Canada's ex-attorney general to testify about SNC scandal

Canada's former attorney general is expected to testify about whether she was inappropriately pressured by Prime Minister Justin Trudeau's office to avoid prosecuting a major Canadian engineering company

Ex-Attorney General Jody Wilson-Raybould has said she wants to tell "her truth" and she will speak at a hearing of the Parliament justice committee.

Trudeau's government has been on the defensive since the Globe and Mail newspaper reported Feb. 7 that Trudeau or his staff pressured Wilson-Raybould last year to try to avoid a criminal prosecution of Montreal-based SNC-Lavalin over allegations of corruption involving government contracts in Libya. Critics say that would be improper political meddling in a legal case. read more »

SNC-Lavalin case shows why Canada should review foreign corruption laws

The controversy in Canada involving Québec-based corporate giant SNC-Lavalin highlights the need for a parliamentary review of the legal scheme for fighting foreign corruption.

Underpinning the scandal is a corporate criminal prosecution for the alleged bribery of Libyan officials by SNC-Lavalin officials and the question of a plea deal. Since corporations cannot do jail time, a fine is the obvious punishment. But how large should the fine be, and with what consequences? Should SNC-Lavalin be barred from consideration for future government contracts? read more »

Debate: Getting real about foreign bribery

Foreign bribery is widely prohibited, and even more widely practiced. It’s also big business – some estimates put the value of corporate bribery at more than $1 trillion annually.

After Watergate-era investigations in the 1970s revealed hundreds of American firms were engaging in foreign bribery, the United States acted to prohibit this conduct in 1977 with the Foreign Corrupt Practices Act (FCPA). read more »

U.S. Internal Revenue Service Whistleblower Awards Increase in 2018

The IRS Whistleblower Office released its annual report on awards under the program, showing 217 awards in 2018 for a total exceeding $300 million.  The awards resulted from more than $1.4 billion in back taxes, penalties, and other proceeds of tax avoidance collected by the IRS due to information provided by private citizens. read more »

Drug executives grilled in Senate over high prices

Top pharmaceutical executives lined up at a Senate hearing Tuesday and expressed deep compassion for patients suffering from disease. They decried high co-payments that shock consumers at the pharmacy counter. They denounced rebates they pay to insurance companies.

But while they were eager to indict a system they said is badly broken, they declined to commit to lowering their own prices.

The industry leaders asserted they are forced to set prices higher so they can pay big rebates to insurance companies and pharmacy benefit managers read more »

U.S. charges My Big Coin virtual currency firm founder with fraud

The founder of a Nevada-based company was arrested on Wednesday on federal charges that he participated in a $6 million scheme to defraud people who wanted to buy a virtual currency called My Big Coin that he claimed was backed by gold.

The indictment came after the U.S. Commodity Futures Trading Commission last year sued the company, Crater and three others associated with My Big Coin Pay Inc and accused them of participating in a fraudulent virtual currency scheme.

The lawsuit led to one of the first court rulings holding that a virtual currency could be considered a commodity within the jurisdiction of the U.S. derivatives regulator. That civil case remains pending. read more »

Vanguard Healthcare Agrees to Resolve Federal and State False Claims Act Liability

Settlement by Nursing Home Chain is Largest Worthless Services Resolution in Tennessee’s History

The Department of Justice announced today that Brentwood, Tennessee-based Vanguard Healthcare LLC, and related Vanguard companies (Vanguard) agreed to pay more than $18 million in allowed claims to resolve a lawsuit brought by the United States and the State of Tennessee against them for billing the Medicare and Medicaid programs for grossly substandard nursing home services.

The United States’ claims were brought under the False Claims Act, which imposes treble damages and penalties on those who submit false claims for federal funds. read more »

Two Defendants Charged in Connection with Alleged Multimillion-Dollar Investment Fraud Scheme

Two individuals were charged in an indictment filed today for their alleged roles in a multimillion-dollar scheme involving purported investments in a start-up financial technology company.

Michael A. Liberty, 58, of Windermere, Florida, and Paul E. Hess, 63, of Braintree, Massachusetts, were each charged in an indictment filed in the District of Maine with one count of conspiracy to commit wire fraud, four counts of wire fraud and one count of securities fraud.  In addition, Liberty was charged with one count of conspiracy to commit money laundering and three counts of money laundering.

The indictment alleges that, beginning in 2010, Liberty and Hess solicited investments in Mozido, a privately held financial technology start-up company that offered users an ability to make payments using their mobile phones.  Liberty and Hess allegedly raised millions of dollars from investors telling them, among other things, that their money would be used to fund Mozido’s business operations and that Hess was not being paid to raise the money.  The indictment alleges that a substantial amount of the money did not go to Mozido, that a portion of the money was diverted to pay Liberty’s personal expenses, and that Hess received commissions and other payments in return for the money he raised from investors. read more »

Majority of cybersecurity incidents go unreported to SEC, analysis finds

Of the 42 public companies that experienced a known cybersecurity incident in 2018, four disclosed the event to the Securities and Exchange Commission in regulatory filings, according to an analysis by SEC Commissioner Robert J. Jackson Jr.'s office.

That 9.5% disclosure rate is up from 2017, when there were 82 cybersecurity incidents at public companies and just four, or 4.9%, filed an 8-K disclosing the breach, Mr. Jackson's office said. The analysis is based on data compiled by the non-profit Identity Theft Resource Center. read more »

Payday lenders preying on borrowers escape crackdown as rules rolled back

Interest rates reach nearly 700% in some states as debate over how to regulate payday loans continues

Asha Clark doesn’t have any savings. She works full-time. She earns a minimum wage, making phone calls as a customer service representative. In Las Vegas, Nevada, where she lives, that’s $8.25 an hour. Sometimes, her paycheck isn’t enough to cover all her bills. Those are times that Clark would take out a payday loan.

In Nevada, there are more payday lenders than Starbucks and McDonald’s restaurants combined. They provide short-term loans that are meant to be repaid in full when the borrower gets their next paycheck. Each loan comes with fees – for example, about $75 in fees for a $500 loan. The trouble is that when borrowers like Clark get their check and spend most of it repaying the loan, they end up short on cash again. And so they take out another payday loan. Next payday, the same thing happens. The borrowers roll over that same $500 loan every two weeks, each time paying the fee. Over the span of the year, the fees alone can be as much as seven times the size of the original loan.

It’s those fees that got Clark in trouble. The payday lender was automatically deducting the fees from her checking account every two weeks, but the money wasn’t there. That triggered overdraft fees.

Back in 2016, scenarios like this led the Consumer Financial Protection Bureau (CFPB) to propose a rule that would require payday lenders to find out if their customers had future income to pay off the loan. Under that rule, lenders would have to notify the borrowers before first attempting to take money out of their checking accounts. And if the money wasn’t in the account, they would only be allowed to make two consecutive attempts to withdraw the money before having to get permission for more withdrawal attempts. Also, borrowers who took out three loans in a short period of time would be required to go through a 30-day “cooling-off period” before being able to take out another loan.

The rule never ended up going into effect, delayed by Donald Trump’s administration. Now, parts of the rule are being rolled back by the recently confirmed CFPB director, Kathy Kraninger. read more »