FROM: U.S. JUSTICE DEPARTMENT
Thursday, July 2, 2015
Statement by Justice Department Spokesperson on Recent Church Fires Across Five States
The following statement is attributable to Justice Department spokesperson Melanie Newman regarding recent church fires across five states:
“The federal law enforcement team of ATF, FBI, the Civil Rights Division and U.S. Attorneys’ Offices are actively investigating several church fires across five states that have occurred over the past two weeks. Preliminary investigations indicate that two of the fires were started by natural causes and one was the result of an electrical fire. All of the fires remain under active investigation and federal law enforcement continues to work to determine the cause of all of the fires. To date the investigations have not revealed any potential links between the fires.
“If in fact there is evidence to support hate crime charges in any one of these cases, the FBI, in coordination with the ATF and local authorities, will work closely with the Civil Rights Division and the U.S. Attorneys’ Offices to bring those forward.”
Sunday, July 5, 2015
FTC ANNOUNCES SETTLEMENT WITH APP DEVELOPER ACCUSED OF HIJACKING PHONES TO MINE CRYPTOCURRENCY
FROM: U.S. FEDERAL TRADE COMMISSION
App Developer Settles FTC and New Jersey Charges It Hijacked Consumers’ Phones to Mine Cryptocurrency
Defendants’ App Installed Malware that Left Phones With Drained Batteries, Depleted Data Plans
A smartphone app developer has agreed to settle charges by the Federal Trade Commission and the New Jersey Attorney General that it lured consumers into downloading its “rewards” app, saying it would be free of malware, when the app’s main purpose was actually to load the consumers’ mobile phones with malicious software to mine virtual currencies for the developer.
The Ohio-based defendants behind the app, called “Prized,” agreed to a settlement that will permanently ban them from creating and distributing malicious software.
“Hijacking consumers’ mobile devices with malware to mine virtual currency isn’t just deplorable; it’s also illegal,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “These scammers are now prohibited from trying such a scheme again.”
The defendants, Equiliv Investments and Ryan Ramminger, began marketing the Prized app around February 2014, making it available in the Google Play Store, Amazon App Store and others. Thousands of consumers downloaded the app believing they could earn points for playing games or downloading affiliated apps and then spend those points on rewards such as clothes, gift cards and other items. Consumers were promised that the downloaded app would be free from malicious software – malware – or viruses, according to the complaint.
What consumers got instead, according to the complaint, was an app that contained malware that took control of the device’s computing resources to “mine” for virtual currencies like DogeCoin, LiteCoin and QuarkCoin.
Virtual currencies are created by solving complex mathematical equations, and the complaint alleges that the app attempted to harness the power of many users’ devices to solve the equations more quickly, thus generating virtual currency for the defendants. The use of that power caused the device’s battery to drain faster and recharge more slowly, and to burn through consumers’ monthly data plans.
“Consumers downloaded this app thinking that at the very worst it would not be as useful or entertaining as advertised,” said Acting New Jersey Attorney General John J. Hoffman. “Instead, the app allegedly turned out to be a Trojan horse for intrusive, invasive malware that was potentially damaging to expensive smartphones and other mobile devices.”
The complaint in the case alleges that the defendants violated both the FTC Act and the New Jersey Consumer Fraud Act. In addition to the ban on creating and distributing malicious software, the court order also requires the defendants to destroy all information about consumers that they collected through the marketing and distribution of the app.
The settlement also includes a $50,000 monetary judgment against the defendants payable to the state of New Jersey, of which $44,800 is suspended upon payment of $5,200 and compliance with the injunctive provisions of the stipulated order.
This case is part of the FTC’s ongoing work to protect consumers taking advantage of new and emerging financial technology, also known as FinTech. As technological advances expand the ways consumers can store, share, and spend money, the FTC is working to keep consumers protected while encouraging innovation for consumers’ benefit.
The Commission vote authorizing the staff to file the complaint and approving the proposed stipulated court order was 5-0. The FTC and state of New Jersey filed the complaint and order in the U.S. District Court for the District of New Jersey.
App Developer Settles FTC and New Jersey Charges It Hijacked Consumers’ Phones to Mine Cryptocurrency
Defendants’ App Installed Malware that Left Phones With Drained Batteries, Depleted Data Plans
A smartphone app developer has agreed to settle charges by the Federal Trade Commission and the New Jersey Attorney General that it lured consumers into downloading its “rewards” app, saying it would be free of malware, when the app’s main purpose was actually to load the consumers’ mobile phones with malicious software to mine virtual currencies for the developer.
The Ohio-based defendants behind the app, called “Prized,” agreed to a settlement that will permanently ban them from creating and distributing malicious software.
“Hijacking consumers’ mobile devices with malware to mine virtual currency isn’t just deplorable; it’s also illegal,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “These scammers are now prohibited from trying such a scheme again.”
The defendants, Equiliv Investments and Ryan Ramminger, began marketing the Prized app around February 2014, making it available in the Google Play Store, Amazon App Store and others. Thousands of consumers downloaded the app believing they could earn points for playing games or downloading affiliated apps and then spend those points on rewards such as clothes, gift cards and other items. Consumers were promised that the downloaded app would be free from malicious software – malware – or viruses, according to the complaint.
What consumers got instead, according to the complaint, was an app that contained malware that took control of the device’s computing resources to “mine” for virtual currencies like DogeCoin, LiteCoin and QuarkCoin.
Virtual currencies are created by solving complex mathematical equations, and the complaint alleges that the app attempted to harness the power of many users’ devices to solve the equations more quickly, thus generating virtual currency for the defendants. The use of that power caused the device’s battery to drain faster and recharge more slowly, and to burn through consumers’ monthly data plans.
“Consumers downloaded this app thinking that at the very worst it would not be as useful or entertaining as advertised,” said Acting New Jersey Attorney General John J. Hoffman. “Instead, the app allegedly turned out to be a Trojan horse for intrusive, invasive malware that was potentially damaging to expensive smartphones and other mobile devices.”
The complaint in the case alleges that the defendants violated both the FTC Act and the New Jersey Consumer Fraud Act. In addition to the ban on creating and distributing malicious software, the court order also requires the defendants to destroy all information about consumers that they collected through the marketing and distribution of the app.
The settlement also includes a $50,000 monetary judgment against the defendants payable to the state of New Jersey, of which $44,800 is suspended upon payment of $5,200 and compliance with the injunctive provisions of the stipulated order.
This case is part of the FTC’s ongoing work to protect consumers taking advantage of new and emerging financial technology, also known as FinTech. As technological advances expand the ways consumers can store, share, and spend money, the FTC is working to keep consumers protected while encouraging innovation for consumers’ benefit.
The Commission vote authorizing the staff to file the complaint and approving the proposed stipulated court order was 5-0. The FTC and state of New Jersey filed the complaint and order in the U.S. District Court for the District of New Jersey.
ARMY SGT. PLEADS GUILTY FOR ROLE IN AFGHANISTAN BRIBERY CASE
FROM: U.S. JUSTICE DEPARTMENT
Thursday, July 2, 2015
Army Sergeant Pleads Guilty to Conspiracy in Afghanistan Bribery Scheme
A Fort Campbell Army Sergeant pleaded guilty today to conspiracy to commit bribery in connection with contracting for supplies while serving in Afghanistan.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney John E. Kuhn Jr. of the Western District of Kentucky, Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office, Special Inspector General for Afghanistan Reconstruction John F. Sopko, Director Frank Robey of the U.S. Army Criminal Investigation Command’s (CID) Major Procurement Fraud Unit, Acting Special Agent in Charge Paul Sternal of the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office and Brigadier General Keith M. Givens, Commander of the Air Force Office of Special Investigations (OSI) made the announcement.
Ramiro Pena Jr., 43, of Fort Campbell, Kentucky, pleaded guilty before U.S. District Judge Thomas B. Russell of the Western District of Kentucky to a one-count information charging him with conspiracy to commit bribery. Pena’s sentencing hearing is scheduled for Oct. 15, 2015.
From January 2008 through September 2009, Pena worked as a U.S. Army Sergeant First Class at the Humanitarian Assistance (HA) Yard at Bagram Airfield in Afghanistan. Pena and his supervisor, Army Master Sergeant Jimmy W. Dennis, were responsible for contracting with local vendors to purchase supplies necessary to support humanitarian relief in Afghanistan. On behalf of the Army, between June 2008 and March 2009, Pena and Dennis entered into approximately 217 such contracts for approximately $30,760,255.
In connection with his guilty plea, Pena admitted that he received money and jewelry from the vendors – primarily through Dennis – in return for Pena and Dennis taking action favorable to the vendors in connection with the HA Yard contracts. Specifically, Pena admitted that he received from the vendors, through Dennis, a Rolex watch in addition to $100,000 in bribe payments, which he received in approximately six installments.
Pena admitted that he sent some of the cash to his family in Kentucky, which he dispersed throughout numerous greeting cards to avoid drawing attention to the thickness of any particular envelope. Pena also used the bribe money to pay his family’s personal expenses both in Afghanistan and in the U.S., and to purchase a Harley Davidson motorcycle.
In May 2014, Dennis pleaded guilty in the Western District of Tennessee to conspiracy to launder bribe payments. In January 2015, Dennis was sentenced to serve 41 months in prison and was ordered to forfeit $115,000.
This case was investigated by the Special Inspector General for Afghanistan Reconstruction, the FBI, CID, DCIS and OSI. This case is being prosecuted by Trial Attorney Daniel P. Butler of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Nute A. Bonner of the Western District of Kentucky.
Thursday, July 2, 2015
Army Sergeant Pleads Guilty to Conspiracy in Afghanistan Bribery Scheme
A Fort Campbell Army Sergeant pleaded guilty today to conspiracy to commit bribery in connection with contracting for supplies while serving in Afghanistan.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney John E. Kuhn Jr. of the Western District of Kentucky, Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office, Special Inspector General for Afghanistan Reconstruction John F. Sopko, Director Frank Robey of the U.S. Army Criminal Investigation Command’s (CID) Major Procurement Fraud Unit, Acting Special Agent in Charge Paul Sternal of the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office and Brigadier General Keith M. Givens, Commander of the Air Force Office of Special Investigations (OSI) made the announcement.
Ramiro Pena Jr., 43, of Fort Campbell, Kentucky, pleaded guilty before U.S. District Judge Thomas B. Russell of the Western District of Kentucky to a one-count information charging him with conspiracy to commit bribery. Pena’s sentencing hearing is scheduled for Oct. 15, 2015.
From January 2008 through September 2009, Pena worked as a U.S. Army Sergeant First Class at the Humanitarian Assistance (HA) Yard at Bagram Airfield in Afghanistan. Pena and his supervisor, Army Master Sergeant Jimmy W. Dennis, were responsible for contracting with local vendors to purchase supplies necessary to support humanitarian relief in Afghanistan. On behalf of the Army, between June 2008 and March 2009, Pena and Dennis entered into approximately 217 such contracts for approximately $30,760,255.
In connection with his guilty plea, Pena admitted that he received money and jewelry from the vendors – primarily through Dennis – in return for Pena and Dennis taking action favorable to the vendors in connection with the HA Yard contracts. Specifically, Pena admitted that he received from the vendors, through Dennis, a Rolex watch in addition to $100,000 in bribe payments, which he received in approximately six installments.
Pena admitted that he sent some of the cash to his family in Kentucky, which he dispersed throughout numerous greeting cards to avoid drawing attention to the thickness of any particular envelope. Pena also used the bribe money to pay his family’s personal expenses both in Afghanistan and in the U.S., and to purchase a Harley Davidson motorcycle.
In May 2014, Dennis pleaded guilty in the Western District of Tennessee to conspiracy to launder bribe payments. In January 2015, Dennis was sentenced to serve 41 months in prison and was ordered to forfeit $115,000.
This case was investigated by the Special Inspector General for Afghanistan Reconstruction, the FBI, CID, DCIS and OSI. This case is being prosecuted by Trial Attorney Daniel P. Butler of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Nute A. Bonner of the Western District of Kentucky.
COMPUTER MODELING THE U.S. ECONOMY
FROM: NATIONAL SCIENCE FOUNDATION
Foreseeing US economic trends
Tim Kehoe's computer models gather international market data, predict impact of policy changes
Although economist Tim Kehoe's computer models are complex--analyzing numerous data sets related to the buying and selling of goods and services, trade and investment, saving and lending--the underlying premise of his research is simple.
He studies how people make economic decisions over time. Producers, for example, must look ahead and try to forecast prices, taking into account how consumer demand is going to change. At the same time, consumers making future buying choices must think about what might happen to their income during the same period.
Kehoe is developing computer models to try to accurately predict the likely outcomes.
"There is uncertainty about productivity and government policies, so many people uncertain about what's going to happen in the future make their plans contingent," says Kehoe, a professor of economics at the University of Minnesota and an adviser to the Federal Reserve Bank of Minneapolis. "If I am a firm and I want to sell my product in a foreign market, and I'm worried about what's going to happen to prices in that foreign market, I'll want to know how the price for those goods will translate into income in my home country."
Kehoe's research and teaching focus on the theory and application of general equilibrium models, which, in economics, attempt to explain the behavior of supply, demand and prices with several or many interacting markets with the assumptions that a set of prices exists that will generate an equilibrium.
These insights could prove especially valuable to policy makers and business leaders looking to foresee future U.S. economic trends.
Kehoe's work involves, among other things, creating models that predict the effects of trade liberalization on the allocation of resources across various sectors of the economy, in particular how this leads to a boom in foreign investment that could leave a country and its financial system vulnerable to a financial crisis.
He also develops models that analyze the impact of trade policies on the structure of industries, for example, the effects of the North American Free Trade Agreement, or NAFTA.
Among other things, Kehoe consulted with the Spanish government in 1986 on the wisdom of joining the European Community; the Mexican government in 1994 on the impact of joining NAFTA; and the government of Panama in 1998 on the effects of unilateral foreign trade and investment reforms.
He has been the recipient of nine National Science Foundation (NSF) grants starting in 1982--totaling about $1.5 million. More recently, he received a prestigious fellowship from the John Simon Guggenheim Memorial Foundation, which annually supports a diverse group of scholars, artists and scientists chosen on the basis of prior achievement and exceptional promise.
Since the early 1990s, the United States has borrowed heavily from its trading partners, and "we wanted to look at what would happen if the foreigners save less and, therefore, lend less to the United States, "he says. "Will it happen in an orderly way, or end in a crisis?"
He and his collaborators modeled U.S. borrowing resulting from a global savings glut--where foreigners sell goods and services to the United States, but prefer purchasing U.S. assets to purchasing U.S. goods and services--using four key data sets of the United States and its position in the world economy during a 20-year period beginning in 1992.
In the model, as in the data, the U.S. trade deficit first increases, then decreases; the U.S. real exchange rate first appreciates, then depreciates; a deficit in goods trade fuels the U.S. trade deficit, with a steady U.S. surplus in the service trade; and the fraction of U.S labor dedicated to producing goods--agriculture, mining and manufacturing--falls throughout the period.
Using their models, he and his colleagues analyzed two possible ends to the saving glut: an orderly, gradual rebalancing and a disorderly, sudden stop in foreign lending as occurred in Mexico in 1995–96.
"We found that a sudden stop would be very disruptive for the U.S. economy in the short term, particularly for the construction industry, "he says. "In the long term, however, a sudden stop would have a surprisingly small impact."
"As the U.S. trade deficit becomes a surplus, gradually or suddenly, employment in goods production will not return to its level in the early 1990s because much of this surplus will be exports of services and because much of the decline in employment in goods production has been, and will be, due to faster productivity growth in goods than in services," he adds. "We will probably produce more services, such as managerial or design services," to make up for the trade deficit decline.
"The United States is the biggest service exporter in the world, and, as services become more and more expensive, the U.S. can sell services at a higher price and buy goods from other countries more cheaply," he says.
Models are not perfect, and have been wrong in the past. His ongoing goal is to change that.
"When economists built models of the impact of trade and investment liberalization in North America 20 years ago...some of our predictions were right, but some predictions were wrong," he says. "We want to understand why, and what we still need to learn about building models, and especially think about what we got wrong and what we need to do in the future."
-- Marlene Cimons, National Science Foundation
-- Maria C. Zacharias
Investigators
Timothy Kehoe
David Levine
Brig 'Chip' Elliott
Foreseeing US economic trends
Tim Kehoe's computer models gather international market data, predict impact of policy changes
Although economist Tim Kehoe's computer models are complex--analyzing numerous data sets related to the buying and selling of goods and services, trade and investment, saving and lending--the underlying premise of his research is simple.
He studies how people make economic decisions over time. Producers, for example, must look ahead and try to forecast prices, taking into account how consumer demand is going to change. At the same time, consumers making future buying choices must think about what might happen to their income during the same period.
Kehoe is developing computer models to try to accurately predict the likely outcomes.
"There is uncertainty about productivity and government policies, so many people uncertain about what's going to happen in the future make their plans contingent," says Kehoe, a professor of economics at the University of Minnesota and an adviser to the Federal Reserve Bank of Minneapolis. "If I am a firm and I want to sell my product in a foreign market, and I'm worried about what's going to happen to prices in that foreign market, I'll want to know how the price for those goods will translate into income in my home country."
Kehoe's research and teaching focus on the theory and application of general equilibrium models, which, in economics, attempt to explain the behavior of supply, demand and prices with several or many interacting markets with the assumptions that a set of prices exists that will generate an equilibrium.
These insights could prove especially valuable to policy makers and business leaders looking to foresee future U.S. economic trends.
Kehoe's work involves, among other things, creating models that predict the effects of trade liberalization on the allocation of resources across various sectors of the economy, in particular how this leads to a boom in foreign investment that could leave a country and its financial system vulnerable to a financial crisis.
He also develops models that analyze the impact of trade policies on the structure of industries, for example, the effects of the North American Free Trade Agreement, or NAFTA.
Among other things, Kehoe consulted with the Spanish government in 1986 on the wisdom of joining the European Community; the Mexican government in 1994 on the impact of joining NAFTA; and the government of Panama in 1998 on the effects of unilateral foreign trade and investment reforms.
He has been the recipient of nine National Science Foundation (NSF) grants starting in 1982--totaling about $1.5 million. More recently, he received a prestigious fellowship from the John Simon Guggenheim Memorial Foundation, which annually supports a diverse group of scholars, artists and scientists chosen on the basis of prior achievement and exceptional promise.
Since the early 1990s, the United States has borrowed heavily from its trading partners, and "we wanted to look at what would happen if the foreigners save less and, therefore, lend less to the United States, "he says. "Will it happen in an orderly way, or end in a crisis?"
He and his collaborators modeled U.S. borrowing resulting from a global savings glut--where foreigners sell goods and services to the United States, but prefer purchasing U.S. assets to purchasing U.S. goods and services--using four key data sets of the United States and its position in the world economy during a 20-year period beginning in 1992.
In the model, as in the data, the U.S. trade deficit first increases, then decreases; the U.S. real exchange rate first appreciates, then depreciates; a deficit in goods trade fuels the U.S. trade deficit, with a steady U.S. surplus in the service trade; and the fraction of U.S labor dedicated to producing goods--agriculture, mining and manufacturing--falls throughout the period.
Using their models, he and his colleagues analyzed two possible ends to the saving glut: an orderly, gradual rebalancing and a disorderly, sudden stop in foreign lending as occurred in Mexico in 1995–96.
"We found that a sudden stop would be very disruptive for the U.S. economy in the short term, particularly for the construction industry, "he says. "In the long term, however, a sudden stop would have a surprisingly small impact."
"As the U.S. trade deficit becomes a surplus, gradually or suddenly, employment in goods production will not return to its level in the early 1990s because much of this surplus will be exports of services and because much of the decline in employment in goods production has been, and will be, due to faster productivity growth in goods than in services," he adds. "We will probably produce more services, such as managerial or design services," to make up for the trade deficit decline.
"The United States is the biggest service exporter in the world, and, as services become more and more expensive, the U.S. can sell services at a higher price and buy goods from other countries more cheaply," he says.
Models are not perfect, and have been wrong in the past. His ongoing goal is to change that.
"When economists built models of the impact of trade and investment liberalization in North America 20 years ago...some of our predictions were right, but some predictions were wrong," he says. "We want to understand why, and what we still need to learn about building models, and especially think about what we got wrong and what we need to do in the future."
-- Marlene Cimons, National Science Foundation
-- Maria C. Zacharias
Investigators
Timothy Kehoe
David Levine
Brig 'Chip' Elliott
GOLD MINE PROMOTERS CHARGED WITH FRAUD, TARGETED SPANISH, PORTUGUESE COMMUNITIES IN U.S.
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
07/02/2015 01:10 PM EDT
The Securities and Exchange Commission announced fraud charges and an asset freeze against the operators of a pyramid and Ponzi scheme falsely promising a gold mine of investment opportunity to investors in Spanish and Portuguese-speaking communities in Massachusetts, Florida, and elsewhere in the U.S.
The SEC alleges that DFRF Enterprises, named for its founder Daniel Fernandes Rojo Filho, claimed to operate more than 50 gold mines in Brazil and Africa, but the company’s revenues came solely from selling membership interests to investors and not from mining gold. With the help of several promoters, they lured investors with such false promises as their money would be fully insured, DFRF has a line of credit with a Swiss private bank, and one-quarter of DFRF’s profits are used for charitable work in Africa. The scheme raised more than $15 million from at least 1,400 investors by recruiting new members in pyramid scheme fashion to keep the fraud afloat, and commissions were paid to earlier investors in Ponzi-like fashion for their recruitment efforts. The SEC further alleges that Filho has withdrawn more than $6 million of investor funds to buy a fleet of luxury cars among other personal expenses.
“DFRF and its operators falsely claimed that they were running a lucrative gold mining business when in reality they were operating a Ponzi and pyramid scheme that preyed on investors in particular ethnic communities who stand to lose millions of dollars,” said John T. Dugan, Associate Regional Director of the SEC’s Boston Regional Office. “Investors were not given the full story about the true value and security of their investments.”
According to the SEC’s complaint filed June 30 and unsealed today in federal court in Boston, Filho is a Brazilian native who lives in Winter Garden, Fla., and he orchestrated the scheme with assistance from six promoters also charged in the case: Wanderley M. Dalman of Revere, Mass.; Gaspar C. Jesus of Malden, Mass.; Eduardo N. Da Silva of Orlando, Fla.; Heriberto C. Perez Valdes of Miami; Jeffrey A. Feldman of Boca Raton; and Romildo Da Cunha of Brazil.
The SEC alleges that Filho and others began selling “memberships” in DFRF last year through meetings with prospective investors primarily in Massachusetts hotel conference rooms, private homes, and businesses. DFRF promoted the investment opportunity through online videos in which Filho falsely claimed that the company had registered with the SEC and its stock would be publicly traded. As DFRF’s marketing reach widened, membership sales dramatically increased from under $100,000 in June 2014 to more than $4 million in March 2015 alone.
The SEC’s complaint alleges that all defendants violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and registration provisions Section 5(a) and 5(c) of the Securities Act.
The SEC’s investigation was conducted by Caitlyn M. Campbell, Mark Albers, John McCann, Frank C. Huntington, and Michele T. Perillo of the SEC’s Boston Regional Office, and assisted by Carlos Costa-Rodrigues in the agency’s Office of International Affairs.
The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Massachusetts, the Boston field office of the Federal Bureau of Investigation, the Massachusetts Securities Division of the Massachusetts Secretary of Commonwealth’s office, the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico, the British Columbia Securities Commission, the Swiss Financial Market Supervisory Authority, the Financial Services Commission of Barbados, and the United Kingdom Financial Conduct Authority.
07/02/2015 01:10 PM EDT
The Securities and Exchange Commission announced fraud charges and an asset freeze against the operators of a pyramid and Ponzi scheme falsely promising a gold mine of investment opportunity to investors in Spanish and Portuguese-speaking communities in Massachusetts, Florida, and elsewhere in the U.S.
The SEC alleges that DFRF Enterprises, named for its founder Daniel Fernandes Rojo Filho, claimed to operate more than 50 gold mines in Brazil and Africa, but the company’s revenues came solely from selling membership interests to investors and not from mining gold. With the help of several promoters, they lured investors with such false promises as their money would be fully insured, DFRF has a line of credit with a Swiss private bank, and one-quarter of DFRF’s profits are used for charitable work in Africa. The scheme raised more than $15 million from at least 1,400 investors by recruiting new members in pyramid scheme fashion to keep the fraud afloat, and commissions were paid to earlier investors in Ponzi-like fashion for their recruitment efforts. The SEC further alleges that Filho has withdrawn more than $6 million of investor funds to buy a fleet of luxury cars among other personal expenses.
“DFRF and its operators falsely claimed that they were running a lucrative gold mining business when in reality they were operating a Ponzi and pyramid scheme that preyed on investors in particular ethnic communities who stand to lose millions of dollars,” said John T. Dugan, Associate Regional Director of the SEC’s Boston Regional Office. “Investors were not given the full story about the true value and security of their investments.”
According to the SEC’s complaint filed June 30 and unsealed today in federal court in Boston, Filho is a Brazilian native who lives in Winter Garden, Fla., and he orchestrated the scheme with assistance from six promoters also charged in the case: Wanderley M. Dalman of Revere, Mass.; Gaspar C. Jesus of Malden, Mass.; Eduardo N. Da Silva of Orlando, Fla.; Heriberto C. Perez Valdes of Miami; Jeffrey A. Feldman of Boca Raton; and Romildo Da Cunha of Brazil.
The SEC alleges that Filho and others began selling “memberships” in DFRF last year through meetings with prospective investors primarily in Massachusetts hotel conference rooms, private homes, and businesses. DFRF promoted the investment opportunity through online videos in which Filho falsely claimed that the company had registered with the SEC and its stock would be publicly traded. As DFRF’s marketing reach widened, membership sales dramatically increased from under $100,000 in June 2014 to more than $4 million in March 2015 alone.
The SEC’s complaint alleges that all defendants violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and registration provisions Section 5(a) and 5(c) of the Securities Act.
The SEC’s investigation was conducted by Caitlyn M. Campbell, Mark Albers, John McCann, Frank C. Huntington, and Michele T. Perillo of the SEC’s Boston Regional Office, and assisted by Carlos Costa-Rodrigues in the agency’s Office of International Affairs.
The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Massachusetts, the Boston field office of the Federal Bureau of Investigation, the Massachusetts Securities Division of the Massachusetts Secretary of Commonwealth’s office, the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico, the British Columbia Securities Commission, the Swiss Financial Market Supervisory Authority, the Financial Services Commission of Barbados, and the United Kingdom Financial Conduct Authority.
Saturday, July 4, 2015
INDEPENDENCE DAY MARKED BY SAILORS ON USS THEODORE ROOSEVELT
FROM: U.S. NAVY
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| Sailors spell out #USA next to the American flag to mark Independence Day on the flight deck of the aircraft carrier USS Theodore Roosevelt in the Arabian Sea, June 28, 2015. The carrier is deployed to the U.S. 5th Fleet area of operations to support Operation Inherent Resolve and strike operations in Iraq and Syria. U.S. Navy photo by Petty Officer 3rd Class Jackie Hart. |
Friday, July 3, 2015
AMBASSADOR POWER'S STATEMENT CONDEMNING TERRORIST ATTACKS ON UN CONVOY IN MALI
FROM: U.S. STATE DEPARTMENT UN
Samantha Power
U.S. Permanent Representative to the United Nations
New York, NY
July 2, 2015
FOR IMMEDIATE RELEASE
The United States condemns in the strongest possible terms the July 2 terrorist attack on a United Nations Multidimensional Integrated Stabilization Mission in Mali (MINUSMA) convoy near Timbuktu, northern Mali that resulted in the death of six peacekeepers and the injury of five other peacekeepers, all from Burkina Faso.
We express our condolences to the families of those killed and to the Government of Burkina Faso and wish those wounded a full recovery. We call on the Government of Mali to immediately investigate the incident and hold those responsible to account.
Such terrorist attacks threaten the stability of northern Mali and the well-being of all Malians. We take this opportunity to urge the Malian parties signatory to the 2015 Agreement for Peace and Reconciliation in Mali to stand united against these and all attempts to undermine the country’s march toward peace.
The United States reiterates its support for MINUSMA and its brave men and women, who work each day to assist the Malian people in the pursuit of lasting peace, security, development, and economic prosperity.
Samantha Power
U.S. Permanent Representative to the United Nations
New York, NY
July 2, 2015
FOR IMMEDIATE RELEASE
The United States condemns in the strongest possible terms the July 2 terrorist attack on a United Nations Multidimensional Integrated Stabilization Mission in Mali (MINUSMA) convoy near Timbuktu, northern Mali that resulted in the death of six peacekeepers and the injury of five other peacekeepers, all from Burkina Faso.
We express our condolences to the families of those killed and to the Government of Burkina Faso and wish those wounded a full recovery. We call on the Government of Mali to immediately investigate the incident and hold those responsible to account.
Such terrorist attacks threaten the stability of northern Mali and the well-being of all Malians. We take this opportunity to urge the Malian parties signatory to the 2015 Agreement for Peace and Reconciliation in Mali to stand united against these and all attempts to undermine the country’s march toward peace.
The United States reiterates its support for MINUSMA and its brave men and women, who work each day to assist the Malian people in the pursuit of lasting peace, security, development, and economic prosperity.
MRO TAKES CLOSEUP IN AUREUM CHAOS, MARS
FROM: NASA
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The High Resolution Imaging Science Experiment (HiRISE) camera aboard NASA's Mars Reconnaissance Orbiter acquired this closeup image of a light-toned deposit in Aureum Chaos, a 368 kilometer (229 mile) wide area in the eastern part of Valles Marineris, on Jan. 15, 2015, at 2:51 p.m. local Mars time.
The objective of this observation is to examine a light-toned deposit in a region of what is called “chaotic terrain.” There are indications of layers in the image. Some shapes suggest erosion by a fluid moving north and south. The top of the light-toned deposit appears rough, in contrast to the smoothness of its surroundings. Image Credit: NASA/JPL/University of Arizona. Caption: HIRISE Science Team.
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FED FUNDING OF SCIENCE AND ENGINEERING INSTITUTIONS DROPS 6%
FROM: NATIONAL SCIENCE FOUNDATION
Federal funding for science and engineering at universities down 6 percent
Latest figures show obligations down for R&D and facilities that support science and engineering
Federal agencies obligated $29 billion to 995 science and engineering academic institutions in fiscal year 2013, according to a new report from the National Science Foundation's (NSF) National Center for Science and Engineering Statistics (NCSES). The figure represents a 6 percent decline in current dollars from the previous year, when agencies provided $31 billion to 1,073 institutions.
After adjustment for inflation, federal science and engineering obligations to academic institutions dropped by $1 billion from FY 2011 to FY 2012, and by $2 billion between FY 2012 and FY 2013. The obligations fall into six categories:
Research and development;
R&D plant (facilities and fixed equipment, such as reactors, wind tunnels and particle accelerators);
Facilities and equipment for instruction in science and engineering;
Fellowships, traineeships and training grants;
General support for science and engineering;
Other science and engineering activities.
Of those categories, research and development accounted for 89 percent of total federal obligations during the past three years.
The three largest providers of federal funding in fiscal 2013 were the Department of Health and Human Services (58 percent), NSF (17 percent) and the Department of Defense (12 percent). The Department of Energy, the Department of Agriculture and NASA provided the remainder of funding (11 percent, combined). Of these six agencies, only the Department of Energy showed increased obligations between FY 2012 and FY 2013.
The leading 20 universities, ranked in terms of federal academic S&E obligations, accounted for 37 percent of the FY 2013 federal total. The Johns Hopkins University continued to receive the most federal obligations of any university, at $1.5 billion.
NCSES collects information about federal obligations to independent nonprofit institutions in two categories: research and development, and R&D plant. The $6.6 billion provided to 1,068 institutions in FY 2013 represented a 2 percent decrease from $6.8 billion the previous year. The leading 10 nonprofits accounted for 36 percent of fiscal 2013 funding, with the MITRE Corporation receiving the largest total, at $485 million.
The statistics are from the NCSES Survey of Federal Science and Engineering Support to Universities, Colleges and Nonprofit Institutions.
-NSF-
Media Contacts
Rob Margetta, NSF
Federal funding for science and engineering at universities down 6 percent
Latest figures show obligations down for R&D and facilities that support science and engineering
Federal agencies obligated $29 billion to 995 science and engineering academic institutions in fiscal year 2013, according to a new report from the National Science Foundation's (NSF) National Center for Science and Engineering Statistics (NCSES). The figure represents a 6 percent decline in current dollars from the previous year, when agencies provided $31 billion to 1,073 institutions.
After adjustment for inflation, federal science and engineering obligations to academic institutions dropped by $1 billion from FY 2011 to FY 2012, and by $2 billion between FY 2012 and FY 2013. The obligations fall into six categories:
Research and development;
R&D plant (facilities and fixed equipment, such as reactors, wind tunnels and particle accelerators);
Facilities and equipment for instruction in science and engineering;
Fellowships, traineeships and training grants;
General support for science and engineering;
Other science and engineering activities.
Of those categories, research and development accounted for 89 percent of total federal obligations during the past three years.
The three largest providers of federal funding in fiscal 2013 were the Department of Health and Human Services (58 percent), NSF (17 percent) and the Department of Defense (12 percent). The Department of Energy, the Department of Agriculture and NASA provided the remainder of funding (11 percent, combined). Of these six agencies, only the Department of Energy showed increased obligations between FY 2012 and FY 2013.
The leading 20 universities, ranked in terms of federal academic S&E obligations, accounted for 37 percent of the FY 2013 federal total. The Johns Hopkins University continued to receive the most federal obligations of any university, at $1.5 billion.
NCSES collects information about federal obligations to independent nonprofit institutions in two categories: research and development, and R&D plant. The $6.6 billion provided to 1,068 institutions in FY 2013 represented a 2 percent decrease from $6.8 billion the previous year. The leading 10 nonprofits accounted for 36 percent of fiscal 2013 funding, with the MITRE Corporation receiving the largest total, at $485 million.
The statistics are from the NCSES Survey of Federal Science and Engineering Support to Universities, Colleges and Nonprofit Institutions.
-NSF-
Media Contacts
Rob Margetta, NSF
REGULATING METHANE EMISSIONS FROM FRESHWATER WETLANDS
FROM: NATIONAL SCIENCE FOUNDATION
Methane-eating microorganisms help regulate emissions from wetlands
Without this process, methane emissions from freshwater wetlands could be 30 to 50 percent higher
Though they occupy a small fraction of Earth's surface, freshwater wetlands are the largest natural source of methane emitted into the atmosphere. New research identifies an unexpected process that acts as a key gatekeeper in regulating methane emissions from these freshwater environments.
The study results are published this week in the journal Nature Communications by biologist Samantha Joye of the University of Georgia and colleagues.
The researchers report that high rates of anaerobic (no oxygen) methane oxidation in freshwater wetlands substantially reduce atmospheric emissions of methane.
New attention
The process of anaerobic methane oxidation was once considered insignificant in freshwater wetlands, but scientists now think very differently about its importance.
"Some microorganisms actually eat methane, and recent decades have seen an explosion in our understanding of the way they do this," says Matt Kane, program director in the National Science Foundation's Division of Environmental Biology, which funded the research. "These researchers demonstrate that if it were not for an unusual group of methane-eating microbes that live in freshwater wetlands, far more methane would be released into the atmosphere."
Although anaerobic methane oxidation in freshwater has been gathering scientific attention, the environmental relevance of this process was unknown until recently, Joye says.
"This paper reports a previously unrecognized sink for methane in freshwater sediments, soils and peats: microbially-mediated anaerobic oxidation of methane," she says. "The fundamental importance of this process in freshwater wetlands underscores the critical role that anaerobic oxidation of methane plays on Earth, even in freshwater habitats."
Without this process, Joye says, methane emissions from freshwater wetlands could be 30 to 50 percent greater.
Comparison of wetlands
The researchers investigated the anaerobic oxidation process in freshwater wetlands in three regions: the freshwater peat soils of the Florida Everglades; a coastal organic-rich wetland in Acadia National Park, Maine; and a tidal freshwater wetland in coastal Georgia.
All three sites were sampled over multiple seasons.
The anaerobic oxidation of methane was coupled to some extent with sulfate reduction. Rising sea levels, for example, would result in increased sulfate, which could fuel greater rates of anaerobic oxidation.
Similarly, with saltwater intrusion into coastal freshwater wetlands, increasing sulfate inhibits microbial methane formation, or methanogenesis.
So while freshwater wetlands are known to be significant methane sources, their low sulfate concentrations previously led most researchers to conclude that anaerobic oxidation of methane was not important in these regions.
Crucial process
The new findings show that if not for the anaerobic methane oxidation process, freshwater environments would account for an even greater portion of the global methane budget.
"The process of anaerobic oxidation of methane in freshwater wetlands appears to be different than what we know about this process in marine sediments," Joye says. "There could be unique biochemistry at work."
Adds Katherine Segarra, an oceanographer at the U.S. Department of the Interior's Bureau of Ocean Energy Management and co-author of the paper: "This study furthers the understanding of the global methane budget, and may have ramifications for the development of future greenhouse gas models."
Additional financial support for the research was provided by the Deutsche Forschungsgemeinschaft via the Research Center/Cluster of Excellence at the MARUM Center for Marine Environmental Sciences and department of geosciences at the University of Bremen, Germany.
-- Cheryl Dybas
-- Alan Flurry, University of Georgia
Investigators
Samantha Joye
Christof Meile
Vladimir Samarkin
Related Institutions/Organizations
University of Georgia Research Foundation Inc
Methane-eating microorganisms help regulate emissions from wetlands
Without this process, methane emissions from freshwater wetlands could be 30 to 50 percent higher
Though they occupy a small fraction of Earth's surface, freshwater wetlands are the largest natural source of methane emitted into the atmosphere. New research identifies an unexpected process that acts as a key gatekeeper in regulating methane emissions from these freshwater environments.
The study results are published this week in the journal Nature Communications by biologist Samantha Joye of the University of Georgia and colleagues.
The researchers report that high rates of anaerobic (no oxygen) methane oxidation in freshwater wetlands substantially reduce atmospheric emissions of methane.
New attention
The process of anaerobic methane oxidation was once considered insignificant in freshwater wetlands, but scientists now think very differently about its importance.
"Some microorganisms actually eat methane, and recent decades have seen an explosion in our understanding of the way they do this," says Matt Kane, program director in the National Science Foundation's Division of Environmental Biology, which funded the research. "These researchers demonstrate that if it were not for an unusual group of methane-eating microbes that live in freshwater wetlands, far more methane would be released into the atmosphere."
Although anaerobic methane oxidation in freshwater has been gathering scientific attention, the environmental relevance of this process was unknown until recently, Joye says.
"This paper reports a previously unrecognized sink for methane in freshwater sediments, soils and peats: microbially-mediated anaerobic oxidation of methane," she says. "The fundamental importance of this process in freshwater wetlands underscores the critical role that anaerobic oxidation of methane plays on Earth, even in freshwater habitats."
Without this process, Joye says, methane emissions from freshwater wetlands could be 30 to 50 percent greater.
Comparison of wetlands
The researchers investigated the anaerobic oxidation process in freshwater wetlands in three regions: the freshwater peat soils of the Florida Everglades; a coastal organic-rich wetland in Acadia National Park, Maine; and a tidal freshwater wetland in coastal Georgia.
All three sites were sampled over multiple seasons.
The anaerobic oxidation of methane was coupled to some extent with sulfate reduction. Rising sea levels, for example, would result in increased sulfate, which could fuel greater rates of anaerobic oxidation.
Similarly, with saltwater intrusion into coastal freshwater wetlands, increasing sulfate inhibits microbial methane formation, or methanogenesis.
So while freshwater wetlands are known to be significant methane sources, their low sulfate concentrations previously led most researchers to conclude that anaerobic oxidation of methane was not important in these regions.
Crucial process
The new findings show that if not for the anaerobic methane oxidation process, freshwater environments would account for an even greater portion of the global methane budget.
"The process of anaerobic oxidation of methane in freshwater wetlands appears to be different than what we know about this process in marine sediments," Joye says. "There could be unique biochemistry at work."
Adds Katherine Segarra, an oceanographer at the U.S. Department of the Interior's Bureau of Ocean Energy Management and co-author of the paper: "This study furthers the understanding of the global methane budget, and may have ramifications for the development of future greenhouse gas models."
Additional financial support for the research was provided by the Deutsche Forschungsgemeinschaft via the Research Center/Cluster of Excellence at the MARUM Center for Marine Environmental Sciences and department of geosciences at the University of Bremen, Germany.
-- Cheryl Dybas
-- Alan Flurry, University of Georgia
Investigators
Samantha Joye
Christof Meile
Vladimir Samarkin
Related Institutions/Organizations
University of Georgia Research Foundation Inc
DOJ FILES LAWSUIT TO STOP GE FROM SELLING APPLIANCE BUSINESS TO ELECTROLUX
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, July 1, 2015
Justice Department Files Antitrust Lawsuit to Stop Electrolux from Buying General Electric's Appliance Business
The Department of Justice filed a civil antitrust lawsuit today seeking to block the acquisition of General Electric Company’s appliance business by AB Electrolux and Electrolux North America Inc., whose brands include Frigidaire. The department said that the $3.3 billion acquisition would combine two of the leading manufacturers of ranges, cooktops and wall ovens sold in the United States, eliminating competition that has benefited American consumers through lower prices and more options. According to the department’s complaint, purchasers in the United States spent over $4 billion on these major cooking appliances in 2014.
“Electrolux’s proposed acquisition of General Electric’s appliance business would leave millions of Americans vulnerable to price increases for ranges, cooktops and wall ovens, products that serve an important role in family life and represent large purchases for many households,” said Deputy Assistant Attorney General Leslie C. Overton of the Justice Department’s Antitrust Division. “This lawsuit also seeks to prevent a duopoly in the sale of these major cooking appliances to builders and other commercial purchasers, who often pass on price increases to home buyers or renters.”
The Antitrust Division’s lawsuit, which seeks to prevent the companies from merging and to preserve their existing head-to-head competition, was filed in the U.S. District Court for the District of Columbia.
Electrolux North America Inc. is an Ohio corporation headquartered in Charlotte, North Carolina. Electrolux North America Inc. makes and sells major appliances, including those under the brand names Frigidaire, Tappan and Electrolux. Electrolux’s annual major-appliance sales in the United States total approximately $2.6 billion. Electrolux North America Inc. is a wholly owned subsidiary of defendant AB Electrolux.
General Electric Company is a New York corporation headquartered in Fairfield, Connecticut. General Electric’s appliance business is based in Louisville, Kentucky. It makes and sells major appliances, including those under the brand names GE Monogram, GE Café, GE Profile, GE, GE Artistry and Hotpoint. In the United States, General Electric’s annual major appliance sales total approximately $3.4 billion.
Wednesday, July 1, 2015
Justice Department Files Antitrust Lawsuit to Stop Electrolux from Buying General Electric's Appliance Business
The Department of Justice filed a civil antitrust lawsuit today seeking to block the acquisition of General Electric Company’s appliance business by AB Electrolux and Electrolux North America Inc., whose brands include Frigidaire. The department said that the $3.3 billion acquisition would combine two of the leading manufacturers of ranges, cooktops and wall ovens sold in the United States, eliminating competition that has benefited American consumers through lower prices and more options. According to the department’s complaint, purchasers in the United States spent over $4 billion on these major cooking appliances in 2014.
“Electrolux’s proposed acquisition of General Electric’s appliance business would leave millions of Americans vulnerable to price increases for ranges, cooktops and wall ovens, products that serve an important role in family life and represent large purchases for many households,” said Deputy Assistant Attorney General Leslie C. Overton of the Justice Department’s Antitrust Division. “This lawsuit also seeks to prevent a duopoly in the sale of these major cooking appliances to builders and other commercial purchasers, who often pass on price increases to home buyers or renters.”
The Antitrust Division’s lawsuit, which seeks to prevent the companies from merging and to preserve their existing head-to-head competition, was filed in the U.S. District Court for the District of Columbia.
Electrolux North America Inc. is an Ohio corporation headquartered in Charlotte, North Carolina. Electrolux North America Inc. makes and sells major appliances, including those under the brand names Frigidaire, Tappan and Electrolux. Electrolux’s annual major-appliance sales in the United States total approximately $2.6 billion. Electrolux North America Inc. is a wholly owned subsidiary of defendant AB Electrolux.
General Electric Company is a New York corporation headquartered in Fairfield, Connecticut. General Electric’s appliance business is based in Louisville, Kentucky. It makes and sells major appliances, including those under the brand names GE Monogram, GE Café, GE Profile, GE, GE Artistry and Hotpoint. In the United States, General Electric’s annual major appliance sales total approximately $3.4 billion.
TWO TECH COMPANIES SETTLE FALSE CLAIMS ACT VIOLATIONS BY AGREEING TO PAY 75.5 MILLION
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, June 30, 2015
VMWare and Carahsoft Agree to Pay $75.5 Million to Settle Claims that they Concealed Commercial Pricing and Overcharged the Government
VMware Inc. and Carahsoft Technology Corporation have agreed to pay $75.5 million to resolve allegations that they violated the False Claims Act by misrepresenting their commercial pricing practices and overcharging the government on VMware software products and related services, the Department of Justice announced today. VMware is a Delaware corporation that specializes in computer virtualization software and has its principal place of business in Palo Alto, California. Carahsoft is a privately held Maryland corporation that distributes information technology products to federal, state and local governments and has its principal place of business in Reston, Virginia.
“Today’s settlement demonstrates our continuing vigilance to ensure that those doing business with the government give the taxpayers a fair deal,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division. “Government contractors who seek to profit improperly at the expense of taxpayers face serious consequences.”
“Transparency by contractors in the disclosure of their discounts and prices offered to commercial customers is critical in the award of GSA Multiple Award Schedule contracts and the prices charged to government agency purchasers,” said U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
“We will continue to look into all allegations of false claims in GSA contracts,” said Acting Inspector General Robert C. Erickson of the U.S. General Services Administration (GSA). “I appreciate the hard work of our auditors, our agents and the attorneys on this complex case that has resulted in a large amount of money being returned to the United States.” Under the Multiple Award Schedule (MAS) Program, prospective vendors agree to disclose commercial pricing policies and practices to the GSA in exchange for the opportunity to gain access to the broad federal marketplace and the ease of administration that comes from selling to any government purchaser under one central contract. GSA regulations require that, during contract negotiations with GSA, prospective vendors seeking an MAS contract make “current, accurate and complete” disclosures of the standard and non-standard discounts they offer to commercial customers. The GSA relies on the accuracy of these disclosures in order to negotiate fair pricing for government purchasers. Additionally, after the MAS contract is awarded, regulations require that MAS Program vendors disclose to the GSA changes in their commercial pricing practices, including improved discounts that are offered to commercial customers, after the MAS contract is in place.
The settlement resolves allegations that VMware and Carahsoft made false statements to the government in connection with the sale of VMware products and services under Carahsoft’s MAS contract. These false statements allegedly concealed the companies’ commercial pricing practices and enabled the companies to overcharge the government for VMware’s products and services from 2007 through 2013.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The civil lawsuit was filed in the Eastern District of Virginia by Dane Smith, who is a former vice president of the Americas at VMware Inc. Mr. Smith’s share of the recovery has not been determined.
The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Eastern District of Virginia and the GSA’s Office of Inspector General, with assistance from the Defense Criminal Investigative Service Mid-Atlantic Field Office. The case is captioned United States ex rel. Smith v. VMware, Inc., et al., Case No. 10-CV-769 (E.D. Va.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Tuesday, June 30, 2015
VMWare and Carahsoft Agree to Pay $75.5 Million to Settle Claims that they Concealed Commercial Pricing and Overcharged the Government
VMware Inc. and Carahsoft Technology Corporation have agreed to pay $75.5 million to resolve allegations that they violated the False Claims Act by misrepresenting their commercial pricing practices and overcharging the government on VMware software products and related services, the Department of Justice announced today. VMware is a Delaware corporation that specializes in computer virtualization software and has its principal place of business in Palo Alto, California. Carahsoft is a privately held Maryland corporation that distributes information technology products to federal, state and local governments and has its principal place of business in Reston, Virginia.
“Today’s settlement demonstrates our continuing vigilance to ensure that those doing business with the government give the taxpayers a fair deal,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division. “Government contractors who seek to profit improperly at the expense of taxpayers face serious consequences.”
“Transparency by contractors in the disclosure of their discounts and prices offered to commercial customers is critical in the award of GSA Multiple Award Schedule contracts and the prices charged to government agency purchasers,” said U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
“We will continue to look into all allegations of false claims in GSA contracts,” said Acting Inspector General Robert C. Erickson of the U.S. General Services Administration (GSA). “I appreciate the hard work of our auditors, our agents and the attorneys on this complex case that has resulted in a large amount of money being returned to the United States.” Under the Multiple Award Schedule (MAS) Program, prospective vendors agree to disclose commercial pricing policies and practices to the GSA in exchange for the opportunity to gain access to the broad federal marketplace and the ease of administration that comes from selling to any government purchaser under one central contract. GSA regulations require that, during contract negotiations with GSA, prospective vendors seeking an MAS contract make “current, accurate and complete” disclosures of the standard and non-standard discounts they offer to commercial customers. The GSA relies on the accuracy of these disclosures in order to negotiate fair pricing for government purchasers. Additionally, after the MAS contract is awarded, regulations require that MAS Program vendors disclose to the GSA changes in their commercial pricing practices, including improved discounts that are offered to commercial customers, after the MAS contract is in place.
The settlement resolves allegations that VMware and Carahsoft made false statements to the government in connection with the sale of VMware products and services under Carahsoft’s MAS contract. These false statements allegedly concealed the companies’ commercial pricing practices and enabled the companies to overcharge the government for VMware’s products and services from 2007 through 2013.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The civil lawsuit was filed in the Eastern District of Virginia by Dane Smith, who is a former vice president of the Americas at VMware Inc. Mr. Smith’s share of the recovery has not been determined.
The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Eastern District of Virginia and the GSA’s Office of Inspector General, with assistance from the Defense Criminal Investigative Service Mid-Atlantic Field Office. The case is captioned United States ex rel. Smith v. VMware, Inc., et al., Case No. 10-CV-769 (E.D. Va.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Thursday, July 2, 2015
AG LYNCH MAKES STATEMENT ON DEEPWATER HORIZON $18.7 BILLION SETTLEMENT AGREEMENT
FROM: U.S. JUSTICE DEPARTMENT
Thursday, July 2, 2015
Statement by Attorney General Loretta E. Lynch on the Agreement in Principle with BP to Settle Civil Claims for the Deepwater Horizon Oil Spill
Total Value of Settlement Would Top $18.7 Billion, the Largest Settlement with a Single Entity in American History
Today, BP disclosed that it has reached agreements in principle with the United States, state, and local governments for a settlement of civil claims arising from the April 20, 2010, Deepwater Horizon oil spill in the Gulf of Mexico. The Attorney General made the following statement:
“Since the Deepwater Horizon oil spill – the largest environmental disaster in our nation’s history – the Justice Department has been fully committed to holding BP accountable, to achieving justice for the American people and to restoring the environment and the economy of the Gulf region at the expense of those responsible and not the American taxpayer. In December 2010, my predecessor, Attorney General Eric Holder, announced a civil lawsuit against BP and its co-defendants. Since that time, the Deepwater trial team has fought aggressively in federal court for an outcome that would achieve this mission, proving along the way that BP’s gross negligence resulted in the Deepwater disaster.
“Today, I am pleased to say that after productive discussions with BP over the previous several weeks, we have reached an agreement in principle that would justly and comprehensively address outstanding federal and state claims, including Clean Water Act civil penalties and natural resource damages. BP is also resolving significant economic claims with the impacted state and local governments. We will work diligently during the next several months to incorporate the agreement in principle into a consent decree, which would then undergo public comment before court approval. If approved by the court, this settlement would be the largest settlement with a single entity in American history; it would help repair the damage done to the Gulf economy, fisheries, wetlands and wildlife; and it would bring lasting benefits to the Gulf region for generations to come.
“I am so very grateful to the Deepwater civil trial team, made up of men and women from the department’s Environment and Natural Resources Division and Civil Division, as well as the incredible response, investigative and supporting efforts of the Departments of Homeland Security, Interior, Commerce and Agriculture and the Environmental Protection Agency, whose efforts have made this important step possible. I also appreciate the extraordinary effort of the many state leaders and environmental professionals who collaborated to advance this agreement in principle.”
Thursday, July 2, 2015
Statement by Attorney General Loretta E. Lynch on the Agreement in Principle with BP to Settle Civil Claims for the Deepwater Horizon Oil Spill
Total Value of Settlement Would Top $18.7 Billion, the Largest Settlement with a Single Entity in American History
Today, BP disclosed that it has reached agreements in principle with the United States, state, and local governments for a settlement of civil claims arising from the April 20, 2010, Deepwater Horizon oil spill in the Gulf of Mexico. The Attorney General made the following statement:
“Since the Deepwater Horizon oil spill – the largest environmental disaster in our nation’s history – the Justice Department has been fully committed to holding BP accountable, to achieving justice for the American people and to restoring the environment and the economy of the Gulf region at the expense of those responsible and not the American taxpayer. In December 2010, my predecessor, Attorney General Eric Holder, announced a civil lawsuit against BP and its co-defendants. Since that time, the Deepwater trial team has fought aggressively in federal court for an outcome that would achieve this mission, proving along the way that BP’s gross negligence resulted in the Deepwater disaster.
“Today, I am pleased to say that after productive discussions with BP over the previous several weeks, we have reached an agreement in principle that would justly and comprehensively address outstanding federal and state claims, including Clean Water Act civil penalties and natural resource damages. BP is also resolving significant economic claims with the impacted state and local governments. We will work diligently during the next several months to incorporate the agreement in principle into a consent decree, which would then undergo public comment before court approval. If approved by the court, this settlement would be the largest settlement with a single entity in American history; it would help repair the damage done to the Gulf economy, fisheries, wetlands and wildlife; and it would bring lasting benefits to the Gulf region for generations to come.
“I am so very grateful to the Deepwater civil trial team, made up of men and women from the department’s Environment and Natural Resources Division and Civil Division, as well as the incredible response, investigative and supporting efforts of the Departments of Homeland Security, Interior, Commerce and Agriculture and the Environmental Protection Agency, whose efforts have made this important step possible. I also appreciate the extraordinary effort of the many state leaders and environmental professionals who collaborated to advance this agreement in principle.”
LEADER IN COLOMBIAN PARAMILITARY SENTENCED FOR DRUG TRAFFICKING
FROM: U.S. STATE DEPARTMENT
Tuesday, June 30, 2015
Colombian Paramilitary Leader Sentenced to More Than 15 Years in Prison for International Drug Trafficking
A senior paramilitary leader and one of Colombia’s most notorious drug traffickers was sentenced today to serve 190 months in prison for leading an international drug trafficking conspiracy that imported into the United States ton-quantities of cocaine. Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting Deputy Administrator Jack Riley of the U.S. Drug Enforcement Administration (DEA) made the announcement.
“Through his leadership position in the AUC, Salvatore Mancuso-Gomez directed the manufacture and shipment of over 100,000 kilograms of cocaine into the United States and elsewhere,” said Assistant Attorney General Caldwell. “In addition to enriching himself, Mancuso-Gomez and the AUC used this drug money to raise and arm a paramilitary force of more than 30,000 fighters and cement his control over regions of Colombia. This case is yet another example of our continued commitment to collaborating with our international partners to prosecute criminals and warlords who traffic in illegal narcotics, violence and intimidation.”
“DEA is committed to relentlessly attacking global criminal networks who use drug trafficking as a means to finance their terrorist activities,” said Acting Deputy Administrator Riley. “The arrest and prosecution of Salvatore Mancuso-Gomez clearly illustrates this dedication. As a senior leader in the AUC, Mancuso-Gomez controlled huge amounts of cocaine production in Colombia, and oversaw its movement to the United States and other parts of the world. Proceeds from his drug trafficking enterprise were used to acquire weapons and further the AUC’s violent criminal agenda. DEA is pleased that this significant narco-terror leader has faced justice in a U.S. court of law.”
Salvatore Mancuso-Gomez, aka El Mono and Santander Lozada, formerly of Monteria, Colombia, pleaded guilty in October 2008 to one count of conspiracy to distribute cocaine knowing and intending that it would be imported into the United States. U.S. District Judge Ellen Segal Huvelle of the District of Columbia imposed the sentence.
According to the statement of facts agreed to as part of his guilty plea, Mancuso-Gomez held one of the highest level leadership positions within the Autodefensas Unidas de Colombia (United Self Defense Forces of Colombia or AUC), a terrorist and paramilitary organization in Colombia. In September 2001, the AUC was designated a Foreign Terrorist Organization by the U.S. Department of State. In May 2003, the AUC was placed on the Significant Foreign Narcotics Traffickers list by order of the President, pursuant to the Foreign Narcotics Kingpin Designation Act. In February 2004, Mancuso-Gomez individually was designated as a Tier II Kingpin by the Department of Treasury’s Office of Foreign Assets Control, subjecting him to severe economic sanctions under the Kingpin Act.
The statement of facts also established that the AUC consisted of approximately 30,000 armed soldiers organized into blocs (or regions) with commanders for each bloc. In connection with his guilty plea, Mancuso-Gomez admitted that, from the mid-1990s through 2004, he directed thousands of soldiers in two blocs of the AUC, controlling large areas where cocaine was produced.
Mancuso-Gomez admitted that the AUC produced approximately 2,000 kilograms of cocaine per month during the conspiracy, and that he and members of the organization transported the cocaine to the coastal areas of Colombia where it was loaded onto go-fast boats and other vessels for ultimate transportation to the United States and Europe. Mancuso-Gomez also admitted that he levied taxes on other narcotics traffickers who needed passage through AUC-controlled territories, and that he used proceeds from his drug trafficking activities to purchase weapons and other supplies for AUC activities. Mancuso-Gomez further admitted that he and the AUC maintained tight control of their territories in Colombia through intimidation of corrupt members of the Colombian government, including law enforcement and military personnel and politicians.
Today’s sentence does not account for violations of Colombian human rights-related laws allegedly committed by Mancuso-Gomez, which are being addressed in Colombia through the Justice and Peace process – a legal framework enacted in 2005 to facilitate the demobilization of its paramilitary organizations – and Colombian criminal justice system.
The case was investigated by DEA’s Bogotá and Cartagena, Colombia, Country Offices, and the DEA Special Operations Division. The government of Colombia provided unprecedented assistance through the investigation, prosecution and sentencing phase of this case.
The case was prosecuted by Trial Attorneys Paul W. Laymon and Carmen Colon of the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS). NDDS Judicial Attachés in Bogotá, Colombia; the Criminal Division’s Office of International Affairs; and the Prosecutor General’s Office of the Republic of Colombia (Fiscalia), including the Fiscalia’s Transitional Justice program, provided significant assistance.
Tuesday, June 30, 2015
Colombian Paramilitary Leader Sentenced to More Than 15 Years in Prison for International Drug Trafficking
A senior paramilitary leader and one of Colombia’s most notorious drug traffickers was sentenced today to serve 190 months in prison for leading an international drug trafficking conspiracy that imported into the United States ton-quantities of cocaine. Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting Deputy Administrator Jack Riley of the U.S. Drug Enforcement Administration (DEA) made the announcement.
“Through his leadership position in the AUC, Salvatore Mancuso-Gomez directed the manufacture and shipment of over 100,000 kilograms of cocaine into the United States and elsewhere,” said Assistant Attorney General Caldwell. “In addition to enriching himself, Mancuso-Gomez and the AUC used this drug money to raise and arm a paramilitary force of more than 30,000 fighters and cement his control over regions of Colombia. This case is yet another example of our continued commitment to collaborating with our international partners to prosecute criminals and warlords who traffic in illegal narcotics, violence and intimidation.”
“DEA is committed to relentlessly attacking global criminal networks who use drug trafficking as a means to finance their terrorist activities,” said Acting Deputy Administrator Riley. “The arrest and prosecution of Salvatore Mancuso-Gomez clearly illustrates this dedication. As a senior leader in the AUC, Mancuso-Gomez controlled huge amounts of cocaine production in Colombia, and oversaw its movement to the United States and other parts of the world. Proceeds from his drug trafficking enterprise were used to acquire weapons and further the AUC’s violent criminal agenda. DEA is pleased that this significant narco-terror leader has faced justice in a U.S. court of law.”
Salvatore Mancuso-Gomez, aka El Mono and Santander Lozada, formerly of Monteria, Colombia, pleaded guilty in October 2008 to one count of conspiracy to distribute cocaine knowing and intending that it would be imported into the United States. U.S. District Judge Ellen Segal Huvelle of the District of Columbia imposed the sentence.
According to the statement of facts agreed to as part of his guilty plea, Mancuso-Gomez held one of the highest level leadership positions within the Autodefensas Unidas de Colombia (United Self Defense Forces of Colombia or AUC), a terrorist and paramilitary organization in Colombia. In September 2001, the AUC was designated a Foreign Terrorist Organization by the U.S. Department of State. In May 2003, the AUC was placed on the Significant Foreign Narcotics Traffickers list by order of the President, pursuant to the Foreign Narcotics Kingpin Designation Act. In February 2004, Mancuso-Gomez individually was designated as a Tier II Kingpin by the Department of Treasury’s Office of Foreign Assets Control, subjecting him to severe economic sanctions under the Kingpin Act.
The statement of facts also established that the AUC consisted of approximately 30,000 armed soldiers organized into blocs (or regions) with commanders for each bloc. In connection with his guilty plea, Mancuso-Gomez admitted that, from the mid-1990s through 2004, he directed thousands of soldiers in two blocs of the AUC, controlling large areas where cocaine was produced.
Mancuso-Gomez admitted that the AUC produced approximately 2,000 kilograms of cocaine per month during the conspiracy, and that he and members of the organization transported the cocaine to the coastal areas of Colombia where it was loaded onto go-fast boats and other vessels for ultimate transportation to the United States and Europe. Mancuso-Gomez also admitted that he levied taxes on other narcotics traffickers who needed passage through AUC-controlled territories, and that he used proceeds from his drug trafficking activities to purchase weapons and other supplies for AUC activities. Mancuso-Gomez further admitted that he and the AUC maintained tight control of their territories in Colombia through intimidation of corrupt members of the Colombian government, including law enforcement and military personnel and politicians.
Today’s sentence does not account for violations of Colombian human rights-related laws allegedly committed by Mancuso-Gomez, which are being addressed in Colombia through the Justice and Peace process – a legal framework enacted in 2005 to facilitate the demobilization of its paramilitary organizations – and Colombian criminal justice system.
The case was investigated by DEA’s Bogotá and Cartagena, Colombia, Country Offices, and the DEA Special Operations Division. The government of Colombia provided unprecedented assistance through the investigation, prosecution and sentencing phase of this case.
The case was prosecuted by Trial Attorneys Paul W. Laymon and Carmen Colon of the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS). NDDS Judicial Attachés in Bogotá, Colombia; the Criminal Division’s Office of International Affairs; and the Prosecutor General’s Office of the Republic of Colombia (Fiscalia), including the Fiscalia’s Transitional Justice program, provided significant assistance.
ROBERT BERSCHINSKI MAKES REMARKS ON PREVENTION OF VIOLENT EXTREMISM
FROM: U.S. STATE DEPARTMENT
The Role of Youth, Women, Religious Groups, and Civil Society in Preventing Violent Extremism
Remarks
Robert Berschinski
Deputy Assistant Secretary, Bureau of Democracy, Human Rights, and Labor
Remarks as Delivered at Central and South Asia Regional Conference on Countering Violent Extremism
Astana, Kazakhstan
June 30, 2015
Let me begin by thanking the Government of Kazakhstan for hosting this important conference and for your hospitality last night, and also thanking my fellow panelists for sharing your time and insights.
I'd like to take as my point of departure a few of the points raised by the U.S. head of delegation, Customs and Border Patrol Commissioner Gil Kerlikowske, in his opening remarks yesterday.
Given that we've heard a lot of panelists since yesterday morning, I'll offer a brief recap. Commissioner Kerlikowske said five things I think are worth repeating:
First, that as a life-long professional law enforcement officer, his perspective is that "real security is not about arrests and detention," but about "the way governments interact with their societies."
Second, that as we seek to prevent violent extremism, it is in governments' best interest to empower non-governmental organizations and other citizens--youth, women, faith leaders, and victims among them.
Third, that violations of religious freedom are one important driver of radicalization.
Fourth, that respect for human rights is a law enforcement best practice.
And fifth and finally, that corruption undermines society's faith in its government, which produces the kinds of alienation that can drive individuals toward the forms of violent extremism that we collectively seek to end.
One additional theme I've heard running through all the panels thus far is that the drivers of radicalization are complex, and thus we need to be as holistic and inclusive as possible in our response. It's clear that government alone cannot successfully address the issue. Non-governmental, community-based, and religious voices are essential.
I'd like to offer a few thoughts on each of these lessons.
First, as we heard in yesterday's panel on the uses and abuses of new media, we are all grappling with extremists' misuse of the internet to spread their message. And while there are certainly times in which calls for direct imminent violence by terrorist groups and their sympathizers should be taken offline, we should remember that peaceful expression and the free exchange of ideas are an essential part of the antidote to the appeal of violent extremist ideologies.
When we suppress peaceful and legitimate expression and ideas, even ones with which we disagree or even find abhorrent, we simply drive extremist voices underground, where they are harder to track and challenge, while in many cases enabling conspiracy theories to thrive. So engagement, rather than censorship, needs to be part of the solution.
Efforts to clamp down on freedom of expression lead me to my next point, which is that notwithstanding the many things that we don't know about the process of radicalization, one thing we do know is that one of the key drivers of political violence is that it is in part rooted in experiences of injustice—such as discrimination, corruption, and abuses by government authorities or security forces that are perpetuated with impunity.
This conference's analogue in Kenya just wrapped up last week, and one of the data points noted during that conference was that 65% of Shabaab members interviewed by a think tank said they joined the group as a reaction to the aggressive and discriminatory actions of local security forces, as well as ethnic profiling, arbitrary detentions, and police corruption.
Now we need to take each instance of radicalization within a local context, but there is a generalizable point to be made that populations that have access to transparent and non-corrupt governance, the rule of law, and the fundamental freedoms of expression, religious belief, association, and assembly tend to have fewer grievances and more outlets for what grievances they do have, and are thus more resistant to the call of violent extremism.
With respect to religious groups, we know that government efforts to control peaceful religious belief or practice, especially for so-called “non-traditional” religious actors, generates grievances and in some cases alienates communities -- the opposite of what we should seek to achieve from the perspective of countering violent extremist narratives of oppression and subjugation.
More broadly, reducing the space for civil society to operate--a trend that is unfortunately spreading across this region and around the world in parallel to the growth of groups like Al Qaeda and Daesh--harms governmental CVE efforts, as civil society actors are often those closest to vulnerable populations.
This is particularly true not only of religious groups, but also of women and youth. That's why, through the Global Counterterrorism Forum and other means, we must continue to develop best practices on incorporating women's views into CVE efforts, and conduct more study on what motivates women and girls toward radicalism.
A range of contextual challenges, including legal and institutional restrictions, safety concerns, and lack of resources and skills, often prevent full and effective participation of women and girls in CVE policy-making and programs. But women and girls are leaders, problem-solvers, inspirers, and teachers, as well as mothers, sisters, wives, and providers -- their input and efforts are imperative to batting back violent extremism.
Let me say in closing that we in government cannot do it alone. More broadly, as UN Secretary General Ban Ki-moon said recently while touring this region, curbing freedoms creates “an illusion of stability in the short-run” but ultimately fosters “a breeding ground for extremist ideologies" in the longer run.
As Ban said, “Around the world, the way to confront threats is not more repression, it is more openness. More human rights. The road to a stable future is by strengthening the rule of law. By fighting corruption. By ensuring an independent judiciary. By guaranteeing free media. By building just societies. By empowering citizens."
The United States fully supports these words from the UN Secretary General. Operating space for youth, women, religious groups, and civil society must be safeguarded—so that these populations can speak their minds, organize among themselves, and bring their experiences to bear on creating more peaceful, tolerant, and democratic societies.
Thank you.
The Role of Youth, Women, Religious Groups, and Civil Society in Preventing Violent Extremism
Remarks
Robert Berschinski
Deputy Assistant Secretary, Bureau of Democracy, Human Rights, and Labor
Remarks as Delivered at Central and South Asia Regional Conference on Countering Violent Extremism
Astana, Kazakhstan
June 30, 2015
Let me begin by thanking the Government of Kazakhstan for hosting this important conference and for your hospitality last night, and also thanking my fellow panelists for sharing your time and insights.
I'd like to take as my point of departure a few of the points raised by the U.S. head of delegation, Customs and Border Patrol Commissioner Gil Kerlikowske, in his opening remarks yesterday.
Given that we've heard a lot of panelists since yesterday morning, I'll offer a brief recap. Commissioner Kerlikowske said five things I think are worth repeating:
First, that as a life-long professional law enforcement officer, his perspective is that "real security is not about arrests and detention," but about "the way governments interact with their societies."
Second, that as we seek to prevent violent extremism, it is in governments' best interest to empower non-governmental organizations and other citizens--youth, women, faith leaders, and victims among them.
Third, that violations of religious freedom are one important driver of radicalization.
Fourth, that respect for human rights is a law enforcement best practice.
And fifth and finally, that corruption undermines society's faith in its government, which produces the kinds of alienation that can drive individuals toward the forms of violent extremism that we collectively seek to end.
One additional theme I've heard running through all the panels thus far is that the drivers of radicalization are complex, and thus we need to be as holistic and inclusive as possible in our response. It's clear that government alone cannot successfully address the issue. Non-governmental, community-based, and religious voices are essential.
I'd like to offer a few thoughts on each of these lessons.
First, as we heard in yesterday's panel on the uses and abuses of new media, we are all grappling with extremists' misuse of the internet to spread their message. And while there are certainly times in which calls for direct imminent violence by terrorist groups and their sympathizers should be taken offline, we should remember that peaceful expression and the free exchange of ideas are an essential part of the antidote to the appeal of violent extremist ideologies.
When we suppress peaceful and legitimate expression and ideas, even ones with which we disagree or even find abhorrent, we simply drive extremist voices underground, where they are harder to track and challenge, while in many cases enabling conspiracy theories to thrive. So engagement, rather than censorship, needs to be part of the solution.
Efforts to clamp down on freedom of expression lead me to my next point, which is that notwithstanding the many things that we don't know about the process of radicalization, one thing we do know is that one of the key drivers of political violence is that it is in part rooted in experiences of injustice—such as discrimination, corruption, and abuses by government authorities or security forces that are perpetuated with impunity.
This conference's analogue in Kenya just wrapped up last week, and one of the data points noted during that conference was that 65% of Shabaab members interviewed by a think tank said they joined the group as a reaction to the aggressive and discriminatory actions of local security forces, as well as ethnic profiling, arbitrary detentions, and police corruption.
Now we need to take each instance of radicalization within a local context, but there is a generalizable point to be made that populations that have access to transparent and non-corrupt governance, the rule of law, and the fundamental freedoms of expression, religious belief, association, and assembly tend to have fewer grievances and more outlets for what grievances they do have, and are thus more resistant to the call of violent extremism.
With respect to religious groups, we know that government efforts to control peaceful religious belief or practice, especially for so-called “non-traditional” religious actors, generates grievances and in some cases alienates communities -- the opposite of what we should seek to achieve from the perspective of countering violent extremist narratives of oppression and subjugation.
More broadly, reducing the space for civil society to operate--a trend that is unfortunately spreading across this region and around the world in parallel to the growth of groups like Al Qaeda and Daesh--harms governmental CVE efforts, as civil society actors are often those closest to vulnerable populations.
This is particularly true not only of religious groups, but also of women and youth. That's why, through the Global Counterterrorism Forum and other means, we must continue to develop best practices on incorporating women's views into CVE efforts, and conduct more study on what motivates women and girls toward radicalism.
A range of contextual challenges, including legal and institutional restrictions, safety concerns, and lack of resources and skills, often prevent full and effective participation of women and girls in CVE policy-making and programs. But women and girls are leaders, problem-solvers, inspirers, and teachers, as well as mothers, sisters, wives, and providers -- their input and efforts are imperative to batting back violent extremism.
Let me say in closing that we in government cannot do it alone. More broadly, as UN Secretary General Ban Ki-moon said recently while touring this region, curbing freedoms creates “an illusion of stability in the short-run” but ultimately fosters “a breeding ground for extremist ideologies" in the longer run.
As Ban said, “Around the world, the way to confront threats is not more repression, it is more openness. More human rights. The road to a stable future is by strengthening the rule of law. By fighting corruption. By ensuring an independent judiciary. By guaranteeing free media. By building just societies. By empowering citizens."
The United States fully supports these words from the UN Secretary General. Operating space for youth, women, religious groups, and civil society must be safeguarded—so that these populations can speak their minds, organize among themselves, and bring their experiences to bear on creating more peaceful, tolerant, and democratic societies.
Thank you.
KKR AGREES TO PAY ALMOST $30 MILLION TO SETTLE CHARGES IT MISALLOCATED OVER $17 MILLION
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
6/29/2015 10:55 AM EDT
The Securities and Exchange Commission charged Kohlberg Kravis Roberts & Co. (KKR) with misallocating more than $17 million in so-called “broken deal” expenses to its flagship private equity funds in breach of its fiduciary duty.
KKR agreed to pay nearly $30 million to settle the charges, including a $10 million penalty.
The SEC Enforcement Division’s Asset Management Unit has been scrutinizing the private equity industry to make sure that fund managers aren’t misallocating or unfairly charging fees and expenses to investors. An SEC investigation found that during a six-year period ending in 2011, KKR incurred $338 million in broken deal or diligence expenses related to unsuccessful buyout opportunities and similar expenses. Even though KKR’s co-investors, including KKR executives, participated in the firm’s private equity transactions and benefited from the firm’s deal sourcing efforts, KKR did not allocate any portion of these broken deal expenses to any of them for years. KKR did not expressly disclose in its fund limited partnership agreements or related offering materials that it did not allocate broken deal expenses to the co-investors.
“This is the first SEC case to charge a private equity adviser with misallocating broken deal expenses,” said Andrew J. Ceresney, Director of the SEC Enforcement Division. “Although KKR raised billions of dollars of deal capital from co-investors, it unfairly required the funds to shoulder the cost for nearly all of the expenses incurred to explore potential investment opportunities that were pursued but ultimately not completed.”
The SEC’s order instituting a settled administrative proceeding also finds that KKR failed to implement a written compliance policy governing its fund expense allocation practices until the end of the six-year period in 2011.
“KKR’s failure to adopt policies and procedures governing broken deal expense allocation contributed to its breach of fiduciary duty,” said Marshall S. Sprung, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “A robust compliance program helps investment advisers ensure that clients are not disadvantaged and receive full disclosure about how fund expenses are allocated.”
KKR consented to the entry of the SEC’s order finding that the firm violated Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7. KKR agreed to pay more than $14 million in disgorgement ($3.26 million was previously refunded to clients) as well as more than $4.5 million in prejudgment interest and the $10 million penalty. KKR neither admitted nor denied the SEC’s findings.
The SEC’s investigation was conducted by Vincenzo A. DeLeo and Brian E. Fitzpatrick of the Asset Management Unit with the assistance of James E. Addison of the New York Regional Office. The case was supervised by Panayiota K. Bougiamas of the Asset Management Unit. The SEC examination that led to the investigation was conducted by Edward R. Perkins, Francine P. Catapano, Syed Husain, and Tracy O’Sullivan.
6/29/2015 10:55 AM EDT
The Securities and Exchange Commission charged Kohlberg Kravis Roberts & Co. (KKR) with misallocating more than $17 million in so-called “broken deal” expenses to its flagship private equity funds in breach of its fiduciary duty.
KKR agreed to pay nearly $30 million to settle the charges, including a $10 million penalty.
The SEC Enforcement Division’s Asset Management Unit has been scrutinizing the private equity industry to make sure that fund managers aren’t misallocating or unfairly charging fees and expenses to investors. An SEC investigation found that during a six-year period ending in 2011, KKR incurred $338 million in broken deal or diligence expenses related to unsuccessful buyout opportunities and similar expenses. Even though KKR’s co-investors, including KKR executives, participated in the firm’s private equity transactions and benefited from the firm’s deal sourcing efforts, KKR did not allocate any portion of these broken deal expenses to any of them for years. KKR did not expressly disclose in its fund limited partnership agreements or related offering materials that it did not allocate broken deal expenses to the co-investors.
“This is the first SEC case to charge a private equity adviser with misallocating broken deal expenses,” said Andrew J. Ceresney, Director of the SEC Enforcement Division. “Although KKR raised billions of dollars of deal capital from co-investors, it unfairly required the funds to shoulder the cost for nearly all of the expenses incurred to explore potential investment opportunities that were pursued but ultimately not completed.”
The SEC’s order instituting a settled administrative proceeding also finds that KKR failed to implement a written compliance policy governing its fund expense allocation practices until the end of the six-year period in 2011.
“KKR’s failure to adopt policies and procedures governing broken deal expense allocation contributed to its breach of fiduciary duty,” said Marshall S. Sprung, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “A robust compliance program helps investment advisers ensure that clients are not disadvantaged and receive full disclosure about how fund expenses are allocated.”
KKR consented to the entry of the SEC’s order finding that the firm violated Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7. KKR agreed to pay more than $14 million in disgorgement ($3.26 million was previously refunded to clients) as well as more than $4.5 million in prejudgment interest and the $10 million penalty. KKR neither admitted nor denied the SEC’s findings.
The SEC’s investigation was conducted by Vincenzo A. DeLeo and Brian E. Fitzpatrick of the Asset Management Unit with the assistance of James E. Addison of the New York Regional Office. The case was supervised by Panayiota K. Bougiamas of the Asset Management Unit. The SEC examination that led to the investigation was conducted by Edward R. Perkins, Francine P. Catapano, Syed Husain, and Tracy O’Sullivan.
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