OWNER, EMPLOYEES OF MORTGAGE COMPANY, TWO REAL ESTATE DEVELOPERS INDICTED FOR ROLES IN $50 MILLION MORTGAGE SCAM

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, August 28, 2014

Owner and Seven Employees of Mortgage Company and Two Real Estate Developers Indicted for $50 Million Scam Involving Federally Insured Mortgages

The owner of a Florida mortgage company, seven employees of the company and two real estate developers were indicted in the Southern District of Florida in connection with an alleged $50 million mortgage fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and David A. Montoya, Inspector General for the Department of Housing and Urban Development (HUD) made the announcement.

Hector Hernandez, 56, of Miami, Florida, the owner and operator of Great Country Mortgage Bankers (Great Country), a mortgage lender in Miami, was charged with one count of conspiracy to commit wire fraud affecting a financial institution and 25 counts of wire fraud affecting a financial institution.   Great Country loan officers Durand Deeb, 43, of Miami, Frank Carino, 48, of Apollo Beach, Florida, and Fabian Perez, 39, of Miami; Great Country loan processors Juliette Del Rio, 37, of Miami, and Julissa Saavedra, 43, of Miami,; Great Country underwriters Olga Hernandez, 58, of Lake Mary, Florida, and Olga Rodriguez, 53, of Miami; and real estate developers Armando Bravo, 42, of Coral Gables, Florida, and Aleida Fontao, 61, of Miami, were also indicted for conspiracy to commit wire fraud affecting a financial institution and varying counts of wire fraud affecting a financial institution.

According to the indictment, beginning in January 2006 and continuing through September 2008, Hernandez and others allegedly obtained mortgage loans insured by the Federal Housing Administration (FHA), a division of HUD, for unqualified borrowers by exaggerating the borrowers’ income and otherwise misrepresenting their financial condition.

Specifically, Hernandez and others allegedly created false documents on behalf of borrowers who could not otherwise qualify for FHA-insured loans due to insufficient income, high levels of debt, and outstanding collections.   These documents included bogus earnings statements that inflated the borrowers’ income and false verification of employment forms that overstated their work histories.

In addition to creating these false documents, Hernandez and others allegedly offered the unqualified borrowers cash back after closing as an incentive to purchase condominiums.   These secret payments were not disclosed in the loan applications and were omitted from loan closing documents so that HUD and the financial institutions that subsequently purchased the loans would not know of their existence.

By later selling the fraudulent loans to financial institutions, Great Country transferred the risk of loss to those institutions .   The vast majority of the unqualified borrowers failed to meet their monthly mortgage obligations and defaulted on their loans.   When the loans went into foreclosure, HUD, which insured the loans, was required to pay the outstanding balances to the financial institutions, resulting in losses in excess of $50 million to the agency.

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

This case is being investigated by HUD’s Office of Inspector General with assistance from the U.S. Marshals Service, Miami-Dade Police Department Warrants Bureau and Miami-Dade State Attorney’s Office – Public Corruption Task Force.   This is being prosecuted by Senior Litigation Counsel David A. Bybee and Trial Attorney Michael T. O’Neill of the Criminal Division’s Fraud Section.

DOD VIDEO: DOD NEWS NOW: 1500 AUGUST 28, 2014

SEC CHARGES TWO IT COMPANY EXECUTIVES WITH "MISCHARACTERIZEING AN ARRANGEMENT"

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION 

The Securities and Exchange Commission today charged two executives at a Dallas-based information technology company with mischaracterizing an arrangement with an equipment manufacturer to purport that it was conducting so-called “resale transactions” to inflate the company’s reported revenue.

An SEC investigation found that then-CEO Lynn R. Blodgett and then-CFO Kevin R. Kyser caused the disclosure failures at Affiliated Computer Services (ACS), which has since been acquired by Xerox Corporation.  ACS provided business process outsourcing and information technology services.  Shortly before the end of its first quarter in fiscal year 2009, ACS faced a scenario where the company’s revenue was set to fall short of company guidance and consensus analyst expectations, so ACS arranged for an equipment manufacturer to re-direct through ACS pre-existing orders that the manufacturer already had received from one of its customers.  This gave the appearance that ACS was involved in resale transactions, but ACS in fact had no such involvement.  ACS went on to report $124.5 million in fiscal year 2009 revenue from these transactions as though it had resold the equipment itself.

Blodgett and Kyser have agreed to pay nearly $675,000 to settle the SEC’s charges that they and ACS did not adequately describe the arrangement in its financial reporting, and the purported revenue in turn allowed ACS to publicly report inflated internal revenue growth (IRG).  Blodgett and Kyser emphasized the inflated IRG as a key metric in earnings releases and other public statements to investors, and a portion of their annual bonuses was linked to IRG.
“ACS positioned itself in the middle of pre-existing transactions without adding value, but still improperly reported the revenue. Blodgett and Kyser knew the truth about these deals, and they were responsible for ensuring that ACS accurately disclosed the full story to investors,” said David R. Woodcock, director of the SEC’s Fort Worth Regional Office and chair of the agency’s Financial Reporting and Audit Task Force.  “This enforcement action holds them accountable for failing to uphold that responsibility.”

Blodgett and Kyser consented to the SEC’s order to cease-and-desist from violating Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, and Rules 12b-20, 13a-1, 13a-11, 13a-13, and 13a-14.  Without admitting or denying the findings, they have agreed to collectively disgorge IRG-related bonuses plus prejudgment interest totaling $569,327, and they each must pay $52,000 penalties.

The SEC’s investigation was conducted by James E. Etri, Todd B. Baker, and David R. King of the Fort Worth office.

NOAA VIDEO: GREEN: VEGETATION ON OUR PLANET (TOUR OF THE EARTH)

SYRIAN NATIONAL AND SUSPECTED TERRORIST EXTRADITED TO U.S. TO FACE CHARGES

FROM:  U.S. DEPARTMENT OF JUSTICE 

Thursday, August 28, 2014

Defendant Extradited to U.S. to Face Terrorism Charges

Ahmad Ibrahim Al-Ahmad made his initial appearance today in federal court in Phoenix, Arizona, on federal terrorism offenses, announced John P. Carlin, Assistant Attorney General for National Security, John S. Leonardo, U.S. Attorney for the District of Arizona and Douglas G. Price, Special Agent in Charge, FBI Phoenix Division.   The charges stem from Al-Ahmad’s alleged participation in a conspiracy to use improvised explosive devices (IEDs) to attack U.S. military personnel in Iraq from approximately 2005 to 2010.

Al-Ahmad was originally charged under seal with terrorism-related offenses in May 2011.   He was subsequently arrested in Turkey on May 17, 2011, based upon those charges and an Interpol Red Notice, and was detained there pending completion of extradition proceedings.   Al-Ahmad was extradited from Turkey yesterday and arrived in Arizona on the same day.

Following his appearance, Al-Ahmad was placed in custody of the U.S. Marshals Service, pending a status conference on the issue of detention on Sept. 8, 2014.  A trial date is set for Oct. 7, 2014.

On Aug. 12, 2014, a federal grand jury in the District of Arizona returned a superseding indictment charging Ahmad Ibrahim Al-Ahmad, a Syrian national, with multiple charges related to Al-Ahmad’s alleged participation in a conspiracy, from approximately 2005 to 2010, to supply component parts to the 1920 Revolution Brigades – an Iraqi insurgent group – for use in IEDs that were employed against U.S. military personnel in Iraq during that time period.   The charges include conspiracy to use a weapon of mass destruction (IEDs); conspiracy to maliciously damage or destroy U.S. government property by means of an explosive; possession of a destructive device during a crime of violence and aiding and abetting; conspiracy to commit extraterritorial murder of a U.S. national, and providing material support to terrorists.

If convicted of the offenses alleged in the indictment, Al-Ahmad would face a statutory maximum sentence of life in prison.

An indictment is merely a formal allegation that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until and unless proven guilty.

This case is being investigated by the FBI Phoenix Division Joint Terrorism Task Force with substantial assistance from various other government agencies.   The case is being prosecuted by the U. S. Attorney’s Office for the District of Arizona and the Counterterrorism Section of the Justice Department’s National Security Division.   The Justice Department’s Office of International Affairs also provided significant assistance in this matter.

PRESIDENT OBAMA DELIVERS A STATEMENT ON ECONOMY, IRAQ, AND UKRAINE

U.S. ATTACKS ISIL TERRORISTS NEAR MOSUL DAM

FROM:  U.S. DEFENSE DEPARTMENT 

U.S. Conducts Airstrikes Against ISIL Near Mosul Dam

From a U.S. Central Command News Release

WASHINGTON, Aug. 28, 2014 – U.S. military forces continued to attack ISIL terrorists in support of Iraqi security force operations, using fighter aircraft to conduct five airstrikes in the vicinity of the Mosul Dam.

The strikes destroyed an ISIL Humvee, a tank, four armed vehicles, an ISIL construction vehicle and severely damaged an ISIL checkpoint. All aircraft exited the strike areas safely.

The strikes were conducted under authority to support Iraqi security force and Kurdish defense force operations, as well as to protect critical infrastructure, U.S. personnel and facilities, and support humanitarian efforts.

Since Aug. 8, U.S. Central Command has conducted a total of 106 airstrikes across Iraq.

NASA's TRMM SATELLITE SEES POWERFUL TOWERING STORMS IN CRISTOBAL

FDIC REPORTS Q2 AGGREGATE COMMERCIAL BANK AND SAVINGS INSTITUTION NET INCOME OF $40.2 BILLION

FROM:  U.S. FEDERAL DEPOSIT INSURANCE CORPORATION 

Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported aggregate net income of $40.2 billion in the second quarter of 2014, up $2.0 billion (5.3 percent) from earnings of $38.2 billion the industry reported a year earlier. The increase in earnings was mainly attributable to a $1.9 billion (22.4 percent) decline in loan-loss provisions and a $1.5 billion (1.4 percent) decline in noninterest expenses. Also, strong loan growth contributed to an increase in net interest income compared to a year ago. However, lower income from reduced mortgage activity and a drop in trading revenue contributed to a year-over-year decline in noninterest income. More than half of the 6,656 insured institutions reporting (57.5 percent) had year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable during the second quarter fell to 6.8 percent from 8.4 percent a year earlier.

"We saw further improvement in the banking industry during the second quarter," FDIC Chairman Martin J. Gruenberg said. "Net income was up, asset quality improved, loan balances grew at their fastest pace since 2007, and loan growth was broad-based across institutions and loan types. We also saw a large decline in the number of problem banks. However, challenges remain. Industry revenue has been under pressure from narrow net interest margins and lower mortgage-related income. Institutions have been extending asset maturities, which is raising concerns about interest-rate risk. And banks have been increasing higher-risk loans to leveraged commercial borrowers. These issues are matters of ongoing supervisory attention. Nonetheless, on balance, results from the second quarter reflect a stronger banking industry and stronger community banks."

Total loan and lease balances rose by $178.5 billion (2.3 percent) in the second quarter to $8.1 trillion. This is the largest quarterly increase since the fourth quarter of 2007. Commercial and industrial loans increased by $49.9 billion (3.1 percent), residential mortgage loans rose by $22.7 billion (1.2 percent), credit card balances were up by $20.0 billion (3.0 percent), and auto loans grew by $10.9 billion (3.0 percent). Over the last 12 months, loan and lease balances increased by 4.9 percent, the highest 12-month growth rate since before the recent financial crisis.

Asset quality indicators continued to improve as insured banks and thrifts charged off $9.9 billion in uncollectible loans during the quarter, down $4.1 billion (29.5 percent) from a year earlier. The amount of noncurrent loans and leases (those 90 days or more past due or in nonaccrual status) fell by $13.4 billion (6.9 percent) during the quarter. The percentage of loans and leases that were noncurrent declined to 2.24 percent, the lowest level since the 2.09 percent posted at the end of the second quarter of 2008.

Despite the quarterly increase in mortgage balances, income from mortgage-related activity remained well below the level of a year earlier. Noninterest income from the sale, securitization and servicing of mortgages was $3.7 billion (42.5 percent) lower than a year ago. One- to four-family residential real estate loans originated and intended for sale during the quarter were $290.6 billion (63.9 percent) lower than in the second quarter of 2013, as higher interest rates reduced the demand for mortgage refinancing. Realized gains on securities sales also were lower than a year ago, as higher medium- and long-term interest rates reduced the market values of fixed-rate securities. Banks reported $770 million in pretax income from realized gains in the second quarter, a decline of $601 million (43.8 percent) from the second quarter of 2013.

Second quarter net operating revenue (the sum of net interest income and total noninterest income) of $169.0 billion was $1.5 billion (0.9 percent) lower than a year earlier, as a $2.0 billion (1.9 percent) increase in net interest income was outweighed by a $3.6 billion (5.3 percent) drop in noninterest income. The average net interest margin (the difference between the average yield banks earn on loans and other investments and the average cost of funding those investments) was 3.15 percent, the lowest since 3.11 percent in the third quarter of 1989, as declining asset yields at larger institutions outpaced the decline in the cost of funds.
Noninterest expenses for goodwill impairment declined by $4.4 billion, and expenses for salaries and employee benefits were $399 million (0.8 percent) lower than in the second quarter of 2013. Banks set aside $6.6 billion in provisions for loan losses, down 22.4 percent from $8.5 billion a year earlier. This is the 19th consecutive quarter that the industry has reported a year-over-year decline in loss provisions.

The average return on assets (ROA) rose slightly to 1.07 percent in the second quarter from 1.06 percent a year earlier. The average return on equity (ROE) rose from 9.46 percent to 9.54 percent.

Financial results for the second quarter of 2014 are contained in the FDIC's latest Quarterly Banking Profile, which was released today. Also among the findings:

Community banks earned $4.9 billion during the quarter. In the last Quarterly Banking Profile, the FDIC added a new section that reports on the performance of community banks – those institutions that provide traditional, relationship-based banking services in their local communities. Based on criteria developed for the FDIC Community Banking Study published in December 2012, there were 6,163 community banks (93 percent of all FDIC-insured institutions) in the second quarter of 2014 with assets of $2.0 trillion (13 percent of industry assets). Second quarter net income at community banks of $4.9 billion was up $166 million (3.5 percent) from a year earlier, driven by higher net interest income and lower loan loss provisions. The report also found that loan balances at community banks in the second quarter grew at a faster pace than in the industry as a whole, asset quality indicators continued to show improvement, and community banks again accounted for 45 percent of small loans to businesses.

The number of "problem banks" fell for the 13th consecutive quarter. The number of banks on the FDIC's "Problem List" declined from 411 to 354 during the quarter. The number of "problem" banks now is 60 percent below the post-crisis high of 888 at the end of the first quarter of 2011. Seven FDIC-insured institutions failed in the second quarter, compared to 12 in the second quarter of 2013.

The Deposit Insurance Fund (DIF) balance continued to increase. The DIF balance — the net worth of the Fund — rose to $51.1 billion as of June 30 from $48.9 billion at the end of March. Assessment income was the primary contributor to the growth in the Fund balance. Estimated insured deposits declined by 0.2 percent, and the DIF reserve ratio (the Fund balance as a percentage of estimated insured deposits) rose to 0.84 percent as of June 30 from 0.80 percent as of March 31. A year ago, the DIF reserve ratio was 0.64 percent. By law, the DIF must achieve a minimum reserve ratio of 1.35 percent by 2020.

DOD VIDEO: DOD NEWS NOW: 1500 AUGUST 27, 2014

FORMER ELECTED OFFICIAL ADMITS TO TAKING MONEY FROM PRESIDENTIAL CAMPAIGN COMMITTEE TO SWITCH SIDES

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, August 27, 2014

Former Iowa State Senator Pleads Guilty to Concealing Federal Campaign Expenditures

A former Iowa State Senator pleaded guilty today to concealing payments he received from a presidential campaign in exchange for switching his support and services from one candidate to another and to obstructing a subsequent investigation into his conduct.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting Assistant Director in Charge Timothy A. Gallagher of the FBI’s Washington Field Office made the announcement.

“An elected official admitted that he accepted under-the-table payments from a campaign committee to secure his support and services for a candidate in the 2012 presidential election,” said Assistant Attorney General Caldwell.   “Campaign finance reports should be accurate and transparent, not tools for concealing campaign expenditures.   Lying by public officials – whether intended to obstruct the FEC or federal investigators – violates the public trust and the law, and the Department of Justice does not tolerate it.”

“Today, Mr. Sorenson has taken responsibility for his crimes,” said Acting Assistant Director in Charge Gallagher.  “Exploiting the political process for personal gain will not be tolerated, and we will continue to pursue those who commit such illegal actions.”

Kent Sorenson, 42, of Milo, Iowa, pleaded guilty today to one count of causing a federal campaign committee to falsely report its expenditures to the Federal Election Commission (FEC) and one count of obstruction of justice in connection with the concealed expenditures.   The guilty plea was taken by Chief Magistrate Judge Celeste F. Bremer of the Southern District of Iowa for later review by Senior District Court Judge Robert W. Pratt.   Sentencing will be scheduled at a later date.

According to a statement of facts filed with the plea agreement, Sorenson admitted that he had supported one campaign for the 2012 presidential election, but from October to December 2011, he met and secretly negotiated with a second political campaign to switch his support to that second campaign in exchange for concealed payments that amounted to $73,000.   On Dec. 28, 2011, at a political event in Des Moines, Iowa, Sorenson publicly announced his switch of support and work from one candidate to the other.

The payments included monthly installments of approximately $8,000 each and were concealed by transmitting them to a film production company, then through a second company, and finally to Sorenson and his spouse.  In response to criticism of his change of support for the candidates, Sorenson gave interviews to the media denying allegations that he was receiving any money from the second campaign committee, and noted that the committee’s FEC filings would show that the committee made no payments to him.

In his plea agreement, Sorenson also admitted that he gave false testimony to an independent counsel appointed at the request of the Iowa Senate Ethics Committee, which was investigating allegations from a former employee of the first presidential campaign.  Sorenson testified falsely to the independent counsel about the concealed payments, in part to obstruct investigations that he anticipated by the FBI and FEC .

The case is being investigated by the FBI’s Washington Field Office, with assistance from the Omaha Field Office and the Des Moines Resident Agency.   The case is being prosecuted by Election Crimes Branch Director Richard C. Pilger and Trial Attorney Robert J. Higdon Jr. of the Criminal Division’s Public Integrity Section.

8/27/14: White House Press Briefing

"YOUR BABY CAN READ" DEFENDANTS SETTLE FTC CHARGES OF MAKING BASELESS CLAIMS

FROM:  U.S. FEDERAL TRADE COMMISSION 

Defendants Settle FTC Charges Related to “Your Baby Can Read” Program

Your Baby Can Read creator, Dr. Robert Titzer, and his company, Infant Learning, Inc. d/b/a The Infant Learning Company have settled charges that they made baseless claims about the effectiveness of the Your Baby Can Read program and misrepresented that scientific studies proved the claims.

The program was widely touted in infomercials and on the Internet, and used videos, flash cards, and lift-a-flap books that supposedly taught children as young as nine months old how to read. Two of the four defendants, Hugh Penton, Jr. and Your Baby Can LLC, named in the FTC's 2012 complaint previously settled with the FTC.

The stipulated final order announced today prohibits Titzer and his company from making any unsubstantiated claims about the performance or efficacy of any product that teaches reading. It also prohibits them from using the term “Your Baby Can Read,” bars them from misrepresenting the results of any tests or research, and prohibits Titzer from endorsing any product unless he has a reasonable basis for the claims made. Finally, the order imposes two monetary judgments against Titzer and his company totaling more than $185 million, which will be suspended after he pays $300,000.

“Marketers and expert endorsers must have adequate substantiation for the claims they make, and the FTC will continue to pursue those who fail to abide by this basic rule,” said Jessica Rich, Director of the Commission’s Bureau of Consumer Protection.

According to the FTC’s 2013 amended complaint, beginning in 2008 the marketers of Your Baby Can Read sold the program to parents and grandparents of children between three months and five years old, directly via a toll-free number and through websites, charging about $200 for each kit, and earning more than $185 million.

The amended complaint alleged the defendants failed to have competent and reliable scientific evidence that babies can learn to read using the Your Baby Can Read program, or that children who used the program can read books such as Charlotte’s Web or Harry Potter by age three or four. The amended complaint also charged Titzer with making deceptive expert endorsements for the program.

The Commission vote approving the settlement was 5-0. The FTC filed the proposed final order in the U.S. District Court for the Southern District of California on August 18, 2014, and the court entered it the next day.

NOTE: Stipulated orders have the force of law when approved and signed by the District Court judge.

EX-IM BANK AUTHORIZES ALMOST $65 MILLION IN LOANS FOR WIND POWER PROJECTS IN PERU

FROM:  U.S. EXPORT-IMPORT BANK 

Ex-Im Financing Supports the Export of Wind Turbines made in Kansas and Iowa to Peru

The sale will support approximately 800 jobs in those states

Washington, D.C. – The Export-Import Bank of the United States (Ex-Im Bank) has authorized a pair of direct loans to two wind power projects in Peru for the export of wind turbines manufactured in Hutchinson, Kan., and Fort Madison, Iowa, by Siemens Energy Inc.  

The financing, almost $65 million in total, represents Ex-Im Bank’s first renewable-energy transactions in Peru and will support approximately 800 U.S. jobs in Kansas and Iowa, according to bank estimates derived from Departments of Commerce and Labor data and methodology. Additionally, 20 percent of each transaction should provide indirect support to small-business exporters.

“These transactions reflect our continued commitment to increasing U.S. renewable energy exports while supporting good-paying jobs here at home,” said Ex-Im Bank Chairman and President Fred P. Hochberg. “During this fiscal year alone, Ex-Im Bank has approved financing for five wind farm projects, and we are looking to do more in the near future. This financing helps ensure that the turbines helping to power Peru are made here in the U.S. by American workers, rather than in a competing country.”

The wind turbines are destined for use in the Marcona wind project and the Tres Hermanas wind project, which are located in close proximity in the Ica region of southern Peru and are estimated to yield an aggregate 129 Mega Watts. Repayment terms are 17.3 years for the Marcona project and 16.6 years for the Tres Hermanas project, respectively.

Siemens Energy Inc. is a U.S. subsidiary of Siemens AG, an engineering company that operates in the industry, energy, healthcare, and infrastructure and cities sectors. The company reported revenue of $5.9 billion in exports and employs approximately 52,000 people throughout all 50 states and Puerto Rico.

“In addition to manufacturing wind turbine blades in Iowa and assembling nacelles in Kansas for projects across the United States, we’ve been able to successfully export our equipment to Americas wind projects in Canada, Chile, Brazil and with Ex-Im Bank’s help, Peru, ” said Mark Albenze, CEO of Siemens’ Onshore Wind Americas business. “Being able to export our equipment has helped support more than 800 manufacturing jobs in the heartland of the U.S. at a time when the U.S. wind market continues to be beleaguered by policy uncertainty.”

In FY 2013 alone, Ex-Im Bank authorized $257 million to support renewable energy exports, primarily to Central and Latin America.

LABOR UNION OFFICIAL PLEADS GUILTY TO THEFT FROM LABOR ORGANIZATION

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, August 28, 2014

Former Secretary-Treasurer Pleads Guilty to Theft of Union Treasury Funds

The former Secretary-Treasurer of Security Police Fire Professionals of America Local 287 pleaded guilty today to theft from a labor organization in violation of his fiduciary responsibilities as a union officer.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and District Director Mark Wheeler of the Department of Labor, Office of Labor-Management Standards, Washington District Office made the announcement.

Milton Hilliard, 47, of Fort Washington, Maryland, was the Secretary-Treasurer of Local 287, which represents security guards employed by Coastal International Security at various locations in Washington, D.C.   At the plea hearing, he acknowledged that, between September 2008 and December 2010, he made dozens of unauthorized personal purchases using union funds.   Specifically, he used the Local 287 debit card to purchase $11,303.92 in personal items at places such as Bed Bath & Beyond, Best Buy, Maryland Speedy Tag & Title, DARCARS Toyota, H&R Block, Golden Corral, Five Below and others.   During the same period, Hilliard made 29 unauthorized cash withdrawals, totaling $23,308.50, from the Local 287 treasury.

Hillard pleaded guilty before U.S. District Judge Tanya S. Chutkan in the District of Columbia.   Sentencing is set for Nov. 18, 2014.

The investigation was conducted by the Department of Labor, Office of Labor-Management Standards, Washington District Office.   The case is being prosecuted by Trial Attorney Vincent J. Falvo Jr. of the Criminal Division’s Organized Crime and Gang Section.

NSF FUNDS SCIENTIST STUDYING USE OF LIQUID METALS IN ELECTRONICS

FROM:  NATIONAL SCIENCE FOUNDATION 

Changing the shape and function of liquid metal

Researchers study gallium to design adjustable electronic components, including new types of antennas

Gallium is one of the few metals that turns into a liquid at room temperature. When that happens, its surface oxidizes, forming a "skin" over the fluid, almost like a water balloon or a water bed. Years ago, scientists often thought the coating a nuisance. Today they consider it an opportunity.

"We are trying to flip conventional wisdom on its head," says Michael Dickey, associate professor of chemical and bio-molecular engineering at North Carolina State University. "We are taking an old material and using it in a new way."

The National Science Foundation (NSF)-funded scientist is exploring ways to manipulate and modify this liquid metal in order to mold it into functional structures, in electronics, for example, that result in soft, flexible and stretchable and reconfigurable components, such as antennas.

One potential application could be to find a way to put the liquid gallium (actually an alloy of gallium and indium, the latter keeps the gallium from freezing) into already stretchable material in order to provide conductivity.

"If you put aluminum into a rubber band, it will behave mechanically like aluminum," Dickey explains. "But if you put liquid metal into a rubber band, you have the metal conductivity, which you want, but you still have the properties of the rubber band. We are taking advantage of the fact that this metal forms this oxide layer in order to control its shape."

By better understanding the mechanical properties of the liquid gallium, including learning whether it is possible to modify the "skin" itself--by making it stronger or even weaker, for example--it might be possible to design electronic components that can be "adjustable," that is, that can alter their functions as needed, he says.

"If you can change the shape, you can change the function," he says, adding that new types of antennas with this kind of flexibility could transform smartphones, navigation systems and Wi-Fi. "We could develop potentially better antennas for cell phones that can respond to changing conditions."

Other applications could include wearable items, such as watches or medical devices, or in the field of soft robotics. "Most robots that work in factories are made out of stiff materials and aren't good interfacing with humans," he says. "Taken to the extreme, imagine an octopus with large freedom of motion that could perform delicate tasks."

In medicine, "we could see embedded electronics in gloves that a doctor or lab technician might wear, such as feedback sensors or prosthetics, and the doctor wouldn't even know that they were there," he adds.

Dickey is conducting his research under an NSF Faculty Early Career Development (CAREER) award, which he received in 2010. The award supports junior faculty who exemplify the role of teacher-scholars through outstanding research, excellent education and the integration of education and research within the context of the mission of their organization.

"We're trying to understand what is happening at the surface of the metal," he says. "I look at this metal as being like a composite material. It's a metal that forms this oxide on its surface, and the combination is interesting to me."

He and his team are trying to characterize the mechanical properties of the liquid metal, and "how to harness them," he says. "Also, we've been doing some chemical characterization in order to understand what is actually on the surface, and how we can modify it. And we are trying to reconfigure the shape of the metal."

His team is studying the way the metal flows in response to pressure.

"In a sense, the metal behaves like ketchup," he says. "It only flows when the skin breaks, due to application of a critical pressure."

The team harnessed this property to print the metal into freestanding 3D shapes despite the metal being a liquid.

As part of the grant's educational component, the research will be integrated into a new course at NC State for both undergraduate and graduate engineering students. Also, the researchers developed an interactive module that discusses the work within the context of popular movies designed to attract middle school minority children to higher education and careers in science. Among other things, they participate in a summer camp for about 200 middle school youngsters, "where we talk about the research, liquid metal and different fluids."

In preparing for this presentation, in fact, Dickey spoke at length to Gene Warren Jr., who created the special effects for Terminator 2: Judgment Day, in which "the bad guy turns into liquid metal, and then reassembles," Dickey says. "He said that they used liquid metal to do it. We show the kids a clip from the movie and they really get a kick out of it."

-- Marlene Cimons, National Science Foundation
Investigators
Michael Dickey
John Lach
John Muth
Veena Misra
Thomas Jackson
Shekhar Bhansali
Related Institutions/Organizations
North Carolina State University
Related Programs
Engineering Research Centers

NSF VIDEO: LOS ANGELES & WATER IMPORTS

16 PUERTO RICO POLICE OFFICERS PLEAD GUILTY TO USING BADGES TO COMMIT CRIMES

FROM:   U.S. JUSTICE DEPARTMENT 

Monday, August 25, 2014

Sixteen Former Puerto Rico Police Officers Plead Guilty to Running Criminal Organization from the Police Department

Former Officers Convicted of Racketeering, Robbery, Extortion, and Firearms Charges

Sixteen former Puerto Rico police officers have pleaded guilty for their roles in a criminal organization run out of the police department.   The officers used their affiliation with law enforcement to commit robbery and extortion, to manipulate court records in exchange for bribes, and to sell illegal narcotics.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI’s San Juan Division made the announcement.

“These 16 police officers were charged with fighting crime, protecting lives and property, and improving the quality of life in Puerto Rico,” said Assistant Attorney General Caldwell.   “Instead, they used their badges and guns to do the opposite, committing crimes, endangering lives, and stealing property under the veil of police authority.  This prosecution demonstrates the Justice Department’s commitment to holding all criminals accountable – including those who wear a badge.  We will use every tool at our disposal, including the RICO laws, to rid our communities of corruption.”

The following 13 defendants pleaded guilty to conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act:  Osvaldo Vazquez-Ruiz, 38; Orlando Sierra-Pereira, 37; Danny Nieves-Rivera, 35; Roberto Ortiz-Cintron, 35; Yovanny Crespo-Candelaria, 34; Jose Sanchez-Santiago, 32; Miguel Perez-Rivera, 35; Nadab Arroyo-Rosa, 33; Jose Flores-Villalongo, 52; Luis Suarez-Sanchez, 36; Eduardo Montañez-Perez, 29; Carlos Laureano-Cruz, 40; and Carlos Candelario-Santiago, 47.   Three defendants, Ruben Casiano-Pietri, 36, Christian Valles-Collazo, 28, and Ricardo Rivera Rodriguez, 39, pleaded guilty to robbery and extortion charges.   Several of the defendants also pleaded guilty to firearms charges in connection with the use of their police-issued firearms in furtherance of their crimes.   At the time of their criminal conduct, Flores-Villalongo and Candelario-Santiago were sergeants with the Police of Puerto Rico (POPR), and the other defendants were police officers.  Sentencing hearings are scheduled for December 2014.

According to court documents, over the course of the conspiracy, the officers worked together to conduct traffic stops and enter the homes of suspected criminals to steal money, property and drugs for their own personal enrichment.   They planted evidence to make false arrests, and then extorted money from their victims in exchange for their release from custody.   Additionally, in exchange for bribe payments, the officers gave false testimony, manipulated court records and failed to appear in court when required so that criminal cases would be wrongfully dismissed.   The officers also sold and distributed wholesale quantities of narcotics.

As just a few examples of their criminal conduct, in April 2012, defendants Vazquez-Ruiz and Sierra-Pereira conducted a traffic stop in their capacity as police officers and stole approximately $22,000 they believed to be illegal drug proceeds.   Vazquez-Ruiz later attempted to extort approximately $8,000 from an individual believed to be a drug dealer’s accomplice in exchange for promising to release a prisoner.

Further, in November 2012, defendants Sierra-Pereira, Nieves-Rivera, Ortiz-Cintron and Valles-Collazo illegally entered an apartment and stole approximately $30,000, which they believed were illegal lottery proceeds.

The defendants frequently shared with one another the proceeds they illegally obtained, and used their power, authority and official positions as police officers to promote and protect their illegal activity.   Among other things, the defendants used POPR firearms, badges, patrol cars, tools, uniforms and other equipment to commit the crimes, and then concealed their illegal activity with fraudulently obtained court documents and falsified POPR paperwork that made it appear they were engaged in legitimate police work.

The case was investigated by the FBI’s San Juan Division, and prosecuted by Trial Attorneys Brian K. Kidd, Emily Rae Woods and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mariana E. Bauzá of the District of Puerto Rico.

NASA VIDEO | OZONE-DEPLETING COMPOUND PERSISTS

DOD VIDEO: EXERCISE RED DRAGON UNDERWAY IN WISCONSIN

AG HOLDER'S REMARKS AT ST. LOUIS FBI FIELD OFFICE

FROM:  U.S. JUSTICE DEPARTMENT 

Attorney General Eric Holder Delivers Remarks at the St. Louis FBI Field Office

~ Wednesday, August 20, 2014

We have brought to this area very experienced prosecutors, we have very experienced agents who are handling this matter, and doing so, I think, in a fine way.

I'm going to get briefed on more of the details about the investigation.  I've been kept up to date, but there's nothing that can replace actually coming to the office that's handling the matter, and being able to look in the face the people who are, I think at this point, very ably handling this investigation.

Now, our investigation is different from that which the state is doing.  We are looking for violations of federal, criminal civil rights statutes, which is different from what the local investigation is.

We have brought a substantial number of people here, of agents here, who have done a great job in the canvassing that they did over the past weekend, and continue to follow leads so that we can do a thorough and a fair job of making a determination about what happened on August the ninth.  And I'm confident that through the ability of these people, we will be able to make a determination about whether or not any federal statutes have in fact been violated.

My hope also is that through the trip that I'm making out here today and by expressing the importance of the way in which this investigation is going, that hopefully will have a calming influence on the area, if people know that a federal, thorough investigation is being done--is being manned by these very capable people.  My hope is that that will have—give people some degree of confidence that the appropriate things are being done by their federal government.

Again, we are doing something different, okay, than that which the state is doing--than what the county prosecutors are doing.  But nevertheless, I think that what we are doing, hopefully, will have a positive impact.

Thank you.

FTC ALERTS RETAILERS REGARDING ATHLETIC MOUTHGUARD PROTECTION CLAIMS

FROM:  U.S. FEDERAL TRADE COMMISSION 

FTC Alerts Major Retailers to Concerns About Concussion Protection Claims for Athletic Mouthguards Made on Websites

Staff of the Federal Trade Commission has sent letters to five major retailers, alerting them to concerns about whether there is adequate substantiation for concussion-protection claims made for athletic mouthguards sold on their web sites.

“Given all of the news reports in the past few years about concussions, retailers should be vigilant in reviewing claims made for products they are selling for young athletes,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.

According to the letters, making an objective claim for a product without a reasonable basis to support the claim is deceptive, and “competent and reliable” scientific evidence is generally needed to substantiate health-related claims.  The letters point out that retailers, as well as product manufacturers, can be liable for violating the FTC Act if they disseminate false or unsubstantiated claims.

Each letter identifies a mouthguard on the retailer’s website for which a concussion protection claim is made.  The letter then discusses the FTC’s 2012 case against mouthguard manufacturer Brain-Pad Inc., and recommends that the retailer review its website to ensure that it is not making unsupported concussion protection claims.  The letter also suggests that the retailer contact the product manufacturer to inquire about the substantiation for concussion protection claims, and says that the staff plans to revisit their website in 90 days.

This is the third set of warning letters the FTC has sent regarding concussion protection claims.  In November 2012, after the order in the Brain-Pad case became final, agency staff sent out warning letters to 18 other manufacturers of sports equipment, advising them of the Brain-Pad settlement and warning them that they might be making deceptive concussion protection claims for their products.  Letters to almost a dozen additional manufacturers were subsequently sent out over the next 18 months.

The FTC also testified before a Congressional subcommittee last May, noting that as awareness of the danger of concussions has grown, manufacturers have started making concussion-protection claims for an increasing array of sports-related products.

For more information about concussions, see: Concussion and Mild Brain Traumatic Injury on the website of the Centers for Disease Control and Prevention.

The FTC is a member of the National Prevention Council, which provides coordination and leadership at the federal level regarding prevention, wellness, and health promotion practices.  These letters advance the National Prevention Strategy’s goal of increasing the number of Americans who are healthy at every stage of life.

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.

CLIMATE CHANGE AND MAMMALS OF THE PAST

FROM:  NATIONAL SCIENCE FOUNDATION 

Understanding how ancestors of today's mammals responded to climate change
Research provides valuable insights for future environmental challenges
About 10 million years into the current Cenozoic Era, or roughly 56 million years ago, during a climate that was hot and wet, two groups of mammals moved from land to water. These were the cetaceans, which include whales, dolphins and porpoises, and the sirenians, with its sea cows, manatees and dugongs.

Over time, their bodies began to adapt to their new environment. They lost their hind limbs, and their forelimbs began to resemble flippers. Their nostrils moved higher on their skulls. The cetaceans became carnivores, eating fish and squid, while the sirenians became herbivores, living on sea grasses and algae.

"It's an interesting example of evolution, and a natural experiment you don't normally have," says Mark T. Clementz, an associate professor of paleontology in the University of Wyoming's department of geology and geophysics. "The changes are so extreme, you can't really ignore them. By studying these groups, we can tease out the main environmental factors that affect mammalian groups as they move into a new environment, and a new ecosystem."

The National Science Foundation (NSF)-funded scientist believes that understanding how the ancient ancestors of today's mammals responded to climate change will provide valuable insights that will help in dealing with environmental challenges.

"A better understanding of how these mammals responded in the past will give us a more informed idea of how they will respond to climate change in the future," he says. "This could benefit conservation efforts down the road, for example, what to look out for, what things could benefit these groups, and what will hurt them if climate change goes as we project."

Moreover, "these mammals are like data loggers," he adds. "You can infer what the environmental conditions of the past were like, and how they changed over time, and you can say something about how marine ecosystems have changed over time."

The primary goal of his project is to compare the evolutionary ecology of these two orders, the Cetacea and the Sirenia, in the context of Cenozoic climate change.

The Cenozoic Era is made up of two time periods, the Paleogene and the Neogene, with each of those divided into epochs, which are smaller subdivisions of geologic time.

"With the appearance of whales and sea cows in the Early Eocene [the second epoch of the Paleogene], the evolution and diversification of both groups occurred across major episodes of significant climate change as the Earth moved from the greenhouse conditions of the early Paleogene and into the icehouse conditions of the Neogene, and today," he says.

Clementz is conducting his research under an NSF Faculty Early Career Development (CAREER) award, which he received in 2009. The award supports junior faculty who exemplify the role of teacher-scholars through outstanding research, excellent education, and the integration of education and research within the context of the mission of their organization.

In order to evaluate the impact of climate change on each group, Clementz is examining fossil specimens of these ancient whales and sea cows as part of marine food webs, analyzing the stable isotopes of calcium, carbon, oxygen and strontium, with an emphasis on, among other things, each group's ecological status, including diet and salinity tolerance.

"When we look at the sirenians, it appears that they had a relationship with sea grasses, which are found only in salt water, that extends far in the past," he says, noting that it is unusual for mammals to move from land to saltwater without first spending a transitional period in freshwater. "The isotopes suggest they were feeding in sea grass beds while still capable of walking on land, and skipped the freshwater phase."

However, these conclusions may change upon examining recently acquired additional specimens.

"We now have some new fossils that imply that some sea cows might have been living in freshwater, but we haven't been able to fully analyze them yet," he says. Should that be the case, "it might have been a really fast transition," he says. "They might have spent a very short amount of time in freshwater, then moved quickly into a marine habitat."

The cetaceans, on the other hand, "do show a freshwater phase," he says.

Interestingly, the sirenians are very sensitive to environmental temperatures, staying where the water is warm--20 degrees Celsius (about 68 degrees Fahrenheit) or warmer. Today's global warming may, in fact, support them but possibly only to a certain extent.

"They like it warm," he says. "In the past, when conditions were warm, their range was greater. They went further north and further south. So, from a temperature perspective, today's climate change warming could benefit them. There is some question about how the climate could affect sea grasses and algae. It could be worse for them if it hurts their food supply."

Cetaceans, being more diverse, are more complicated, he says.

"They have about 80 different species, compared to the sirenians' four," he says. "They have been more successful at taking advantages of changes. It could be related to their diet of fish and squid. In cooler environments, they had higher food productivity They exploited those periods and diversified. Now that things are getting hotter, we're not sure how this will affect them."

As part of the grant's educational component, Clementz is taking an integrative big-picture approach to teaching K-12 and college students the concepts of evolution, ecology and climate change.

For example, he wrote a children's play that explains what occurred during the evolution of whales. Later, with the input of a choreographer and dance instructor, the play expanded to include a dance recital. It has been performed multiple times on campus, and many outside groups of young children have seen it.

"The children studied the movement of whales, then learned about their movements through dance," he says. "They got to see how whales move, and how it affects their bodies, and they got to dance, using dance moves that simulate whale movement. Visually, it really was stunning, and the kids learned a lot this way."

-- Marlene Cimons, National Science Foundation
Investigators
Mark Clementz
Related Institutions/Organizations
University of Wyoming

DOJ ANNOUNCES $16.85 BILLION SETTLEMENT WITH BANK OF AMERICA

FROM:  U.S. DEPARTMENT OF JUSTICE 

Thursday, August 21, 2014

Bank of America to Pay $16.65 Billion in Historic Justice Department Settlement for Financial Fraud Leading up to and During the Financial Crisis 

Attorney General Eric Holder and Associate Attorney General Tony West announced today that the Department of Justice has reached a $16.65 billion settlement with Bank of America Corporation – the largest civil settlement with a single entity in American history ­— to resolve federal and state claims against Bank of America and its former and current subsidiaries, including Countrywide Financial Corporation and Merrill Lynch.  As part of this global resolution, the bank has agreed to pay a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) – the largest FIRREA penalty ever – and provide billions of dollars of relief to struggling homeowners, including funds that will help defray tax liability as a result of mortgage modification, forbearance or forgiveness.  The settlement does not release individuals from civil charges, nor does it absolve Bank of America, its current or former subsidiaries and affiliates or any individuals from potential criminal prosecution.

“This historic resolution - the largest such settlement on record - goes far beyond ‘the cost of doing business,’” said Attorney General Holder.  "Under the terms of this settlement, the bank has agreed to pay $7 billion in relief to struggling homeowners, borrowers and communities affected by the bank’s conduct.  This is appropriate given the size and scope of the wrongdoing at issue.”

This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force and its Residential Mortgage-Backed Securities (RMBS) Working Group, which has recovered $36.65 billion to date for American consumers and investors.

“At nearly $17 billion, today’s resolution with Bank of America is the largest the department has ever reached with a single entity in American history,” said Associate Attorney General West.  “But the significance of this settlement lies not just in its size; this agreement is notable because it achieves real accountability for the American people and helps to rectify the harm caused by Bank of America’s conduct through a $7 billion consumer relief package that could benefit hundreds of thousands of Americans still struggling to pull themselves out from under the weight of the financial crisis.”

The Justice Department and the bank settled several of the department’s ongoing civil investigations related to the packaging, marketing, sale, arrangement, structuring and issuance of RMBS, collateralized debt obligations (CDOs), and the bank’s practices concerning the underwriting and origination of mortgage loans.  The settlement includes a statement of facts, in which the bank has acknowledged that it sold billions of dollars of RMBS without disclosing to investors key facts about the quality of the securitized loans.  When the RMBS collapsed, investors, including federally insured financial institutions, suffered billions of dollars in losses.  The bank has also conceded that it originated risky mortgage loans and made misrepresentations about the quality of those loans to Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA).

Of the record-breaking $16.65 billion resolution, almost $10 billion will be paid to settle federal and state civil claims by various entities related to RMBS, CDOs and other types of fraud.  Bank of America will pay a $5 billion civil penalty to settle the Justice Department claims under FIRREA.  Approximately $1.8 billion will be paid to settle federal fraud claims related to the bank’s origination and sale of mortgages, $1.03 billion will be paid to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $135.84 million will be paid to settle claims by the Securities and Exchange Commission.  In addition, $300 million will be paid to settle claims by the state of California, $45 million to settle claims by the state of Delaware, $200 million to settle claims by the state of Illinois, $23 million to settle claims by the Commonwealth of Kentucky, $75 million to settle claims by the state of Maryland, and $300 million to settle claims by the state of New York.

Bank of America will provide the remaining $7 billion in the form of relief to aid hundreds of thousands of consumers harmed by the financial crisis precipitated by the unlawful conduct of Bank of America, Merrill Lynch and Countrywide.  That relief will take various forms, including principal reduction loan modifications that result in numerous homeowners no longer being underwater on their mortgages and finally having substantial equity in their homes.  It will also include new loans to credit worthy borrowers struggling to get a loan, donations to assist communities in recovering from the financial crisis, and financing for affordable rental housing.  Finally, Bank of America has agreed to place over $490 million in a tax relief fund to be used to help defray some of the tax liability that will be incurred by consumers receiving certain types of relief if Congress fails to extend the tax relief coverage of the Mortgage Forgiveness Debt Relief Act of 2007.

An independent monitor will be appointed to determine whether Bank of America is satisfying its obligations.  If Bank of America fails to live up to its agreement by Aug. 31, 2018, it must pay liquidated damages in the amount of the shortfall to organizations that will use the funds for state-based Interest on Lawyers’ Trust Account (IOLTA) organizations and NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development.  The organizations will use the funds for foreclosure prevention and community redevelopment, legal assistance, housing counselling and neighborhood stabilization.

As part of the RMBS Working Group, the U.S. Attorney’s Office for the District of New Jersey conducted a FIRREA investigation into misrepresentations made by Merrill Lynch to investors in 72 RMBS throughout 2006 and 2007.  As the statement of facts describes, Merrill Lynch regularly told investors the loans it was securitizing were made to borrowers who were likely and able to repay their debts.  Merrill Lynch made these representations even though it knew, based on the due diligence it had performed on samples of the loans, that a significant number of those loans had material underwriting and compliance defects - including as many as 55 percent in a single pool.  In addition, Merrill Lynch rarely reviewed the unsampled loans to ensure that the defects observed in the samples were not present throughout the remainder of the pools.  Merrill Lynch also disregarded its own due diligence and securitized loans that the due diligence vendors had identified as defective.  This practice led one Merrill Lynch consultant to “wonder why we have due diligence performed” if Merrill Lynch was going to securitize the loans “regardless of issues.”

“In the run-up to the financial crisis, Merrill Lynch bought more and more mortgage loans, packaged them together, and sold them off in securities – even when the bank knew a substantial number of those loans were defective,” said U.S. Attorney Paul J. Fishman for the District of New Jersey.  “The failure to disclose known risks undermines investor confidence in our financial institutions.  Today’s record-breaking settlement, which includes the resolution of our office’s imminent multibillion-dollar suit for FIRREA penalties, reflects the seriousness of the lapses that caused staggering losses and wider economic damage.”

This settlement also resolves the complaint filed against Bank of America in August 2013 by the U.S. Attorney’s Office for the Western District of North Carolina concerning an $850 million securitization.  Bank of America acknowledges that it marketed this securitization as being backed by bank-originated “prime” mortgages that were underwritten in accordance with its underwriting guidelines.  Yet, Bank of America knew that a significant number of loans in the security were “wholesale” mortgages originated through mortgage brokers and that based on its internal reporting, such loans were experiencing a marked increase in underwriting defects and a noticeable decrease in performance.  Notwithstanding these red flags, the bank sold these RMBS to federally backed financial institutions without conducting any third party due diligence on the securitized loans and without disclosing key facts to investors in the offering documents filed with the SEC.  A related case concerning the same securitization was filed by the SEC against Bank of America and is also being resolved as part of this settlement.

“Today’s settlement attests to the fact that fraud pervaded every level of the RMBS industry, including purportedly prime securities, which formed the basis of our filed complaint,” said U.S. Attorney Anne M. Tompkins for the Western District of North Carolina.  “Even reputable institutions like Bank of America caved to the pernicious forces of greed and cut corners, putting profits ahead of their customers.  As we deal with the aftermath of the financial meltdown and rebuild our economy, we will hold accountable firms that contributed to the economic crisis.  Today’s settlement makes clear that my office will not sit idly while fraud occurs in our backyard.”

The U.S. Attorney’s Office for the Central District of California has been investigating the origination and securitization practices of Countrywide as part of the RMBS Working Group effort.  The statement of facts describes how Countrywide typically represented to investors that it originated loans based on underwriting standards that were designed to ensure that borrowers could repay their loans, although Countrywide had information that certain borrowers had a high probability of defaulting on their loans.  Countrywide also concealed from RMBS investors its use of “shadow guidelines” that permitted loans to riskier borrowers than Countrywide’s underwriting guidelines would otherwise permit.  Countrywide’s origination arm was motivated by the “saleability” of loans and Countrywide was willing to originate “exception loans” (i.e., loans that fell outside of its underwriting guidelines) so long as the loans, and the attendant risk, could be sold.  This led Countrywide to expand its loan offerings to include, for example, “Extreme Alt-A” loans, which one Countrywide executive described as a “hazardous product,” although Countrywide failed to tell RMBS investors that these loans were being originated outside of Countrywide’s underwriting guidelines.  Countrywide knew that these exception loans were performing far worse than loans originated without exceptions, although it never disclosed this fact to investors.

“The Central District of California has taken the lead in the department’s investigation of Countrywide Financial Corporation,” said Acting U.S. Attorney Stephanie Yonekura for the Central District of California.  “Countrywide’s improper securitization practices resulted in billions of dollars of losses to federally-insured financial institutions.  We are pleased that this investigation has resulted in a multibillion-dollar recovery to compensate the United States for the losses caused by Countrywide’s misconduct.”

In addition to the matters relating to the securitization of toxic mortgages, today’s settlement also resolves claims arising out of misrepresentations made to government entities concerning the origination of residential mortgages.

The U.S. Attorney’s Office for the Southern District of New York, along with the Federal Housing Finance Agency’s Office of Inspector General and the Special Inspector General for the Troubled Asset Relief Program, conducted investigations into the origination of defective residential mortgage loans by Countrywide’s Consumer Markets Division and Bank of America’s Retail Lending Division as well as the fraudulent sale of such loans to the government sponsored enterprises Fannie Mae and Freddie Mac (the “GSEs”).  The investigation into these practices, as well as three private whistleblower lawsuits filed under seal pursuant to the False Claims Act, are resolved in connection with this settlement.  As part of the settlement, Countrywide and Bank of America have agreed to pay $1 billion to resolve their liability under the False Claims Act.  The FIRREA penalty to be paid by Bank of America as part of the settlement also resolves the government’s claims against Bank of America and Countrywide under FIRREA for loans fraudulently sold to Fannie Mae and Freddie Mac.  In addition, Countrywide and Bank of America made admissions concerning their conduct, including that they were aware that many of the residential mortgage loans they had made to borrowers were defective, that many of the representations and warranties they made to the GSEs about the quality of the loans were inaccurate, and that they did not self-report to the GSEs mortgage loans they had internally identified as defective.

“For years, Countrywide and Bank of America unloaded toxic mortgage loans on the government sponsored enterprises Fannie Mae and Freddie Mac with false representations that the loans were quality investments,” said U.S. Attorney Preet Bharara for the Southern District of New York.  “This office has already obtained a jury verdict of fraud and a judgment for over a billion dollars against Countrywide and Bank of America for engaging in similar conduct.  Now, this settlement, which requires the bank to pay another billion dollars for false statements to the GSEs, continues to send a clear message to Wall Street that mortgage fraud cannot be a cost of doing business.”

The U.S. Attorney’s Office for the Eastern District of New York, together with its partners from the Department of Housing and Urban Development (HUD), conducted a two-year investigation into whether Bank of America knowingly made loans insured by the FHA in violation of applicable underwriting guidelines.  The investigation established that the bank caused the FHA to insure loans that were not eligible for FHA mortgage insurance.  As a result, HUD incurred hundreds of millions of dollars of losses.  Moreover, many of Bank of America’s borrowers have defaulted on their FHA mortgage loans and have either lost or are in the process of losing their homes to foreclosure.

“As a Direct Endorser of FHA insured loans, Bank of America performs a critical role in home lending,” said U.S. Attorney Loretta E. Lynch for the Eastern District of New York.  “It is a gatekeeper entrusted with the authority to commit government funds earmarked for facilitating mortgage lending to first-time and low-income homebuyers, senior citizen homeowners and others seeking or owning homes throughout the nation, including many who live in the Eastern District of New York.  In obtaining a payment of $800 million and sweeping relief for troubled homeowners, we have not just secured a meaningful remedy for the bank’s conduct, but have sent a powerful message of deterrence.”

“Bank of America failed to make accurate and complete disclosure to investors and its illegal conduct kept investors in the dark,” said Rhea Kemble Dignam, Regional Director of the SEC’s Atlanta Office.  “Requiring an admission of wrongdoing as part of Bank of America’s agreement to resolve the SEC charges filed today provides an additional level of accountability for its violation of the federal securities laws.”

“Today’s settlement with Bank of America is another important step in the Obama Administration’s efforts to provide relief to American homeowners who were hurt during the housing crisis,” said U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro.  “This global settlement will strengthen the FHA fund and Ginnie Mae, and it will provide $7 billion in consumer relief with a focus on helping borrowers in areas that were the hardest hit during the crisis.  HUD will continue working with the Department of Justice, state attorneys general, and other partners to take appropriate action to hold financial institutions accountable and provide consumers with the relief they need to stay in their homes.  HUD remains committed to solidifying the housing recovery and creating more opportunities for Americans to succeed.”

“Bank of America and the banks it bought securitized billions of dollars of defective mortgages,” said Acting Inspector General Michael P. Stephens of the FHFA-OIG.  “Investors, including Fannie Mae and Freddie Mac, suffered enormous losses by purchasing RMBS from Bank of America, Countrywide and Merrill Lynch not knowing about those defects.  Today’s settlement is a significant, but by no means final step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit.”

The attorneys general of California, Delaware, Illinois, Kentucky, Maryland and New York also conducted related investigations that were critical to bringing about this settlement.  In addition, the settlement resolves investigations conducted by the Securities and Exchange Commission (SEC) and litigation filed by the Federal Deposit Insurance Company (FDIC).

The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis.  The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, 10 U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and more than 10 state attorneys general offices around the country.

The RMBS Working Group is led by Director Geoffrey Graber and five co-chairs: Assistant Attorney General for the Civil Division Stuart Delery, Assistant Attorney General for the Criminal Division Leslie Caldwell, Director of the SEC’s Division of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman.

Investigations were led by Assistant U.S. Attorneys Leticia Vandehaar of the District of New Jersey; Dan Ryan and Mark Odulio of the Western District of North Carolina; George Cardona and Lee Weidman of the Central District of Carolina; Richard Hayes and Kenneth Abell of the Eastern District of New York; and Pierre Armand and Jaimie Nawaday of the Southern District of New York.

DOD SAYS U.S. CONTINUES AIRSTRIKES IN IRAQ NEAR MOSUL DAM

FROM:  U.S. DEFENSE DEPARTMENT 

U.S. Conducts Airstrikes Against ISIL Near Mosul Dam

DoD News, Defense Media Activity

WASHINGTON, Aug. 21, 2014 – U.S. military forces continued to attack ISIL terrorists in support of Iraqi Security Force operations, using fighter and attack aircraft to conduct six airstrikes in the vicinity of the Mosul Dam, according to a U.S. Central Command news release issued today.

The strikes destroyed or damaged three ISIL Humvees, one ISIL vehicle, and multiple IED emplacements. All aircraft exited the strike area safely.

These strikes were conducted under authority to support Iraqi security forces and Kurdish defense force operations, as well as to protect critical infrastructure, U.S. personnel and facilities, and support humanitarian efforts.

Since Aug. 8, U.S. Central Command has conducted a total of 90 airstrikes across Iraq. Of those 90 strikes, 57 have been in support of Iraqi forces near the Mosul Dam.

U.S. DEFENSE DEPARTMENT CONTRACTS FOR AUGUST 21, 2014

FROM:  U.S. DEFENSE DEPARTMENT 

CONTRACTS

ARMY

Boh Bros. Construction Co., LLC, New Orleans, Louisiana, was awarded an $116,956,672 firm-fixed-price contract with options for the Southeast Louisiana Urban Flood Control Project’s widening of the Florida Avenue Canal, Phase II and III, Orleans Parish, Louisiana. Work will be performed in New Orleans, Louisiana, with an estimated completion date of Oct. 15, 2018. Bids were solicited via the Internet, with six received. Fiscal 2014 operations and maintenance (Army) funds in the amount of $116,956,672 are being obligated at the time of the award. U.S. Army Corps of Engineers, New Orleans, Louisiana, is the contracting activity (W912P8-14-C-0049).

ImSAR LLC,* Springville, Utah, was awarded a $98,971,746 cost-plus-fixed-fee contract for research and development, rapid advancement and integration of small aperture radars on small unmanned aerial systems. Funding and work location will be determined with each order, with an estimated completion date of Aug. 20, 2019. One bid was solicited, with one received. Army Contracting Command, Natick, Massachusetts, is the contracting activity (W911QY-14-D-0007).

Nova Technologies,* Panama City, Florida, was awarded a $55,000,000 modification (P00007) to contract W900KK-12-D-0005 for modification of the fire training system for simulated battlefield training of fire support specialists, joint fire observers and soldiers at the institutional and unit level. Funding and work location will be determined with each order. Estimated completion date is Aug. 14, 2017. Army PEO Simulation, Training, and Instrumentation, Orlando, Florida, is the contracting activity.

Northrop Grumman Systems Corp., Rolling Meadows, Illinois, was awarded a $10,006,600 modification (P00019) to contract W58RGZ-12-C-0046 for sole source modification for limited scope services to provide additional development and testing of the current Common Infrared Countermeasure Technology Development phase system. Fiscal 2014 research, development, test and evaluation funds in the amount of $10,006,600 were obligated at the time of the award. Estimated completion date is March 14, 2015. Work will be performed in Rolling Meadows, Illinois. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity.

BAE Systems Information and Electronic Systems Integration Inc., Nashua, New Hampshire, was awarded an $8,005,521 modification (P00018) to contract W58RGZ-12-C-0045 for limited scope services to provide additional development and testing of the current Common Infrared Countermeasure Technology Development phase system. Fiscal 2014 research, development, test and evaluation funds in the amount of $8,005,521 were obligated at the time of the award. Estimated completion date is March 14, 2015. Work will be performed in Nashua, New Hampshire. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity.

MACKNAK Korte Group*, Lakewood, Washington, was awarded a $7,143,462 firm-fixed-price contract for design and construction of the air support operations center expansion. Work will be performed at Fort Campbell, Kentucky, with an estimated completion date of Feb. 29, 2016. Bids were solicited via the Internet, with 26 received. Fiscal 2014 military construction funds in the amount of $7,143,462 are being obligated at the time of the award. U.S. Army Corps of Engineers, Louisville, Kentucky, is the contracting activity (W912QR-14-C-0027).

NAVY

Honeywell Technology Solutions Inc., Jacksonville, Florida, is being awarded a $71,979,673 modification (P00031) to a previously awarded contract (M67004-09-D-0020) to exercise option year six for prepositioning and Marine Corps logistics support services for Blount Island Command. Work will be performed at the Blount Island Command in Jacksonville, Florida (85 percent); aboard 12 maritime prepositioning ships (12 percent); six locations in Norway (2 percent); and one location in Kuwait (1 percent). Work for this modification is expected to be completed Sept. 30, 2015. No funds will be obligated at the time of award. U. S. Marine Corps, Blount Island Command, Jacksonville, Florida, is the contracting activity.

Northrop Grumman Systems Corp., Airborne Early Warning & Electronic Warfare Systems, Bethpage, New York, is being awarded $47,596,436 for cost-plus-fixed-fee delivery order 0055 against a previously issued Basic Ordering Agreement (N00019-10-G-0004) for non-recurring engineering and development of five French E-2C compatible AN/ALQ-217 electronic support measures units for the government of France under the Foreign Military Sales program. In addition, this delivery order includes hardware and software modifications required for compatibility with the French E-2C aircraft, modification kits, aircrew and maintenance training, publications, post-installation ground and flight testing, and technical data. Work will be performed in Owego, New York (43 percent); Melbourne, Florida (40 percent); Cuers, France (9 percent); Dayton, Ohio (4 percent); Norfolk, Virginia (2 percent); Rolling Meadows, Illinois (1 percent); and Redwood City, California (1 percent), and is expected to be completed in December 2018. FMS funds in the amount of $37,461,976 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.

Raydar Inc., Odon, Indiana, is being awarded a $25,973,375 firm-fixed-price, indefinite-delivery/ indefinite-quantity contract for vehicular automated diagnostic systems (VADS). The VADS allows trouble shooting to be performed on a wide variety of U.S. Marine Corps vehicles. Work will be performed in Odon, Indiana, and is expected to be completed by August 2019. Fiscal 2014 procurement (Marine Corps) funds in the amount of $2,655,135 will be obligated at time of contract award and will not expire at the end of the current fiscal year. This contract was competitively procured via the Federal Business Opportunities website, with five offers received. The Naval Surface Warfare Center, Crane Division, Crane, Indiana, is the contracting activity (N00164-14-D-JS20).

American Rheinmetall Munitions Inc., Stafford, Virginia, is being awarded a $16,783,613 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for multi-bang, flash bang grenades in support of the U.S. Special Operations Command. Multi-bang, flash bang grenades are sound and flash devices that produce an intense light and sound display used as non-lethal means to distract and disorient in hostile environments that require less than lethal force. Work will be performed in Trittau, Germany, and is expected to be completed by August 2019. Fiscal 2014 research, development, test and evaluation funds in the amount of $461,318 will be obligated at time of award and will not expire at the end of the current fiscal year. This contract was competitively procured via the Federal Business Opportunities website, with five offers received. The Naval Surface Warfare Center, Crane Division, Crane, Indiana, is the contracting activity (N00164-14-D-JR04).

L-3 Communications Corp., Link Simulation & Training Division, Arlington, Texas, is being awarded $15,548,954 for cost-plus-fixed-fee, firm-fixed-price delivery order 0005 against a previously issued Basic Ordering Agreement (N61340-12-G-0001) for the procurement of 25 system configuration sets, Navy Aviation Simulation Master Plans, Next Generation Threat System upgrades and 25 liquid crystal display spare kits in support of the F/A-18 Tactical Operational Flight Trainer Suites. Work will be performed in Naval Air Station Oceana, Virginia (25 percent); Naval Air Station Lemoore, California (15 percent); Marine Corps Air Station Miramar, California (15 percent); Marine Corps Air Station Beaufort, South Carolina (15 percent); Marine Corps Air Station Iwakuni, Japan (10 percent); Joint Reserve Base New Orleans, Louisiana (10 percent); and Joint Reserve Base Fort Worth, Texas (10 percent), and is expected to be completed in August 2016. Fiscal 2013 and 2014 aircraft procurement (Navy) funds in the amount of $15,548,954 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Warfare Center Training Systems Division, Orlando, Florida, is the contracting activity.

IntelliSolutions, Inc.,* San Diego, California, is being awarded a $13,689,953 indefinite-delivery/indefinite-quantity, cost-plus-fixed-fee contract to provide engineering support services for standards engineering and analysis, test support, configuration management, architecture engineering and analysis services, fleet support engineering services, and Network Design Facility operation to ensure interfacing Navy, joint service, and allied nations air, surface, subsurface and land command, control, communications, computers and intelligence, surveillance, and reconnaissance systems are interoperable. This is one of three contracts awarded; each awardee will have the opportunity to compete for task orders during the ordering period. This five-year contract includes a three-year base period followed by a two-year option period, which, if exercised, would bring the potential value of this contract to $23,241,504. Work will be performed in San Diego, California (94 percent), and Philadelphia, Pennsylvania (6 percent); work is expected to be completed Aug. 20, 2017. With all options exercised, work will continue through August 2019. No fiscal 2014 funding is currently associated with this award. Funding will be obligated via task orders beginning in fiscal 2015. The types of funding to be obligated include aircraft procurement (Navy); ship construction (Navy); operations and maintenance (Navy); research, development, test and evaluation; foreign military sales, and Navy working capital fund. This contract was competitively procured via 100 percent Small Business Set-Aside solicitation via publication on the Federal Business Opportunities and the SPAWAR e-Commerce Central websites. Five proposals were received and three were selected for award. The Space and Naval Warfare Systems Center Pacific, San Diego, California, is the contracting activity (N66001-14-D-0041).

Tactical Engineering & Analysis, Inc.,* San Diego, California, is being awarded a $13,411,718 indefinite-delivery/indefinite-quantity, cost-plus-fixed-fee contract to provide engineering support services for standards engineering and analysis, test support, configuration management, architecture engineering and analysis services, fleet support engineering services, and Network Design Facility operation to ensure interfacing Navy, joint service, and allied nations air, surface, subsurface and land command, control, communications, computers and intelligence, surveillance, and reconnaissance systems are interoperable. This is one of three contracts awarded; each awardee will have the opportunity to compete for task orders during the ordering period. This five-year contract includes a three-year base period followed by one two-year option period, which, if exercised, would bring the potential value of this contract to $22,592,386. Work will be performed in San Diego, California (94 percent), and Philadelphia, Pennsylvania (6 percent); work is expected to be completed Aug. 20, 2017. With all options exercised, work will continue through August 2019. No fiscal 2014 funding is currently associated with this award. Funding will be obligated via task orders beginning in fiscal 2015. The types of funding to be obligated include aircraft procurement (Navy); ship construction (Navy); operations and maintenance (Navy); research, development, test and evaluation; foreign military sales, and Navy working capital fund. This contract was competitively procured via 100 percent Small Business Set-Aside solicitation via publication on the Federal Business Opportunities and the SPAWAR e-Commerce Central websites. Five proposals were received and three were selected for award. The Space and Naval Warfare Systems Center Pacific, San Diego, California is the contracting activity (N66001-14-D-0042).

Data Intelligence LLC,* Marlton, New Jersey, is being awarded a $12,958,772 indefinite-delivery/indefinite-quantity, cost-plus-fixed-fee multiple award contract to provide engineering support services for standards engineering and analysis, test support, configuration management, architecture engineering and analysis services, fleet support engineering services, and Network Design Facility operation to ensure interfacing Navy, joint service, and allied nations air, surface, subsurface and land command, control, communications, computers and intelligence, surveillance, and reconnaissance systems are interoperable. This is one of three contracts awarded; each awardee will have the opportunity to compete for task orders during the ordering period. This five-year contract includes a three-year base period followed by one two-year option period, which, if exercised, would bring the potential value of this contract to $21,961,954. Work will be performed in San Diego, California (64 percent); Marlton, New Jersey (30 percent); and Philadelphia, Pennsylvania (6 percent); work is expected to be completed Aug. 20, 2017. With all options exercised, work will continue through August 2019. No fiscal 2014 funding is currently associated with this award. Funding will be obligated via task orders beginning in fiscal 2015. The types of funding to be obligated include aircraft procurement (Navy); ship construction (Navy); operations and maintenance (Navy); research, development, test and evaluation; foreign military sales, and Navy working capital fund. This contract was competitively procured via 100% Small Business Set-Aside solicitation via publication on the Federal Business Opportunities and the SPAWAR e-Commerce Central websites. Five proposals were received and three were selected for award. The Space and Naval Warfare Systems Center Pacific, San Diego, California, is the contracting activity (N66001-14-D-0040).

Choctaw Manufacturing Defense Contractor,* McAlester, Oklahoma, is being awarded $10,757,625 for firm-fixed price delivery order 0015 under an a previously awarded indefinite-delivery/indefinite-quantity contract (M67854-09-D-5024), for the procurement of 500 Medium Tactical Vehicle Replacement (MTVR) modular production trailers (MPT) and water dispensing systems to support and fill the needs of the U.S. Marine Corps. The MTVR MPT will be employed throughout all elements of the Marine Air-Ground Task Force as well as being forward deployed through the Maritime Prepositioned Force. Work will be performed in McAlester, Oklahoma, and is expected to be completed by March 31, 2016. Fiscal 2012 procurement Marine Corps overseas contingency operations funds in the amount of $10,607,018 will be obligated at the time of award, and will expire at the end of this current fiscal year. This contract was not competitively procured in accordance with 10 U.S.C. 2304(c)(5). The Marine Corps Systems Command, Quantico, Virginia, is the contracting activity.

AIR FORCE

Rockwell Collins, Inc. Cedar Rapids, Iowa, has been awarded a $35,364,765 modification (P00027) to a firm-fixed-price contract (FA8106-11-C-0006) for KC-10 Communication Navigation Surveillance/Air Traffic Management (CNS/ATM) kits and installs. The total cumulative face value of the contract is $114,485,428. This modification provides for the exercise of an option for Group A and B kits and installation for 27 KC-10 aircraft. Work will be performed at Oklahoma City, Oklahoma; Cedar Rapids, Iowa; and Atlanta, Georgia, and is expected to be completed by November 2015. Fiscal 2014 aircraft procurement funds in the amount of $35,364,765 are being obligated at time of award. Air Force Life Cycle Management Center/WKDK, Tinker Air Force Base, Oklahoma, is the contracting activity. 

Alion Science and Technology Corp., Burr Ridge, Illinois, has been awarded a $25,172,296 cost-plus-fixed-fee delivery order (0082) on the AMMTIAC indefinite-delivery/indefinite-quantity, cost-plus-fixed-fee, sole-source (FA4600-06-D-0003) for technical analysis, logistics and sustainment for Headquarters U. S. Marine Corps. AMMTIAC shall provide research and development, engineering analysis, technical and operational evaluations, and systems engineering for programs designated by the U.S. Marine Corps. The work will be performed at Mount Arlington, New Jersey, and is expected to be completed by Dec. 29, 2016. Fiscal 2014 Marine Corps operations and maintenance funds in the amount of $50,000 are being obligated at time of award. Air Force Installation Contracting Agency/KD, Offutt Air Force Base, Nebraska, is the contracting activity.

Crash Rescue Equipment Service, Inc.,* Dallas, Texas, has been awarded an estimated $11,330,244 indefinite-delivery requirements contract for the fire truck overhaul and repair. Work will be performed in Dallas, Texas, and is expected to be completed by Aug. 19, 2015. This award is the result of a competitive acquisition; multiple offers were solicited and four offers were received. No operations and maintenance funds are being obligated at time of award. The contracting activity is Air Force Life Cycle Management Center/WNKBBA, Robins Air Force Base, Georgia (FA8519-14-D-0004).

*Small business 

DOD STATEMENT ON ATTEMPTED RESCUE OF HOSTAGES HELD BY ISIL

FROM:  U.S. DEFENSE DEPARTMENT 

Pentagon Provides Statement on Rescue Operation

DoD News, Defense Media Activity

WASHINGTON, Aug. 20, 2014 – The United States attempted a rescue operation recently to free a number of American hostages held in Syria by the Islamic State of Iraq and the Levant, Pentagon Press Secretary Navy Rear Adm. John Kirby said in a statement released today.

The mission was not successful because the hostages were not present at the targeted location, Kirby said in the statement. He added that the U.S. government will not tolerate the abduction of its people and will work tirelessly to secure the safety of its citizens and to hold their captors accountable.

Kirby’s statement reads as follows:

“The United States attempted a rescue operation recently to free a number of American hostages held in Syria by the Islamic State of Iraq and the Levant (ISIL). This operation involved air and ground components and was focused on a particular captor network within ISIL. Unfortunately, the mission was not successful because the hostages were not present at the targeted location.

“As we have said repeatedly, the United States government is committed to the safety and well-being of its citizens, particularly those suffering in captivity. In this case, we put the best of the United States military in harms' way to try and bring our citizens home.

“The United States government uses the full breadth of our military, intelligence and diplomatic capabilities to bring people home whenever we can. The United States will not tolerate the abduction of our people, and will work tirelessly to secure the safety of our citizens and to hold their captors accountable.”

THE 'BONANZA KING' OF MARS

FROM:  NASA 

The pale rocks in the foreground of this fisheye image from NASA's Curiosity Mars rover include the "Bonanza King" target under consideration to become the fourth rock drilled by the Mars Science Laboratory mission.  No previous mission has collected sample material from the interior of rocks on Mars. Curiosity delivers the drilled rock powder into analytical laboratory instruments inside the rover. Curiosity's front Hazard Avoidance Camera (Hazcam), which has a very wide-angle lens, recorded this view on Aug. 14, 2014, during the 719th Martian day, or sol, of the rover's work on Mars.  The view faces southward, looking down a ramp at the northeastern end of sandy-floored "Hidden Valley." Wheel tracks show where Curiosity drove into the valley, and back out again, earlier in August 2014.  The largest of the individual flat rocks in the foreground are a few inches (several centimeters) across.  For scale, the rover's left front wheel, visible at left, is 20 inches (0.5 meter) in diameter. A map showing Hidden Valley is at http://photojournal.jpl.nasa.gov/catalog/PIA18408 . NASA's Jet Propulsion Laboratory, a division of the California Institute of Technology, Pasadena, manages the Mars Science Laboratory Project for NASA's Science Mission Directorate, Washington. JPL designed and built the project's Curiosity rover and the rover's Navcam. Image Credit: NASA/JPL-Caltech