Tuesday, June 30, 2015
UNIVERSITY STUDENT SENTENCED FOR POSSESSION OF RICIN
FROM: U.S. JUSTICE DEPARTMENT
Friday, June 26, 2015
Former UW-Oshkosh Student Sentenced to 40 Months in Prison for Possession of Ricin
Kyle Allen Smith, 21, of Oshkosh, Wisconsin, was sentenced today to 40 months in federal prison for possession of ricin by the Chief District Judge William C. Griesbach of the Eastern District of Wisconsin, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney James L. Santelle of the Eastern District of Wisconsin.
Smith was arrested on October 31, 2014, after two professors at the University of Wisconsin at Oshkosh reported to campus authorities that Smith was making unusual inquiries about chemical processes, including extracting of ribosomal inhibiting protein. According to the plea agreement, Smith admitted growing castor bean plants and extracting ricin from the beans. A substance found in Smith’s residence was sent to the Department of Homeland Security’s National Bioforensics Analysis Center at Fort Detrick, Maryland, and tested positive for the toxin ricin. Ricin is a toxin that infects human cells and blocks their ability to synthesize their own protein. Small doses of ricin may be lethal to human beings if ingested, inhaled or injected. Symptoms of ricin poisoning can include difficulty breathing, nausea, vomiting and diarrhea, with possible death occurring within 36 to 72 hours. According to information posted on the website of the Centers for Disease Control and Prevention (CDC), there are no known antidotes for ricin poisoning.
Smith admitted having homicidal thoughts and that these thoughts might have sparked his curiosity about the production of ricin. He stated he would not use or test the ricin on any human because too many people knew what he was doing and would turn him in.
Assistant Attorney General Carlin joined U.S. Attorney Santelle in praising the actions of the professors and the University administration in bringing Smith to the prompt attention of law enforcement authorities. It is a perfect example of “see something, say something,” which guides the required vigilance of our times. Assistant Attorney General Carlin and U.S. Attorney Santelle also thanked the Wisconsin National Guard, 54th Civil Support Team, for the critical assistance they provided in the safe recovery of the ricin.
The case was investigated by the Oshkosh Police Department, the FBI and the University of Wisconsin – Oshkosh Police Department. The case was prosecuted by Assistant U.S. Attorney Paul L. Kanter of the Eastern District of Wisconsin and the Justice Department’s National Security Division.
Friday, June 26, 2015
Former UW-Oshkosh Student Sentenced to 40 Months in Prison for Possession of Ricin
Kyle Allen Smith, 21, of Oshkosh, Wisconsin, was sentenced today to 40 months in federal prison for possession of ricin by the Chief District Judge William C. Griesbach of the Eastern District of Wisconsin, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney James L. Santelle of the Eastern District of Wisconsin.
Smith was arrested on October 31, 2014, after two professors at the University of Wisconsin at Oshkosh reported to campus authorities that Smith was making unusual inquiries about chemical processes, including extracting of ribosomal inhibiting protein. According to the plea agreement, Smith admitted growing castor bean plants and extracting ricin from the beans. A substance found in Smith’s residence was sent to the Department of Homeland Security’s National Bioforensics Analysis Center at Fort Detrick, Maryland, and tested positive for the toxin ricin. Ricin is a toxin that infects human cells and blocks their ability to synthesize their own protein. Small doses of ricin may be lethal to human beings if ingested, inhaled or injected. Symptoms of ricin poisoning can include difficulty breathing, nausea, vomiting and diarrhea, with possible death occurring within 36 to 72 hours. According to information posted on the website of the Centers for Disease Control and Prevention (CDC), there are no known antidotes for ricin poisoning.
Smith admitted having homicidal thoughts and that these thoughts might have sparked his curiosity about the production of ricin. He stated he would not use or test the ricin on any human because too many people knew what he was doing and would turn him in.
Assistant Attorney General Carlin joined U.S. Attorney Santelle in praising the actions of the professors and the University administration in bringing Smith to the prompt attention of law enforcement authorities. It is a perfect example of “see something, say something,” which guides the required vigilance of our times. Assistant Attorney General Carlin and U.S. Attorney Santelle also thanked the Wisconsin National Guard, 54th Civil Support Team, for the critical assistance they provided in the safe recovery of the ricin.
The case was investigated by the Oshkosh Police Department, the FBI and the University of Wisconsin – Oshkosh Police Department. The case was prosecuted by Assistant U.S. Attorney Paul L. Kanter of the Eastern District of Wisconsin and the Justice Department’s National Security Division.
"ALERT FATIGUE" RESEARCHERS SAY MAKES 90% DRUG ALERTS INEFFECTIVE
FROM: NATIONAL SCIENCE FOUNDATION
Rethinking computerized clinical alerts
Researchers at Indiana University-Purdue University Indianapolis redesign drug interaction warnings to avoid 'alert fatigue'
June is National Safety Month, with a call to action to reduce harm and injury through enhanced attention to safety.
Healthcare in the United States is constantly evolving to provide safe and quality care while decreasing the incidence of medical errors. Advances in health information technology can improve patient safety, including in the area of safer prescribing of medications through the smarter design of clinical alerts.
A frequent source of errors in clinical care settings is related to the prescribing of medications. Electronic Health Records have the potential to improve safety by notifying providers of potentially harmful medication interactions. Currently, clinicians using electronic health records encounter numerous alerts as they navigate computerized prescribing for their patients.
While these alerts are critical for patient safety, they are often overridden or ignored due to "alert fatigue"--an unintended consequence of the computerization of health care, where clinicians become desensitized to the large volume of safety alerts.
An estimated 90 percent of drug interaction alerts are ineffective, as they temporarily halt prescribing with generic warning imagery and brief messaging, but do not offer user-friendly interfaces with advice that resonates with the prescriber.
With support from the National Science Foundation's (NSF) Smart and Connected Health Program, Davide Bolchini and Jon Duke from Indiana University-Purdue University Indianapolis (IUPUI) are advancing knowledge in Human Computer Interaction (HCI)--a field that studies the design, development and implementation of information technologies for optimal use by a target audience--through a collaborative project to rethink and redesign computerized clinical alerts.
Identifying disconnects
"Although physicians routinely encounter drug-drug interaction alerts during daily medication prescribing, the effectiveness of such alerts remains extremely low," explained Duke, director of drug safety informatics at Regenstrief Institute.
An additional barrier to the desired effect of alerts is that healthcare providers may be wary of utilizing computerized advice in the same way they would trust advice from medical literature or peer providers.
These challenges necessitate new approaches to design which can leverage health information technology to improve the care team's integration of information into computerized alerts to ensure patient safety. Multiple, complex factors influence the healthcare team's decision-making and the researchers want to integrate this knowledge to optimize the design and impact of computerized drug interaction alerts.
The overarching objective is to re-design the content and visualization of alerts such that they capture the attention of providers while offering advice more likely to be trusted than current alerts.
"We are looking at how to improve the trust between the physician and computer," said Duke.
Visualizing trustworthy alerts
A crucial step in the process of transforming the design of drug-drug interaction alerts involved studying the types and sources of information that providers deemed important and impactful.
The team researched information flow by directly observing hospital team meetings. They then constructed work models to identify the themes that drive trusted advice in clinical settings. The models integrated the roles of evidence in medical literature and advice provided by peer consultants such as pharmacists and subspecialists.
The research team is now actively using this foundational knowledge to transform the computer interface to reflect various models of trust based alerts.
The team is also developing novel interface designs where computer alerts can convey drug safety guidance in various forms, including changes in the alert message tones, such as from danger-based tones to supportive ones. The new alert designs also vary the source of knowledge from the empirical medical research to a peer collaborator.
The design ideas include visualizations for different trust-based alert messages. Examples include warnings whose message stresses empathy, peer-endorsement, conflict-mitigation and collaboration. The team will test and evaluate the different alerts in the lab and in hospital environments to determine the effect on prescriber responses. They will also elicit healthcare provider feedback on the visual aspects and impact of the alerts.
"This innovative Human Computer Interaction project illustrates how studying novel visualizations and design can better integrate information that is meaningful to clinicians and maximize the potential of computerized alerts to improve safety," said Wendy Nilsen, Smart and Connected Health program director at NSF.
The broader impacts of this Smart and Connected Health project are numerous. The team believes that translating these research findings into real-world electronic medical record systems could improve the user experience of prescribers and yield a potential reduction in the millions of adverse drug events that occur each year.
"A key aspect of the work is to generate alerts that are perceived as collaborating with the providers rather than critiquing every micro-decision," said Bolchini. "We have the opportunity to change technologies which are pervasive and create the next generation of systems for human use and patient safety."
-- Nivedita Mohanty, National Science Foundation
-- Aaron Dubrow, NSF
Investigators
Jon Duke
Davide Bolchini
Related Institutions/Organizations
Indiana University-Purdue University Indianapolis
Locations
Indianapolis , Indiana
Rethinking computerized clinical alerts
Researchers at Indiana University-Purdue University Indianapolis redesign drug interaction warnings to avoid 'alert fatigue'
June is National Safety Month, with a call to action to reduce harm and injury through enhanced attention to safety.
Healthcare in the United States is constantly evolving to provide safe and quality care while decreasing the incidence of medical errors. Advances in health information technology can improve patient safety, including in the area of safer prescribing of medications through the smarter design of clinical alerts.
A frequent source of errors in clinical care settings is related to the prescribing of medications. Electronic Health Records have the potential to improve safety by notifying providers of potentially harmful medication interactions. Currently, clinicians using electronic health records encounter numerous alerts as they navigate computerized prescribing for their patients.
While these alerts are critical for patient safety, they are often overridden or ignored due to "alert fatigue"--an unintended consequence of the computerization of health care, where clinicians become desensitized to the large volume of safety alerts.
An estimated 90 percent of drug interaction alerts are ineffective, as they temporarily halt prescribing with generic warning imagery and brief messaging, but do not offer user-friendly interfaces with advice that resonates with the prescriber.
With support from the National Science Foundation's (NSF) Smart and Connected Health Program, Davide Bolchini and Jon Duke from Indiana University-Purdue University Indianapolis (IUPUI) are advancing knowledge in Human Computer Interaction (HCI)--a field that studies the design, development and implementation of information technologies for optimal use by a target audience--through a collaborative project to rethink and redesign computerized clinical alerts.
Identifying disconnects
"Although physicians routinely encounter drug-drug interaction alerts during daily medication prescribing, the effectiveness of such alerts remains extremely low," explained Duke, director of drug safety informatics at Regenstrief Institute.
An additional barrier to the desired effect of alerts is that healthcare providers may be wary of utilizing computerized advice in the same way they would trust advice from medical literature or peer providers.
These challenges necessitate new approaches to design which can leverage health information technology to improve the care team's integration of information into computerized alerts to ensure patient safety. Multiple, complex factors influence the healthcare team's decision-making and the researchers want to integrate this knowledge to optimize the design and impact of computerized drug interaction alerts.
The overarching objective is to re-design the content and visualization of alerts such that they capture the attention of providers while offering advice more likely to be trusted than current alerts.
"We are looking at how to improve the trust between the physician and computer," said Duke.
Visualizing trustworthy alerts
A crucial step in the process of transforming the design of drug-drug interaction alerts involved studying the types and sources of information that providers deemed important and impactful.
The team researched information flow by directly observing hospital team meetings. They then constructed work models to identify the themes that drive trusted advice in clinical settings. The models integrated the roles of evidence in medical literature and advice provided by peer consultants such as pharmacists and subspecialists.
The research team is now actively using this foundational knowledge to transform the computer interface to reflect various models of trust based alerts.
The team is also developing novel interface designs where computer alerts can convey drug safety guidance in various forms, including changes in the alert message tones, such as from danger-based tones to supportive ones. The new alert designs also vary the source of knowledge from the empirical medical research to a peer collaborator.
The design ideas include visualizations for different trust-based alert messages. Examples include warnings whose message stresses empathy, peer-endorsement, conflict-mitigation and collaboration. The team will test and evaluate the different alerts in the lab and in hospital environments to determine the effect on prescriber responses. They will also elicit healthcare provider feedback on the visual aspects and impact of the alerts.
"This innovative Human Computer Interaction project illustrates how studying novel visualizations and design can better integrate information that is meaningful to clinicians and maximize the potential of computerized alerts to improve safety," said Wendy Nilsen, Smart and Connected Health program director at NSF.
The broader impacts of this Smart and Connected Health project are numerous. The team believes that translating these research findings into real-world electronic medical record systems could improve the user experience of prescribers and yield a potential reduction in the millions of adverse drug events that occur each year.
"A key aspect of the work is to generate alerts that are perceived as collaborating with the providers rather than critiquing every micro-decision," said Bolchini. "We have the opportunity to change technologies which are pervasive and create the next generation of systems for human use and patient safety."
-- Nivedita Mohanty, National Science Foundation
-- Aaron Dubrow, NSF
Investigators
Jon Duke
Davide Bolchini
Related Institutions/Organizations
Indiana University-Purdue University Indianapolis
Locations
Indianapolis , Indiana
MARYLAND DAY CAMP AGREES TO AFFORD EQUAL RIGHTS FOR CHILDREN WITH EPILEPSY
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, June 24, 2015
Justice Department Reaches Agreement with Maryland Day Camp to Ensure Equal Rights for Children with Epilepsy
The Justice Department signed a settlement agreement today with Camp Bravo, a day camp that operates in Towson, Maryland, just outside Baltimore. The settlement resolves allegations that Camp Bravo violated a child’s civil rights by denying her admission to the camp because she has epilepsy, in violation of the Americans with Disabilities Act (ADA). Because the child would need emergency medication administered if she were to have a prolonged or acute repetitive seizure, Camp Bravo denied her admission. Though the medication, Diastat, is designed to be administered by trained laypersons and could save the child’s life, Camp Bravo would not permit non-medical staff to administer the medication and later refused to permit the camp nurse to accompany the child on field trips or bus rides. As a result, the child was not able to attend Camp Bravo for two consecutive summers.
Title III of the ADA prohibits discrimination on the basis of disability by private camps and child care programs. Under the ADA, such entities must make reasonable modifications to their policies, practices or procedures when necessary to provide equal access to a child with a disability, unless a modification would fundamentally alter the nature of the goods and services. It generally will be a reasonable modification required by title III of the ADA for certain public accommodations, such as camps and child care programs, to train laypersons to administer Diastat.
“Equal access to camps and child care programs is essential to children and parents across the country,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “These programs allow children with disabilities to learn and play with their peers and develop important social skills. The Civil Rights Division will not allow the exclusion of children with seizure disorders where life-saving medication can be safely administered by trained laypersons.”
“Federal law prohibits businesses from discriminating against children with disabilities,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland.
Under the agreement, Camp Bravo will admit the child for all future camp sessions of the child’s choosing, as long as she is of eligible age, and will pay $8,000 to the family to compensate them for Camp Bravo’s failure to admit the child when she previously applied. In addition, Camp Bravo will train its staff on the ADA and, if a child with epilepsy is enrolled in the camp, on epilepsy and seizures. The camp will also adopt and enforce a nondiscrimination policy, as well as an emergency anti-seizure medication administration policy and procedure. The department will monitor Camp Bravo’s compliance with the agreement for three years.
Wednesday, June 24, 2015
Justice Department Reaches Agreement with Maryland Day Camp to Ensure Equal Rights for Children with Epilepsy
The Justice Department signed a settlement agreement today with Camp Bravo, a day camp that operates in Towson, Maryland, just outside Baltimore. The settlement resolves allegations that Camp Bravo violated a child’s civil rights by denying her admission to the camp because she has epilepsy, in violation of the Americans with Disabilities Act (ADA). Because the child would need emergency medication administered if she were to have a prolonged or acute repetitive seizure, Camp Bravo denied her admission. Though the medication, Diastat, is designed to be administered by trained laypersons and could save the child’s life, Camp Bravo would not permit non-medical staff to administer the medication and later refused to permit the camp nurse to accompany the child on field trips or bus rides. As a result, the child was not able to attend Camp Bravo for two consecutive summers.
Title III of the ADA prohibits discrimination on the basis of disability by private camps and child care programs. Under the ADA, such entities must make reasonable modifications to their policies, practices or procedures when necessary to provide equal access to a child with a disability, unless a modification would fundamentally alter the nature of the goods and services. It generally will be a reasonable modification required by title III of the ADA for certain public accommodations, such as camps and child care programs, to train laypersons to administer Diastat.
“Equal access to camps and child care programs is essential to children and parents across the country,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “These programs allow children with disabilities to learn and play with their peers and develop important social skills. The Civil Rights Division will not allow the exclusion of children with seizure disorders where life-saving medication can be safely administered by trained laypersons.”
“Federal law prohibits businesses from discriminating against children with disabilities,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland.
Under the agreement, Camp Bravo will admit the child for all future camp sessions of the child’s choosing, as long as she is of eligible age, and will pay $8,000 to the family to compensate them for Camp Bravo’s failure to admit the child when she previously applied. In addition, Camp Bravo will train its staff on the ADA and, if a child with epilepsy is enrolled in the camp, on epilepsy and seizures. The camp will also adopt and enforce a nondiscrimination policy, as well as an emergency anti-seizure medication administration policy and procedure. The department will monitor Camp Bravo’s compliance with the agreement for three years.
Monday, June 29, 2015
AG LYNCH'S STATEMENT ON SUPREME COURT RULING ON GERRYMANDERING
FROM: U.S. JUSTICE DEPARTMENT
Monday, June 29, 2015
Attorney General Loretta E. Lynch Statement on the U.S. Supreme Court Ruling in Arizona State Legislature v. Arizona Independent Redistricting Commission
Attorney General Loretta E. Lynch released the following statement today after the Supreme Court ruling in Arizona State Legislature v. Arizona Independent Redistricting Commission:
“I am pleased that the Supreme Court has vindicated the rights of voters who want their electoral districts drawn fairly, independently and without undue emphasis on partisan affiliation or political creed. Arizona’s approach to redistricting is an innovative and effective advance in the effort to reduce gerrymandering and give all Americans an opportunity to make their voices heard. Today’s decision is a victory for the people of Arizona, for the promise of fair and competitive elections and for the principles of democratic self-governance that make our nation exceptional.”
Monday, June 29, 2015
Attorney General Loretta E. Lynch Statement on the U.S. Supreme Court Ruling in Arizona State Legislature v. Arizona Independent Redistricting Commission
Attorney General Loretta E. Lynch released the following statement today after the Supreme Court ruling in Arizona State Legislature v. Arizona Independent Redistricting Commission:
“I am pleased that the Supreme Court has vindicated the rights of voters who want their electoral districts drawn fairly, independently and without undue emphasis on partisan affiliation or political creed. Arizona’s approach to redistricting is an innovative and effective advance in the effort to reduce gerrymandering and give all Americans an opportunity to make their voices heard. Today’s decision is a victory for the people of Arizona, for the promise of fair and competitive elections and for the principles of democratic self-governance that make our nation exceptional.”
FORMER SENIOR EXEC AT QUALCOMM SENTENCED FOR INSIDER TRADING
FROM: U.S. JUSTICE DEPARTMENT
Friday, June 26, 2015
Former Senior Executive of Qualcomm Sentenced to 18 Months and Fined $500,000 for Insider Trading and Money Laundering
The former Executive Vice President and President of Global Business Operations for Qualcomm Inc., was sentenced today to 18 months in prison and fined $500,000 for his role in a three-year insider trading scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California made the announcement.
“Through his position as a high-ranking executive at Qualcomm, Jing Wang gained unique access to information about the company’s earnings and intended acquisitions and illegally exploited that inside information for personal gain,” said Assistant Attorney General Caldwell. “He then enlisted the services of others – his stock broker and his brother – to cover up the scheme. This prosecution demonstrates the Criminal Division’s commitment to holding accountable corporate executives who would undermine the integrity of the financial marketplace.”
“Jing Wang was a powerful insider at one of the world’s top corporations – but he threw it all away to make a few hundred thousand dollars,” said U.S. Attorney Duffy. “While Wang has lost his power, his position and his freedom, the real losers here are investors who play by the rules, and our nation’s financial system, which is diminished with every one of these schemes.”
Jing Wang, 52, of Del Mar, California, pleaded guilty in July 2014 to insider trading, money laundering and obstruction of justice for orchestrating a multi-year scheme to trade on the confidential information of Qualcomm and cover up his criminal conduct. The sentence was imposed by U.S. District Judge William Q. Hayes of the Southern District of California.
In connection with his plea, Wang admitted that he made three, separate insider trades using a brokerage account in the name of his British Virgin Island (BVI) shell company, Unicorn Global Enterprises. First, in early 2010, prior to Qualcomm’s announcement of a dividend increase and stock repurchase, Wang bought company stock valued at approximately $277,000. He also admitted that, in December 2010, while attending Qualcomm’s Board of Directors meeting in Hong Kong, and hours after the Board approved a non-public offer to purchase Atheros, a developer of semiconductors for wireless communications, Wang purchased stock in Atheros. Wang further admitted that, just a few weeks later, he directed his stockbroker, Gary Yin, to sell the Atheros stock, for approximately $481,000, and purchase Qualcomm stock one day before the company announced record earnings.
Wang also pleaded guilty to money laundering for transferring the illegal proceeds from Unicorn’s account to an account of a new BVI shell company he controlled. He further admitted to obstructing justice by creating a false cover story in which he and co-conspirator Yin would blame Wang’s brother Bing Wang, who resides in rural China, for the insider trading and ownership of the Unicorn Account. Among other acts, Wang collected incriminating evidence and provided it to Yin to take to China, and arranged meetings between Yin and Bing Wang during which the two rehearsed the false account.
Yin pleaded guilty to conspiring to obstruct justice and launder money, and currently is scheduled to be sentenced on July 17, 2015. Bing Wang has been charged in connection with the scheme, and is wanted on an international arrest warrant.
This case was investigated by the FBI’s San Diego Field Office and the Internal Revenue Service-Criminal Investigation’s San Diego Field Division. The SEC’s Los Angeles Regional Office provided substantial assistance. The case is being prosecuted by Trial Attorney James P. McDonald of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Eric J. Beste of the Southern District of California.
Friday, June 26, 2015
Former Senior Executive of Qualcomm Sentenced to 18 Months and Fined $500,000 for Insider Trading and Money Laundering
The former Executive Vice President and President of Global Business Operations for Qualcomm Inc., was sentenced today to 18 months in prison and fined $500,000 for his role in a three-year insider trading scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California made the announcement.
“Through his position as a high-ranking executive at Qualcomm, Jing Wang gained unique access to information about the company’s earnings and intended acquisitions and illegally exploited that inside information for personal gain,” said Assistant Attorney General Caldwell. “He then enlisted the services of others – his stock broker and his brother – to cover up the scheme. This prosecution demonstrates the Criminal Division’s commitment to holding accountable corporate executives who would undermine the integrity of the financial marketplace.”
“Jing Wang was a powerful insider at one of the world’s top corporations – but he threw it all away to make a few hundred thousand dollars,” said U.S. Attorney Duffy. “While Wang has lost his power, his position and his freedom, the real losers here are investors who play by the rules, and our nation’s financial system, which is diminished with every one of these schemes.”
Jing Wang, 52, of Del Mar, California, pleaded guilty in July 2014 to insider trading, money laundering and obstruction of justice for orchestrating a multi-year scheme to trade on the confidential information of Qualcomm and cover up his criminal conduct. The sentence was imposed by U.S. District Judge William Q. Hayes of the Southern District of California.
In connection with his plea, Wang admitted that he made three, separate insider trades using a brokerage account in the name of his British Virgin Island (BVI) shell company, Unicorn Global Enterprises. First, in early 2010, prior to Qualcomm’s announcement of a dividend increase and stock repurchase, Wang bought company stock valued at approximately $277,000. He also admitted that, in December 2010, while attending Qualcomm’s Board of Directors meeting in Hong Kong, and hours after the Board approved a non-public offer to purchase Atheros, a developer of semiconductors for wireless communications, Wang purchased stock in Atheros. Wang further admitted that, just a few weeks later, he directed his stockbroker, Gary Yin, to sell the Atheros stock, for approximately $481,000, and purchase Qualcomm stock one day before the company announced record earnings.
Wang also pleaded guilty to money laundering for transferring the illegal proceeds from Unicorn’s account to an account of a new BVI shell company he controlled. He further admitted to obstructing justice by creating a false cover story in which he and co-conspirator Yin would blame Wang’s brother Bing Wang, who resides in rural China, for the insider trading and ownership of the Unicorn Account. Among other acts, Wang collected incriminating evidence and provided it to Yin to take to China, and arranged meetings between Yin and Bing Wang during which the two rehearsed the false account.
Yin pleaded guilty to conspiring to obstruct justice and launder money, and currently is scheduled to be sentenced on July 17, 2015. Bing Wang has been charged in connection with the scheme, and is wanted on an international arrest warrant.
This case was investigated by the FBI’s San Diego Field Office and the Internal Revenue Service-Criminal Investigation’s San Diego Field Division. The SEC’s Los Angeles Regional Office provided substantial assistance. The case is being prosecuted by Trial Attorney James P. McDonald of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Eric J. Beste of the Southern District of California.
FRANK ROSE MAKES REMARKS ON TRANSATLANTIC MISSILE DEFENSE
FROM: U.S. STATE DEPARTMENT
6/26/2015 12:12 PM EDT
Transatlantic Missile Defense: Defining the Right Threat Set
Remarks
Frank A. Rose
Assistant Secretary, Bureau of Arms Control, Verification and Compliance
The Atlantic Council
Washington, DC
June 24, 2015
As prepared
Thank you Ian for that kind introduction and for having me here today.
I always appreciate the opportunity to speak at the annual Atlantic Council missile defense conference alongside so many experts in this important field. Today, I would like to focus my remarks on how the Obama Administration has defined the ballistic missile threat and how we are cooperating to address this threat. I'll keep my comments brief to maximize our time to more freely engage on these issues.
The 2010 Ballistic Missile Defense Review (or BMDR) makes clear that the United States’ missile defenses are focused on defending against limited missile threats to the U.S. homeland and regional missile threats to our deployed forces, allies and partners throughout the world. The development of ballistic missiles by countries like Iran and North Korea, and the proliferation of these systems around the world is what drives our threat assessment.
Our deployment of missile defenses is focused on strengthening the twin U.S. goals of deterrence and assurance. In so doing, they also contribute to international peace and stability and reinforce our nonproliferation aims.
At the same time, we have made clear both in our policy and in the capabilities we have deployed that our missile defense efforts are not intended to affect the strategic balance with Russia and China.
As a practical matter, the U.S. experience with missile defense suggests that attempting to develop a comprehensive missile defense system to defend against ballistic missile attack from Russia would be extremely challenging – and costly – given the size and sophistication of Russia’s strategic missile force and the relatively limited number of missile defense interceptors that would be available to defend against such a large force.
It is to address the regional threats from the Middle East and North Korea, and to enhance our regional deterrence posture, that leads us to cooperate with our allies and partners in deploying missile defense systems and architectures today.
For example, I just returned from a trip to the Middle East, where the United States and Gulf Cooperation Council (or GCC) member states have committed to develop a region-wide ballistic missile defense capability, including through the development of a Ballistic Missile Early Warning System. At the recent U.S.-GCC Summit, the United States committed to work with the GCC to conduct a study of a GCC-wide missile defense architecture and offered technical assistance in the development of a GCC-wide Ballistic Missile Early Warning System. Finally, we agreed to hold a senior leader missile defense tabletop exercise to examine improved regional ballistic missile defense cooperation.
In Europe, we continue to make excellent progress implementing the European Phased Adaptive Approach (or EPAA), which will serve as the U.S. national contribution to NATO’s missile defense system.
Starting in 2011 with Phase 1, we deployed a missile defense radar in Turkey and began the sustained deployment of Aegis Ballistic Missile Defense (BMD)-capable ships in the Mediterranean. With NATO’s declaration of Interim Capability in 2012, the radar in Turkey transitioned to NATO operational control. Additionally, we have been working with Spain to deploy four U.S. Aegis BMD-capable ships at the naval facility at Rota which will allow us to increase our rotational presence in the region and respond to potential crises.
We are on track to complete the deployment of an Aegis Ashore site in Romania as part of Phase 2 of the EPAA later this year. When operational, this site, combined with BMD-capable ships in the Mediterranean, will enhance coverage of NATO from short- and medium-range ballistic missiles launched from the Middle East.
Finally, Phase 3 will involve the construction of an Aegis Ashore site in Poland equipped with the new SM-3 Block IIA interceptor. President Obama’s Fiscal Year 2016 budget request designates approximately $200 million for the establishment of the site, including construction which will begin next year, allowing us to remain on schedule to complete this site by 2018. The Phase 3 site in Poland, when combined with other EPAA assets, will provide ballistic missile defense coverage of all NATO European territory
In the Asia-Pacific, we are continuing missile defense cooperation through our bilateral alliances and key partnerships. I’d highlight that the next generation of Aegis missile defense interceptor, the Standard Missile-3 Block IIA, which we are co-developing with Japan, just completed a successful flight test earlier this month. We also recently deployed a second AN/TPY-2 radar to Japan, which will enhance the defense of both the United States and Japan.
Finally, over the past twenty years, the United States and NATO offered Russia various proposals for missile defense cooperation. Russia declined to accept our proposals. As you’re aware, Russia’s illegal actions in Ukraine led to the suspension of our dialogue on missile defense cooperation. But prior to the suspension, Russia continued to demand that the United States provide “legally binding” guarantees that U.S. missile defenses will not harm or diminish Russia’s strategic nuclear deterrent. These guarantees would have been based on criteria that would have limited our missile defenses and undermined our ability to protect ourselves, our deployed forces, allies and friends against an evolving and growing ballistic missile threat.
The 2010 BMDR is quite clear on our policy: U.S. missile defenses are neither designed nor directed against Russia’s or China’s strategic nuclear forces. However, by the same token, we have also made it clear that we cannot and will not accept legally-binding or other constraints that would limit our ability to defend ourselves, our allies, and our partners. The United States will continue to insist on having the flexibility to respond to evolving ballistic missile threats.
Allow me to conclude by emphasizing that U.S. cooperation on missile defense is not a one size fits all approach. Threats are diverse and so must be our solutions. We tailor our unique sets of capabilities to fit with each regional security environment stretching from Europe to the Asia-Pacific. And as more actors develop sophisticated ballistic missile capabilities, it is incumbent upon us to take the appropriate steps to defend the U.S. homeland, our deployed forces, and our allies and partners. I can personally attest that our diplomatic engagements the last six years have made us, and our allies, better equipped to meet the threats of today, and nimble enough to respond to what threats may lay ahead.
Thank you and I look forward to your questions and our discussion.
6/26/2015 12:12 PM EDT
Transatlantic Missile Defense: Defining the Right Threat Set
Remarks
Frank A. Rose
Assistant Secretary, Bureau of Arms Control, Verification and Compliance
The Atlantic Council
Washington, DC
June 24, 2015
As prepared
Thank you Ian for that kind introduction and for having me here today.
I always appreciate the opportunity to speak at the annual Atlantic Council missile defense conference alongside so many experts in this important field. Today, I would like to focus my remarks on how the Obama Administration has defined the ballistic missile threat and how we are cooperating to address this threat. I'll keep my comments brief to maximize our time to more freely engage on these issues.
The 2010 Ballistic Missile Defense Review (or BMDR) makes clear that the United States’ missile defenses are focused on defending against limited missile threats to the U.S. homeland and regional missile threats to our deployed forces, allies and partners throughout the world. The development of ballistic missiles by countries like Iran and North Korea, and the proliferation of these systems around the world is what drives our threat assessment.
Our deployment of missile defenses is focused on strengthening the twin U.S. goals of deterrence and assurance. In so doing, they also contribute to international peace and stability and reinforce our nonproliferation aims.
At the same time, we have made clear both in our policy and in the capabilities we have deployed that our missile defense efforts are not intended to affect the strategic balance with Russia and China.
As a practical matter, the U.S. experience with missile defense suggests that attempting to develop a comprehensive missile defense system to defend against ballistic missile attack from Russia would be extremely challenging – and costly – given the size and sophistication of Russia’s strategic missile force and the relatively limited number of missile defense interceptors that would be available to defend against such a large force.
It is to address the regional threats from the Middle East and North Korea, and to enhance our regional deterrence posture, that leads us to cooperate with our allies and partners in deploying missile defense systems and architectures today.
For example, I just returned from a trip to the Middle East, where the United States and Gulf Cooperation Council (or GCC) member states have committed to develop a region-wide ballistic missile defense capability, including through the development of a Ballistic Missile Early Warning System. At the recent U.S.-GCC Summit, the United States committed to work with the GCC to conduct a study of a GCC-wide missile defense architecture and offered technical assistance in the development of a GCC-wide Ballistic Missile Early Warning System. Finally, we agreed to hold a senior leader missile defense tabletop exercise to examine improved regional ballistic missile defense cooperation.
In Europe, we continue to make excellent progress implementing the European Phased Adaptive Approach (or EPAA), which will serve as the U.S. national contribution to NATO’s missile defense system.
Starting in 2011 with Phase 1, we deployed a missile defense radar in Turkey and began the sustained deployment of Aegis Ballistic Missile Defense (BMD)-capable ships in the Mediterranean. With NATO’s declaration of Interim Capability in 2012, the radar in Turkey transitioned to NATO operational control. Additionally, we have been working with Spain to deploy four U.S. Aegis BMD-capable ships at the naval facility at Rota which will allow us to increase our rotational presence in the region and respond to potential crises.
We are on track to complete the deployment of an Aegis Ashore site in Romania as part of Phase 2 of the EPAA later this year. When operational, this site, combined with BMD-capable ships in the Mediterranean, will enhance coverage of NATO from short- and medium-range ballistic missiles launched from the Middle East.
Finally, Phase 3 will involve the construction of an Aegis Ashore site in Poland equipped with the new SM-3 Block IIA interceptor. President Obama’s Fiscal Year 2016 budget request designates approximately $200 million for the establishment of the site, including construction which will begin next year, allowing us to remain on schedule to complete this site by 2018. The Phase 3 site in Poland, when combined with other EPAA assets, will provide ballistic missile defense coverage of all NATO European territory
In the Asia-Pacific, we are continuing missile defense cooperation through our bilateral alliances and key partnerships. I’d highlight that the next generation of Aegis missile defense interceptor, the Standard Missile-3 Block IIA, which we are co-developing with Japan, just completed a successful flight test earlier this month. We also recently deployed a second AN/TPY-2 radar to Japan, which will enhance the defense of both the United States and Japan.
Finally, over the past twenty years, the United States and NATO offered Russia various proposals for missile defense cooperation. Russia declined to accept our proposals. As you’re aware, Russia’s illegal actions in Ukraine led to the suspension of our dialogue on missile defense cooperation. But prior to the suspension, Russia continued to demand that the United States provide “legally binding” guarantees that U.S. missile defenses will not harm or diminish Russia’s strategic nuclear deterrent. These guarantees would have been based on criteria that would have limited our missile defenses and undermined our ability to protect ourselves, our deployed forces, allies and friends against an evolving and growing ballistic missile threat.
The 2010 BMDR is quite clear on our policy: U.S. missile defenses are neither designed nor directed against Russia’s or China’s strategic nuclear forces. However, by the same token, we have also made it clear that we cannot and will not accept legally-binding or other constraints that would limit our ability to defend ourselves, our allies, and our partners. The United States will continue to insist on having the flexibility to respond to evolving ballistic missile threats.
Allow me to conclude by emphasizing that U.S. cooperation on missile defense is not a one size fits all approach. Threats are diverse and so must be our solutions. We tailor our unique sets of capabilities to fit with each regional security environment stretching from Europe to the Asia-Pacific. And as more actors develop sophisticated ballistic missile capabilities, it is incumbent upon us to take the appropriate steps to defend the U.S. homeland, our deployed forces, and our allies and partners. I can personally attest that our diplomatic engagements the last six years have made us, and our allies, better equipped to meet the threats of today, and nimble enough to respond to what threats may lay ahead.
Thank you and I look forward to your questions and our discussion.
EX-IM BANK ANNOUNCES GUARANTEE OF FINANCING FOR FORKLIFT EXPORTS TO BRAZIL
FROM: U.S. EXPORT-IMPORT BANK
California Small Business Exports Forklifts to Brazil Supported by EXIM-Guaranteed Buyer Financing from Northstar Trade Finance
Financing will support 30 jobs
Washington, D.C. – Wiggins Lift Co. Inc., a small-business manufacturer in Oxnard, Calif., is exporting its forklifts to marinas in Brazil with the support of medium-term buyer financing being guaranteed by the Export-Import Bank of the United States (EXIM Bank) from Northstar Trade Finance Inc. in Vancouver, British Columbia.
Northstar – which was awarded EXIM’s Lender of the Year award in April – is providing approximately $1.4 million in EXIM-backed medium-term loans to finance the export of Wiggins Lift’s forklifts to three Brazilian borrowers: BR Marina Group S.A., Marina Verolme S.A. and Marina Porto Bracuhy Ltda. The exports sales are helping to sustain an estimated 30 jobs at the company.
“To compete successfully in global markets, exporters need to be able to offer their foreign buyers competitive financing terms in addition to a quality product or service,” said EXIM Bank Chairman and President Fred P. Hochberg. “Through EXIM’s Medium-Term Delegated Authority Program, we work with commercial lenders to empower small businesses such as Wiggins Lift to make sales on longer repayment terms and increase their exports.”
“EXIM’s guarantee is a positive for everyone. It facilitated competitive financing from Northstar for these marinas in Brazil and enabled them to purchase our world-class lifts. In turn, these sales are helping us continue to grow, add employees and contribute to the U.S. economy,” said Wiggins Lift CEO Michele McDowell.
“We at Northstar are pleased to support Wiggins Lift in these exports to Brazil. EXIM’s Medium-Term Delegated Authority Program is a powerful tool that enables American exporters to offer their customers a complete sales solution and to compete more effectively against their foreign competitors who offer financing,” said Northstar’s Craig MacKenzie, managing director, North America.
MacKenzie noted that the delegated authority program enables Northstar to significantly “speed up” the credit decision and approval process to a few days, which enables exporters to offer financing to their customers in a timely way.
Wiggins Lift Co. Inc. designs and manufactures custom heavy-lifting equipment for applications in the marine, mining, military, agriculture and other industries. Wiggins Lift was founded in the 1950s in Oxnard, Calif., where it currently employs over 50 workers. The woman-owned company is led by the founder’s granddaughter.
Northstar’s international trade finance includes a strategic approach to developing effective public-partnerships with key government agencies and departments, particularly successful in the provision of trade-related financing and insurance/guarantee solutions. Northstar’s partners include top financial institutions in North America and leading government agencies and credit insurers in Canada, the United States, Europe and Australia, among other countries.
EXIM Bank’s Medium Term Delegated Authority (MTDA) program enables the lender to make a commitment based on a set of defined parameters if they agree to share risk. The applications are made through EXIM’s online system, and transactions are authorized by the lender. Applications that are determined to be complete are generally made operative within five business days.
California Small Business Exports Forklifts to Brazil Supported by EXIM-Guaranteed Buyer Financing from Northstar Trade Finance
Financing will support 30 jobs
Washington, D.C. – Wiggins Lift Co. Inc., a small-business manufacturer in Oxnard, Calif., is exporting its forklifts to marinas in Brazil with the support of medium-term buyer financing being guaranteed by the Export-Import Bank of the United States (EXIM Bank) from Northstar Trade Finance Inc. in Vancouver, British Columbia.
Northstar – which was awarded EXIM’s Lender of the Year award in April – is providing approximately $1.4 million in EXIM-backed medium-term loans to finance the export of Wiggins Lift’s forklifts to three Brazilian borrowers: BR Marina Group S.A., Marina Verolme S.A. and Marina Porto Bracuhy Ltda. The exports sales are helping to sustain an estimated 30 jobs at the company.
“To compete successfully in global markets, exporters need to be able to offer their foreign buyers competitive financing terms in addition to a quality product or service,” said EXIM Bank Chairman and President Fred P. Hochberg. “Through EXIM’s Medium-Term Delegated Authority Program, we work with commercial lenders to empower small businesses such as Wiggins Lift to make sales on longer repayment terms and increase their exports.”
“EXIM’s guarantee is a positive for everyone. It facilitated competitive financing from Northstar for these marinas in Brazil and enabled them to purchase our world-class lifts. In turn, these sales are helping us continue to grow, add employees and contribute to the U.S. economy,” said Wiggins Lift CEO Michele McDowell.
“We at Northstar are pleased to support Wiggins Lift in these exports to Brazil. EXIM’s Medium-Term Delegated Authority Program is a powerful tool that enables American exporters to offer their customers a complete sales solution and to compete more effectively against their foreign competitors who offer financing,” said Northstar’s Craig MacKenzie, managing director, North America.
MacKenzie noted that the delegated authority program enables Northstar to significantly “speed up” the credit decision and approval process to a few days, which enables exporters to offer financing to their customers in a timely way.
Wiggins Lift Co. Inc. designs and manufactures custom heavy-lifting equipment for applications in the marine, mining, military, agriculture and other industries. Wiggins Lift was founded in the 1950s in Oxnard, Calif., where it currently employs over 50 workers. The woman-owned company is led by the founder’s granddaughter.
Northstar’s international trade finance includes a strategic approach to developing effective public-partnerships with key government agencies and departments, particularly successful in the provision of trade-related financing and insurance/guarantee solutions. Northstar’s partners include top financial institutions in North America and leading government agencies and credit insurers in Canada, the United States, Europe and Australia, among other countries.
EXIM Bank’s Medium Term Delegated Authority (MTDA) program enables the lender to make a commitment based on a set of defined parameters if they agree to share risk. The applications are made through EXIM’s online system, and transactions are authorized by the lender. Applications that are determined to be complete are generally made operative within five business days.
U.S. AND KAZAKHSTAN MAKE INITIAL SCIENCE & TECHNOLOGY CENTER AGREEMENT
FROM: U.S. STATE DEPARTMENT
United States and Kazakhstan Initial New International Science and Technology Center Agreement
Bureau of International Security and Nonproliferation
June 24, 2015
UNITED STATES EMBASSY ASTANA
On June 22, in Astana, Kazakhstan, Deputy Assistant Secretary of State for Nonproliferation Programs Simon Limage initialed on behalf of the United States the Agreement Continuing the International Science and Technology Center (ISTC) along with the European Union, Georgia, Japan, the Kingdom of Norway, Kyrgyz Republic, the Republic of Armenia, the Republic of Kazakhstan, and the Republic of Korea.
The ISTC, with its new headquarters at Nazarbayev University in Astana, Kazakhstan, seeks to minimize incentives for scientists and engineers in states with technologies, expertise, and related materials applicable to WMD to engage in activities that could result in the proliferation of WMD or related materials by supporting and cooperating in research and development activities for peaceful purposes. The initialing of the agreement sets the stage for signing the agreement once all parties have completed their internal procedures.
Deputy Assistant Secretary of State Limage, as the US representative to the ISTC Governing Board, led a U.S. interagency delegation, which included technical experts from the Departments of State and Energy. In the course of the two day Governing Board meeting, significant decisions were made to streamline the ISTC, endorse plans to expand the organization to other regions, and enhance opportunities for scientific projects in new fields.
United States and Kazakhstan Initial New International Science and Technology Center Agreement
Bureau of International Security and Nonproliferation
June 24, 2015
UNITED STATES EMBASSY ASTANA
On June 22, in Astana, Kazakhstan, Deputy Assistant Secretary of State for Nonproliferation Programs Simon Limage initialed on behalf of the United States the Agreement Continuing the International Science and Technology Center (ISTC) along with the European Union, Georgia, Japan, the Kingdom of Norway, Kyrgyz Republic, the Republic of Armenia, the Republic of Kazakhstan, and the Republic of Korea.
The ISTC, with its new headquarters at Nazarbayev University in Astana, Kazakhstan, seeks to minimize incentives for scientists and engineers in states with technologies, expertise, and related materials applicable to WMD to engage in activities that could result in the proliferation of WMD or related materials by supporting and cooperating in research and development activities for peaceful purposes. The initialing of the agreement sets the stage for signing the agreement once all parties have completed their internal procedures.
Deputy Assistant Secretary of State Limage, as the US representative to the ISTC Governing Board, led a U.S. interagency delegation, which included technical experts from the Departments of State and Energy. In the course of the two day Governing Board meeting, significant decisions were made to streamline the ISTC, endorse plans to expand the organization to other regions, and enhance opportunities for scientific projects in new fields.
Sunday, June 28, 2015
NASA STATEMENT ON SPACEX EXPLOSION
FROM: NASA
NASA Administrator Statement on the Loss of SpaceX CRS-7
The following is a statement from NASA Administrator Charles Bolden on the loss Sunday of the SpaceX Commercial Resupply Services 7 (CRS-7) mission.
“We are disappointed in the loss of the latest SpaceX cargo resupply mission to the International Space Station. However, the astronauts are safe aboard the station and have sufficient supplies for the next several months. We will work closely with SpaceX to understand what happened, fix the problem and return to flight. The commercial cargo program was designed to accommodate loss of cargo vehicles. We will continue operation of the station in a safe and effective way as we continue to use it as our test bed for preparing for longer duration missions farther into the solar system.
“A Progress vehicle is ready to launch July 3, followed in August by a Japanese HTV flight. Orbital ATK, our other commercial cargo partner, is moving ahead with plans for its next launch later this year.
“SpaceX has demonstrated extraordinary capabilities in its first six cargo resupply missions to the station, and we know they can replicate that success. We will work with and support SpaceX to assess what happened, understand the specifics of the failure and correct it to move forward. This is a reminder that spaceflight is an incredible challenge, but we learn from each success and each setback. Today's launch attempt will not deter us from our ambitious human spaceflight program.”
NASA Administrator Statement on the Loss of SpaceX CRS-7
The following is a statement from NASA Administrator Charles Bolden on the loss Sunday of the SpaceX Commercial Resupply Services 7 (CRS-7) mission.
“We are disappointed in the loss of the latest SpaceX cargo resupply mission to the International Space Station. However, the astronauts are safe aboard the station and have sufficient supplies for the next several months. We will work closely with SpaceX to understand what happened, fix the problem and return to flight. The commercial cargo program was designed to accommodate loss of cargo vehicles. We will continue operation of the station in a safe and effective way as we continue to use it as our test bed for preparing for longer duration missions farther into the solar system.
“A Progress vehicle is ready to launch July 3, followed in August by a Japanese HTV flight. Orbital ATK, our other commercial cargo partner, is moving ahead with plans for its next launch later this year.
“SpaceX has demonstrated extraordinary capabilities in its first six cargo resupply missions to the station, and we know they can replicate that success. We will work with and support SpaceX to assess what happened, understand the specifics of the failure and correct it to move forward. This is a reminder that spaceflight is an incredible challenge, but we learn from each success and each setback. Today's launch attempt will not deter us from our ambitious human spaceflight program.”
READOUT: PRESIDENT OBAMA'S CALL WITH CHANCELLOR MERKEL REGARDING GREECE AND THE EUROZONE
FROM: THE WHITE HOUSE
Readout of the President’s Call with Chancellor Angela Merkel of Germany
The President spoke today with Chancellor Merkel of Germany regarding developments in Greece. The two leaders agreed that it was critically important to make every effort to return to a path that will allow Greece to resume reforms and growth within the Eurozone. The leaders affirmed that their respective economic teams are carefully monitoring the situation and will remain in close touch. The President also offered his condolences for the loss of German citizens in Friday’s tragic attack in Tunisia.
Readout of the President’s Call with Chancellor Angela Merkel of Germany
The President spoke today with Chancellor Merkel of Germany regarding developments in Greece. The two leaders agreed that it was critically important to make every effort to return to a path that will allow Greece to resume reforms and growth within the Eurozone. The leaders affirmed that their respective economic teams are carefully monitoring the situation and will remain in close touch. The President also offered his condolences for the loss of German citizens in Friday’s tragic attack in Tunisia.
SPRING OVER NORTH KOREA
On April 27, 2015, the Moderate Resolution Imaging Spectroradiometer (MODIS) instrument on NASA’s Terra satellite observed dozens of fires burning in the eastern part of North Korea and parts of Russia north of North Korea. Actively burning areas, detected by the thermal bands on MODIS, are outlined in red.
While North Korea’s best agricultural land is located in the western part of the country, many people farm land along rivers in the mountainous areas. Fire is often used to clear debris from last year’s crops and to help fertilize the soil for the coming season. While fire helps enhance crops and grasses for pasture, the fires also produce smoke that degrades air quality. The fires in this image have produced enough smoke to send plumes of haze drifting east over the Sea of Japan. Last year at this time, the Earth Observatory posted a similar image of North Korea's agricultural fires. NASA image courtesy Jeff Schmaltz, MODIS Rapid Response Team. Caption: NASA/Goddard, Lynn Jenner
ASSISTANT AG CALDWELL'S REMARKS ON DIGITAL CURRENCIES LIKE BITCOM
FROM: U.S. JUSTICE DEPARTMENT
Assistant Attorney General Leslie R. Caldwell Delivers Remarks at the ABA’s National Institute on Bitcoin and Other Digital Currencies
Washington, DC United States ~ Friday, June 26, 2015
Thank you Nina [Marino] for that kind introduction.
It is a pleasure to address today’s ABA National Institute on Bitcoin and Other Digital Currencies. As head of the Justice Department’s Criminal Division, I am privileged to lead over 600 attorneys who investigate and prosecute federal crime, help develop criminal law and formulate law enforcement policy. Our talented prosecutors perform crucial work in many of the areas relevant to today’s discussion, including the fight to combat money laundering, financial fraud, child exploitation and cybercrime.
This afternoon, I’d like to discuss the department’s approach to the emerging virtual currency landscape, our ongoing efforts to prosecute those who commit crimes by using virtual currency, and our view that compliance and cooperation from exchanges, companies and other market actors can ensure that emerging technologies are not misused to fund and facilitate illicit activities.
The department is aware of the many legitimate actual and potential uses of virtual currency. It has the potential to promote a more efficient online marketplace. It also potentially can lower costs for brick and mortar businesses, by removing the need to pay credit card-related costs. And in theory, it can help speed and reduce the cost of cross-border transactions. But we also have seen that criminals have been among the first to enthusiastically embrace the use of virtual currency, primarily in crime involving the internet.
Many of the inherent features of virtual currencies are exactly what makes them attractive to criminals. Many criminals like virtual currency systems because these systems conduct transfers quickly, securely and with a perceived level of anonymity. For others, the irreversibility of payments made in virtual currency and lack of oversight by a central financial authority is appealing. Finally, the ability to conduct international peer-to-peer transactions that lack immediately available personally identifying information has made decentralized virtual currency attractive to those who wish to cover their money trail.
As a result, virtual currency facilitates a wide range of traditional criminal activities as well as sophisticated cybercrime schemes.
Much of the illicit conduct involving virtual currency occurs through online black markets such as the now-shuttered Silk Road, which operated on an anonymized “dark web” network that masked users’ physical locations, making them difficult to track. Similar online black markets continue to operate, offering on a global scale, a wide selection of illicit goods and services. While these have included more traditional crimes such as narcotics trafficking, stolen credit card information, and hit-men for hire, we have also seen a significant evolution in criminal activity.
For example, Bitcoin has been utilized to fund the production of child exploitation material through online crowd-sourcing – a development rarely seen before the prevalence of virtual currency. It has also been used to buy and sell lethal toxins over the internet and as a payment method for virtual kidnapping and extortion, allowing near-instantaneous transactions across the globe between perpetrators of phishing and hacking schemes and their victims.
Despite the significant challenges in investigating, much less prosecuting, this activity, the department already has a strong record of bringing cases in which virtual currencies were used to facilitate criminal conduct. While the burgeoning assortment of online exchanges, virtual currencies and virtual marketplaces has created a complex and evolving environment or “ecosystem” as this audience knows it, we too are keeping pace and will pursue those who exploit vulnerabilities in that ecosystem for illegal gain.
In this arena, we rely principally on money services business, money transmission and anti-money laundering statutes. While individual users who are not acting as exchangers or transmitters are not required to register with FinCEN, many virtual currency systems, exchangers and related services are. Additionally, most states also require money transmitters to obtain a state license in order to conduct business in that state, and some like New York have established virtual-currency specific licensing requirements. Any failure to register or obtain a license may subject a money transmitter to criminal prosecution, and a money transmitter that knowingly moves funds connected to a criminal offense also faces prosecution for money laundering, regardless of licensing status. Whether the currency involved is virtual or traditional, the department enforces these critical laws to prosecute money services businesses that engage in money laundering or facilitate crime by flouting registration and licensing requirements.
The department’s enforcement actions have evolved along with the virtual currency ecosystem. Our first major action against a virtual currency service used for illicit purposes was in 2007, when the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS), together with our Computer Crime and Intellectual Property Section (CCIPS), spearheaded the prosecution against e-Gold and its owners on charges related to money laundering and operating an unlicensed money transmitting business. E-Gold was a popular online currency exchange, and was a favored hub for cybercriminals in part because of the lack of account holder identity verification. An e-mail address was the only information needed to set up an account, allowing global anonymous transactions. After a multi-agency investigation, e-Gold and three associated individuals pleaded guilty in 2008 to charges of money laundering and operating an unlicensed money transmitting business.
In the wake of e-Gold’s demise, the virtual currency system Liberty Reserve was created. As alleged in our pending indictment, Liberty Reserve was structured and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes.
Liberty Reserve quickly became one of the principal money transfer agents used by cybercriminals around the world to distribute, store and launder the proceeds of their illegal activity. Like e-Gold, any would-be account holder needed little more than a working email address to move funds around the globe. Again, this virtual currency platform became a favorite of cybercriminals and other tech-savvy wrongdoers, enabling them to engage in anonymous financial transactions, all conducted in violation of BSA requirements.
Before the government shut down Liberty Reserve in 2013, it had accumulated more than one million users worldwide, including more than 200,000 in the United States, who conducted approximately 55 million transactions through its system totaling more than $6 billion in funds. These funds included suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, child pornography, narcotics trafficking and other crimes.
In a case jointly spearheaded by AFMLS and prosecutors from the Southern District of New York, several of Liberty Reserve’s top executives, including a co-founder of the company, the IT Manager and its Chief Technology Officer, have pleaded guilty to money laundering and operating an unlicensed money transmitting business and have been sentenced up to five years in prison. The creator of Liberty Reserve was extradited to the United States from Spain in October 2014 and is currently awaiting trial, where he is, of course, presumed innocent.
The department has also taken action against a number of individuals and groups who sought to exploit decentralized systems such as Bitcoin and anonymized dark web servers to finance illicit trade and activity in online black markets.
The first major prosecution of a dark market website was by the Southern District of New York in a case against Ross Ulbricht, aka “Dread Pirate Roberts,” who was arrested in October 2013 and convicted by a jury for his role in creating and operating Silk Road, an online black market whose payment operations exclusively used Bitcoin.
Silk Road – designed to act as a black-market bazaar completely free from government regulation and oversight – attempted to enable its users to exchange illegal drugs and other unlawful goods and services anonymously and beyond the reach of law enforcement. It emerged as one of the most extensive criminal marketplaces on the internet. Before it was dismantled by law enforcement, Silk Road was used by thousands of drug dealers and other vendors to distribute hundreds of kilograms of illegal drugs and other unlawful goods and services to well over a 100,000 buyers, and has been linked to at least six overdose deaths around the world. Further, Silk Road was also used to launder hundreds of millions of dollars derived from these unlawful transactions. And just a few weeks ago, in a federal courtroom in New York City, Ulbricht was sentenced to a term of life in prison – a cautionary tale for all those who would use dark spaces on the internet to flout the law.
The Silk Road story, however, did not end with Ross Ulbricht. Two federal agents, sworn to uphold the law, were also apparently lured by the perceived anonymity of virtual currency.
Carl Force, a Special Agent with the Drug Enforcement Administration, and Shaun Bridges, a Special Agent with the U.S. Secret Service, were both assigned to the Baltimore Silk Road Task Force, which investigated illegal activity in the Silk Road marketplace.
Force served as an undercover agent. According to court documents, Force went rogue and developed additional online personas to engage in complex bitcoin transactions to steal hundreds of thousands of dollars from the government and from the targets of the investigation. Independently, Bridges also allegedly engaged in an even larger direct theft, illegally diverting over $800,000 in virtual currency to his personal account.
Both individuals have been charged by the Criminal Division’s Public Integrity Section and prosecutors from the Northern District of California with wire fraud, theft of government property and money laundering. These investigations and prosecutions should send a strong message to those who would exploit technology to commit crimes: no matter how anonymous people might feel using virtual currency, their actions are not untraceable. People should not assume that law enforcement will not notice when they act on the dark web, or that we are not keeping up with emerging technology. Our successful prosecutions have shown that neither the supposed anonymity of the dark web nor the use of virtual currency is an effective shield from arrest and prosecution.
In addition to the operators of Silk Road and the drug traffickers who conducted their deals online in bitcoin, prosecutors from the Southern District of New York have also taken action against those who enabled this activity through the operation of Bitcoin currency exchanges. We understand that there are legitimate exchanges, and many of those are working closely with FinCEN and other regulators to ensure compliance with the law. But there are also many exchanges that don’t concern themselves with following the law.
From approximately December 2011 to October 2013, Robert Faiella ran an underground Bitcoin exchange on the Silk Road website under the alias “BTCKing,” and sold bitcoin to users to fund their purchases on the site.
Faiella would run bitcoin orders through Charlie Shrem, who operated a New York-based company that acted as a bitcoin to fiat currency exchange. Although Shrem was the company’s Anti-Money Laundering Officer and had registered the company with FinCEN as a money services business, Shrem failed to report any of BTCKing’s activity, despite knowing it was being used for illegal purchases. Shrem’s assistance enabled BTCKing to finance Silk Road transactions without collecting any personal identifying information from customers. Faiella pleaded guilty to operating an unlicensed money transmitting business involving funds he knew were intended to support unlawful activity, and Shrem pleaded guilty to aiding and abetting Faiella’s operations. Just this past winter, they were sentenced to four and two years in prison, respectively.
While these cases demonstrate that the criminal use of virtual currency has grown rapidly in recent years, its comparative scale versus traditional money laundering still pales in magnitude. Few virtual systems currently can accommodate the hundreds of millions of dollars we have seen in certain large-scale money laundering schemes involving government-issued currency. That said, as virtual currencies become more mature and better understood by criminals, we expect to see an increase in both individualized criminal activity and large-scale money laundering enterprises.
In some ways, companies and individuals operating in the virtual currency ecosystem are at a crossroads, and they have an opportunity to help virtual currency emerge from its association with criminal activities. While there obviously are good and legitimate reasons to use these currencies, industry participants are now on notice that criminals too, make regular use of them. So, to ensure the integrity of this ecosystem and prevent its penetration by crime, the industry must raise the level of its game on the compliance front.
That includes strict compliance with money services business regulations and anti-money laundering statutes. I understand that you have heard from our partners at FinCEN this morning about our collaborative efforts to investigate and enforce anti-money laundering laws, and you’ll also hear more from Katie Haun this afternoon about the investigation of the virtual currency business Ripple Labs, which operated an unlicensed money transmitting business.
Ripple sold a virtual currency called “XRP,” but failed for a time to register with FinCEN as a money service business and failed to establish and maintain appropriate anti-money laundering protections. Importantly, the department resolved this investigation after Ripple agreed to a number of substantial remedial measures. This includes cooperation in other ongoing investigations, a change in business model and oversight by independent auditors, an extensive look-back through their previous activities and development of an extensive compliance framework.
The resolution with Ripple Labs underscores the importance of having a strong compliance program to ensure adherence to the law. Virtual currency exchangers and other marketplace actors comprise the front line of defense against money laundering and other financial crime. Robust compliance programs, such as those imposed on Ripple Labs, are essential to keeping crime out of our financial system. If a money services business finds itself subject to a criminal investigation, we will look, as we do in all cases involving potential prosecution of a business entity, at the factors set forth in the Principles of Prosecution of Business Organizations, or Filip Factors. Two of the Filip Factors in particular, the existence of an effective and well-designed compliance program and a company’s remedial actions, including steps to improve upon an existing compliance regime, are explicitly set forth as factors prosecutors should consider.
As you know, there is no “one-size-fits-all” compliance program. Rather, effective anti-money laundering and other compliance programs must be tailored to meet the circumstances, size, structure and risks encountered by each entity. And virtual currencies, with their perceived anonymity, pose compliance risks that money transmitters such as Western Union do not face. Industry participants must address those risks, even when it may be costly to do so.
Just as in any other corporate investigation, when reviewing the conduct of, for example, an exchange, the department will examine whether a company has meaningfully addressed compliance. We have resolved cases against many financial institutions and other entities, and are deeply familiar with hallmarks of a genuine compliance program.
We expect virtual currency businesses to take compliance risk as seriously as they take any other business risk. Now, we recognize that new entrants in emerging fields may find that compliance requires a significant expenditure of resources, and we will be context-specific in analyzing appropriate compliance frameworks including consideration of the size and scope of the business. But a real commitment to compliance is a must, particularly given the significant risks in the virtual currency market. In the long run, investment in effective compliance programs will be well worth it, especially in the event that a company has to interact with law enforcement.
In many ways, I think that is a message that everybody gathered here today can appreciate. As the virtual currency markets attempt to move past their association with the Silk Roads and Liberty Reserves of the online world, are used to finance legitimate activity, and are becoming increasingly subject to regulation, robust compliance with existing anti-money laundering laws and regulations is necessary – indeed, critical – to bolster the reliability and value of virtual currency.
The challenges posed by the cases I’ve described are not unique to the virtual currency world. Indeed, these dark web criminals are merely using new tools to conduct the same old crimes, committing what is essentially street crime like drug trafficking and extortion, but over computer networks.
For those investors, exchanges and compliance officers who deal in virtual currency, compliance is of paramount importance. Adherence to regulations and state license requirements can reduce the liability of corporations who invest or deal in virtual currency. As seen with Ripple Labs, compliance and remediation can lead to a more favorable resolution of criminal investigations and adhering to anti-money laundering guidelines allows the legitimate use of virtual currency to grow and be responsive to infiltration and abuse by criminal elements. While the department will aggressively investigate and prosecute criminal activity that is funded through virtual currency, money services businesses that fall under the department’s scrutiny can also receive credit for meaningful and sincere compliance efforts.
Your compliance and cooperation will make it more difficult for those who seek to operate illicit and underground marketplaces and will be a key element for law enforcement to shed light on these illegal virtual currency transactions. It also will help to ensure the continued viability of virtual currency systems in the future.
Thank you for the opportunity to address this year’s National Institute on Bitcoin and Other Virtual Currencies.
Assistant Attorney General Leslie R. Caldwell Delivers Remarks at the ABA’s National Institute on Bitcoin and Other Digital Currencies
Washington, DC United States ~ Friday, June 26, 2015
Thank you Nina [Marino] for that kind introduction.
It is a pleasure to address today’s ABA National Institute on Bitcoin and Other Digital Currencies. As head of the Justice Department’s Criminal Division, I am privileged to lead over 600 attorneys who investigate and prosecute federal crime, help develop criminal law and formulate law enforcement policy. Our talented prosecutors perform crucial work in many of the areas relevant to today’s discussion, including the fight to combat money laundering, financial fraud, child exploitation and cybercrime.
This afternoon, I’d like to discuss the department’s approach to the emerging virtual currency landscape, our ongoing efforts to prosecute those who commit crimes by using virtual currency, and our view that compliance and cooperation from exchanges, companies and other market actors can ensure that emerging technologies are not misused to fund and facilitate illicit activities.
The department is aware of the many legitimate actual and potential uses of virtual currency. It has the potential to promote a more efficient online marketplace. It also potentially can lower costs for brick and mortar businesses, by removing the need to pay credit card-related costs. And in theory, it can help speed and reduce the cost of cross-border transactions. But we also have seen that criminals have been among the first to enthusiastically embrace the use of virtual currency, primarily in crime involving the internet.
Many of the inherent features of virtual currencies are exactly what makes them attractive to criminals. Many criminals like virtual currency systems because these systems conduct transfers quickly, securely and with a perceived level of anonymity. For others, the irreversibility of payments made in virtual currency and lack of oversight by a central financial authority is appealing. Finally, the ability to conduct international peer-to-peer transactions that lack immediately available personally identifying information has made decentralized virtual currency attractive to those who wish to cover their money trail.
As a result, virtual currency facilitates a wide range of traditional criminal activities as well as sophisticated cybercrime schemes.
Much of the illicit conduct involving virtual currency occurs through online black markets such as the now-shuttered Silk Road, which operated on an anonymized “dark web” network that masked users’ physical locations, making them difficult to track. Similar online black markets continue to operate, offering on a global scale, a wide selection of illicit goods and services. While these have included more traditional crimes such as narcotics trafficking, stolen credit card information, and hit-men for hire, we have also seen a significant evolution in criminal activity.
For example, Bitcoin has been utilized to fund the production of child exploitation material through online crowd-sourcing – a development rarely seen before the prevalence of virtual currency. It has also been used to buy and sell lethal toxins over the internet and as a payment method for virtual kidnapping and extortion, allowing near-instantaneous transactions across the globe between perpetrators of phishing and hacking schemes and their victims.
Despite the significant challenges in investigating, much less prosecuting, this activity, the department already has a strong record of bringing cases in which virtual currencies were used to facilitate criminal conduct. While the burgeoning assortment of online exchanges, virtual currencies and virtual marketplaces has created a complex and evolving environment or “ecosystem” as this audience knows it, we too are keeping pace and will pursue those who exploit vulnerabilities in that ecosystem for illegal gain.
In this arena, we rely principally on money services business, money transmission and anti-money laundering statutes. While individual users who are not acting as exchangers or transmitters are not required to register with FinCEN, many virtual currency systems, exchangers and related services are. Additionally, most states also require money transmitters to obtain a state license in order to conduct business in that state, and some like New York have established virtual-currency specific licensing requirements. Any failure to register or obtain a license may subject a money transmitter to criminal prosecution, and a money transmitter that knowingly moves funds connected to a criminal offense also faces prosecution for money laundering, regardless of licensing status. Whether the currency involved is virtual or traditional, the department enforces these critical laws to prosecute money services businesses that engage in money laundering or facilitate crime by flouting registration and licensing requirements.
The department’s enforcement actions have evolved along with the virtual currency ecosystem. Our first major action against a virtual currency service used for illicit purposes was in 2007, when the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS), together with our Computer Crime and Intellectual Property Section (CCIPS), spearheaded the prosecution against e-Gold and its owners on charges related to money laundering and operating an unlicensed money transmitting business. E-Gold was a popular online currency exchange, and was a favored hub for cybercriminals in part because of the lack of account holder identity verification. An e-mail address was the only information needed to set up an account, allowing global anonymous transactions. After a multi-agency investigation, e-Gold and three associated individuals pleaded guilty in 2008 to charges of money laundering and operating an unlicensed money transmitting business.
In the wake of e-Gold’s demise, the virtual currency system Liberty Reserve was created. As alleged in our pending indictment, Liberty Reserve was structured and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes.
Liberty Reserve quickly became one of the principal money transfer agents used by cybercriminals around the world to distribute, store and launder the proceeds of their illegal activity. Like e-Gold, any would-be account holder needed little more than a working email address to move funds around the globe. Again, this virtual currency platform became a favorite of cybercriminals and other tech-savvy wrongdoers, enabling them to engage in anonymous financial transactions, all conducted in violation of BSA requirements.
Before the government shut down Liberty Reserve in 2013, it had accumulated more than one million users worldwide, including more than 200,000 in the United States, who conducted approximately 55 million transactions through its system totaling more than $6 billion in funds. These funds included suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, child pornography, narcotics trafficking and other crimes.
In a case jointly spearheaded by AFMLS and prosecutors from the Southern District of New York, several of Liberty Reserve’s top executives, including a co-founder of the company, the IT Manager and its Chief Technology Officer, have pleaded guilty to money laundering and operating an unlicensed money transmitting business and have been sentenced up to five years in prison. The creator of Liberty Reserve was extradited to the United States from Spain in October 2014 and is currently awaiting trial, where he is, of course, presumed innocent.
The department has also taken action against a number of individuals and groups who sought to exploit decentralized systems such as Bitcoin and anonymized dark web servers to finance illicit trade and activity in online black markets.
The first major prosecution of a dark market website was by the Southern District of New York in a case against Ross Ulbricht, aka “Dread Pirate Roberts,” who was arrested in October 2013 and convicted by a jury for his role in creating and operating Silk Road, an online black market whose payment operations exclusively used Bitcoin.
Silk Road – designed to act as a black-market bazaar completely free from government regulation and oversight – attempted to enable its users to exchange illegal drugs and other unlawful goods and services anonymously and beyond the reach of law enforcement. It emerged as one of the most extensive criminal marketplaces on the internet. Before it was dismantled by law enforcement, Silk Road was used by thousands of drug dealers and other vendors to distribute hundreds of kilograms of illegal drugs and other unlawful goods and services to well over a 100,000 buyers, and has been linked to at least six overdose deaths around the world. Further, Silk Road was also used to launder hundreds of millions of dollars derived from these unlawful transactions. And just a few weeks ago, in a federal courtroom in New York City, Ulbricht was sentenced to a term of life in prison – a cautionary tale for all those who would use dark spaces on the internet to flout the law.
The Silk Road story, however, did not end with Ross Ulbricht. Two federal agents, sworn to uphold the law, were also apparently lured by the perceived anonymity of virtual currency.
Carl Force, a Special Agent with the Drug Enforcement Administration, and Shaun Bridges, a Special Agent with the U.S. Secret Service, were both assigned to the Baltimore Silk Road Task Force, which investigated illegal activity in the Silk Road marketplace.
Force served as an undercover agent. According to court documents, Force went rogue and developed additional online personas to engage in complex bitcoin transactions to steal hundreds of thousands of dollars from the government and from the targets of the investigation. Independently, Bridges also allegedly engaged in an even larger direct theft, illegally diverting over $800,000 in virtual currency to his personal account.
Both individuals have been charged by the Criminal Division’s Public Integrity Section and prosecutors from the Northern District of California with wire fraud, theft of government property and money laundering. These investigations and prosecutions should send a strong message to those who would exploit technology to commit crimes: no matter how anonymous people might feel using virtual currency, their actions are not untraceable. People should not assume that law enforcement will not notice when they act on the dark web, or that we are not keeping up with emerging technology. Our successful prosecutions have shown that neither the supposed anonymity of the dark web nor the use of virtual currency is an effective shield from arrest and prosecution.
In addition to the operators of Silk Road and the drug traffickers who conducted their deals online in bitcoin, prosecutors from the Southern District of New York have also taken action against those who enabled this activity through the operation of Bitcoin currency exchanges. We understand that there are legitimate exchanges, and many of those are working closely with FinCEN and other regulators to ensure compliance with the law. But there are also many exchanges that don’t concern themselves with following the law.
From approximately December 2011 to October 2013, Robert Faiella ran an underground Bitcoin exchange on the Silk Road website under the alias “BTCKing,” and sold bitcoin to users to fund their purchases on the site.
Faiella would run bitcoin orders through Charlie Shrem, who operated a New York-based company that acted as a bitcoin to fiat currency exchange. Although Shrem was the company’s Anti-Money Laundering Officer and had registered the company with FinCEN as a money services business, Shrem failed to report any of BTCKing’s activity, despite knowing it was being used for illegal purchases. Shrem’s assistance enabled BTCKing to finance Silk Road transactions without collecting any personal identifying information from customers. Faiella pleaded guilty to operating an unlicensed money transmitting business involving funds he knew were intended to support unlawful activity, and Shrem pleaded guilty to aiding and abetting Faiella’s operations. Just this past winter, they were sentenced to four and two years in prison, respectively.
While these cases demonstrate that the criminal use of virtual currency has grown rapidly in recent years, its comparative scale versus traditional money laundering still pales in magnitude. Few virtual systems currently can accommodate the hundreds of millions of dollars we have seen in certain large-scale money laundering schemes involving government-issued currency. That said, as virtual currencies become more mature and better understood by criminals, we expect to see an increase in both individualized criminal activity and large-scale money laundering enterprises.
In some ways, companies and individuals operating in the virtual currency ecosystem are at a crossroads, and they have an opportunity to help virtual currency emerge from its association with criminal activities. While there obviously are good and legitimate reasons to use these currencies, industry participants are now on notice that criminals too, make regular use of them. So, to ensure the integrity of this ecosystem and prevent its penetration by crime, the industry must raise the level of its game on the compliance front.
That includes strict compliance with money services business regulations and anti-money laundering statutes. I understand that you have heard from our partners at FinCEN this morning about our collaborative efforts to investigate and enforce anti-money laundering laws, and you’ll also hear more from Katie Haun this afternoon about the investigation of the virtual currency business Ripple Labs, which operated an unlicensed money transmitting business.
Ripple sold a virtual currency called “XRP,” but failed for a time to register with FinCEN as a money service business and failed to establish and maintain appropriate anti-money laundering protections. Importantly, the department resolved this investigation after Ripple agreed to a number of substantial remedial measures. This includes cooperation in other ongoing investigations, a change in business model and oversight by independent auditors, an extensive look-back through their previous activities and development of an extensive compliance framework.
The resolution with Ripple Labs underscores the importance of having a strong compliance program to ensure adherence to the law. Virtual currency exchangers and other marketplace actors comprise the front line of defense against money laundering and other financial crime. Robust compliance programs, such as those imposed on Ripple Labs, are essential to keeping crime out of our financial system. If a money services business finds itself subject to a criminal investigation, we will look, as we do in all cases involving potential prosecution of a business entity, at the factors set forth in the Principles of Prosecution of Business Organizations, or Filip Factors. Two of the Filip Factors in particular, the existence of an effective and well-designed compliance program and a company’s remedial actions, including steps to improve upon an existing compliance regime, are explicitly set forth as factors prosecutors should consider.
As you know, there is no “one-size-fits-all” compliance program. Rather, effective anti-money laundering and other compliance programs must be tailored to meet the circumstances, size, structure and risks encountered by each entity. And virtual currencies, with their perceived anonymity, pose compliance risks that money transmitters such as Western Union do not face. Industry participants must address those risks, even when it may be costly to do so.
Just as in any other corporate investigation, when reviewing the conduct of, for example, an exchange, the department will examine whether a company has meaningfully addressed compliance. We have resolved cases against many financial institutions and other entities, and are deeply familiar with hallmarks of a genuine compliance program.
We expect virtual currency businesses to take compliance risk as seriously as they take any other business risk. Now, we recognize that new entrants in emerging fields may find that compliance requires a significant expenditure of resources, and we will be context-specific in analyzing appropriate compliance frameworks including consideration of the size and scope of the business. But a real commitment to compliance is a must, particularly given the significant risks in the virtual currency market. In the long run, investment in effective compliance programs will be well worth it, especially in the event that a company has to interact with law enforcement.
In many ways, I think that is a message that everybody gathered here today can appreciate. As the virtual currency markets attempt to move past their association with the Silk Roads and Liberty Reserves of the online world, are used to finance legitimate activity, and are becoming increasingly subject to regulation, robust compliance with existing anti-money laundering laws and regulations is necessary – indeed, critical – to bolster the reliability and value of virtual currency.
The challenges posed by the cases I’ve described are not unique to the virtual currency world. Indeed, these dark web criminals are merely using new tools to conduct the same old crimes, committing what is essentially street crime like drug trafficking and extortion, but over computer networks.
For those investors, exchanges and compliance officers who deal in virtual currency, compliance is of paramount importance. Adherence to regulations and state license requirements can reduce the liability of corporations who invest or deal in virtual currency. As seen with Ripple Labs, compliance and remediation can lead to a more favorable resolution of criminal investigations and adhering to anti-money laundering guidelines allows the legitimate use of virtual currency to grow and be responsive to infiltration and abuse by criminal elements. While the department will aggressively investigate and prosecute criminal activity that is funded through virtual currency, money services businesses that fall under the department’s scrutiny can also receive credit for meaningful and sincere compliance efforts.
Your compliance and cooperation will make it more difficult for those who seek to operate illicit and underground marketplaces and will be a key element for law enforcement to shed light on these illegal virtual currency transactions. It also will help to ensure the continued viability of virtual currency systems in the future.
Thank you for the opportunity to address this year’s National Institute on Bitcoin and Other Virtual Currencies.
243 CHARGED IN $712 MILLION IN MEDICARE FRAUD SCHEMES
FROM: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
June 18, 2015
National Medicare fraud takedown results in charges against 243 individuals for approximately $712 million in false billing
Most defendants charged and largest alleged loss amount in Strike Force history
WASHINGTON – Department of Health and Human Services (HHS) Secretary Sylvia M. Burwell and Attorney General Loretta E. Lynch announced today a nationwide sweep led by the Medicare Fraud Strike Force in 17 districts, resulting in charges against 243 individuals, including 46 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings. In addition, the Centers for Medicare & Medicaid Services (CMS) also suspended a number of providers using its suspension authority as provided in the Affordable Care Act. This coordinated takedown is the largest in Strike Force history, both in terms of the number of defendants charged and loss amount.
Secretary Burwell and Attorney General Lynch were joined in the announcement by FBI Director James B. Comey, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Inspector General Daniel R. Levinson of the HHS Office of Inspector General (HHS-OIG) and Deputy Administrator and Director of CMS Center for Program Integrity Dr. Shantanu Agrawal.
The defendants are charged with various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes, money laundering and aggravated identity theft. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and pharmacy fraud. More than 44 of the defendants arrested are charged with fraud related to the Medicare prescription drug benefit program known as Part D, which is the fastest-growing component of the Medicare program overall.
“This action represents the largest criminal health care fraud takedown in the history of the Department of Justice, and it adds to an already remarkable record of enforcement,” said Attorney General Lynch. “The defendants charged include doctors, patient recruiters, home health care providers, pharmacy owners, and others. They billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered. In the days ahead, the Department of Justice will continue our focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives. We are prepared – and I am personally determined – to continue working with our federal, state, and local partners to bring about the vital progress that all Americans deserve.”
“This Administration is committed to fighting fraud and protecting taxpayer dollars in Medicare and Medicaid,” said Secretary Burwell. “This takedown adds to the hundreds of millions we have saved through fraud prevention since the Affordable Care Act was passed. With increased resources that have allowed the Strike Force to expand and new tools, like enhanced screening and enrollment requirements, tough new rules and sentences for criminals, and advanced predictive modeling technology, we have managed to better find and fight fraud as well as stop it before it starts.”
According to court documents, the defendants participated in alleged schemes to submit claims to Medicare and Medicaid for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, Medicare beneficiaries and other co-conspirators allegedly were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit a total of approximately $712 million in fraudulent billing.
“The people charged in this case targeted the system each of us depends on in our most vulnerable moments,” said FBI Director James Comey. “Health care fraud is a crime that hurts all of us and each dollar taken from programs that help the sick and the suffering is one dollar too many.”
“Every day, the Criminal Division is more strategic in our approach to prosecuting Medicare Fraud,” said Assistant Attorney General Caldwell. “We obtain and analyze billing data in real-time. We target hot spots – areas of the country and the types of health care services where the billing data shows the potential for a high volume of fraud – and we are speeding up our investigations. By doing this, we are increasingly able to stop schemes at the developmental stage, and to prevent them from spreading to other parts of the country.”
“Health care fraud drives up health care costs, wastes taxpayer money, undermines the Medicare and Medicaid programs, and endangers program beneficiaries,” said HHS-OIG Inspector General Levinson. “Today’s takedown includes perpetrators of prescription drug fraud, home health care fraud, and personal care services fraud, three particularly harmful types of fraud plaguing our health care system. This record-setting takedown sends a message to would-be perpetrators that health care fraud is a risky way to line your pockets. Our agents and our law enforcement partners stand ready to protect these vital programs and ensure that those who would steal from federal health care programs ultimately pay for their crimes.”
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since their inception in March 2007, Strike Force operations in nine locations have charged over 2,300 defendants who collectively have falsely billed the Medicare program for over $7 billion.
Including today’s enforcement actions, nearly 900 individuals have been charged in national takedown operations, which have involved more than $2.5 billion in fraudulent billings. Today’s announcement marks the first time that districts outside of Strike Force locations participated in a national takedown, and they accounted for 82 defendants charged in this takedown.
*********
In Miami, a total of 73 defendants were charged with offenses relating to their participation in various fraud schemes involving approximately $263 million in false billings for home health care, mental health services, and pharmacy fraud. In one case, administrators in a mental health center billed close to $64 million between 2006 and 2012 for purported intensive mental health treatment to beneficiaries and allegedly paid kickbacks to patient recruiters and assisted living facility owners throughout the Southern District of Florida. Medicare paid approximately half of the claimed amount.
In Houston and McAllen, 22 individuals were charged in cases involving over $38 million in alleged fraud. One of these defendants allegedly coached beneficiaries on what to tell doctors to make them appear eligible for Medicare services and treatments and then received payment for those who qualified. The company that paid the defendant for patients submitted close to $16 million in claims to Medicare, over $4 million of which was paid.
In Dallas, seven people were charged in connection with home health care schemes. In one scheme, six owners and operators of a physician house call company submitted nearly $43 million in billings under the name of a single doctor, regardless of who actually provided the service. The company also significantly exaggerated the length of physician visits, often times billing for 90 minutes or more for an appointment that lasted only 15 or 20 minutes.
In Los Angeles, eight defendants were charged for their roles in schemes to defraud Medicare of approximately $66 million. In one case, a doctor is charged with causing almost $23 million in losses to Medicare through his own fraudulent billing and referrals for DME, including over 1000 expensive power wheelchairs, and home health services that were not medically necessary and often not provided.
In Detroit, 16 defendants face charges for their alleged roles in fraud, kickback and money laundering schemes involving approximately $122 million in false claims for services that were medically unnecessary or never rendered, including home health care, physician visits, and psychotherapy, as well as pharmaceuticals that were billed by not dispensed. Among these are three owners of a hospice service who allegedly paid kickbacks for referrals made by two doctors who defrauded Medicare Part D by issuing medically unnecessary prescriptions.
In Tampa, five individuals were charged with participating in a variety of schemes, ranging from fraudulent physical therapy billings to a scheme involving millions in physician services and tests that never occurred. In one case, a licensed pain management physician sought reimbursement for nerve conduction studies and other services that he allegedly never performed. Medicare paid the defendant over $1 million for these purported services.
In Brooklyn, N.Y., nine individuals were charged in two separate criminal schemes involving physical and occupational therapy. In one case, three individuals face charges for their roles in a previously charged $50 million physical therapy scheme. In the second case, six defendants were charged for their roles in a $8 million physical and occupational therapy scheme.
In New Orleans, 11 people were charged in connection with $110 million in home health care and psychotherapy schemes. In one case, four individuals who operated two companies – one in Louisiana and one in California – that mass-marketed talking glucose monitors (TGMs) across the country allegedly sent TGMs to Medicare beneficiaries regardless of whether they were needed or requested. The companies billed Medicare approximately $38 million for the devices, and Medicare paid the companies over $22 million.
The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois, and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.
In addition to the Strike Force, today’s enforcement actions include cases brought by the U.S. Attorney’s Offices for the Southern District of California, Southern District of Illinois, Northern District of Ohio, Western District of Kentucky, District of Maryland, District of Connecticut, District of Alaska and the Southern District of Georgia.
A complaint or indictment is merely a charge, and defendants are presumed innocent until proven guilty.
The Affordable Care Act has provided new tools and resources to fight fraud in federal health care programs. The law provides an additional $350 million for health care fraud prevention and enforcement efforts, which has allowed the Justice Department to hire more prosecutors and the Strike Force to expand from two cities to nine. It also toughens sentencing for criminal activity, enhances provider and supplier screenings and enrollment requirements, and encourages increased sharing of data across government.
In addition to providing new tools and resources to fight fraud, the Affordable Care Act clarified that for sentencing purposes, the loss is determined by the amount billed to Medicare and increased the sentencing guidelines for the billed amounts, which has provided a strong deterrent effect due to increased prison time, particularly in the most egregious cases.
Saturday, June 27, 2015
U.S. GOVERNMENT DEPARTMENTS ANNOUNCE PHASE II OF ANTI-TRAFFICKING COORDINATION INITIATIVE
FROM: U.S. JUSTICE DEPARTMENT
Thursday, June 25, 2015
Departments of Justice, Labor and Homeland Security Announce Phase II of Anti-Trafficking Coordination Team Initiative
Phase II Will Build on Momentum of Highly Effective Phase I to Further Enhance Interagency Anti-Trafficking Efforts
The Departments of Justice, Labor (DOL) and Homeland Security (DHS) today announced the launch of Phase II of the Anti-Trafficking Coordination Team (ACTeam) Initiative aimed at streamlining federal criminal investigations and prosecutions of human trafficking offenses.
Phase II ACTeams will be convened in up to six selected districts around the country, following a competitive, nationwide, interagency selection process. The ACTeams, comprised of federal prosecutors and investigators representing multiple federal enforcement agencies, will implement a joint strategic action plan to develop high-impact federal investigations and prosecutions, vindicate the rights of human trafficking victims, bring traffickers to justice and dismantle human trafficking networks.
“Human traffickers prey on some of the most vulnerable members of our society to exploit them for labor, for sex and for servitude of all kinds,” said Attorney General Loretta E. Lynch. “Their crimes, appropriately described as modern-day slavery, have no place in a nation that has overcome the scourge of slavery. That’s why the Department of Justice is committed—and I am personally determined—to hold human traffickers accountable, provide support to trafficking survivors, and stand up for the rights and the dignity that they deserve.”
“Labor trafficking affects workers who are vulnerable to exploitation for a number of reasons, who may not know their workplace rights, and may be afraid to raise their voices,” said Secretary Thomas E. Perez of DOL. “The challenges we face as a nation and a government demand unprecedented levels of interagency collaboration. Through these ACTeams, we’re bringing our respective departments’ collective resources and expertise to bear, building a whole even greater than the sum of our individual parts. DOL will remain a vigorous and unfaltering partner during phase II. Together we can ensure workers receive the wages they’ve earned, restore victims’ basic human rights and bring traffickers to justice.”
“The ACTeam Initiative has been an important tool in our collective ability to combat sex trafficking, forced labor and domestic servitude here in the United States,” said Secretary Jeh Johnson of DHS. “This is not a problem that we can afford to ignore which is why, under a banner of shared responsibility and collaboration, the Departments of Justice, Labor and Homeland Security are recommitting ourselves to the fight against human trafficking by expanding the ACTeam Initiative. Through the unified voice of the Blue Campaign, the Department of Homeland Security will continue to combat human trafficking through the guiding philosophy that we are at our best when we work together.”
These departments collaborated to develop the ACTeam Initiative to streamline rapidly expanding human trafficking enforcement efforts, focusing on forced labor, international sex trafficking and sex trafficking of adults by force, fraud and coercion. Project Safe Childhood and the Innocence Lost National Initiative continue to focus on sex trafficking of minors and sexual exploitation of minors.
Drawing together federal prosecutors and federal agents from multiple investigative agencies, ACTeams streamline coordination on the front lines of federal human trafficking investigations and prosecutions, while also enhancing collaboration between front-line enforcement efforts and national human trafficking subject matter experts in the Justice Department’s Human Trafficking Prosecution Unit, Executive Office of U.S. Attorneys and FBI Civil Rights Unit, DHS’s Immigration and Customs Enforcement-Homeland Security Investigations, DOL’s Wage and Hour Division and the Office of the Inspector General. In 2011, the Attorney General and the Secretaries of DHS and DOL announced Phase I of the ACTeam Initiative and the designation of six Phase I Pilot ACTeam sites in Atlanta; El Paso, Texas; Kansas City, Missouri; Los Angeles; Memphis, Tennessee; and Miami, following a rigorous interagency selection process.
During the ACTeam Phase I period, Fiscal Years 2012-2013, federal human trafficking prosecutions involving forced labor, international sex trafficking and sex trafficking of adults rose by 35 percent nationwide, reflecting strong partnerships among U.S. Attorneys’ Offices, the Civil Rights Division’s Human Trafficking Prosecution Unit, federal, state and local law enforcement agencies, and non-governmental victim assistance organizations and task forces led by U.S. Attorneys’ Offices.
The ACTeams played a significant role in leading these nationwide advances. In ACTeam Districts, prosecutions of forced labor, international sex trafficking and adult sex trafficking rose even more markedly than they did nationally, due to the force-multiplier effect of interagency commitment to implementing coordinated, joint anti-trafficking strategies and due to advanced training, expertise and operational support provided to the Phase I ACTeams. Comparing federal forced labor, international sex trafficking and adult sex trafficking prosecutions during the ACTeam Phase I period of Fiscal Years 2012-2013, to the pre-Phase I period of Fiscal Years 2010-2011:
Cases filed increased by:
119 percent in ACTeam Districts,
18 percent in non-ACTeam Districts; and
35 percent nationwide.
Defendants charged increased by:
114 percent in ACTeam Districts,
12 percent in non-ACTeam Districts; and
28 percent nationwide.
Defendants convicted increased by:
86 percent in ACTeam Districts,
14 percent in non-ACTeam Districts; and
26 percent nationwide.
Thursday, June 25, 2015
Departments of Justice, Labor and Homeland Security Announce Phase II of Anti-Trafficking Coordination Team Initiative
Phase II Will Build on Momentum of Highly Effective Phase I to Further Enhance Interagency Anti-Trafficking Efforts
The Departments of Justice, Labor (DOL) and Homeland Security (DHS) today announced the launch of Phase II of the Anti-Trafficking Coordination Team (ACTeam) Initiative aimed at streamlining federal criminal investigations and prosecutions of human trafficking offenses.
Phase II ACTeams will be convened in up to six selected districts around the country, following a competitive, nationwide, interagency selection process. The ACTeams, comprised of federal prosecutors and investigators representing multiple federal enforcement agencies, will implement a joint strategic action plan to develop high-impact federal investigations and prosecutions, vindicate the rights of human trafficking victims, bring traffickers to justice and dismantle human trafficking networks.
“Human traffickers prey on some of the most vulnerable members of our society to exploit them for labor, for sex and for servitude of all kinds,” said Attorney General Loretta E. Lynch. “Their crimes, appropriately described as modern-day slavery, have no place in a nation that has overcome the scourge of slavery. That’s why the Department of Justice is committed—and I am personally determined—to hold human traffickers accountable, provide support to trafficking survivors, and stand up for the rights and the dignity that they deserve.”
“Labor trafficking affects workers who are vulnerable to exploitation for a number of reasons, who may not know their workplace rights, and may be afraid to raise their voices,” said Secretary Thomas E. Perez of DOL. “The challenges we face as a nation and a government demand unprecedented levels of interagency collaboration. Through these ACTeams, we’re bringing our respective departments’ collective resources and expertise to bear, building a whole even greater than the sum of our individual parts. DOL will remain a vigorous and unfaltering partner during phase II. Together we can ensure workers receive the wages they’ve earned, restore victims’ basic human rights and bring traffickers to justice.”
“The ACTeam Initiative has been an important tool in our collective ability to combat sex trafficking, forced labor and domestic servitude here in the United States,” said Secretary Jeh Johnson of DHS. “This is not a problem that we can afford to ignore which is why, under a banner of shared responsibility and collaboration, the Departments of Justice, Labor and Homeland Security are recommitting ourselves to the fight against human trafficking by expanding the ACTeam Initiative. Through the unified voice of the Blue Campaign, the Department of Homeland Security will continue to combat human trafficking through the guiding philosophy that we are at our best when we work together.”
These departments collaborated to develop the ACTeam Initiative to streamline rapidly expanding human trafficking enforcement efforts, focusing on forced labor, international sex trafficking and sex trafficking of adults by force, fraud and coercion. Project Safe Childhood and the Innocence Lost National Initiative continue to focus on sex trafficking of minors and sexual exploitation of minors.
Drawing together federal prosecutors and federal agents from multiple investigative agencies, ACTeams streamline coordination on the front lines of federal human trafficking investigations and prosecutions, while also enhancing collaboration between front-line enforcement efforts and national human trafficking subject matter experts in the Justice Department’s Human Trafficking Prosecution Unit, Executive Office of U.S. Attorneys and FBI Civil Rights Unit, DHS’s Immigration and Customs Enforcement-Homeland Security Investigations, DOL’s Wage and Hour Division and the Office of the Inspector General. In 2011, the Attorney General and the Secretaries of DHS and DOL announced Phase I of the ACTeam Initiative and the designation of six Phase I Pilot ACTeam sites in Atlanta; El Paso, Texas; Kansas City, Missouri; Los Angeles; Memphis, Tennessee; and Miami, following a rigorous interagency selection process.
During the ACTeam Phase I period, Fiscal Years 2012-2013, federal human trafficking prosecutions involving forced labor, international sex trafficking and sex trafficking of adults rose by 35 percent nationwide, reflecting strong partnerships among U.S. Attorneys’ Offices, the Civil Rights Division’s Human Trafficking Prosecution Unit, federal, state and local law enforcement agencies, and non-governmental victim assistance organizations and task forces led by U.S. Attorneys’ Offices.
The ACTeams played a significant role in leading these nationwide advances. In ACTeam Districts, prosecutions of forced labor, international sex trafficking and adult sex trafficking rose even more markedly than they did nationally, due to the force-multiplier effect of interagency commitment to implementing coordinated, joint anti-trafficking strategies and due to advanced training, expertise and operational support provided to the Phase I ACTeams. Comparing federal forced labor, international sex trafficking and adult sex trafficking prosecutions during the ACTeam Phase I period of Fiscal Years 2012-2013, to the pre-Phase I period of Fiscal Years 2010-2011:
Cases filed increased by:
119 percent in ACTeam Districts,
18 percent in non-ACTeam Districts; and
35 percent nationwide.
Defendants charged increased by:
114 percent in ACTeam Districts,
12 percent in non-ACTeam Districts; and
28 percent nationwide.
Defendants convicted increased by:
86 percent in ACTeam Districts,
14 percent in non-ACTeam Districts; and
26 percent nationwide.
Subscribe to:
Posts (Atom)