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$4 Billion in Taxpayer Dollars Recovered « USDOJ: Justice Blog

January 27, 2011 By Leave a Comment

The following is posted on behalf of Attorney General Eric Holder and HHS Secretary Kathleen Sebelius

The Obama Administration has been aggressive in its fraud-fighting efforts, and it is paying off.  Last year resulted in the largest annual recovery of Medicare and Medicaid dollars in U.S. history.  More than $4 billion stolen from federal health care programs was recovered in Fiscal Year 2010 and returned to the Medicare Health Insurance Trust Fund, the Treasury, and other government programs.

Through the Health Care Fraud Prevention and Enforcement Action Team, or HEAT, and Medicare Fraud Strike Force prosecution teams, we are making it clear to wrong-doers that fraud will no longer pay.  For example, in fiscal year 2010, 140 indictments involving charges were filed against 284 defendants who collectively billed the Medicare program more than $590 million.  And 146 defendants were sentenced for an average of more than 40 months.

via $4 Billion in Taxpayer Dollars Recovered « USDOJ: Justice Blog.

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Internet Identity System Said Readied by Obama Administration – BusinessWeek

January 7, 2011 By Leave a Comment

The Obama administration plans to announce today plans for an Internet identity system that will limit fraud and streamline online transactions, leading to a surge in Web commerce, officials said.

While the White House has spearheaded development of the framework for secure online identities, the system led by the U.S. Commerce Department will be voluntary and maintained by private companies, said the officials, who spoke on condition of anonymity ahead of the announcement.

A group representing companies including Verizon Communications Inc., Google Inc., PayPal Inc., Symantec Corp. and AT&T Inc. has supported the program, called the National Strategy for Trusted Identities in Cyberspace, or NSTIC.

“This is going to cause a huge shift in consumer use of the Internet,” said John Clippinger, co-director of the Law Lab at Harvard’s Berkman Center for Internet and Society in Cambridge, Massachusetts. “There’s going to be a huge bump and a huge increase in the amount and kind of data retailers are going to have.”

via Internet Identity System Said Readied by Obama Administration – BusinessWeek.

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Corruption Currents: Trends To Look For In 2011 – Corruption Currents – WSJ

December 31, 2010 By Leave a Comment

The anti-corruption world crackled with activity in 2010, with the U.S. (again) setting Foreign Corrupt Practices Act enforcement records, the Group of 20 turning its gaze toward the United Nations Convention against Corruption and the World Bank amping up its fraud and corruption investigations unit, to name a few major developments.

Zuma Press

But now it’s time to peer into the future, to what promises to be another groundbreaking year on several anti-corruption fronts. We’ve listed below 10 trends we expect to see in 2011. But don’t take our word for it — please, write us with your own forecasts.

More anti-corruption enforcement by foreign nations: The anti-graft group Transparency International found that seven parties to the OECD anti-bribery convention actively enforced it in 2010, up from four in 2009. The U.K. Bribery Act, which takes effect in April, has the potential to reach corruption anywhere on the globe, and U.K. investigators are eager to grab some of the market share from their counterparts in the U.S. Nigeria, meanwhile, has capitalized on U.S. anti-bribery cases, opening its own probes into Halliburton Co., Panalpina Group and others. Earlier this week, authorities in Malaysia and Honduras announced investigations that piggyback on the U.S. probe of French telecommunications company Alcatel-Lucent SA, which agreed to pay $137 million to resolve bribery allegations. And the U.S. now routinely includes language in settlement agreements requiring companies to cooperate with foreign authorities and multilateral development banks.

via Corruption Currents: Trends To Look For In 2011 – Corruption Currents – WSJ.

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Europeans concerned over ongoing privacy fraud in U.S. – Computerworld

December 31, 2010 By Leave a Comment

Self-regulation turns to chaos

But there is much more going on. The rules and policies of Safe Harbor are as soft as butter and there’s no oversight. The main problem lies with the U.S. Department of Commerce, which administers the Safe Harbor list of companies. Companies put themselves on this list through self-certification, without anybody checking anything.

The department itself is clear on this: “In maintaining the list, the Department of Commerce does not assess and makes no representations to the adequacy of any organization’s privacy policy or its adherence to that policy. Furthermore, the Department of Commerce does not guarantee the accuracy of the list and assumes no liability for the erroneous inclusion, misidentification, omission, or deletion of any organization, or any other action related to the maintenance of the list.”

The result of this self-regulation is disastrous. Hundreds of U.S. companies claim they are certified, without meeting the necessary conditions. These problems had already surfaced in 2002 and 2004, when the E.U. commissioned two studies.

In 2008 nothing had improved and the independent research and consultancy company Galexia reached shocking conclusions. Of the 1,597 organizations on the Safe Harbor list, only 348 met all seven principles in the most basic way, Galexia reported.

via Europeans concerned over ongoing privacy fraud in U.S. – Computerworld.

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It’s Here: Cuomo Files Suit Against E&Y Over Lehman Meltdown – Law Blog – WSJ

December 21, 2010 By Leave a Comment

Tuesday morning, Cuomo filed that suit against Ernst & Young for civil fraud, according to the WSJ’s Liz Rappaport. The allegation: that the accounting firm helped Lehman shield the truth about its financial situation from investors for about seven years before the bank finally collapsed in September of 2008. Click here for the complaint; here for the story.

Ernst & Young knew about, supported, and advised Lehman on its “Repo 105” transactions, a type of debt they took on, but labeled as sales, which made the firm appear to investors less risky than it really was, according to the complaint. The audit firm also stood quietly by while Lehman misled analysts and investors on conference calls and in financial filings about its levels of risk, particularly after the firm’s stability began to crack after the credit crisis began in 2007, said the complaint.

via It’s Here: Cuomo Files Suit Against E&Y Over Lehman Meltdown – Law Blog – WSJ.

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It’s Here: Cuomo Files Suit Against E&Y Over Lehman Meltdown – Law Blog – WSJ

December 21, 2010 By Leave a Comment

Tuesday morning, Cuomo filed that suit against Ernst & Young for civil fraud, according to the WSJ’s Liz Rappaport. The allegation: that the accounting firm helped Lehman shield the truth about its financial situation from investors for about seven years before the bank finally collapsed in September of 2008. Click here for the complaint; here for the story.

Ernst & Young knew about, supported, and advised Lehman on its “Repo 105” transactions, a type of debt they took on, but labeled as sales, which made the firm appear to investors less risky than it really was, according to the complaint. The audit firm also stood quietly by while Lehman misled analysts and investors on conference calls and in financial filings about its levels of risk, particularly after the firm’s stability began to crack after the credit crisis began in 2007, said the complaint.

via It’s Here: Cuomo Files Suit Against E&Y Over Lehman Meltdown – Law Blog – WSJ.

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Operation Broken Trust in Action « USDOJ: Justice Blog

December 6, 2010 By Leave a Comment

Attorney General Eric Holder announced today the results of Operation Broken Trust, a nationwide operation organized by the Financial Fraud Enforcement Task Force to target investment fraud. To date, the operation has involved enforcement actions against 343 criminal defendants and 189 civil defendants for fraud schemes that harmed more than 120,000 victims throughout the country.

The operation’s criminal cases involved more than $8.3 billion in estimated losses and the civil cases involved estimated losses of more than $2.1 billion. Operation Broken Trust is the first national operation of its kind to target a broad array of investment fraud schemes that directly prey upon the investing public.

via Operation Broken Trust in Action « USDOJ: Justice Blog.

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Fraud Files: U.S. FCPA Rules Against Foreign Bribery Hit Companies in the Wallet – DailyFinance

November 28, 2010 By Leave a Comment

One major worry for American companies doing business overseas is the Foreign Corrupt Practices Act (FCPA), a 1977 federal law that prohibits the bribing of foreign officials. Those familiar with this regulation know it has many pitfalls, and even the most careful companies can run afoul of the law due to the actions of their employees.

FCPA enforcement isn’t new, but in recent years, such corporate misbehavior is receiving more attention and increased enforcement, which is making executives nervous. Violations can mean both civil and criminal penalties for companies and their executives, and the monetary costs can be huge. Beyond the price of defending itself against a government investigation, a company with FCPA violations will pay penalties and incur ongoing costs for remediation and monitoring of activities.

It’s not a stretch to suggest that the federal government may have increased its vigilance on the corporate bribery front lately due to the possibility of bringing in billions of dollars through FCPA enforcement. Or perhaps the Obama administration is just more interested in ensuring good, clean business operations by U.S. companies. Either way, Lanny Breuer, assistant attorney general for the Criminal Division of the Justice Department, has declared publicly that FCPA enforcement is a priority.

via Fraud Files: U.S. FCPA Rules Against Foreign Bribery Hit Companies in the Wallet – DailyFinance.

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European banks see new ATM skimming attacks – Computerworld

November 18, 2010 By Leave a Comment

Banks in Europe are seeing innovative skimming attacks against ATMs, where fraudsters rig special devices to the cash machines to record payment card details.

Many banks have fitted ATMs with devices that are designed to thwart criminals from attaching skimmers to the machines. But it now appears in some areas that those devices are being successfully removed and then modified for skimming, according to the latest report from the European ATM Security Team (EAST), which collects data on ATM fraud throughout Europe.

Skimming devices are designed to record the account details from the magnetic stripe on the back of a payment card. The data can then be encoded onto a dummy card. A person’s PIN (personal identification number) is often captured with a micro-camera, which was done with the illicitly modified anti-skimming devices, according to the report.

Banks in five countries also reported seeing a new type of skimming device, which uses a modified MP3 player to record card details. It also has a micro-camera to record PINs, according to a photo seen by IDG News Service.

via European banks see new ATM skimming attacks – Computerworld.

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DOJ Strengthening Its Fraud Section, Wiretap Unit – Corruption Currents – WSJ

November 9, 2010 By Leave a Comment

The use of wiretaps in the Galleon insider-trading case and the FBI’s undercover work in the “Shot Show Takedown” this year threw into sharp relief the Justice Department’s willingness to apply the same gritty investigatory techniques it uses to fight mobsters to combat white-collar crime.

The government’s investigation of Raj Rajaratnam, the co-founder of the hedge fund Galleon Group, marked the first time the department used a wiretap in an insider-trading case. (Rajaratnam is fighting to keep the wiretap evidence out of court, saying the department obtained the warrants through misdirection.)

The FBI’s arrest in January of 22 men in the military and police equipment on suspicion of violating foreign bribery law represented the first sting operation, with undercover agents and a government informant, in a Foreign Corrupt Practices Act investigation. (Some of the defendants have indicated they will argue entrapment.)

Assistant Attorney General Lanny Breuer, head of Criminal Division, promised Thursday that these techniques would be commonplace in white-collar cases going forward.

The department, he said, has “substantially increased” the number of lawyers who work in the division’s Office of Enforcement Operations, the unit that reviews and approves applications for federal wiretaps around the country.

“As a result, the number of wiretaps we authorize – in all types of cases – has gone up,” Breuer said Thursday during a speech at the Practising Law Institute in New York City, according to his prepared remarks.

via DOJ Strengthening Its Fraud Section, Wiretap Unit – Corruption Currents – WSJ.

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