SEC Charges Credit Suisse With FCPA Violations

The Securities and Exchange Commission today announced that Credit Suisse Group AG will pay approximately $30 million to resolve SEC charges that it obtained investment banking business in the Asia-Pacific region by corruptly influencing foreign officials in violation of Foreign Corrupt Practices Act (FCPA).

Credit Suisse also agreed to pay a $47 million criminal penalty to the U.S. Department of Justice.

According to the SEC’s order, several senior Credit Suisse managers in the Asia-Pacific region sought to win business by hiring and promoting individuals connected to government officials as part of a quid pro quo arrangement.  While the practice of hiring client referrals bypassed the firm’s normal hiring process, employees in other Credit Suisse subsidiaries and affiliates were aware of it and in some instances approved these “relationship hires” or “referral hires.”  The SEC’s order found that in a six-year period, Credit Suisse offered to hire more than 100 individuals referred by or connected to foreign government officials, resulting in millions of dollars of business revenue. read more »

Jay Peak ski resort investors sue two Vermont attorneys

A group of Jay Peak investors is suing two Vermont lawyers, contending the attorneys had a conflict of interest.

Edward Carroll and Mark Scribner, formerly of Carroll & Scribner, represented both the foreign investors and the resort, the lawsuit alleges.

The plaintiffs, 21 EB-5 immigrants who invested $10.5 million in the Tram Haus, a hotel at Jay Peak, also allege Carroll & Scribner failed to alert them of potential red flags that would have indicated that the developers of the resort were engaged in a massive fraud involving hundreds of EB-5 investors. The lawsuit against Carroll & Scribner is pending in U.S. District Court in Vermont. read more »

Youtube Embroiled in a Ponzi Scheme Related Lawsuit

While the outcome remains to be seen, the results of this case may have serious implications for the future.

Youtube, the world’s most widely used video-streaming platform, has been caught in the midst of the recent Bitconnect Ponzi Scheme Class action lawsuit.

As per documents that have been made available by relevant authorities, Youtube is facing charges that it acted as an “advertising platform” for Bitconnect without actively conducting a thorough examination of the product and its legitimacy.

During its heyday, Bitconnect advertised itself as an investing platform that could help users procure daily profits of up to 1%. They claimed that these figures were backed by an intricate set of investment algorithms that had been “time tested”.

As with any Ponzi scheme, it became obvious fairly quickly that the venture was dodgy and soon enough, Bitconnect went broke.

Since Youtube acted as a transmission agent within the larger scheme of things, it is being alleged that the company should now pay some fines because it let many Youtubers’ advertise the platform on their channels– where they claimed Bitconnect actually worked for them. read more »

$14.4 Million to Resolve Alleged False Claims for Department of Energy Funds

North American Power Group Ltd. (NAPG) and its owner and president, Michael Ruffatto, have agreed to pay the United States $14.4 million to resolve allegations that they violated the False Claims Act by submitting fraudulent claims under a cooperative agreement with the Department of Energy (DOE) National Energy and Technology Laboratory (NETL), located in Pittsburgh, Pennsylvania, the Department of Justice announced today.

Based in Greenwood Village, Colorado, NAPG develops, owns, operates and manages energy-related projects.  On December 8, 2009, NETL awarded a $14 million cooperative agreement to NAPG for a Carbon Site Characterization Project to collect and analyze data, as well as to design and implement carbon sequestration wells at the Two Elk Energy Park (TEEP) located in Campbell County, Wyoming.   Between December 2009 and January 2012, Ruffatto served as NAPG’s representative for the cooperative agreement and was responsible for authorizing the submission of the company’s invoices to NETL for payment.  During that time, NAPG was paid approximately $5.7 million by NETL for costs purportedly related to the project.  In fact, however, none of the claimed costs were for work associated with the project and instead reflected expenses incurred by Ruffatto to pay legal fees, car payments, jewelry, international travel and other personal items unrelated to the scope of work under the cooperative agreement.  The DOE suspended the cooperative agreement in January 2012 after discovering the fraudulent claims.

“The money allocated by Congress for the National Energy and Technology Laboratory is designed to fund the important mission carried out by the laboratory, not to be diverted for personal use,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “This investigation and its resolution demonstrate that the Justice Department will work with its agency partners to ensure that public funds are used for their intended purposes.” 

“This $14.4 million False Claims Act settlement is the largest NETL settlement in the history of western Pennsylvania,” said U.S. Attorney Scott W. Brady of the Western District of Pennsylvania.  “Protecting taxpayer funds is an important priority of our office and this settlement, along with yesterday’s sentence, demonstrate we will use every tool in our arsenal to prevent and deter wrongful expenditures of government monies.” read more »