Sunday, September 23, 2012

Oil Executive Convicted of Oil and Gas Investment Fraud: John Arthur Apple, Jr. Guilty Plea Press Release


Northern District of Texas Successfully Prosecuted Numerous Individuals

for Fraud in Connection with Oil and Gas Investments in Recent Years

DALLAS — This week, another oil and gas company executive, John Arthur Apple, Jr., 53, of Lewisville, Texas, pleaded guilty to felony offenses stemming from his operation of Western Pipeline Corporation. He is the fifth defendant to be convicted in that investment fraud case. Apple pleaded guilty to one count of conspiracy to commit securities fraud and one count of securities fraud and faces a maximum statutory sentence of five years in prison and a $250,000 fine on each count. Sentencing is set for April 16, 2012, before U.S. District Judge Sam A. Lindsay.

In making today’s announcement, U.S. Attorney Sarah R. Saldaña of the Northern District of Texas, said, “During roughly the last two years, this office has mounted an aggressive campaign against investment fraud in the oil and gas business, which has led to the conviction of 19 individuals on felony charges of fraud and conspiracy. Prison sentences for the eleven defendants who have been sentenced total nearly 70 years. The remaining defendants awaiting sentencing are each facing five to 25-year prison sentences.” Saldaña continued, “This office will continue to work side-by-side with our law enforcement partners to prosecute those fraudsters who put their greed above the law.”

John Arthur Apple, Jr. Guilty Plea Press Release

Oil Industry Regulations: Dodd-Frank Act Rulemaking and Transparency in the Oil, Gas, and Mining Industry by Oil and Gas Professional Confidential Whistleblower Lawyer

New Mandatory Disclosures Will Provide Increased Transparency into the Oil and Gas Industry and May Expose Corrupt Practices That Can Be the Basis of Whistleblower Bounty Actions by Oil and Gas Professional Confidential Whistleblower Lawyer Jason S. Coomer

New mandatory disclosures are designed to expose corruption in the oil, gas, and mineral extraction industry.  Disclosure omissions and disclosure fraud can be the basis of SEC Bounty Actions that can result in large financial rewards for oil and gas professionals that expose large scale corruption including bribes to foreign governments to obtain drilling leases, mineral leases, and other lucrative contracts.  Oil and gas professionals that are aware of disclosure fraud are encouraged to contact an oil and gas professional whistleblower lawyer who can confidentially review a potential bounty action and confidentially file the bounty action on behalf of the whistleblower. 

Dodd-Frank Act Rulemaking: Specialized Corporate Disclosure

Title XV of the Dodd-Frank Wall Street Reform and Consumer Protection Act contains several specialized disclosure provisions. For example:
  • Section 1502 requires persons to disclose annually whether any conflict minerals that are necessary to the functionality or production of a product of the person, as defined in the provision, originated in the Democratic Republic of the Congo or an adjoining country and, if so, to provide a report describing, among other matters, the measures taken to exercise due diligence on the source and chain of custody of those minerals, which must include an independent private sector audit of the report that is certified by the person filing the report. Certain aspects of this rulemaking will require consultation with other federal agencies, including the State Department, the Government Accountability Office, and the Commerce Department. Persons are not required to comply with these rules until their first full fiscal year after the date on which the Commission issues its final rules.
  • Section 1503 requires any reporting issuer that is a mine operator, or has a subsidiary that is an operator, to disclose in each periodic report filed with the Commission information related to health and safety violations, including the number of certain violations, orders, and citations received from the Mine Safety and Health Administration (MSHA) among other matters. Issuers must also disclose in their Form 8-K reports the receipt from MSHA of any imminent danger orders or notices indicating that a mine has a pattern or potential pattern of violating mandatory health or safety standards.
  • Section 1504 requires reporting issuers engaged in the commercial development of oil, natural gas, or minerals to disclose in an annual report certain payments made to the United States or a foreign government. This information must be provided in an interactive data format, and the Commission must make a compilation of the information available online. Issuers are not required to provide their disclosures until their first annual report ending at least one year after the date on which the Commission issues its final rules.

Tuesday, September 11, 2012

International Bank Fraud Whistleblower Rewards: IRS pays whistleblower $104 million

IRS and SEC Whistleblower Reward Laws Offer Large Rewards and Bounties to International Bank Fraud Whistleblowers That Expose Tax Fraud, False Accounting, Government Bribes, and Corruption in the Financial Services Industry by International Financial Services Whistleblower Lawyer and International Bank Fraud Whistleblower Lawyer Jason S. Coomer

New International Whistleblower Reward Laws have been enacted to encourage professionals with knowledge of financial services fraud, financial services government bribes, investment fraud and false accounting, and other Foreign Corrupt Practice Act Violations, to expose the fraud and corruption.  These new international whistleblower reward laws offer large financial rewards and whistleblower protections for persons that qualify and expose significant fraud and corruption.

If you are the original source with special knowledge of fraud and are interested in learning more about a potential bank employee whistleblower lawsuit, please feel free to contact Texas International Bank Employee Whistleblower Protection Lawyer, Multinational Bank Officer Whistleblower Lawyer, and International Financial Services Institute Employee Anonymous Whistleblower Lawyer, Jason S. Coomer or go to the following webpage: Financial Services Whistleblowers and Bank Whistleblowers Can Confidentially Expose Bank Fraud and Collect Large Financial Rewards.

IRS pays whistleblower $104 million

WASHINGTON (AP) — The Internal Revenue Service has awarded an ex-banker $104 million for providing information about overseas tax cheats — the largest amount ever awarded by the agency, lawyers for the whistleblower announced Tuesday.

Former Swiss banker Bradley Birkenfeld is credited with exposing widespread tax evasion at Swiss bank UBS AG. Birkenfeld himself served roughly two and-a-half years in prison for a fraud conspiracy conviction related to the case, which resulted in a $780 million fine against the bank and an unprecedented agreement requiring UBS to turn over thousands of names of suspected American tax dodgers to the IRS.

"The IRS today sent 104 million messages to whistleblowers around the world — that there is now a safe and secure way to report tax fraud and that the IRS is now paying awards," Birkenfeld's lawyers, Stephen M. Kohn and Dean A. Zerbe, said in a statement. "The IRS also sent 104 million messages to banks around the world — stop enabling tax cheats or you will get caught."

The IRS, which doesn't usually confirm individual award payments, said Birkenfeld signed a disclosure waiver, allowing the agency to confirm his award.

"The IRS believes that the whistleblower statute provides a valuable tool to combat tax non-compliance, and this award reflects our commitment to the law," IRS spokeswoman Michele Eldridge said in an email.

Birkenfeld has become something of a cause celebre among whistleblowers because of the magnitude of his case and the fact that he was jailed after cooperating with authorities.
In a summary of the award provided by Birkenfeld's lawyers, the IRS said, "The comprehensive information provided by the whistleblower was exceptional in both its breadth and depth."

"While the IRS was aware of tax compliance issues related to secret bank accounts in Switzerland and elsewhere, the information provided by the whistleblower formed the basis for unprecedented actions against UBS AG, with collateral impact on other enforcement activities and a continuing impact on future compliance by UBS AG," the IRS said in the summary.

Federal prosecutors, however, had said Birkenfeld withheld information about his own dealings with a former UBS client who pleaded guilty in 2007 to tax charges.

In 2006, Congress strengthened whistleblower rewards. The 2006 law targets high-income tax dodgers, guaranteeing rewards for qualified whistleblowers if the company in question owes a least $2 million in unpaid taxes, interest and penalties.

Some lawmakers, however, have complained that the IRS has been slow to pay out awards.
"The potential for this program is tremendous, and it's up to the IRS to continue paying rewards and demonstrating to whistleblowers that the process will work and that they will be heard and protected," said Sen. Chuck Grassley, R-Iowa, who helped write the law. "An award of $104 million is obviously a great deal of money, but billions of dollars in taxes owed will be collected that otherwise would not have been paid, as a result of the whistleblower information."

Sunday, September 9, 2012

SEC Cracks Down Investment Fraud Schemes: James C. Howard III, Michael R. Casey, and Louis N. Gallo III, Defendants and Sutton Capital, LLC, J&W Trading, LLC, American Financial Solutions, LLC, and Minjo Corporation, Relief Defendants (Release No. LR-22472; September 6, 2012)

James C. Howard III, Michael R. Casey, and Louis N. Gallo III, Defendants and Sutton Capital, LLC, J&W Trading, LLC, American Financial Solutions, LLC, and Minjo Corporation, Relief Defendants (Release No. LR-22472; September 6, 2012)

On September 5, 2012, the Securities and Exchange Commission charged an attorney and two others living in South Florida for their roles in a $27.5 million investment scheme that led investors to believe they were purchasing securities consisting of "pre-sold" commodities contracts with a pre-determined profit. However, the supposed profits actually distributed to investors were largely taken from other investors' funds.

The SEC halted the scheme last year when it obtained an asset freeze and a court-appointed receiver over the companies involved: Commodities Online LLC and Commodities Online Management LLC. The SEC's follow-up charges are against the founder and former president of the company, James C. Howard III, as well as the company's vice president Louis N. Gallo III and outside counsel Michael R. Casey, who later became the president.

In a parallel action, the U.S. Attorney's Office for the Southern District of Florida today announced criminal charges against Howard, Gallo and Casey.
According to the SEC's complaint filed in federal court in Miami, Commodities Online offered investors the chance to participate in its purportedly profitable brokering of physical commodities via pre-sold contracts - for example, the purchase and sale of large amounts of seafood or iron ore. Investors were sold participation units in unregistered private placement offerings, each supposedly tied to a commodities transaction in which Commodities Online had already secured a buyer and a seller of the commodity. These participation units would purportedly generate predetermined profits for investors.

The SEC alleges that in reality, Commodities Online performed only a limited percentage of the commodities transactions that were promised to investors. The majority of "profits" allocated or distributed to investors were not profits from completed commodities transactions, but instead taken from the funds of other investors. Meanwhile, Howard and Gallo were dissipating millions of dollars in investor funds to largely sham companies. Through these companies, Howard and Gallo stole investor funds for their own use. For example, Howard met with prospective investors at a luxury hotel in Fort Lauderdale and offered Commodities Online membership interests. He told investors that the funds raised from the offering would be used for the company's start-up costs such as salaries, marketing, and advertising. However, within weeks of receiving $2 million in investor funds for the purchase of the membership units, Howard siphoned $1.45 million to another entity he controlled. Furthermore, Howard failed to disclose to prospective investors that he's a convicted felon.
According to the SEC's complaint, Howard stepped down as the company's president in 2010 after he was arrested for an unrelated investment fraud. He was replaced by Casey, who misled investors about Howard's continuing control over Commodities Online while also misrepresenting the profitability, structure, and existence of the purported commodities contracts to investors. Casey also failed to tell at least one investor that the funds raised from the purchase of membership interests had previously been misappropriated by Howard.

The SEC alleges that Gallo ran an in-house "boiler room" of telephone sales agents and a network of approximately 20 regional and international sales offices. He failed to disclose to investors that he previously pled guilty to federal bank fraud and other felonies and was serving a term of supervised release while employed at Commodities Online. Gallo also misled investors about Howard's role at Commodities Online.

The SEC's complaint charges Howard, Gallo and Casey with violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. They're also charged with aiding and abetting violations by Commodities Online and Commodities Online Management of Section 10(b) of the Exchange Act and Rule 10b-5. Howard is further charged with a violation of Section 20(a) of the Exchange Act as a control person of Commodities Online, and the complaint alleges he is therefore jointly and severally liable for Commodities Online's violations of Section 10(b) of the Exchange Act and Rules 10b-5 thereunder. The SEC is seeking disgorgement of ill-gotten gains plus pre-judgment interest, financial penalties, and permanent injunctions against Howard, Gallo, and Casey. The SEC's complaint also names several relief defendants for the purposes of recovering investor money steered to those entities in the scheme: Sutton Capital LLC, J&W Trading LLC, American Financial Solutions LLC, and Minjo Corporation.

Tuesday, September 4, 2012

Government Procurement Bribes Can Be The Basis of International Whistleblower Rewards: What Awaits Investors in the Far East After APEC | 2012 | APEC Russia 2012 | The Moscow Times

Government Procurement Bribes From Increased Government Procurement Spending Can Be The Basis For International Whistleblower Rewards:  International Whistleblowers Are Receiving Large Financial Rewards for Exposing Government Procurement Bribe Schemes and other Government Corruption by International Government Procurement Bribe Lawyer, International  Procurement Contract Bribe Lawyer, and International Procurement Illegal Kickback Whistleblower Lawyer Jason S. Coomer

Worldwide government purchasing or government procurement is estimated to be over $10 Trillion each year and is expected to continue to increase as many countries are investing in large infrastructure projects and public health projects.  Of this large amount of government purchasing, it is estimated that as much as 20% may be through illegal bribes, kickbacks, and other illicit payments.  Government procurement spending includes military spending; public works projects; public health care (pharmaceuticals, medical equipment, & hospitals); ports, transportation, & roads; mining and oil extraction; power grid and stations; education; law enforcement; and sanitation services.  Because of the vast amount of money spent by governments on government procurement, there are many different types of government procurement illegal bribery schemes, illegal kickback schemes, and other illicit payment schemes that have been created to steal money from the public at the expense of a country's citizens.

If you are aware of a government procurement illegal bribery scheme, illegal kickback scheme, and other illicit payment scheme, it is important that you learn how to properly report the government corruption and determine the best way to expose the corruption.  For more information on this topic, please go to the following web pages: Government Procurement International Whistleblowers and Latin America Procurement and Contract Bribe Whistleblowers.

What Awaits Investors in the Far East After APEC | 2012 | APEC Russia 2012 | The Moscow Times

Far East Development Minister Viktor Ishayev has called for increased state spending on infrastructure, mainly railroads and highways, that could facilitate mining, logging and other local businesses.

"This is the only way for us to get serious development," he said at a meeting dedicated to the Far East, chaired by Prime Minister Dmitry Medvedev in July. "Where there are roads, there is life."
Former and present business leaders have pushed another agenda. The government must announce tax breaks and rebates for any new businesses in the Far East, said Pavel Maslovsky, a Federation Council senator who formerly worked as a mining director in the region.

"The solution is to create a special economic zone for the entire Far East," he said. "A special taxation regime could drive the economy forward."

One of the heaviest burdens, the profit tax, needs to disappear altogether for a while, he said.
"It should be a total zero," Maslovsky, who led the Petropavlovsk company, said in an interview. "Why be petty about this?"

Investors in a new Far Eastern enterprise could use breaks for the value-added and property taxes, he said. The social tax, charged on the payroll, could stay, but at a lower rate.
"As a former executive of a metallurgic company, I know that would give a strong push to the things there," Maslovsky said.

Given these conditions, private companies could bankroll construction of some of the required roads and power lines to remote natural-resource deposits, rather than wait for the state to make these basic investments, he said.

Maslovsky mentioned the need for a rail connection between Magadan and the country's railway system. There's also demand for greater capacity of the one-track Baikal-Amur Railway. Companies use the railway to transport coal, timber and other resources, mainly for export from the Pacific coastal ports.

Sunday, September 2, 2012

Defense Industry Faces New Scrutiny of Anti-Corruption Practices - Businessweek

Defense Industry Faces New Scrutiny of Anti-Corruption Practices - Businessweek

More than 100 defense companies from Lockheed Martin Corp. (LMT), the world’s largest arms maker, to Czech military truck manufacturer Tatra AS, face a new test of their anticorruption practices as an independent watchdog puts the industry under examination. 

The U.K. arm of Transparency International will issue its first ranking of about 130 companies worldwide on Oct. 4, grading their corporate guidelines for avoiding corruption. Each company is being assessed against 34 criteria and will receive a grade from A to F, an executive for the not-for-profit organization said in an interview in London.

Hedge Fund Manager Insider Trading Schemes: Fraud Clay Capital Management, LLC, et al.

Hedge Fund Manager Insider Trading Scheme Lawyers Are Working With The SEC To Obtain Large Financial Rewards For Whistleblowers That Properly Expose Hedge Fund Manager Insider Trading Schemes and Money Manger Insider Trading Schemes by Hedge Fund Manager Insider Trading Scheme Lawyer, Confidential Insider Trade Whistleblower Lawyer, & Stock Manipulation Scheme Whistleblower Lawyer Jason Coomer

Hedge Fund Manager Insider Trading Scheme Lawyers are working with confidential whistleblowers and the SEC to obtain large financial rewards for insider trade whistleblowers that properly expose insider and stock manipulation schemes including hedge fund manager insider trading, money manger insider trading, hedge fund manager illegal trades, and stock manipulation schemes.  These insider trading whistleblower rewards can be obtained by financial professionals with knowledge of illegal insider trading and other SEC violations.  The SEC encourages all financial professionals with original knowledge of executive insider trades, hedge fund insider trades, private equity fund fraud, false misleading information on a company's financial statements, false information on Securities and Exchange Commission (SEC) filings, stock manipulation schemes; embezzlement by stockbrokers; and other securities fraud to properly expose the violations.


The Securities and Exchange Commission announced that on August 29, 2012, the U. S. District Court for the District of New Jersey entered final judgments against New Jersey hedge fund firm Clay Capital Management, LLC and its former Chief Investment Officer, James F. Turner II, for their roles in an insider trading scheme involving the securities of three companies – Moldflow Corporation, Autodesk, Inc. and, Inc. The Court ordered Clay Capital and Turner to pay $2.1 million in illicit gains and permanently enjoined them from future violations of the antifraud provisions of the federal securities laws.

Clay Capital Management, LLC, et al.