Global Head of HSBC’S Foreign Exchange Cash-Trading Desks Arrested For Orchestrating Multimillion-Dollar Front Running Scheme

The head of global foreign exchange cash trading at HSBC Bank plc, a subsidiary of HSBC Holdings plc (collectively HSBC), and HSBC’s former head of foreign exchange cash trading for Europe, the Middle East and Africa, were charged with conspiring to defraud a client of HSBC through a scheme commonly referred to as “front running.”

U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting Inspector General Frederick W. Gibson of the Federal Deposit Insurance Corporation (FDIC), and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office, made the announcement.

Mark Johnson, 50, a U.K. citizen and U.K. and U.S. resident, and Stuart Scott, 43, a U.K. citizen and resident, were charged by complaint with conspiracy to commit wire fraud.  Johnson was arrested last night at JFK International Airport in Queens, New York, and will be arraigned later today before U.S. Magistrate Judge Lois Bloom of the Eastern District of New York. read more »

United States Files Suit against DynCorp International Alleging Submission of False Claims under State Department Contract

The United States filed a False Claims Act complaint against DynCorp International Inc. (DynCorp) alleging that it knowingly submitted inflated claims in connection with a State Department contract to train Iraqi police forces (CIVPOL contract), the Department of Justice announced today.  The United States filed the complaint in the U.S. District Court for the District of Columbia.  DynCorp, which is headquartered in McLean, Virginia, is a wholly-owned subsidiary of Delta Tucker Holdings Inc. read more »

Motives Group fined $13m for evading US customs duties

A China-based manufacturer is to pay a fine of more than US $13m for evading customs duties in a double invoicing scheme designed to defraud the US of millions of dollars.

Following an investigation by US Immigration and Customs Enforcement's (ICE), Homeland Security Investigation (HSI) and US Customs and Border Protection (CBP), Motives Far East and Motives China Limited, subsidiaries of Motives Group, admitted to and accepted responsibility for under-reporting the value of imported merchandise.

The company will pay almost $13.4m to the United States under the False Claims Act. read more »

SRA International Inc. And Galaxy Scientific Corp. To Pay $1.1 Million To Resolve Alleged False Claims Related To Military Contracts

SRA International Inc. and Galaxy Scientific Corp. will pay more than $1.1 million to resolve civil claims relating to a scheme to bill for, and capture, unlawful profits on certain military contracts, U.S. Attorney Paul J. Fishman of the District of New Jersey announced today. 

In the civil settlement, SRA International Inc. (SRA), Galaxy Scientific Corp. (GSC), Galaxy Technology LLC (GTech), and Engineering Integrated Services L.L.C. (EIS), agreed to pay $1,105,087 plus accrued interest to the federal government to resolve allegations under the False Claims Act. The United States alleged that in 2004 and 2005 GSC used shell affiliates to improperly induce the Government to fund and award task orders, disguise actual costs, misrepresent what work was actually performed, and capture unlawful profit

The civil settlement resolves a False Claims Act lawsuit filed under the FCA’s qui tam provisions in federal court in the District of New Jersey by John Carr, who worked as a contracting officer for GSC. As part of today’s resolution, Mr. Carr will receive approximately $250,000 from the civil settlement amount. read more »

Frontier misused federal funds, false claims suit alleges 

Bridgeport-based Internet provider Citynet has filed a lawsuit against Frontier Communications under the False Claims Act, alleging Frontier misused $40.5 million in federal stimulus funds and built a high-speed broadband network designed to shut out its competitors in West Virginia.

Citynet accuses Frontier of double-billing, falsifying records and charging excess fees not authorized by the federal grant that paid for the broadband expansion project completed two years ago.

Citynet initially filed the federal lawsuit in 2014, but it was kept under seal until this week. A revised complaint was filed Monday, after the U.S. Justice Department declined to intervene in the case. The federal government typically joins about 25 percent of lawsuits filed under the False Claims Act.  read more »