospital-onset C. difficile infections between 2011 and 2012
“Our nation is making progress in preventing healthcare-associated infections through three main mechanisms: financial incentives to improve quality, performance measures and public reporting to improve transparency, and the spreading and scaling of effective interventions,” said Patrick Conway, M.D.,External Web Site Icon Deputy Administrator for Innovation and Quality for Centers for Medicare & Medicaid Services (CMS) and CMS chief medical officer. “This progress represents thousands of lives saved, prevented patient harm, and the associated reduction in costs across our nation.”
The federal government considers elimination of health care-associated infections a top priority and has a number of ongoing efforts to protect patients and improve health care quality. In addition to CDC’s expertise and leadership in publishing evidence-based infection prevention guidelines, housing the nation’s healthcare-associated infection laboratories, responding to health care facility outbreaks and tracking infections in these facilities, other federal and non-federal partners are actively working to accelerate the prevention progress that is happening across the country. These initiatives are coordinated through the National Action Plan to Prevent Healthcare-Associated Infections and include CMS’ Partnership for PatientsExternal Web Site Icon, CMS Quality Improvement OrganizationsExternal Web Site Icon, and the Agency for Healthcare Research and Quality’sExternal Web Site Icon Comprehensive Unit-based Safety ProgramExternal Web Site Icon.
State Data
The Progress Report looked at data submitted to CDC’s National Healthcare Safety Network (NHSN), the nation’s healthcare-associated infection tracking system, which is used by more than 12,600 health care facilities across all 50 states, Washington, D.C., and Puerto Rico. Not all states reported or had enough data to calculate valid infection information on every infection in this report. The number of infections reported was compared to a national baseline.
In the report, none of the 50 states, Washington, D.C., or Puerto Rico performed better than the nation on all four infection types tracked by state (CLABSI, CAUTI, and infections after colon surgery and abdominal hysterectomy). Sixteen states performed better than the nation on two infections, including two states performing better on three infections. In addition, 16 states performed worse than the nation on two infections, with seven states performing worse on at least three infections.
FY15 President’s Budget
Expanding upon current patient safety goals, the FY 2015 President’s Budget requests funding for CDC to increase the detection of antibiotic resistant infections and improve efforts to protect patients from infections, including those detailed in today’s CDC reports. Additionally the President’s Budget requests an increase for the National Healthcare Safety Network to fully implement tracking of antibiotic use and antibiotic resistance threats in U.S. hospitals.
SEC ANNOUNCES SETTLEMENT IN IMMIGRANT INVESTOR OFFERING FRAUD
FROM: SECURITIES AND EXCHANGE COMMISSION
SEC Obtains Settlements in $150 Million EB-5 Immigrant Investor Offering Fraud
On March 17, 2014, the U.S. District Court entered a consent judgment against defendants Anshoo R. Sethi, A Chicago Convention Center, LLC (ACCC) and Intercontinental Regional Center Trust of Chicago, LLC (IRCTC) for their roles in raising approximately $158 million dollars from close to 300 investors as part of a fraudulent offering that targeted foreign nationals who sought to invest in the U.S. economy and gain a legal pathway to citizenship through the EB-5 Immigrant Investor Program, as alleged in the SEC's February 2013 complaint. The Final Judgment provides the following relief:
joint-and-several liability for over $11.5 million in disgorgement and prejudgment interest, subject to offsets for certain amounts refunded or credited to investors;
permanent injunctions against future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder;
an order enjoining and restraining defendants for twenty years from offering or selling securities issued by any of the defendants or issued by any entity owned or controlled by Sethi;
a civil penalty of $1 million against defendant Sethi;
civil penalties of up to $1.45 each against ACCC and IRCTC;
ACCC and IRCTC agreed to wind up and dissolve after satisfying their payment obligations.
The Defendants will satisfy their payment obligations, at least in part, by paying over the funds frozen in certain bank accounts pursuant to the Court's asset freeze order in this case and also by selling property held in ACCC's name.
The Commission filed its case on February 6, 2013, and obtained a temporary restraining order and asset freeze against Sethi, ACCC and IRCTC. On April 19, 2013, the Court granted the Commission's motion to return to investors the entire $147 million of principal that had been frozen pursuant to the SEC's motions. The agreed upon settlement resolves, among other things, the disposition of approximately $11 million in administrative fees paid by investors, which are the only funds remaining to be returned in order to make the investors whole.
Sethi, ACCC and IRCTC neither admitted nor denied the SEC's allegations.
SEC Obtains Settlements in $150 Million EB-5 Immigrant Investor Offering Fraud
On March 17, 2014, the U.S. District Court entered a consent judgment against defendants Anshoo R. Sethi, A Chicago Convention Center, LLC (ACCC) and Intercontinental Regional Center Trust of Chicago, LLC (IRCTC) for their roles in raising approximately $158 million dollars from close to 300 investors as part of a fraudulent offering that targeted foreign nationals who sought to invest in the U.S. economy and gain a legal pathway to citizenship through the EB-5 Immigrant Investor Program, as alleged in the SEC's February 2013 complaint. The Final Judgment provides the following relief:
joint-and-several liability for over $11.5 million in disgorgement and prejudgment interest, subject to offsets for certain amounts refunded or credited to investors;
permanent injunctions against future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder;
an order enjoining and restraining defendants for twenty years from offering or selling securities issued by any of the defendants or issued by any entity owned or controlled by Sethi;
a civil penalty of $1 million against defendant Sethi;
civil penalties of up to $1.45 each against ACCC and IRCTC;
ACCC and IRCTC agreed to wind up and dissolve after satisfying their payment obligations.
The Defendants will satisfy their payment obligations, at least in part, by paying over the funds frozen in certain bank accounts pursuant to the Court's asset freeze order in this case and also by selling property held in ACCC's name.
The Commission filed its case on February 6, 2013, and obtained a temporary restraining order and asset freeze against Sethi, ACCC and IRCTC. On April 19, 2013, the Court granted the Commission's motion to return to investors the entire $147 million of principal that had been frozen pursuant to the SEC's motions. The agreed upon settlement resolves, among other things, the disposition of approximately $11 million in administrative fees paid by investors, which are the only funds remaining to be returned in order to make the investors whole.
Sethi, ACCC and IRCTC neither admitted nor denied the SEC's allegations.
FINAL ORDER APPROVED BY FTC REGARDING KIDS IN-APP PURCHASES OF APPLE PRODUCTS
FROM: FEDERAL TRADE COMMISSION
FTC Approves Final Order in Case About Apple Inc. Charging for Kids’ In-App Purchases Without Parental Consent
Following a public comment period, the Federal Trade Commission has approved a final order resolving FTC allegations that Apple Inc. unfairly charged consumers for in-app purchases incurred by children without their parents’ consent.
The settlement was first announced by the Commission in January. In its complaint, the agency alleged that Apple failed to notify parents that entering their password would approve a purchase and then open a 15-minute window in which unlimited charges could be made without authorization. In the complaint, the FTC cited examples of children incurring thousands of dollars in in-app purchases without their parents’ consent.
Under the settlement, by March 31, 2014, Apple must change its billing practices to ensure that it has obtained express, informed consent from consumers before charging them for in-app purchases.
Apple also must provide full refunds, totaling a minimum of $32.5 million, to consumers who were billed for in-app purchases that were incurred by children and were either accidental or not authorized by the consumer. Should Apple issue less than $32.5 million in refunds to consumers within the 12 months after the settlement becomes final, the company must remit the balance to the Commission. By April 15, 2014, Apple must notify all consumers charged for in-app purchases with instructions on how to obtain a refund for unauthorized purchases by kids.
The Commission vote approving the final order and letters to members of the public was 3-1, with Commissioner Wright voting in the negative. (FTC File No. 112-3108, the staff contacts in the Bureau of Consumer Protection are Duane Pozza, 202-326-2042; Jason Adler, 202-326-3231; and Miya Rahamim, 202-326-2351.)
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.
FTC Approves Final Order in Case About Apple Inc. Charging for Kids’ In-App Purchases Without Parental Consent
Following a public comment period, the Federal Trade Commission has approved a final order resolving FTC allegations that Apple Inc. unfairly charged consumers for in-app purchases incurred by children without their parents’ consent.
The settlement was first announced by the Commission in January. In its complaint, the agency alleged that Apple failed to notify parents that entering their password would approve a purchase and then open a 15-minute window in which unlimited charges could be made without authorization. In the complaint, the FTC cited examples of children incurring thousands of dollars in in-app purchases without their parents’ consent.
Under the settlement, by March 31, 2014, Apple must change its billing practices to ensure that it has obtained express, informed consent from consumers before charging them for in-app purchases.
Apple also must provide full refunds, totaling a minimum of $32.5 million, to consumers who were billed for in-app purchases that were incurred by children and were either accidental or not authorized by the consumer. Should Apple issue less than $32.5 million in refunds to consumers within the 12 months after the settlement becomes final, the company must remit the balance to the Commission. By April 15, 2014, Apple must notify all consumers charged for in-app purchases with instructions on how to obtain a refund for unauthorized purchases by kids.
The Commission vote approving the final order and letters to members of the public was 3-1, with Commissioner Wright voting in the negative. (FTC File No. 112-3108, the staff contacts in the Bureau of Consumer Protection are Duane Pozza, 202-326-2042; Jason Adler, 202-326-3231; and Miya Rahamim, 202-326-2351.)
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.
LANL RESEARCH ON MAGNETIZING A SEMICONDUCTOR MATERIAL WITH LIGHT
 |
| Photo Credit: U.S. Government/Wikimedia |
Flipping the Switch on Magnetism in Strontium Titanate
Semiconductor material can be magnetized with light, suggesting new technology opportunities
LOS ALAMOS, N.M., March 27, 2013—Interest in oxide-based semiconductor electronics has exploded in recent years, fueled largely by the ability to grow atomically precise layers of various oxide materials.
One of the most important materials in this burgeoning field is strontium titanate (SrTiO3), a nominally nonmagnetic wide-bandgap semiconductor, and researchers at Los Alamos National Laboratory have found a way to magnetize this material using light, an effect that persists for hours at a time.
“One doesn’t normally think of this material as being able to support magnetism. It’s supposed to be useful – but magnetically uninteresting – stuff. So when we started shining light on it and saw what appeared to be extremely long-lived magnetic signals – that persisted for hours even after we turned the light off – it came as quite a surprise,” said Scott Crooker, lead scientist on the project at Los Alamos.
Studies of strontium titanate’s electrical and optical properties abound, it’s not a new material – in fact it was marketed in the 1950s and ‘60s as a “faux diamond” product before cubic zirconium gained popularity. Though often used in industry for its robust dielectric properties, its potential magnetic properties were less well understood. A renewed interest in SrTiO3 was recently sparked by observations of an unexpected and emergent magnetization in strontium titanate-based structures.
“There’ve been tantalizing hints in recent years that there might be more to SrTiO3 than originally thought. When layered with other ‘nominally non-magnetic’ oxides, a handful of recent experiments around the world have shown not only superconductivity but also an unexpected magnetism. So that piqued our interest in this material,” Crooker said.
"This is really something completely new in oxide materials like these - the ability to write permanent magnetic patterns into an otherwise non-magnetic material. The challenge will be to properly understand how and why this works, and to increase the temperature at which it can be done. The exciting possibility is to potentially use this to store data in some way,” said collaborator Chris Leighton of the University of Minnesota.
In a paper published this week in Nature Materials, Crooker and collaborators illustrated a new aspect to the nature of magnetism in strontium titanate, reporting the observation of an optically induced and persistent magnetization in crystals of SrTiO3 when they are slightly oxygen-deficient.
Using samples prepared by collaborators in Leighton’s group, Crooker and Los Alamos colleagues William Rice and Joe Thompson used magnetic circular dichroism spectroscopy and also SQUID magnetometry to show that circularly polarized light can induce an extremely long-lived magnetic moment in SrTiO3 at zero applied magnetic field.
These signals appear below 18 Kelvin, persist for hours below 10 K, and can be controlled in both magnitude and sign via the circular polarization and wavelength of blue/green light in the range spanning 400-500 nm. As such, magnetic patterns can be “written” into SrTiO3, and subsequently read out, using light alone. These effects occur only in crystals containing oxygen vacancies, revealing a detailed interplay between magnetism, lattice defects and light in an archetypal complex oxide material.
This work was funded by Laboratory Directed Research and Development Exploratory Research at Los Alamos National Laboratory under the auspices of the US DOE Office of Science.
Saturday, March 29, 2014
WOMAN PLEADS GUILTY IN CASE OF HOLDING PERSON FOR FORCED LABOR IN RESTAURANT
FROM: U.S. JUSTICE DEPARTMENT
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Wednesday, March 26, 2014
Minnesota Woman Pleads Guilty to Human Trafficking for Holding Victim in Forced Labor in Restaurant
Tieu Tran, 59, of Mankato, Minn., pleaded guilty to one count of forced labor trafficking in the U.S. District Court for the District of Minnesota, the Justice Department announced today. Tran is the former owner and manager of Nails By Jordan, a nail salon located in Mankato.
According to evidence presented in court proceedings and documents, in 2008, Tran recruited a woman from Vietnam to travel to the United States using false promises of legal immigration status and a high-paying job. In reality, Tran smuggled the victim and two other Vietnamese nationals across the southern U.S.-Mexico border, imposed a significant debt upon the victim and forced the victim to pay down the smuggling debt by working at Tran’s son’s Vietnamese restaurant, Pho Saigon, in Mankato.
During the plea proceedings, Tran admitted to compelling the victim to work long hours without paying her as promised, using a scheme, plan and pattern of non-violent coercion. This included manipulation of debts, isolation and verbal intimidation to hold the victim in fear, knowing that the victim was without legal status and money, did not have the ability to speak English, feared losing her family home in Vietnam to creditors and had nowhere else to turn for subsistence.
“This defendant preyed on vulnerable victims and exploited them for her profit,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Traffickers routinely use schemes of non-violent coercion to exploit victims by manipulating the victims’ debts, fears of immigration consequences, linguistic isolation and other vulnerabilities. The Civil Rights Division is committed to seeking justice on behalf of victims of human trafficking and to holding human traffickers accountable”
“Human trafficking degrades the dignity of humanity and strikes at the heart of individual equality and freedom,” said U.S. Attorney Andy Luger for the District of Minnesota. “The U.S. Attorney’s Office for the District of Minnesota will aggressively prosecute those who seek to capitalize on human frailty through such conduct.”
“ The FBI, in conjunction with its law enforcement partners, remains steadfast in its commitment to eradicate human trafficking,” said Special Agent in Charge J. Chris Warrener of the FBI’s Minneapolis Field Office. “Human trafficking is an insidious crime which impacts not only its victims, but society as a whole. Detecting and bringing to justice those who perpetrate these schemes will always be a top priority for law enforcement. ”
Tran faces a statutory maximum sentence of 20 years in prison and a $250,000 fine. As part of her plea agreement, Tran agreed to nullify all debts imposed upon the victim, as well as similar debts imposed upon seven other individuals believed to be under similar circumstances.
This case was investigated by the FBI and is being prosecuted by Trial Attorney William Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit and Assistant U.S. Attorney David Steinkamp of the U.S. Attorney’s Office for the District of Minnesota.
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Wednesday, March 26, 2014
Minnesota Woman Pleads Guilty to Human Trafficking for Holding Victim in Forced Labor in Restaurant
Tieu Tran, 59, of Mankato, Minn., pleaded guilty to one count of forced labor trafficking in the U.S. District Court for the District of Minnesota, the Justice Department announced today. Tran is the former owner and manager of Nails By Jordan, a nail salon located in Mankato.
According to evidence presented in court proceedings and documents, in 2008, Tran recruited a woman from Vietnam to travel to the United States using false promises of legal immigration status and a high-paying job. In reality, Tran smuggled the victim and two other Vietnamese nationals across the southern U.S.-Mexico border, imposed a significant debt upon the victim and forced the victim to pay down the smuggling debt by working at Tran’s son’s Vietnamese restaurant, Pho Saigon, in Mankato.
During the plea proceedings, Tran admitted to compelling the victim to work long hours without paying her as promised, using a scheme, plan and pattern of non-violent coercion. This included manipulation of debts, isolation and verbal intimidation to hold the victim in fear, knowing that the victim was without legal status and money, did not have the ability to speak English, feared losing her family home in Vietnam to creditors and had nowhere else to turn for subsistence.
“This defendant preyed on vulnerable victims and exploited them for her profit,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Traffickers routinely use schemes of non-violent coercion to exploit victims by manipulating the victims’ debts, fears of immigration consequences, linguistic isolation and other vulnerabilities. The Civil Rights Division is committed to seeking justice on behalf of victims of human trafficking and to holding human traffickers accountable”
“Human trafficking degrades the dignity of humanity and strikes at the heart of individual equality and freedom,” said U.S. Attorney Andy Luger for the District of Minnesota. “The U.S. Attorney’s Office for the District of Minnesota will aggressively prosecute those who seek to capitalize on human frailty through such conduct.”
“ The FBI, in conjunction with its law enforcement partners, remains steadfast in its commitment to eradicate human trafficking,” said Special Agent in Charge J. Chris Warrener of the FBI’s Minneapolis Field Office. “Human trafficking is an insidious crime which impacts not only its victims, but society as a whole. Detecting and bringing to justice those who perpetrate these schemes will always be a top priority for law enforcement. ”
Tran faces a statutory maximum sentence of 20 years in prison and a $250,000 fine. As part of her plea agreement, Tran agreed to nullify all debts imposed upon the victim, as well as similar debts imposed upon seven other individuals believed to be under similar circumstances.
This case was investigated by the FBI and is being prosecuted by Trial Attorney William Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit and Assistant U.S. Attorney David Steinkamp of the U.S. Attorney’s Office for the District of Minnesota.
MAN SENTENCED FOR PART IN RACIAL ASSAULT AGAINST WHITE MAN AND AFRICAN-AMERICAN WOMAN
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, March 25, 2014
California Man Sentenced to Federal Prison for Racially Motivated Assault on White Man and African-American Woman
Billy James Hammett, 30, of Marysville, Calif., was sentenced today by U.S. District Judge John A. Mendez to serve 87 months in prison for violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act in a 2011 racially motivated attack against a white man and an African-American woman in Marysville. The court also ordered Hammett to pay restitution in the amount of $175 and to serve three years of supervised release following his prison sentence. Hammett pleaded guilty on Dec. 17, 2013, and his co-defendants, Perry Sylvester Jackson, 28, and Anthony Merrell Tyler, 33, have also pleaded guilty and are awaiting sentencing.
According to documents filed with the court, around 10:45 p.m. on April 18, 2011, a white man and an African-American woman parked their car at a convenience store in Marysville. Shortly afterward, the three defendants, each of whom has white supremacist tattoos, attacked the man and woman based on race. After calling the male victim a “[racial slur]-lover,” Jackson punched him twice in the head through the open passenger window. At the same time, Hammett kicked the woman in the chest. A few seconds later, Tyler smashed the car’s windshield with a crowbar. As the attack continued, the woman managed to take refuge inside the convenience store. All three assailants then descended upon the male victim and began attacking him in the parking lot. He sustained abrasions on his right forearm and knees, while the woman suffered bruising to her chest. At the end of the incident, Tyler used a racial slur to refer to an African-American witness.
In sentencing the defendant, Judge Mendez said he found surveillance video footage of the assault “disturbing.” He noted that Hammett’s attack on the victims was “unprovoked and unwarranted,” and that the victims continue to suffer.
During the sentencing hearing, Judge Mendez also specifically considered Hammett’s background and criminal history, which includes a conviction in 2006 for assaulting a 72-year-old black man, also in Marysville. According to court records, Hammett made racial comments immediately before the unprovoked attack. In addition, Hammett has been affiliated with a number of white supremacist gangs, including Supreme White Power. He has tattoos of the words “white power” across his abdomen, a large swastika on the right side of his torso and the word “skinhead” written across the top of his back. Judge Mendez stated during the sentencing hearing that Hammett poses “a serious threat to the public.”
“The defendant and his associates accosted the victims in public and assaulted them because of their race,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The department is committed to stamping out racial violence and will continue to prosecute hate crimes vigorously.”
“Racially-motivated violence has no place in civilized society,” said U.S. Attorney Benjamin B. Wagner for the Eastern District of California. “This office has a history of prosecuting those who perpetrate crimes of hate, and as long as these crimes continue, we will be there to enforce the law and uphold this nation’s constitutional values.”
Jackson is scheduled to be sentenced on April 22, 2014, and Tyler is scheduled to be sentenced on July 8, 2014. Each defendant faces a statutory maximum sentence of 10 years in prison and a fine of $250,000.
This case was investigated by the FBI with the assistance of the Yuba County Sheriff's Office and the Yuba County District Attorney's Office. The case is being prosecuted by U.S. Attorney Wagner and Trial Attorney Chiraag Bains of the Justice Department's Civil Rights Division.
Tuesday, March 25, 2014
California Man Sentenced to Federal Prison for Racially Motivated Assault on White Man and African-American Woman
Billy James Hammett, 30, of Marysville, Calif., was sentenced today by U.S. District Judge John A. Mendez to serve 87 months in prison for violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act in a 2011 racially motivated attack against a white man and an African-American woman in Marysville. The court also ordered Hammett to pay restitution in the amount of $175 and to serve three years of supervised release following his prison sentence. Hammett pleaded guilty on Dec. 17, 2013, and his co-defendants, Perry Sylvester Jackson, 28, and Anthony Merrell Tyler, 33, have also pleaded guilty and are awaiting sentencing.
According to documents filed with the court, around 10:45 p.m. on April 18, 2011, a white man and an African-American woman parked their car at a convenience store in Marysville. Shortly afterward, the three defendants, each of whom has white supremacist tattoos, attacked the man and woman based on race. After calling the male victim a “[racial slur]-lover,” Jackson punched him twice in the head through the open passenger window. At the same time, Hammett kicked the woman in the chest. A few seconds later, Tyler smashed the car’s windshield with a crowbar. As the attack continued, the woman managed to take refuge inside the convenience store. All three assailants then descended upon the male victim and began attacking him in the parking lot. He sustained abrasions on his right forearm and knees, while the woman suffered bruising to her chest. At the end of the incident, Tyler used a racial slur to refer to an African-American witness.
In sentencing the defendant, Judge Mendez said he found surveillance video footage of the assault “disturbing.” He noted that Hammett’s attack on the victims was “unprovoked and unwarranted,” and that the victims continue to suffer.
During the sentencing hearing, Judge Mendez also specifically considered Hammett’s background and criminal history, which includes a conviction in 2006 for assaulting a 72-year-old black man, also in Marysville. According to court records, Hammett made racial comments immediately before the unprovoked attack. In addition, Hammett has been affiliated with a number of white supremacist gangs, including Supreme White Power. He has tattoos of the words “white power” across his abdomen, a large swastika on the right side of his torso and the word “skinhead” written across the top of his back. Judge Mendez stated during the sentencing hearing that Hammett poses “a serious threat to the public.”
“The defendant and his associates accosted the victims in public and assaulted them because of their race,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The department is committed to stamping out racial violence and will continue to prosecute hate crimes vigorously.”
“Racially-motivated violence has no place in civilized society,” said U.S. Attorney Benjamin B. Wagner for the Eastern District of California. “This office has a history of prosecuting those who perpetrate crimes of hate, and as long as these crimes continue, we will be there to enforce the law and uphold this nation’s constitutional values.”
Jackson is scheduled to be sentenced on April 22, 2014, and Tyler is scheduled to be sentenced on July 8, 2014. Each defendant faces a statutory maximum sentence of 10 years in prison and a fine of $250,000.
This case was investigated by the FBI with the assistance of the Yuba County Sheriff's Office and the Yuba County District Attorney's Office. The case is being prosecuted by U.S. Attorney Wagner and Trial Attorney Chiraag Bains of the Justice Department's Civil Rights Division.
DOCTOR ACCUSED OF BILLING MEDICARE FOR MILLIONS IN MEDICARE FRAUD SCHEME
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, March 25, 2014
Long Island Doctor Arrested and Accused of Multi-million Medicare Fraud Scheme
A Long Island, N.Y., doctor was arrested today on charges that he submitted millions of dollars in false billings to Medicare.
The charges were announced by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office and Special Agent in Charge Thomas O’Donnell of the Department of Health and Human Services Office of Inspector General (HHS-OIG).
Dr. Syed Imran Ahmed, 49, was charged with one count of health care fraud by a criminal complaint unsealed this morning in federal court in Brooklyn, N.Y. A seizure warrant seeking millions of dollars of Ahmed’s alleged ill-gotten gains, including the contents of seven bank accounts, was also unsealed. In addition, a civil forfeiture complaint was also filed today against Ahmed’s residence located in Muttontown, N.Y., valued at approximately $4 million. Further, search warrants were executed earlier today at six locations in New York, Michigan and Nevada. Ahmed’s initial appearance is scheduled this afternoon before U.S. Magistrate Judge Marilyn Go.
“The Medicare system entrusts doctors to provide patients with the care and services they need,” said Acting Assistant Attorney General O’Neil. “The charges unsealed today allege that Dr. Ahmed billed millions of dollars to Medicare for surgical procedures that he did not actually perform. These charges are yet another example of the Department of Justice’s determination to hold accountable those who abuse the trust placed in them and steal from the system for personal gain.”
“As alleged, Ahmed created phantom medical procedures to steal very real taxpayer money. The defendant sought to enrich himself and fund his lifestyle through billing Medicare for services he never performed,” stated United States Attorney Lynch. “We are committed to protecting these taxpayer-funded programs and prosecuting those who steal from them.”
“Fraudulently billing the government defrauds every American taxpayer,” said FBI Assistant Director in Charge Venizelos. “We will investigate cases of graft and greed to protect important programs for those who need them.”
“For a single physician, the alleged conduct in this case is among the most serious I've seen in my law enforcement career," said HHS-OIG SAC O’Donnell. “Being a Medicare provider is a privilege, not a right. When Dr. Ahmed allegedly billed Medicare for procedures he never performed, he violated the basic trust that taxpayers extend to healthcare providers.”
As alleged in the complaint, Ahmed engaged in a scheme to submit claims to Medicare for surgical procedures that were not in fact performed. The complaint alleges multiple instances in which either patients told law enforcement officers that they never had the procedures that were billed, or hospital medical records did not contain any evidence that the procedures were actually performed. From January 2011 through mid-December 2013, Medicare was billed at least $85 million for surgical procedures purportedly performed by Ahmed.
The investigation has been conducted by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The case is being prosecuted by Trial Attorney Turner Buford of the Fraud Section and Assistant U.S. Attorneys William Campos and Erin Argo of the U.S. Attorney’s Office for the Eastern District of New York.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Tuesday, March 25, 2014
Long Island Doctor Arrested and Accused of Multi-million Medicare Fraud Scheme
A Long Island, N.Y., doctor was arrested today on charges that he submitted millions of dollars in false billings to Medicare.
The charges were announced by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office and Special Agent in Charge Thomas O’Donnell of the Department of Health and Human Services Office of Inspector General (HHS-OIG).
Dr. Syed Imran Ahmed, 49, was charged with one count of health care fraud by a criminal complaint unsealed this morning in federal court in Brooklyn, N.Y. A seizure warrant seeking millions of dollars of Ahmed’s alleged ill-gotten gains, including the contents of seven bank accounts, was also unsealed. In addition, a civil forfeiture complaint was also filed today against Ahmed’s residence located in Muttontown, N.Y., valued at approximately $4 million. Further, search warrants were executed earlier today at six locations in New York, Michigan and Nevada. Ahmed’s initial appearance is scheduled this afternoon before U.S. Magistrate Judge Marilyn Go.
“The Medicare system entrusts doctors to provide patients with the care and services they need,” said Acting Assistant Attorney General O’Neil. “The charges unsealed today allege that Dr. Ahmed billed millions of dollars to Medicare for surgical procedures that he did not actually perform. These charges are yet another example of the Department of Justice’s determination to hold accountable those who abuse the trust placed in them and steal from the system for personal gain.”
“As alleged, Ahmed created phantom medical procedures to steal very real taxpayer money. The defendant sought to enrich himself and fund his lifestyle through billing Medicare for services he never performed,” stated United States Attorney Lynch. “We are committed to protecting these taxpayer-funded programs and prosecuting those who steal from them.”
“Fraudulently billing the government defrauds every American taxpayer,” said FBI Assistant Director in Charge Venizelos. “We will investigate cases of graft and greed to protect important programs for those who need them.”
“For a single physician, the alleged conduct in this case is among the most serious I've seen in my law enforcement career," said HHS-OIG SAC O’Donnell. “Being a Medicare provider is a privilege, not a right. When Dr. Ahmed allegedly billed Medicare for procedures he never performed, he violated the basic trust that taxpayers extend to healthcare providers.”
As alleged in the complaint, Ahmed engaged in a scheme to submit claims to Medicare for surgical procedures that were not in fact performed. The complaint alleges multiple instances in which either patients told law enforcement officers that they never had the procedures that were billed, or hospital medical records did not contain any evidence that the procedures were actually performed. From January 2011 through mid-December 2013, Medicare was billed at least $85 million for surgical procedures purportedly performed by Ahmed.
The investigation has been conducted by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The case is being prosecuted by Trial Attorney Turner Buford of the Fraud Section and Assistant U.S. Attorneys William Campos and Erin Argo of the U.S. Attorney’s Office for the Eastern District of New York.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
PRESIDENT'S WEEKLY ADDRESS ON MARCH 29, 2014
FROM: THE WHITE HOUSE
Weekly Address: Raise The Minimum Wage – It’s The Right Thing To Do For Hardworking Americans
WASHINGTON, DC— In this week’s address, Vice President Biden discusses the importance of raising the federal minimum wage. It’s good for workers, it’s good for business, and it would help close the gender pay gap, as women make up more than half of the workers who stand to benefit from a raise. And as the Vice President highlights, Congress should boost the federal minimum wage because it is what a majority of the American people want.
The audio of the address and video of the address will be available online atwww.whitehouse.gov at 6:00 a.m. ET, Saturday, March 29, 2014.
Remarks of Vice President Joe Biden
Weekly Address
The White House
March 29, 2014
Weekly Address
The White House
March 29, 2014
Ladies and gentlemen, I’m Joe Biden. I’m filling in for President Obama, who is abroad.
I want to talk to you today about the minimum wage and the overwhelming need to raise the minimum wage. There’s no reason in the world why an American working 40 hours a week has to live in poverty. But right now a worker earning the federal minimum wage makes about $14,500 a year. And you all know that's incredibly hard for an individual to live on, let alone raise a family on.
But if we raise the minimum wage to $10.10 an hour, that same worker will be making $20,200 a year—and with existing tax credits would earn enough to bring that family or a family of four out of poverty. But there’s a lot of good reasons why raising the minimum wage makes sense.
Not only would it put more hard-earned money into the pockets of 28 million Americans, moving millions of them out of poverty, it’s also good for business. And let me tell you why.
There’s clear data that shows fair wages generate loyalty of workers to their employers, which has the benefit of increasing productivity and leading to less turn over. It’s really good for the economy as a whole because raising the minimum wage would generate an additional $19 billion in additional income for people who need it the most.
The big difference between giving a raise in the minimum wage instead of a tax break to the very wealthy is the minimum wage worker will go out and spend every penny of it because they're living on the edge. They’ll spend it in the local economy. They need it to pay their electric bill, put gas in their automobile, to buy fundamental necessities. And this generates economic growth in their communities.
And I’m not the only one who recognizes these benefits. Companies big and small recognize it as well. I was recently in Atlanta, Georgia, and met the owner of a small advertising company, a guy named Darien. He independently raised the wages of his workers to $10.10 an hour. But large companies, as well, Costco and the Gap—they're choosing to pay their employees higher starting wages.
A growing list of governors are also raising wages in their states – the minimum wage. They join the President who raised the minimum wage for employees of federal contractors like the folks serving our troops meals on our bases. They're all doing this for a simple reason. Raising the minimum wage will help hardworking people rise out of poverty.
It’s good for business. It’s helpful to the overall economy. And there’s one more important benefit. Right now women make up more than half of the workers who would benefit from increasing the minimum wage. Folks, a low minimum wage is one of the reasons why women in America make only 77 cents on a dollar that every man makes. But by raising the minimum wage, we can close that gap by 5 percent. And it matters. It matters to a lot of hardworking families, particularly moms raising families on the minimum wage.
And one more thing, folks—it’s what the American people want to do. Three out of four Americans support raising the minimum wage. They know this is the right and fair thing to do, and the good thing to do for the economy. So it’s time for Congress to get behind the minimum wage bill offered by Tom Harkin of Iowa and Congressman George Miller of California—the proposal that would raise the federal minimum wage from $7.25 an hour to $10.10 an hour.
So ask your representatives who oppose raising the federal minimum wage—why do they oppose it? How can we look at the men and women providing basic services to us all, like cleaning our offices, caring for our children, serving in our restaurants and so many other areas—how can we say they don't deserve enough pay to take them out of poverty?
The President and I think they deserve it. And we think a lot of you do too. So, folks, it’s time to act. It’s time to give America a raise.
Thanks for listening and have a great weekend. God bless you all and may God protect our troops.
THE SUPER GUPPY DELIVERS INNOVATIVE COMPOSITE ROCKET FUEL TANK
NASA’s Super Guppy, a wide-bodied cargo aircraft, landed at the Redstone Army Airfield near Huntsville, Ala. on March 26 with a special delivery: an innovative composite rocket fuel tank. The tank was manufactured at the Boeing Developmental Center in Tukwila, Wash. The tank will be unloaded from the Super Guppy, which has a hinged nose that opens and allows large cargos like the tank to be easily unloaded. After the tank is removed from the Super Guppy, it will be inspected and prepared for testing at NASA’s Marshall Space Flight Center in Huntsville, Ala. The composite tank project is part of the Game Changing Development Program and NASA's Space Technology Mission Directorate. Image credit: NASA/MSFC/Emmett Given › Alternate view #1 › Alternate view #2.
FTC CHAIR RELEASES HIGHLIGHTS FROM 2013
FROM: FEDERAL TRADE COMMISSION
FTC Chairwoman Releases 2013 Annual Highlights
Federal Trade Commission Chairwoman Edith Ramirez released the agency’s 2013 Annual Highlights today at the Spring Meeting of the American Bar Association’s Section of Antirust Law in Washington emphasizing the agency’s work to protect consumers and promote competition during the past calendar year.
“The hallmark of our work has been, and will continue to be, our ability to adapt established tools – law enforcement, policy initiatives and education – to address economic challenges and technological advances that Congress could never have imagined when it created the FTC,” said Ramirez in her Highlights message.
The agency’s Enforcement Highlights address a range of law enforcement actions in industries including health care, technology, and energy and the environment. Promoting competition in the health care and pharmaceutical industries that reduces costs to consumers remains a top priority for the Commission and among the most notable accomplishments last year in this area, the FTC obtained two Supreme Court victories (FTC v. Actavis Inc., and FTC v. Phoebe Putney).
Focusing on the technology sector, the agency took its first actions involving mobile cramming and the Internet of Things. Law enforcement to stop consumer fraud continued to be a high priority for the agency along with its complementary order enforcement program. The FTC’s actions resulted in redress orders of more than $297 million and civil penalty orders of $20 million.
As noted in Policy Highlights, the Commission filed 18 advocacy and amicus briefs on topics such as non-physician health care professionals, dental therapy education programs, and local taxicab regulations. Staff conducted 11 workshops on a range of topics including biologic medicines, native advertising, and the Internet of Things, to name a few. The Commission and staff also published 16 reports on topics including mobile payments and mobile privacy disclosures, among others. The FTC also continued to lead efforts to develop strong mutual enforcement cooperation and sound policy with its international partners.
Finally, the FTC’s Education and Outreach Highlights recognizes the agency’s work to alert businesses to compliance standards, and to alert consumers to the tell-tale signs of fraud and deceptive business practices. Among the agency’s many educational products produced in 2013, the FTC released new guidance for media to spot false weight-loss claims; developed information for mobile app developers; hosted the first Military Consumer Protection Day; and launched its Competition Matters blog.
FTC Chairwoman Releases 2013 Annual Highlights
Federal Trade Commission Chairwoman Edith Ramirez released the agency’s 2013 Annual Highlights today at the Spring Meeting of the American Bar Association’s Section of Antirust Law in Washington emphasizing the agency’s work to protect consumers and promote competition during the past calendar year.
“The hallmark of our work has been, and will continue to be, our ability to adapt established tools – law enforcement, policy initiatives and education – to address economic challenges and technological advances that Congress could never have imagined when it created the FTC,” said Ramirez in her Highlights message.
The agency’s Enforcement Highlights address a range of law enforcement actions in industries including health care, technology, and energy and the environment. Promoting competition in the health care and pharmaceutical industries that reduces costs to consumers remains a top priority for the Commission and among the most notable accomplishments last year in this area, the FTC obtained two Supreme Court victories (FTC v. Actavis Inc., and FTC v. Phoebe Putney).
Focusing on the technology sector, the agency took its first actions involving mobile cramming and the Internet of Things. Law enforcement to stop consumer fraud continued to be a high priority for the agency along with its complementary order enforcement program. The FTC’s actions resulted in redress orders of more than $297 million and civil penalty orders of $20 million.
As noted in Policy Highlights, the Commission filed 18 advocacy and amicus briefs on topics such as non-physician health care professionals, dental therapy education programs, and local taxicab regulations. Staff conducted 11 workshops on a range of topics including biologic medicines, native advertising, and the Internet of Things, to name a few. The Commission and staff also published 16 reports on topics including mobile payments and mobile privacy disclosures, among others. The FTC also continued to lead efforts to develop strong mutual enforcement cooperation and sound policy with its international partners.
Finally, the FTC’s Education and Outreach Highlights recognizes the agency’s work to alert businesses to compliance standards, and to alert consumers to the tell-tale signs of fraud and deceptive business practices. Among the agency’s many educational products produced in 2013, the FTC released new guidance for media to spot false weight-loss claims; developed information for mobile app developers; hosted the first Military Consumer Protection Day; and launched its Competition Matters blog.
WHITE FACT SHEET REGARDING STRATEGY TO CUT METHANE EMISSIONS
FROM: THE WHITE HOUSE
FACT SHEET: Climate Action Plan - Strategy to Cut Methane Emissions
With an all-of-the-above approach to develop homegrown energy and steady, responsible steps to cut carbon pollution, we can protect our kids’ health and begin to slow the effects of climate change so we leave a cleaner, more stable environment for future generations. That’s why last June, President Obama issued a broad-based Climate Action Plan, announcing a series of executive actions to reduce carbon pollution, prepare the U.S. for the impacts of climate change, and lead international efforts to address global climate change. Since June, the Administration has made substantial progress in meeting the ambitious goals laid out in the Climate Action Plan in a way that advances our economy, our environment, and public health. In just the last few months:
- The Department of the Interior (DOI) announced permitting the 50th renewables-related project on federal lands during the Administration - bringing us closer to meeting the goal of siting enough wind and solar projects on public lands by 2020 to power more than 6 million homes.
- President Obama directed the Environmental Protection Agency (EPA) and the Department of Transportation to develop fuel economy standards for heavy-duty vehicles to save families money at the pump and further reduce reliance on foreign oil and fuel consumption.
- The Department of Energy (DOE) has issued two proposed energy conservation standards for appliances and equipment and finalized two energy conservation standards. That’s on top of the five proposed and two final energy conservation standards DOE has already issued since June. These standards will help cut consumers' electricity bills by billions of dollars.
- The Department of Agriculture (USDA) announced seven new “climate hubs” to help farmers and ranchers adapt their operations to a changing climate and the President’s Budget proposed a $1 billion in new funding for new technologies and incentives to build smarter, more resilient infrastructure to help communities prepare for a changing climate.
- The Administration announced the Climate Data Initiative, an ambitious new effort bringing together extensive open government data and design competitions with commitments from the private and philanthropic sectors to develop data-driven planning and resilience tools for local communities. This effort will help give communities across America the information and tools they need to plan for current and future climate impacts.
- The Administration has continued the work of the U.S.-China Climate Change Working Group that’s working to promote clean energy and transportation solutions in both countries. And we’re working closely with India to accelerate its clean energy revolution and address the impacts of climate change in vulnerable communities.
Today, the Administration is releasing another key element called for in the President’s Climate Action Plan – a Strategy to Reduce Methane Emissions. The strategy summarizes the sources of methane emissions, commits to new steps to cut emissions of this potent greenhouse gas, and outlines the Administration’s efforts to improve the measurement of these emissions. The strategy builds on progress to date and takes steps to further cut methane emissions from landfills, coal mining, and agriculture, and oil and gas systems through cost-effective voluntary actions and common-sense standards. Key steps include:
- Landfills: In the summer of 2014, the EPA will propose updated standards to reduce methane from new landfills and take public comment on whether to update standards for existing landfills.
- Coal Mines: In April 2014, the DOI’s Bureau of Land Management (BLM) will release an Advanced Notice of Proposed Rulemaking (ANPRM) to gather public input on the development of a program for the capture and sale, or disposal of waste mine methane on lands leased by the Federal government.
- Agriculture: In June, in partnership with the dairy industry, the USDA, EPA and DOE will jointly release a “Biogas Roadmap” outlining voluntary strategies to accelerate adoption of methane digesters and other cost-effective technologies to reduce U.S. dairy sector greenhouse gas emissions by 25 percent by 2020.
- Oil and Gas: Building on success in reducing methane emissions from the oil and gas sector through voluntary programs and targeted regulations, the Administration will take new actions to encourage additional cost-effective reductions. Key steps include:
- In the spring of 2014, EPA will assess several potentially significant sources of methane and other emissions from the oil and gas sector. EPA will solicit input from independent experts through a series of technical white papers, and in the fall of 2014, EPA will determine how best to pursue further methane reductions from these sources. If EPA decides to develop additional regulations, it will complete those regulations by the end of 2016.
- Later this year, the BLM will propose updated standards to reduce venting and flaring from oil and gas production on public lands.
- As part of the Quadrennial Energy Review, and through DOE-convened roundtables, the Administration will identify “downstream” methane reduction opportunities. Through the Natural Gas STAR program, EPA will work with the industry to expand voluntary efforts to reduce methane emissions.
Taking action to curb methane waste and pollution is important because emissions of methane make up nearly 9 percent of all the greenhouse gas emitted as a result of human activity in the United States. Since 1990, methane pollution in the United States has decreased by 11 percent, even as activities that can produce methane have increased. However, methane pollution is projected to increase to a level equivalent to over 620 million tons of carbon dioxide pollution in 2030 absent additional action to reduce emissions.
Reducing methane emissions is a powerful way to take action on climate change; and putting methane to use can support local economies with a source of clean energy that generates revenue, spurs investment and jobs, improves safety, and leads to cleaner air. When fully implemented, the policies in the methane strategy will improve public health and safety while recovering otherwise wasted energy to power our communities, farms, factories, and power plants.
ASTRONAUT NEIL ARMSTRONG WILL HAVE NAVY RESEARCH VESSEL NAMED FOR HIM
FROM: U.S. NAVY
Navy to Christen Research Vessel Neil Armstrong
Story Number: NNS140328-16Release Date: 3/28/2014 2:12:00 PM A A A Email this story to a friend Print this story
From Department of Defense
WASHINGTON (NNS) -- The Navy will christen the Auxiliary General Oceanographic Research (AGOR) R/V Neil Armstrong (AGOR 27) during a ceremony March 29 at the Port of Anacortes Transit Shed in Anacortes, Wash.
In keeping with tradition, Carol Armstrong, the ship's sponsor, will break a bottle of sparkling wine against the ship and christen it in the name of her late husband, astronaut Neil Armstrong.
"The christening of the Neil Armstrong, a state-of-the art research vessel, is a fitting tribute to a man whose work as a naval aviator and astronaut inspired generations of Americans to look beyond the horizon, to strive to achieve the seemingly impossible," said Secretary of the Navy Ray Mabus. "This ceremony honors not only this great man, but the hundreds of people whose tireless efforts in constructing this ship led to this day, a day when the spirit of discovery and exploration is celebrated as it should be."
Mabus named R/V Neil Armstrong (AGOR 27) to honor the memory of Neil Armstrong, best known for being the first man to walk on the moon. Armstrong was an aeronautics pioneer and explorer for the National Aeronautics and Space Administration (NASA) serving as an engineer, test pilot, astronaut and administrator. Armstrong also served as a naval aviator flying nearly 80 combat missions during the Korean War.
The Neil Armstrong-class of research vessels are modern research vessels based on a commercial design, capable of integrated, interdisciplinary, general purpose oceanographic research in coastal and deep ocean areas. R/V Neil Armstrong, the first in its class, is being constructed by Dakota Creek Industries Inc.
Additionally, the Neil Armstrong class will feature a modern suite of oceanographic equipment, state of the art acoustic equipment capable of mapping the deepest parts of the oceans, advanced over-the-side handling gear to deploy and retrieve scientific instruments, emissions controls for stack gasses, and new information technology tools both for monitoring shipboard systems and for communicating with land-based sites worldwide. Enhanced modular onboard laboratories and extensive science payload capacity will provide the ships with the flexibility to meet a wide variety of oceanographic research challenges in the coming decades.
The Navy currently owns six of the nation's largest oceanographic research ships, which support critical naval research in forward deployed areas of the world's oceans, as well as the needs of other federal agencies. A major segment of the U.S. research fleet is now approaching the end of its service life and is in need of replacement.
R/V Neil Armstrong will be U.S. flagged, manned by a commercial crew, and will be operated by Woods Hole Oceanographic Institution under a contract with the U.S. government.
Friday, March 28, 2014
FTC SETTLES WITH COMPANIES ACCUSED OF FAILING TO KEEP SENSITIVE PERSONAL INFORMATION SECURE
FROM: FEDERAL TRADE COMMISSION
Fandango, Credit Karma Settle FTC Charges that They Deceived Consumers By Failing to Securely Transmit Sensitive Personal Information
Mobile Apps Placed Credit Card Details, Credit Report Data, Social Security Numbers at Risk
Two companies have agreed to settle Federal Trade Commission charges that they misrepresented the security of their mobile apps and failed to secure the transmission of millions of consumers’ sensitive personal information from their mobile apps.
The FTC alleged that, despite their security promises, Fandango and Credit Karma failed to take reasonable steps to secure their mobile apps, leaving consumers’ sensitive personal information at risk. Among other things, the complaints charge that Fandango and Credit Karma disabled a critical default process, known as SSL certificate validation, which would have verified that the apps’ communications were secure.
As a result, the companies’ applications were vulnerable to “man-in-the-middle” attacks, which would allow an attacker to intercept any of the information the apps sent or received. This type of attack is especially dangerous on public Wi-Fi networks such as those at coffee shops, airports and shopping centers.
“Consumers are increasingly using mobile apps for sensitive transactions. Yet research suggests that many companies, like Fandango and Credit Karma, have failed to properly implement SSL encryption,” said FTC Chairwoman Edith Ramirez. “Our cases against Fandango and Credit Karma should remind app developers of the need to make data security central to how they design their apps.”
To help secure sensitive transactions, mobile operating systems, including iOS and Android, provide app developers with tools to implement an industry standard known as Secure Sockets Layer, or SSL. If properly implemented, SSL secures an app’s communications and ensures that an attacker cannot intercept the sensitive personal information a consumer submits through an app.
By overriding the default validation process, Fandango undermined the security of ticket purchases made through its iOS app, exposing consumers’ credit card details, including card number, security code, zip code, and expiration date, as well as consumers’ email addresses and passwords. Similarly, Credit Karma’s apps for iOS and Android disabled the default validation process, exposing consumers’ Social Security Numbers, names, dates of birth, home addresses, phone numbers, email addresses and passwords, credit scores, and other credit report details such as account names and balances.
The settlements with Fandango and Credit Karma are part of the FTC’s ongoing effort to ensure that companies secure the applications they develop and keep their privacy promises to consumers. The FTC has also created a guide to help consumers understand how to stay secure when using public WiFi connections.
Fandango
The Fandango Movies app for iOS allows consumers to purchase movie tickets and view show times, trailers, and reviews. According to the FTC’s complaint, the Fandango Movies app assured consumers, during checkout, that their credit card information was stored and transmitted securely. Despite this promise, for almost four years – from March 2009 until February 2013 – the company disabled SSL certificate validation and left consumers that used its app to make mobile ticket purchases vulnerable to man-in-the-middle attacks.
The complaint alleges that Fandango could have easily tested for and prevented the vulnerability, but failed to perform the basic security checks that would have caught the issue. In addition, the complaint charges that Fandango failed to have an adequate process for receiving vulnerability reports from security researchers and other third parties, and as a result, missed opportunities to fix the vulnerability.
Credit Karma
The Credit Karma Mobile app for iOS and Android allows consumers to monitor and evaluate their credit and financial status. In its complaint, the FTC alleges that Credit Karma assured consumers that the company followed “industry-leading security precautions,” including the use of SSL to secure consumers’ information. Despite these promises, the company disabled SSL certificate validation and left consumers that used its credit-monitoring app vulnerable to man-in-the-middle attacks.
According to the FTC, Credit Karma could have easily prevented the vulnerability with basic tests, but did not perform an adequate security review of its iOS app before release. Even after a user warned Credit Karma about the vulnerability in its iOS app, the company failed to test its Android app before launch. As a result, one month after receiving a warning about the issue, the company released its Android app with the very same vulnerability. The complaint charges that Credit Karma failed to appropriately test or audit its apps’ security and failed to oversee the security practices of its application development firm.
Settlements
The settlements require Fandango and Credit Karma to establish comprehensive security programs designed to address security risks during the development of their applications and to undergo independent security assessments every other year for the next 20 years. The settlements also prohibit Fandango and Credit Karma from misrepresenting the level of privacy or security of their products and services.
The Commission vote to accept the consent agreement packages containing the proposed consent orders for public comment was 4-0. The FTC will publish a description of the consent agreement packages in the Federal Register shortly. The agreements will be subject to public comment for 30 days, beginning today and continuing through April 28, 2014, after which the Commission will decide whether to make the proposed consent orders final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section. Comments can be submitted electronically by following the instructions on the web-based form. [Submit comment on Fandango settlement | Submit comment on Credit Karma settlement] Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.
Fandango, Credit Karma Settle FTC Charges that They Deceived Consumers By Failing to Securely Transmit Sensitive Personal Information
Mobile Apps Placed Credit Card Details, Credit Report Data, Social Security Numbers at Risk
Two companies have agreed to settle Federal Trade Commission charges that they misrepresented the security of their mobile apps and failed to secure the transmission of millions of consumers’ sensitive personal information from their mobile apps.
The FTC alleged that, despite their security promises, Fandango and Credit Karma failed to take reasonable steps to secure their mobile apps, leaving consumers’ sensitive personal information at risk. Among other things, the complaints charge that Fandango and Credit Karma disabled a critical default process, known as SSL certificate validation, which would have verified that the apps’ communications were secure.
As a result, the companies’ applications were vulnerable to “man-in-the-middle” attacks, which would allow an attacker to intercept any of the information the apps sent or received. This type of attack is especially dangerous on public Wi-Fi networks such as those at coffee shops, airports and shopping centers.
“Consumers are increasingly using mobile apps for sensitive transactions. Yet research suggests that many companies, like Fandango and Credit Karma, have failed to properly implement SSL encryption,” said FTC Chairwoman Edith Ramirez. “Our cases against Fandango and Credit Karma should remind app developers of the need to make data security central to how they design their apps.”
To help secure sensitive transactions, mobile operating systems, including iOS and Android, provide app developers with tools to implement an industry standard known as Secure Sockets Layer, or SSL. If properly implemented, SSL secures an app’s communications and ensures that an attacker cannot intercept the sensitive personal information a consumer submits through an app.
By overriding the default validation process, Fandango undermined the security of ticket purchases made through its iOS app, exposing consumers’ credit card details, including card number, security code, zip code, and expiration date, as well as consumers’ email addresses and passwords. Similarly, Credit Karma’s apps for iOS and Android disabled the default validation process, exposing consumers’ Social Security Numbers, names, dates of birth, home addresses, phone numbers, email addresses and passwords, credit scores, and other credit report details such as account names and balances.
The settlements with Fandango and Credit Karma are part of the FTC’s ongoing effort to ensure that companies secure the applications they develop and keep their privacy promises to consumers. The FTC has also created a guide to help consumers understand how to stay secure when using public WiFi connections.
Fandango
The Fandango Movies app for iOS allows consumers to purchase movie tickets and view show times, trailers, and reviews. According to the FTC’s complaint, the Fandango Movies app assured consumers, during checkout, that their credit card information was stored and transmitted securely. Despite this promise, for almost four years – from March 2009 until February 2013 – the company disabled SSL certificate validation and left consumers that used its app to make mobile ticket purchases vulnerable to man-in-the-middle attacks.
The complaint alleges that Fandango could have easily tested for and prevented the vulnerability, but failed to perform the basic security checks that would have caught the issue. In addition, the complaint charges that Fandango failed to have an adequate process for receiving vulnerability reports from security researchers and other third parties, and as a result, missed opportunities to fix the vulnerability.
Credit Karma
The Credit Karma Mobile app for iOS and Android allows consumers to monitor and evaluate their credit and financial status. In its complaint, the FTC alleges that Credit Karma assured consumers that the company followed “industry-leading security precautions,” including the use of SSL to secure consumers’ information. Despite these promises, the company disabled SSL certificate validation and left consumers that used its credit-monitoring app vulnerable to man-in-the-middle attacks.
According to the FTC, Credit Karma could have easily prevented the vulnerability with basic tests, but did not perform an adequate security review of its iOS app before release. Even after a user warned Credit Karma about the vulnerability in its iOS app, the company failed to test its Android app before launch. As a result, one month after receiving a warning about the issue, the company released its Android app with the very same vulnerability. The complaint charges that Credit Karma failed to appropriately test or audit its apps’ security and failed to oversee the security practices of its application development firm.
Settlements
The settlements require Fandango and Credit Karma to establish comprehensive security programs designed to address security risks during the development of their applications and to undergo independent security assessments every other year for the next 20 years. The settlements also prohibit Fandango and Credit Karma from misrepresenting the level of privacy or security of their products and services.
The Commission vote to accept the consent agreement packages containing the proposed consent orders for public comment was 4-0. The FTC will publish a description of the consent agreement packages in the Federal Register shortly. The agreements will be subject to public comment for 30 days, beginning today and continuing through April 28, 2014, after which the Commission will decide whether to make the proposed consent orders final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section. Comments can be submitted electronically by following the instructions on the web-based form. [Submit comment on Fandango settlement | Submit comment on Credit Karma settlement] Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.
AG HOLDER, NSA DIRECTOR CLAPPER MAKE STATEMENT ON BULK TELEPHONY METADATA PROGRAM
FROM: U.S. JUSTICE DEPARTMENT
Friday, March 28, 2014
Joint Statement by Attorney General Eric Holder and Director of National Intelligence James Clapper on the Declassification of Renewal of Collection Under Section 215 of the Usa Patriot Act (50 U.S.C. Sec. 1861))
Attorney General Eric Holder and Director of National Intelligence James Clapper released the following joint statement Friday:
“Earlier this year in a speech at the Department of Justice, President Obama announced a transition that would end the Section 215 bulk telephony metadata program as it existed, and that the government would establish a mechanism that preserves the capabilities we need without the government holding this bulk data. As a first step in that transition, the President directed the Attorney General to work with the Foreign Intelligence Surveillance Court (FISC) to ensure that, absent a true emergency, the telephony metadata can only be queried after a judicial finding that there is a reasonable, articulable suspicion that the selection term is associated with an approved international terrorist organization. The President also directed that the query results must be limited to metadata within two hops of the selection term instead of three. These two changes were put into effect on Feb. 5, 2014, when the FISC granted the government’s motion to amend its Jan. 3, 2014, primary order approving the production of telephony metadata collection under Section 215. Following a review for declassification the Jan. 3 primary order, the government’s motion to amend that order, and the order granting the motion were posted to the FISC’s website, as well as the Office of the Director of National Intelligence website and icontherecord.tumblr.com.
“In addition to directing those immediate changes to the program, the President also directed the Intelligence Community and the Attorney General to develop options for a new approach to match the capabilities and fill gaps that the Section 215 program was designed to address without the government holding this metadata. He instructed us to report back to him with options for alternative approaches before the program came up for reauthorization on March 28. Consistent with the President’s direction, we provided him with alternative approaches for consideration.
“After carefully considering the available options, the President announced yesterday that the best path forward is that the government should not collect or hold this data in bulk, and that it should remain at the telephone companies with a legal mechanism in place that would allow the government to obtain data pursuant to individual orders from the FISC approving the use of specific numbers for such queries. The President also noted that legislation would be required to implement this option.
“Given that this legislation is not yet in place, and given the importance of maintaining this capability, the President directed the Department of Justice to seek a 90-day reauthorization of the existing program, which includes the modifications that he directed in January. Consistent with both the President’s direction, and with prior declassification decisions, in light of the significant and continuing public interest in the telephony metadata collection program, DNI Clapper declassified the fact that the United States filed an application with the FISC to reauthorize the existing program as previously modified for 90 days, and that today the FISC issued an order approving the government’s application. The order issued today expires on June 20, 2014. The Administration is undertaking a declassification review of this most recent court order.
Friday, March 28, 2014
Joint Statement by Attorney General Eric Holder and Director of National Intelligence James Clapper on the Declassification of Renewal of Collection Under Section 215 of the Usa Patriot Act (50 U.S.C. Sec. 1861))
Attorney General Eric Holder and Director of National Intelligence James Clapper released the following joint statement Friday:
“Earlier this year in a speech at the Department of Justice, President Obama announced a transition that would end the Section 215 bulk telephony metadata program as it existed, and that the government would establish a mechanism that preserves the capabilities we need without the government holding this bulk data. As a first step in that transition, the President directed the Attorney General to work with the Foreign Intelligence Surveillance Court (FISC) to ensure that, absent a true emergency, the telephony metadata can only be queried after a judicial finding that there is a reasonable, articulable suspicion that the selection term is associated with an approved international terrorist organization. The President also directed that the query results must be limited to metadata within two hops of the selection term instead of three. These two changes were put into effect on Feb. 5, 2014, when the FISC granted the government’s motion to amend its Jan. 3, 2014, primary order approving the production of telephony metadata collection under Section 215. Following a review for declassification the Jan. 3 primary order, the government’s motion to amend that order, and the order granting the motion were posted to the FISC’s website, as well as the Office of the Director of National Intelligence website and icontherecord.tumblr.com.
“In addition to directing those immediate changes to the program, the President also directed the Intelligence Community and the Attorney General to develop options for a new approach to match the capabilities and fill gaps that the Section 215 program was designed to address without the government holding this metadata. He instructed us to report back to him with options for alternative approaches before the program came up for reauthorization on March 28. Consistent with the President’s direction, we provided him with alternative approaches for consideration.
“After carefully considering the available options, the President announced yesterday that the best path forward is that the government should not collect or hold this data in bulk, and that it should remain at the telephone companies with a legal mechanism in place that would allow the government to obtain data pursuant to individual orders from the FISC approving the use of specific numbers for such queries. The President also noted that legislation would be required to implement this option.
“Given that this legislation is not yet in place, and given the importance of maintaining this capability, the President directed the Department of Justice to seek a 90-day reauthorization of the existing program, which includes the modifications that he directed in January. Consistent with both the President’s direction, and with prior declassification decisions, in light of the significant and continuing public interest in the telephony metadata collection program, DNI Clapper declassified the fact that the United States filed an application with the FISC to reauthorize the existing program as previously modified for 90 days, and that today the FISC issued an order approving the government’s application. The order issued today expires on June 20, 2014. The Administration is undertaking a declassification review of this most recent court order.
IRS WARNS TAXPAYERS ABOUT EMAIL PHISHING SCHEME
FROM: INTERNAL REVENUE SERVICE
IRS Warns of New Email Phishing Scheme Falsely Claiming to be from the Taxpayer Advocate Service
WASHINGTON —The Internal Revenue Service today warned consumers to be on the lookout for a new email phishing scam. The emails appear to be from the IRS Taxpayer Advocate Service and include a bogus case number.
The fake emails may include the following message: “Your reported 2013 income is flagged for review due to a document processing error. Your case has been forwarded to the Taxpayer Advocate Service for resolution assistance. To avoid delays processing your 2013 filing contact the Taxpayer Advocate Service for resolution assistance.”
Recipients are directed to click on links that supposedly provide information about the "advocate" assigned to their case or that let them "review reported income." The links lead to web pages that solicit personal information.
Taxpayers who get these messages should not respond to the email or click on the links. Instead, they should forward the scam emails to the IRS at phishing@irs.gov. For more information, visit the IRS's Report Phishing web page.
The Taxpayer Advocate Service is a legitimate IRS organization that helps taxpayers resolve federal tax issues that have not been resolved through the normal IRS channels. The IRS, including TAS, does not initiate contact with taxpayers by email, texting or any social media.
IRS Warns of New Email Phishing Scheme Falsely Claiming to be from the Taxpayer Advocate Service
WASHINGTON —The Internal Revenue Service today warned consumers to be on the lookout for a new email phishing scam. The emails appear to be from the IRS Taxpayer Advocate Service and include a bogus case number.
The fake emails may include the following message: “Your reported 2013 income is flagged for review due to a document processing error. Your case has been forwarded to the Taxpayer Advocate Service for resolution assistance. To avoid delays processing your 2013 filing contact the Taxpayer Advocate Service for resolution assistance.”
Recipients are directed to click on links that supposedly provide information about the "advocate" assigned to their case or that let them "review reported income." The links lead to web pages that solicit personal information.
Taxpayers who get these messages should not respond to the email or click on the links. Instead, they should forward the scam emails to the IRS at phishing@irs.gov. For more information, visit the IRS's Report Phishing web page.
The Taxpayer Advocate Service is a legitimate IRS organization that helps taxpayers resolve federal tax issues that have not been resolved through the normal IRS channels. The IRS, including TAS, does not initiate contact with taxpayers by email, texting or any social media.
SEC HALTS PONZI SCHEME TARGETING ASIAN AND LATINO COMMUNITIES
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today announced charges and asset freezes against the operators of a worldwide pyramid scheme targeting Asian and Latino communities in the U.S. and abroad.
The SEC alleges that three entities collectively operating under the business names WCM and WCM777 are posing as multi-level marketing companies in the business of selling third-party cloud computing services, which can include website hosting, data storage, and software support. The entities are based in California and Hong Kong and controlled by “Phil” Ming Xu, who is a resident of Temple City, California.
According to the SEC’s complaint filed in federal court in Los Angeles, WCM and WCM777 have raised more than $65 million since March 2013 by falsely promising tens of thousands of investors that the return on investment in the cloud services venture would be 100 percent or more in 100 days. Investors were told they would receive “points” for making investments or enrolling other investors. The points would be convertible into equity in initial public offerings of high-tech companies their money would help launch. However, rather than building out cloud services or incubating high-tech companies, Xu and the WCM entities used investor funds to make Ponzi payments of purported investment returns to some investors. They also spent investor money to purchase golf courses and other U.S.-based properties among other unauthorized expenditures.
The court has granted the SEC’s request for an asset freeze and the appointment of a temporary receiver over the assets of WCM, WCM777, and several other entities named as relief defendants for the purpose of recovering money from the scheme in their possession.
“Xu and his entities claimed they were using investor funds to build a strong cloud services company that would then ignite other high-tech companies and ultimately make their investors very wealthy,” said Michele Wein Layne, director of the SEC’s Los Angeles Regional Office. “In reality, they were operating a pyramid scheme that preyed on investors in particular ethnic communities, leaving them with nothing left to show for their investment.”
According to the SEC’s complaint, WCM and WCM777 sell their products exclusively to investors and have no other apparent sources of revenue. Their offerings and operations depend almost entirely on the recruitment of new investors and purchases by existing investors to provide the money for returns. On its website, WCM777 specifically addressed the question “Is WCM777 a Ponzi Game?” by writing, “In summary, we are not a Ponzi game company. We are creating a new business model.”
The SEC alleges that Xu and his entities made various false claims to investors about purported partnerships with more than 700 major companies such as Siemens, Denny’s, and Goldman Sachs – in some instances falsely representing that they had permission to use their logos. Meantime, besides buying two golf courses with investor money, Xu and his entities also purchased a warehouse, vacant land, and several single family homes They also used investor funds to play the stock market and make other related investments through intermediary companies, such as an oil and gas offering. They also sent investor money to a rough diamond jewel merchant in Hong Kong and another unrelated company affiliated with Xu.
The SEC’s complaint alleges that WCM, WCM777, and Xu violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5. The complaint further alleges that Xu violated Section 20(a) of the Exchange Act. In addition to the asset freezes and appointment of a temporary receiver, the Honorable Christina A. Snyder also granted the SEC’s request for an order prohibiting the destruction of documents and requiring the defendants to provide accountings. A court hearing has been scheduled for April 10, 2014.
The SEC’s investigation has been conducted by Peter Del Greco, Maria Rodriguez, and Marc Blau of the Los Angeles office. The SEC’s litigation will be led by John Bulgozdy.
The Securities and Exchange Commission today announced charges and asset freezes against the operators of a worldwide pyramid scheme targeting Asian and Latino communities in the U.S. and abroad.
The SEC alleges that three entities collectively operating under the business names WCM and WCM777 are posing as multi-level marketing companies in the business of selling third-party cloud computing services, which can include website hosting, data storage, and software support. The entities are based in California and Hong Kong and controlled by “Phil” Ming Xu, who is a resident of Temple City, California.
According to the SEC’s complaint filed in federal court in Los Angeles, WCM and WCM777 have raised more than $65 million since March 2013 by falsely promising tens of thousands of investors that the return on investment in the cloud services venture would be 100 percent or more in 100 days. Investors were told they would receive “points” for making investments or enrolling other investors. The points would be convertible into equity in initial public offerings of high-tech companies their money would help launch. However, rather than building out cloud services or incubating high-tech companies, Xu and the WCM entities used investor funds to make Ponzi payments of purported investment returns to some investors. They also spent investor money to purchase golf courses and other U.S.-based properties among other unauthorized expenditures.
The court has granted the SEC’s request for an asset freeze and the appointment of a temporary receiver over the assets of WCM, WCM777, and several other entities named as relief defendants for the purpose of recovering money from the scheme in their possession.
“Xu and his entities claimed they were using investor funds to build a strong cloud services company that would then ignite other high-tech companies and ultimately make their investors very wealthy,” said Michele Wein Layne, director of the SEC’s Los Angeles Regional Office. “In reality, they were operating a pyramid scheme that preyed on investors in particular ethnic communities, leaving them with nothing left to show for their investment.”
According to the SEC’s complaint, WCM and WCM777 sell their products exclusively to investors and have no other apparent sources of revenue. Their offerings and operations depend almost entirely on the recruitment of new investors and purchases by existing investors to provide the money for returns. On its website, WCM777 specifically addressed the question “Is WCM777 a Ponzi Game?” by writing, “In summary, we are not a Ponzi game company. We are creating a new business model.”
The SEC alleges that Xu and his entities made various false claims to investors about purported partnerships with more than 700 major companies such as Siemens, Denny’s, and Goldman Sachs – in some instances falsely representing that they had permission to use their logos. Meantime, besides buying two golf courses with investor money, Xu and his entities also purchased a warehouse, vacant land, and several single family homes They also used investor funds to play the stock market and make other related investments through intermediary companies, such as an oil and gas offering. They also sent investor money to a rough diamond jewel merchant in Hong Kong and another unrelated company affiliated with Xu.
The SEC’s complaint alleges that WCM, WCM777, and Xu violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5. The complaint further alleges that Xu violated Section 20(a) of the Exchange Act. In addition to the asset freezes and appointment of a temporary receiver, the Honorable Christina A. Snyder also granted the SEC’s request for an order prohibiting the destruction of documents and requiring the defendants to provide accountings. A court hearing has been scheduled for April 10, 2014.
The SEC’s investigation has been conducted by Peter Del Greco, Maria Rodriguez, and Marc Blau of the Los Angeles office. The SEC’s litigation will be led by John Bulgozdy.
READOUT: PRESIDENT OBAMA'S CALL WITH PRESIDENT PUTIN
FROM: THE WHITE HOUSE
Readout of the President’s Call with President Putin
President Putin called President Obama today to discuss the U.S. proposal for a diplomatic resolution to the crisis in Ukraine, which Secretary Kerry had again presented to Foreign Minister Lavrov at the meeting at the Hague earlier this week, and which we developed following U.S. consultations with our Ukrainian and European partners. President Obama suggested that Russia put a concrete response in writing and the presidents agreed that Kerry and Lavrov would meet to discuss next steps.
President Obama noted that the Ukrainian government continues to take a restrained and de-escalatory approach to the crisis and is moving ahead with constitutional reform and democratic elections, and urged Russia to support this process and avoid further provocations, including the buildup of forces on its border with Ukraine.
President Obama underscored to President Putin that the United States continues to support a diplomatic path in close consultation with the Government of Ukraine and in support of the Ukrainian people with the aim of de-escalation of the crisis. President Obama made clear that this remains possible only if Russia pulls back its troops and does not take any steps to further violate Ukraine’s territorial integrity and sovereignty. President Obama reiterated that the United States has strongly opposed the actions that Russia has already taken to violate Ukraine's sovereignty and territorial integrity.
Subscribe to:
Posts (Atom)