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BIG 2013 NEW$

Madoff: JP Morgan Had to Know What I Was Doing

Four years after arriving at the Federal Correctional Complex in Butner, N.C., Madoff says he wants to help investigators recover the billions of dollars his scheme robbed from innocent investors. 
"All I care about is to get the money back," he said. 
But it is hard to believe what he says when you consider the enormity of Madoff's crime. The Trustee says investors lost $17 billion in capital they invested with Madoff and even Bernie says the scheme was "...a curse, it was a horror" that came to a calamitous end in December 2008, when Madoff was arrested. Now he's changing his story.

LEGAL CORRUPTION? How to make $30 billion and pay no corporate income tax, the Apple way

Apple went to Ireland, and it found a pot of gold. Or more precisely, it managed to bring in $30 billion in overseas profits over a four-year period without paying a dime of corporate income tax to the Irish, American or any other national government. That is one key conclusion in a new report from the Senate Permanent Subcommittee on Investigations on the computer giant’s strategies for avoiding  U.S. corporate income tax.  It is a rare and detailed window into how multinationals juggle their international operations to avoid having to pay the taxman. This report may be about Apple, but the information it contains will sound familiar to anyone who has talked to tax lawyers or studied the 10-Ks of other major companies that do business around the world.

Senate investigators: Apple sheltered $44 billion from taxes

Senate Subcommittee Memo on Offshore Profit Shifting Apple (PDF,40 pp.)

Apple 'tax gimmicks': rotten to the core or sensible business?

Ireland: We are 'not to blame' for Apple tax affairs

Tax Havens: The How & Why, Without the Semi-Hysteria


Global nature of corruption and the futile war against it

A 270-page book, Global Corruption: Money, Power and Ethics in the Modern World, written by Laurence Cockcroft and published by L.B. Tauris late last year, analyses the causes of corruption, its current characteristics and trends, and its threat to the poor and overall economic growth.
  • Highlights the limitations and dangers that individual prosecutors and heads of anti-corruption agencies face in the anti-graft drive around the world
  • According Cockcroft, political funding is probably the largest single driver of large-scale corruption
  • In its Corruption Perceptions Index 2012 report, Transparency International observes that corruption is a major threat facing humanity

    China's Internet is brimming with disclosures of officials collecting bribes, homes and luxury accessories as casually as they do mistresses. But while the government tolerates such anti-corruption vigilantism, it is also extremely leery of the threat the Internet can pose to Communist Party rule. The Internet is the new tool in the  fight against corruption - a cornerstone policy of new President Xi Jinping, who has pledged to tackle the problem head-on. But while acknowledging that China's online world is helpful, authorities have also moved quickly to quash rumours that might fan protests that could escalate out of control, deleting microblog posts or even entire accounts.



    "...who watches the watchdog?


    (Hong Kong's ICAC ex-Commissioner) Tong is accused of splashing out on gifts, receptions and duty trips during his tenure between 2007 and 2012. Some of the expenses exceeded limits but were approved by Tong himself. What's more, some of the expenses were not reported to the Legislative Council.

    Chief Executive Leung Chun-ying has created a review committee to examine Tong's spending and the regulations on official spending on entertainment. Two Legislative Council committees will also investigate the case.

    Current and former ICAC investigators say they are disappointed and angry at Tong's actions and hope the public will distinguish between Tong's activities and the graft-buster's 39-year record of cleaning up the city.

    "This has affected the ICAC seriously - in terms of staff morale and its credibility, built up over 39 years," said Tony Kwok Man-wai, a former deputy commissioner who served as a graft-buster for 27 years.

    The power structure of the ICAC is designed to keep abuse in check.

    The body is directly accountable to the chief executive, while the ICAC commissioner must report to the Executive Council on major policy issues. The commissioner is also answerable to Legco on policy and funding matters.

    Pulitzer Prize winner says Mexican transparency laws helped her investigation into Wal-Mart

    The independent Mexican journalist Alejandra Xanic von Bertrab, who won the Pulitzer Prize for her research on the network of bribery and corruption that was a key part of Wal-Mart de México’s expansion strategy, recounted to the Knight Center for Journalism in the Americas how she joined the investigation begun byDavid Barstow of the New York Times into the Mexican operations of the world’s largest supermarket chain. “It’s a story that was possible thanks to Mexico’s transparency laws,” said Von Bertrab. Her 18-month investigation required 800 freedom of information requests from municipal, state, and federal offices in Mexico, and a total of 200 interviews...Mexico’s transparency law allowed her to work anonymously, as it prohibits government workers from asking who a citizen is or why they’re requesting information. “I was shocked at how much they respected that law,” said Von Bertrab. “It was a great joy as a Mexican to prove how well the transparency law works,” she said. “The key is to know what to ask for and understand the law, because the government workers can only give you existing information, not create it,” she explained.


    Eurasian Natural Resources Corporation investigated for bribery in Africa and Kazakhstan

    Allegations of cash payments to African presidents are to be investigated as part of the Serious Fraud Office inquiry into corruption at Eurasian Natural Resources Corporation, the FTSE-listed mining firm. The financial watchdog last week launched a criminal investigation into ENRC, at the same time as the resignation of Mehmet Dalman, the chairman brought in to clean up the company, and the sacking of a legal firm which had spent more than two years looking into the miner's operations in Kazakhstan and Africa. In an eight-page letter sent to ENRC following its sacking, seen by the Sunday Times, legal firm Dechert claims to have found "documentary evidence regarding the making of cash payments to African presidents" in connection with the purchase of a copper smelter in Zambia.

    Era of Big Oil Secrecy is Over

    Earlier this month, the European Union (EU) took a decisive step towards transparency: It agreed to mandate publicly-listed European companies as well as large private firms to disclose their payments to governments for oil, gas and mining projects. This transparency is crucial in the fight for better governance of resource-rich countries. It will empower citizens with information about the amount of money their governments receive, helping them to monitor how this money is ultimately used and to deter corruption. Opacity has long ties with corruption, and both are detrimental to growth. Our research shows that countries that control corruption and improve governance can triple their incomes per capita in the long term - a 300% dividend. As seen in the figure, this good governance dividend also applies to countries rich in natural resources.

    Former Siemens Executive Uriel Sharef Settles Bribery Charges

    The Securities and Exchange Commission announced today that on April 15, 2013, the U.S. District Court for the Southern District of New York entered a final judgment against Uriel Sharef, a former officer and board member of Siemens Aktiengesellschaft (Siemens). The settlement resolves the Commission's civil action against Sharef for his role in Siemens' decade-long bribery scheme to retain a $1 billion government contract to produce national identity cards for Argentine citizens. The final judgment, to which Sharef consented, enjoins him from violating the anti-bribery and related internal controls provisions of the FCPA and orders him to pay a $275,000 civil penalty, the second highest penalty assessed against an individual in an FCPA case.

    Wal-Mart One Year Later

    "...the remarkable aspects of the NY Times investigation is the alleged conduct (or lack thereof) of Wal-Mart and its top executives upon learning of problematic conduct in its Mexican subsidiary in 2005.  Even in 2005 and continuing today, most business leaders, audit committees, and boards tend to overreact to FCPA issues and often reflexibly launch broad internal investigations.  But, according to the NY Times, that is not what Wal-Mart did.  Another remarkable aspect of the NY Times investigation is how Eduardo Castro-Wright (at the critical time period the CEO of Wal-Mart Mexico) was allegedy known by others at Wal-Mart to be involved in the Mexican payments, but was nevertheless continuously thereafter promoted by Wal-Mart. Corporate governance, or lack thereof, is what made the NY Times April 2012 remarkable." 

    Nicholas Sarkozy in corruption probe amid claims he took £40MILLION from Colonel Gaddafi to fund election campaign

    Former French president Nicholas Sarkozy is to be formally investigated amid claims he accepted £40million in under-the-table kickbacks from Colonel Gaddafi during his 2007 election campaign, it was revealed today. Sources close to the investigation told AFP news agency prosecutors are looking into charges of 'active and passive corruption', 'influence peddling' and others. French law bans candidates from receiving cash payments above £6,300, but it is claimed that Gaddafi’s donations were laundered through bank accounts in Panama and Switzerland.

    French judge probing Sarkozy corruption case receives death threat

    Why we must outfox the criminal entrepreneurs

    Below the surface of globalization and the green revolution, a global web of crime and corruption feeds an illegal economy that is corroding market-based economies and democratic institutions, threatening the health and safety of citizens around the world and endangering vital ecosystems and habitats. Staying ahead of these illicit networks will take a global network working collaboratively across sectors, governments and organizations. Criminal entrepreneurs have hijacked the technological, financial and communications advances of globalization for illicit gains. The proliferation of these networks and the convergence of their illegal activities threaten the interdependent commercial, transportation and transactional systems that facilitate free trade and the movement of people throughout the global economy.

    The exact volume of illicit trade is unknown, but according to some estimates, the illegal economy accounts for 7-10% of world GDP, with higher rates in the developing world. Far from going underground, this illegal economic activity has a harmful impact on legitimate economies and societies everywhere: government revenues pocketed by corrupt officials; natural resources stolen by smugglers and poachers; people dying due to counterfeit and defective medicines; human beings subjected to forced labour in the manufacturing of goods; the pollution of vital food and water supplies by the dumping of toxic waste by organized criminal groups; and illegal logging, which exacerbates climate change. Criminal entrepreneurs have become the new CEOs and venture capitalists. When illicit financial flows and dirty money enter the global financial system, they weaken the integrity of markets and give false hope to vulnerable communities that illicit enterprise can replace fair and transparent markets.

    Former German President Wulff charged with corruption

    Former German President Christian Wulffhas been charged with corruption in a scandal which prompted his resignation last year. Mr Wulff, 53, stepped down in February after less than two years in the post. He is alleged to have accepted the payment of hotel bills by a film producer in return for favours while he was premier of Lower Saxony. The former president rejects the allegations and has vowed to clear his name in court.

    Former President and Treasurer Accused of Embezzling from Institute of Internal Auditors' D.C. Chapter

    The former president and treasurer of the Washington, D.C., chapter of the Institute of Internal Auditors has been accused of embezzling over $30,000 from the organization. Robin Howard, who had also served as former director of audit services for Prince William County, Va., may have stolen up to $50,000 from the organization. The missing funds were discovered after another treasurer succeeded Howard. “Our Washington, D.C., chapter had noticed when they had an officer transition this past year that when they were looking at the bank statements and the chapter financial statements that were issued, that there was a large discrepancy between what showed in the bank account and what was actually reported on the financial statements,” said Kevin Mayeux, general counsel and chief operating officer at the IIA. “Then at that point, the chapter leadership went out and engaged a third-party forensic accountant to take a look at the matter, to thoroughly investigate in an independent way what the differences are and why, and then after that believed that there were some significant funds unaccounted for and they turned the matter over to the authorities for their investigation and potential prosecution.”

    A bench warrant was issued for Howard last Tuesday in Prince William County, but as of last Friday he had not been arrested. Prosecutors have charged Howard with stealing $50,000 from the Washington, D.C., chapter. “There are $30,000 directly confirmed as unexplained distributions or disbursements, and upwards to approximately an additional $20,000 that are still to be confirmed,” said Mayeux. The alleged misappropriation took place between October 2009 and August 2011.

    French ministers to declare assets publicly after Cahuzac scandal

    France's Socialist government has ordered ministers to declare their assets publicly by 15 April, in a bid for greater transparency, amid a major scandal which erupted last week, when former budget minister Jérôme Cahuzac admitted having a secret bank account abroad.


    How the Pentagon Corrupted Afghanistan

    Washington has vociferously denounced Afghan corruption as a major obstacle to the U.S. mission in Afghanistan. This has been widely reported. Only one crucial element is missing from this routine censure: a credible explanation of why American nation-building failed there. No wonder. To do so, the U.S. would have to denounce itself. Corruption in Afghanistan today is acute and permeates all sectors of society. In recent years, anecdotal evidence on the subject has been superseded by the studies of researchers, surveys by NGOs, and periodic reports by the United Nations Office on Drugs and Crime (UNODC). There is also the Corruption Perceptions Index of the Berlin-based Transparency International (TI). Last year, it bracketed Afghanistan with two other countries as the most corrupt on Earth. None of these documents, however, refers to the single most important fact when it comes to corruption: that it’s Washington-based. It is, in fact, rooted in the massive build-up of U.S. forces there from 2005 onward, the accompanying expansion of American forward operating bases, camps, and combat outposts from 29 in 2005 to nearly 400 five years later, and above all, the tsunami of cash that went with all of this. Last month, when an Afghan court sentenced Sher Khan Farnood and Khalil Ullah Ferozi, the chairman and chief executive of the Kabul Bank, for looting its deposits in a gigantic Ponzi scheme, the event received some media attention. Typically, however, the critical role of the Americans in the bank’s murky past was missing in action.

    Rich and mighty brought to book: Biggest-ever financial leak with global ripples

    More politicians and tycoons appear to be marred by scandal as the International Consortium of Investigative Journalists (ICIJ) keeps adding names to its list of owners of secret offshore firms. ICIJ promises two more weeks of exposures. A third of the world’s wealth is tied up in the offshore, according to the Tax Justice Network, cited byICIJ’s website. That’s estimated at US$20 trillion. Tax Haven Number One appears to be the UK-controlled British Virgin Islands (BVI), home to more than a million offshore entities, while Britons act as nominee directors for such companies, renting out their names to the actual business owners. British MP’s urged Prime Minister David Cameron to act against the offshore industry and address the issue of tax havens at June's G8 summit, to be hosted by the UK. Meanwhile, the fresh portion of names released by ICIJ includes Georgian Prime Minister Bidzina Ivanishvili. Apart from being the country’s top politician, he’s also its richest man and, according to ICIJ data, director of Bosherston Overseas Corp. in the British Virgin Islands.

    Financial controls in Dixon were the 'perfect storm of embezzlement,' an expert says

    Treasurer, comptroller allegedly stole $30 million from city coffers

    Numerous financial safeguards broke down or simply didn't exist in Dixon, experts say, allowing Rita Crundwell, the city's longtime treasurer and comptroller, to allegedly pilfer an astonishing $30 million from the coffers of the small northwestern Illinois town over the last six years. The local bank didn't alert the mayor about a city bank account listed in the care of Crundwell, according to federal charges.

    An annual audit didn't send up red flags about the alleged transfers of hundreds of thousands of dollars at a time into and out of the account. City officials didn't monitor the books closely enough to notice that huge amounts of tax dollars were disappearing, according to the charges. Crundwell, a longtime, trusted employee, had a virtual stranglehold over city finances. And those who knew Crundwell shrugged off her lavish personal lifestyle despite her comparatively modest $80,000-a-year city post, figuring her wealth came from her champion quarter horse breeding farms in Dixon and Beloit, Wis. "This had to be the perfect storm of embezzlement," said Dennis Czurylo, a former Internal Revenue Service agent for 25 years. A week after Crundwell was arrested and whisked away in handcuffs from City Hall on a charge of wire fraud, a Tribune review of financial controls in Dixon shows they were abysmally weak and raises questions about what could have been done to prevent the alleged thefts.

    Italian priest arrested for 4 million-euro fraud

    Italian police on Thursday arrested a priest accused of defrauding a Vatican-linked hospital in Rome that he managed of four million euros ($5.1 million), part of which he used to buy an 18-room villa in Tuscany set on 23 hectares of land. Father Franco Decaminada, a friar who took vows of poverty, has been placed under house arrest. He headed up the prestigious Immaculate Institute of Dermopathology between 2004 and 2011. The specialist hospital has been placed under administration after it registered losses of 600 million euros and pope Benedict XVI in one of his last acts as pontiff last month appointed a cardinal to resolve its economic woes. The tax police said in a statement that Decaminada bought his villa in Tuscany for a million euros -- "essentially with the proceeds of his crime". "The investigation traced fraud for a total of 14 million euros," the police said. Italian media said police linked four million euros of that total directly to Decaminada. Two businessmen are also under investigation and have also been placed under house arrest.

    Significant Percentage of Hedge Fund Professionals Have Witnessed Misconduct and Lack Faith in Regulators and Fund Leadership

    An independent survey of hedge fund professionals commissioned by law firm Labaton Sucharow LLP, HedgeWorld and the Hedge Fund Association, revealed that nearly half (46%) believe that their competitors engage in illegal activity, more than one third (35%) have personally felt pressure to break the rules, and about one third (30%) have witnessed misconduct in the workplace.  
    • 46% of respondents reported that their competitors likely have engaged in unethical or illegal activity in order to be successful.

    • 35% of respondents reported feeling pressured by their compensation or bonus plan to violate the law or engage in unethical conduct, while 25% of respondents reported other pressures that might lead to unethical or illegal conduct.

    • 30% of respondents reported that they had personally observed or had first-hand knowledge of wrongdoing in the workplace.

    • 87% of respondents would report wrongdoing given the protections and incentives such as those offered by the SEC Whistleblower Program, while 83% of respondents were aware of this important program.

    • 29% of respondents reported that it was likely that they would be retaliated against if they were to report wrongdoing in the workplace.

    • 28% of respondents reported that if leaders of their firm learned that a top performer had engaged in insider trading, they would be unlikely to report the misconduct to law enforcement or regulatory authorities; 13% of respondents reported that leaders of their firm would likely ignore the problem.

    • 54% of respondents reported that the SEC is ineffective in detecting, investigating and prosecuting securities violations.

    Chinese Leader's War on Graft Appears to Have Limits

    China’s new leader, Xi Jinping, remains an unknown entity, but one element of his agenda is abundantly clear: The government, he has repeatedly declared, will no longer tolerate the rampant corruption that he says is threatening the Communist Party’s grip on power. But President Xi’s apparent war on graft has limits, at least judging by the treatment of four activists detained by the police on Sunday after they unfurled banners in central Beijing that expressed support for the party’s self-described war on official malfeasance.

    “Unless we put an end to corrupt officials, the China Dream can only be a daydream,” said one of the banners, in a pointed reference to Mr. Xi’s pledge to revitalize the nation through more equitable economic growth, a strong military and increased government transparency — key elements of his so-called Chinese dream. Another banner called for officials to publicly disclose their assets, a proposal that has met resistance from powerful interests within the party. The activists also demanded that officials reveal whether they hold foreign passports, an increasingly common practice among those seeking to escape justice by fleeing overseas.

    The short-lived demonstration at a public plaza not far from China’s leadership compound was promptly, and roughly, broken up by the police. As of Thursday afternoon, the three men and one woman were still being held for “illegal assembly,” according to their lawyers, a criminal charge that carries up to five years in prison. Ma Gangquan, one of the lawyers, said the activists were dumbfounded by their treatment. “Our leaders are the ones who came up with the ‘China Dream’ slogan, vowing to rule by law and to fight corruption,” said Mr. Ma, who represents Ma Xinli, 47, an employee in the logistics department of a Beijing bus company. “Their goal was simply to make his cause their own.”


    • Government officials and their families and associates in Azerbaijan, Russia, Canada, Pakistan, the Philippines, Thailand, Mongolia and other countries have embraced the use of covert companies and bank accounts.
    • The mega-rich use complex offshore structures to own mansions, yachts, art masterpieces and other assets, gaining tax advantages and anonymity not available to average people.
    • Many of the world’s top’s banks – including UBS, Clariden and Deutsche Bank – have aggressively worked to provide their customers with secrecy-cloaked companies in the British Virgin Islands and other offshore hideaways.
    • A well-paid industry of accountants, middlemen and other operatives has helped offshore patrons shroud their identities and business interests, providing shelter in many cases to money laundering or other misconduct.
    • Ponzi schemers and other large-scale fraudsters routinely use offshore havens to pull off their shell games and move their ill-gotten gains.

    Leaks reveal secrets of the rich who hide cash offshore

    Millions of internal records have leaked from Britain's offshore financial industry, exposing for the first time the identities of thousands of holders of anonymous wealth from around the world, from presidents to plutocrats, the daughter of a notorious dictator and a British millionaire accused of concealing assets from his ex-wife. The leak of 2m emails and other documents, mainly from the offshore haven of the British Virgin Islands (BVI), has the potential to cause a seismic shock worldwide to the booming offshore trade, with a former chief economist at McKinsey estimating that wealthy individuals may have as much as $32tn (£21tn) stashed in overseas havens.

    In France, Jean-Jacques Augier, President François Hollande's campaign co-treasurer and close friend, has been forced to publicly identify his Chinese business partner. It emerges as Hollande is mired in financial scandal because his former budget minister concealed a Swiss bank account for 20 years and repeatedly lied about it. In Mongolia, the country's former finance minister and deputy speaker of its parliament says he may have to resign from politics as a result of this investigation. But the two can now be named for the first time because of their use of companies in offshore havens, particularly in the British Virgin Islands, where owners' identities normally remain secret.



    The Great Afghan Corruption Scam

    How Operation Enduring Freedom Mutated into Operation Enduring Corruption

    Washington has vociferously denounced Afghan corruption as a major obstacle to the U.S. mission in Afghanistan. This has been widely reported. Only one crucial element is missing from this routine censure: a credible explanation of why American nation-building failed there. No wonder. To do so, the U.S. would have to denounce itself.  Corruption in Afghanistan today is acute and permeates all sectors of society. In recent years, anecdotal evidence on the subject has been superseded by the studies of researchers, surveys by NGOs, and periodic reports by the United Nations Office on Drugs and Crime (UNODC). There is also the Corruption Perceptions Index of the Berlin-based Transparency International (TI). Last year, it bracketed Afghanistan with two other countries as the most corrupt on Earth. None of these documents, however, refers to the single most important fact when it comes to corruption: that it’s Washington-based.  It is, in fact, rooted in the massive build-up of U.S. forces there from 2005 onward, the accompanying expansion of American forward operating bases, camps, and combat outposts from 29 in 2005 to nearly 400 five years later, and above all, the tsunami of cash that went with all of this.

    Spanish king's daughter charged in corruption inquiry

    Spain's Princess Cristina, daughter of King Juan Carlos, was charged on Wednesday in a corruption inquiry against her husband, the latest in a spate of high-level graft cases that have angered Spaniards suffering in a severe recession. The princess, 47, was ordered to appear before a judge on April 27, charged in a pre-trial investigation amounting to an extraordinary legal move against a member of the royal family. Judge Jose Castro said there was evidence the princess was an accomplice to her husband, Inaki Urdangarin, who has been accused of tax fraud and embezzling 6 million euros in public funds when he headed a charitable foundation.

    BBC: Spanish princess to face court in corruption inquiry

    U.S. tax-evasion investigation in Europe picks up steam

    U.S. prosecutors are stepping up a long-running investigation into undeclared funds that wealthy Americans have hidden in Liechtenstein and Switzerland.
    Based on an agreement in which Liechtenstein promises to help other countries pursue tax evasion, the U.S. has asked approximately 20 Liechtenstein-based firms to hand over data on financial ties that Americans have maintained in the principality...

    The move by the United States represents a new line of attack in a long-running investigation into more than a dozen Swiss banks, including Credit Suisse and Julius Baer, alleged to have aided U.S. tax dodgers with hidden accounts. Switzerland's oldest bank, Wegelin & Co, was fined nearly $58 million this month after it admitted to helping wealthy Americans evade taxes. The latest tax crackdown comes several years after U.S. authorities extracted an admission of wrongdoing from UBS that was accompanied by the release of thousands of sets of client data plus a $780 million payment by UBS to avert criminal prosecution. Through information gleaned from UBS and thousands of so-called voluntary disclosures by one-time Swiss banking clients in the United States, officials there were able to mount the second wave of investigation into Swiss banks.

    State Senator, 5 Other Politicians Arrested In Alleged Plot To Rig New York City Mayor's Race

    Six highly-placed politicians are accused of using bribery to rig this year’s New York City mayoral race. There were three distinct parts to the public corruption and bribery scandal, but in all three money flowed freely and, at times, city and state funds — your tax dollars — paid the freight, CBS 2’s Marcia Kramer reported Tuesday. “The charges we unsealed today demonstrate once again that a ‘show me the money’ culture seems to pervade every level of New York government,” U.S. Attorney Preet Bharara said.

    French ex-budget minister admits lying about Swiss account

    France’s former budget minister Jérôme Cahuzac, who until two weeks ago was responsible for cracking down on tax evasion, admitted to having hidden funds in a secret Swiss bank on Tuesday. Judges have now placed Cahuzac under formal investigation.

    France's former budget minister Jérôme Cahuzac admitted on Tuesday that he had held a secret bank account abroad – a fact that he has strenuously denied until now. His admission comes two weeks after he resigned from the Socialist government over allegations that he had siphoned funds into a UBS bank account in Switzerland in order to avoid paying taxes in France. The allegations were published by French investigative website Mediapart in December 2012, prompting prosecutors to open an inquiry. On Tuesday he was forced to admit to investigating magistrates that he had lied and was placed under formal investigation for tax fraud.

    Swiss probe 'showed French minister held account'

    French press indignant over ex-budget chief's lies

    Hollande says disgraced ex-minister was not "protected"

    Argentina pushes to prosecute HSBC bankers for money laundering

    The US recently fined HSBC a record $1.9 billion, but – unlike Argentina – did not pursue criminal charges.
    The charges...include tax evasion and money laundering totaling up to $120 million...The Argentine government's combative attitude is a stark contrast to the United Statesgovernment, which decided to fine the bank a record $1.9 billion but did not pursue criminal charges even though the company had been a laundering haven for years. A 337-page report by the Senate Committee on Homeland Security and Governmental Affairsreleased to coincide with hearings on the case in July 2012 details just how much worse it was than that of Argentina.

    Four Ministers, 400 Officials Face Graft Charges in Kashmir

    The ruling National Conference-Congress coalition today said that four sitting ministers and more than 400 civil and police officials were facing graft charges in the state.

    Mayor: 40 Moscow Officials Caught Taking Bribes Last Year

    Forty officials from the administration of Moscow were caught last year taking bribes, while 80 criminal cases on corruption-related charges are pending consideration, Moscow Mayor Sergei Sobyanin said...According to the mayor, most of the corruption cases were registered in the sphere of housing and public utilities services, particularly, during signing of contracts with various contractors.

    MAXAM to Fairfield: Not so fast on $2.9M Madoff swindle payback

    A TANGLED WEB: : MAXAM Capital Management LLC of Darien has told the town of Fairfield that repayment of only $250,000 is guaranteed to the town in a recent court award of $2.88 million for losses of money invested from municipal pension funds in the Bernard Madoff multi-billion-dollar pension fraud.

    Stanford fighting SEC fines

    Convicted Ponzi-scheme operator R. Allen Stanford, who continues to protest what he says was an unfair criminal trial, is now fighting the government’s quest to squeeze billions of dollars in penalties out of him in a related civil lawsuit. Stanford, currently serving a 110-year prison sentence, this week filed an objection to the Securities and Exchange Commission’s bid to impose billions of dollars in monetary penalties against him and several other defendants in a civil securities fraud lawsuit. He was convicted last year of criminal charges that he defrauded investors out of about $7 billion.

    Former Atlanta Public Schools Superintendent,34 others indicted in Atlanta schools cheating scandal

    Capping a series of investigations that spanned four years, a Fulton County grand jury indicted Hall and 34 others on charges that they conspired to cheat on federally mandated standardized tests from at least 2005 to 2010. Further, the grand jury charged, Hall, several top aides, principals and teachers engaged in the scheme for their own financial gain. And with investigators closing in, the jury said, Hall and others lied to cover up their crimes.

    Hall inculcated an atmosphere that encouraged using any means necessary to achieve test-score targets, the indictment said, and then “publicly misrepresented the academic performance of schools throughout APS.” Pressuring subordinates to produce targeted scores, the indictment said, “created an environment where achieving the desired end result was more important than the students’ education.”

    Most foreign investment in BRICs isn't foreign at all-it's tycoons using tax havens

    Each of the BRICs have big problems with tax dodging, which saps billions from national treasuries and—in the case of Russia, India, and China—suggests the newly rich are failing to share the wealth with the poor, leading to widening income inequality (pdf p.88). (Brazil has issues with tax avoidance by multinationals rather than individuals...) The clearest sign that BRICs are leaking tax revenues is that each country’s biggest source of outside investment is a tax haven. China counts the tiny Caribbean bolthole of the British Virgin Islands as its biggest source of foreign investment (not including the Chinese territory of Hong Kong). India has Mauritius, Russia has Cyprus, and Brazil has the Netherlands. The explanation for these incongruent flows of cash is that wealthy nationals are sequestering their income offshore to avoid paying tax, and then bringing it home  dressed up as foreign investment to disguise the source of the funds.

    Stanford Ponzi scheme victims seek $90 million "loan" repayment from Antigua

    A committee representing victims of R. Allen Stanford, who devised one of the largest ever Ponzi schemes, has sued the country of Antigua and Barbuda to reclaim allegedly fraudulent transfers the island government received from disgraced banker. Stanford, through a network of companies known as Stanford Financial Group, allegedly made at least $90 million in loans to Antigua that have yet to be repaid, the Official Stanford Investors Committee claims.  Stanford is serving a 110-year sentence for illegally pocketing investor funds.

    Are China's Leaders Serious About Tackling Corruption?

    "...the bigger question is how long will this reformist zeal continue and if it’s really going to change the rules of the game. Wen Jiabao made similar pledges to stamp out official graft and make government accountable. His tenure ended under a shadow after The New York Times reported that his family had raked in billions of dollars during his ten-year rule. It’s a leap of faith to believe that Xi and his peers will act differently. Nomura also seems remarkably naive about the rot that pervades public life in China. It cites experts in Hong Kong’s Independent Commission Against Corruption (ICAS) as saying that ending “open and excessive corruption” could be achieved in 2-3 years. Doing the same for the entire bureaucracy could take “up to a decade,” it opines. To anyone versed in how Asia does business, this is preposterous. It also misses a fundamental point. The ICAS is independent of its political masters. That’s how it gets to indict tycoons who are cosy with the territory’s politicians. When big fish fry in China, it’s usually because of, not in spite, of political allegiances. That’s no way to eradicate corruption. Just ask Russia."

    Former Cayman Islands premier faces 11 criminal charges

    Former premier McKeeva Bush, charged with 11 counts of breach of trust, theft and corruption, was questioned further. He was originally arrested on December 11, 2012, on suspicion of misconduct in a public office, He was bailed to appear in court on 12 April. One week after his initial arrest, Bush was ousted from office when Cayman Islands lawmakers passed a vote of no confidence in him.


    A corruption fighter: Calling Fire Chief Wang

    BOTH the new president, Xi Jinping, and the new prime minister, Li Keqiang, ask to be measured by how they rein in official corruption. They will rely heavily on a third man: Wang Qishan. Mr Wang, who is 64, now heads the Communist Party’s Central Commission for Discipline Inspection, the body that grapples with corruption. More assured and outspoken than most leaders, he has been given the nickname “Fire Chief Wang” for the times he has been called upon to quell crises. When the SARS epidemic paralysed Beijing in 2003, Mr Wang replaced a feckless mayor who spent more time covering up the problem than solving it. Mr Wang also took top jobs in China’s banks during times of financial stress. Fighting corruption will be much tougher.

    FRANCE: Sarkozy comeback dream in tatters after corruption charge

    Nicolas Sarkozy's hopes of a political comeback lay in tatters Friday after the former French president was charged in connection with a criminal probe into illegal party financing. Lawyers for the right-wing politician immediately announced they would appeal the decision to indict Sarkozy for taking advantage of elderly L'Oreal heiress Liliane Bettencourt when she was weakened by poor health.

    Fugitive Israel director arrested for Siemens bribes

    Israel arrested a former judge and state electric company executive who allegedly took bribes from Siemens in exchange for huge contracts to supply gas turbines. Dan Cohen was extradited this weekend from Peru after being a fugitive from Israel since 2005. He was a district judge from 1978 to 1981 and a director of the Israel Electric Corp (IEC) from 1993 to 2004, Reuters said. He's accused of taking about €1 million while at IEC to steer turbine contracts worth hundred of millions of dollars to Siemens. The losing bidder was General Electric. Prosecutors allege Siemens deposited the money in a foreign bank account for Cohen. Investigators believe he took more than $4 million in bribes from several companies during his tenure at IEC.

    How Corruption Crippled Spain and Europe

    As scenic as it is, the A369 is a byway of bribery, a carretera of’s virtually impossible to find a municipality among the dozen or so through here that hasn’t been tainted by institutional graft; the petty thievery of ratepayers’ cash, the sleazy backhanders to get an illegal development approved, the tacky local follies sanctioned by dodgy mayors, and built by their relatives. “I would say [it’s] in 90 per cent of the town halls here. Sadly money talked and developers got their way by paying bribes, which were all too happily accepted in most towns.” The A369’s corruption cancer starts in Ronda itself, where locals have been absorbed by the dramas that have engulfed former mayor Antonio Marin Lara, a charismatic local powerbroker known as Toti. Toti is notorious in Ronda for his role helping the €200 million ($250 million) Los Merinos development, a massive luxury hotel and golf course of villas that had been approved inside a UNESCO-protected environmental zone near the historic town.

    Corruption is Nigeria's biggest problem - Auditor General

    He said if the menace of corruption can be effectively tackled, the country will experience speedy development. Ukura who made this known in Abuja when the National coalition of civil organization against corruption paid him a courtesy visit in his office said Nigeria has great potentials to be amongst the greatest nation. He also lamented the constitutional limitation of his office to investigate and audit the account of certain public offices. According to him, such limitation has given room for impunity in such public offices.

    Russians increasingly concerned about growing corruption - poll

    The share of those who are alarmed by growing corruption and bribery has increased from 28% to 39%, the highest figure for the past 12 years (compared to 23% in 2006 and 25% in 2007).

    Epic Fail: 5 Massive Corruption Scandals from the Last 5 Years

    Some of the biggest and most shocking money scandals in recent years.

    A Russian Corruption Fighter's $3 Million Apartment

    The Russian parliament’s chief corruption fighter has been accused of failing to declare a $3 million apartment in Moscow. It’s the latest in a series of “outings” by Russia’s anarchic opposition, bizarrely coinciding with President Vladimir Putin’s own anti-corruption campaign.  On March 11, the anti-Putin weekly New Times reported that Irina Yarovaya, head of the parliament’s Security and Corruption Fighting Committee, was living in an apartment worth $2,898,000, registered in the name of her 17-year-old daughter. The condo, expensive even by the standards of Moscow’s overheated property market, never appeared on the parliament member’s obligatory declarations. Neither Yarovaya nor her businessman husband have ever declared income that would have allowed them to buy prime real estate in Russia’s capital.

    UK Public sector fraud worth £1bn unearthed

    The National Fraud Initiative has uncovered £1bn in incorrect and dishonestly obtained payments in the UK since its establishment in 1996, the Audit Commission announced today. Almost 10,000 cases of fraudulent single person council tax discounts have been detected or prevented, saving £160m, while £250m of Housing Benefit overpayments have been identified. Almost 70,000 blue badges and 97,000 concessionary travel passes have been cancelled. Audit Commission chair Jeremy Newman congratulated the NFI’s participants. He said: ‘The vigilance of organisations – from local councils to central government departments – in supplying essential data and investigating potential frauds flagged up by the initiative, has paid off to the tune of £1bn. ‘We are working hard to ensure this valuable legacy of the Audit Commission continues to benefit the public.’

    Earlier 2013 Articles and Opinion on BIG Corrup$ion

    Chinese leaders promise to tackle corruption, waste

    China's newly installed president and premier resolved Sunday to tackle corruption — a key frustration among the Chinese — as the country completed its once-a-decade leadership transition. At the close of the annual session of China's legislature, the National People's Congress, party leader and President Xi Jinping, 59, pledged his government would "resolutely reject formalism, bureaucratism, hedonism and extravagance, and resolutely fight against corruption and other misconduct in all manifestations." To win back public trust, Premier Li Keqiang, 57, promised a cleaner, more efficient government, where the law "holds a sacred place in society no matter who you are," he said. Beijing will cut official spending on banquets, foreign trips and cars, reduce the government payroll, build no new offices or guesthouses and "establish a sound mechanism so officials are unable to and dare not to practice corruption," Li said.

    3 Compliance Lessons from the Wal-Mart Bribery Scandal

    Last month, Walmart stated that the company incurred “$157 million of professional fees and expenses” in the last fiscal year related to an ongoing FCPA investigation, and expects to pay an additional $40 – 45 million in the first quarter of fiscal 2014. Congress is also investigating the matter and, in January, requested that Duke explain his knowledge of the bribery allegations. 
    Walmart could have avoided many of these costs by implementing a few basic FCPA compliance processes: ensuring a proper tone from the top, conducting proper due diligence on all third parties, and carefully monitoring foreign subsidiary compliance with antibribery laws.

    Pending bribery probe, Wal-Mart puts India expansion on ice

    In a sign of heightening caution, Wal-Mart has put on hold opening of new stores in India pending the investigation into the bribery charges. This has also prompted some of its staff to quit the company. According to a report in The Economic Times today, Bharti Wal-Mart, the joint venture between Bharti and Wal-Mart was planning to open seven cash and carry outlets across the country over the last five months. However, the company brought about some last minute changes as it tightened licensing procedures, the ET report said.

    WHERE THE BRIBES ARE: Penalties in U.S. Government FCPA Cases Since 1977

    The Foreign Corrupt Practices Act, passed in 1977, has led to more than 200 cases covering activity in about 80 countries. On this map, the darker red that a country appears, the larger the total penalties assessed for FCPA violations in that country. Roll over a country to see the FCPA cases there (the bigger the box, the larger the penalty in that case). Click on each box for case details. Click on the sector list (lower left) for a breakdown by industry.

    New Russia law goes beyond FCPA, Bribery Act

    A new Russian law, which went into effect on January 1, 2013, affirmatively requires companies to establish compliance programs. The law, which was added as Article 13.3 of a broader 2008 Law on Combatting Corruption, is entitled “The Requirement of Organizations to Take Measures to Prevent Corruption” and provides that organizations are required to develop and implement measures to prevent corruption and states that such measures may include the following: (1) designating departments and officers responsible for preventing bribery and related offenses; (2) developing mechanisms for cooperation with law enforcement authorities; (3) developing and implementing standards and procedures designed to ensure ethical business conduct; (4) adopting a code of ethics and professional conduct for all employees; (5) establishing means for identifying, preventing and resolving conflicts of interest; (6) preventing the creation and use of false and altered documents.

    IDB $18 million loan to help prevent and combat corruption in Brazil's public administration

    The initiative will strengthen the operational capacity of the Office of the Comptroller General (CGU), which is charged with carrying out strategic measures to improve the integrity and management of public resources. The program will promote interactions between the CGU and federal public administrators and increase transparency and civil society oversight in the management of public resources, as well strengthen support activities and internal controls at the state and municipal levels. Activities to strengthen the operational capacity of the CGU will include the promotion of good management practices in staff management and intensive use of new technologies. Models for auditing and inspection processes will be revamped and the Observatory for Public Spending will be implemented.

    120 billion euros lost to corruption in EU each year

    An estimated €120 billion is lost to corruption each year throughout the 27 member states, the EU commissioner for home affairs Cecilia Malmstrom has said. “In public procurement, studies suggest that up to 20 to 25 percent of the public contracts’ value may be lost to corruption,” said Malmstrom on Tuesday (5 March) at an anti-corruption seminar in Göteborg, Sweden.

    Asian Development Bank Notes Record Level of Fraud and Corruption Claims

    The ADB’s Office of Anticorruption and Integrity (OAI)  in its annual report, revealed that it received a record 240 complaints last year and opened 114 new investigations. The office imposed sanctions on 42 firms and 38 individuals.  The ADB said most of the complaints involved fraudulent misrepresentations about experience, qualifications and technical capabilities of contractors, consulting firms  and individuals seeking work from the ADB. The ADB said 57 firms and 51  individuals were banned from seeking ADB-financed contracts...

    Ernst & Young to Pay $123 Million to Settle Tax Shelter Fraud Charges

    The agreement comes in connection with the firm’s admitted participation, from 1999 to 2004, in four tax shelters that were used by approximately 200 E&Y clients in an effort to defer, reduce, or eliminate tax liabilities of more than $2 billion, according to the Manhattan U.S. Attorney’s Office.  E&Y entered into a non-prosecution agreement with the United States, in which the firm agreed to pay $123 million to the United States and acknowledged a detailed Statement of Facts in which it admitted the wrongful conduct of certain partners and employees. E&Y also agreed to certain permanent restrictions and controls on its tax practice, including a prohibition against planning, promoting or recommending any “listed transaction,” which is the same as, or substantially similar to, one that the IRS has determined to be a tax avoidance transaction.

    Ernst & Young Hires NJ Governor Chris Christie's Brother, settled SEC charges in 2008

    Corruption Victimizes the Poor in the Americas

    According to a LAPOP poll, one in five people report that they had to pay at least one bribe to a government official last year. Think about it. That means that more than 200 million of our neighbors in the Americas—20 percent of respondents—have been victims of corruption, forced to pay bribes to bureaucrats just so they will do the jobs they are already receiving a paycheck to do. What is really significant is how the level of corruption differs by country. The most corrupt country in the hemisphere is Haiti, where 2 out of 3 people (67 percent) surveyed reported they had to pay bribes to government officials. In second and third place we find Bolivia andEcuador with 45 percent and 41 percent, respectively.

    Violations of the Rule of Law Fuel Tolerance of Bribery in the Americas: AmericasBarometer Insights: 2013, Number 88

    Executive Summary. Understanding citizen attitudes toward bribery is
    important for identifying the micro-foundations of democracy and the rule of law. This Insights report tests a rational-actor model of bribe justification using public opinion data from the Americas. In line with this model, the evidence suggests that where citizens detect norms of corruption and law disobedience, they are more likely to see bribery as a justifiable behavior.
    Specifically, support for bribe justification increases with having been
    asked to pay a bribe, perceptions of corruption, distrust of the justice system, doubts that police protect citizens, and the rejection of the rule of law. These results point to the strategic dilemmas citizens face in contexts where anti-corruption and law-obedience norms are not firmly established. They further point to both the importance of and challenges inherent toefforts to reform institutions, laws, and policies that reflect and motivate adherence to the rule of law in the Americas.

    Swiss Bank Wegelin to Pay $58M for Conspiring to Evade Taxes

    Switzerland’s oldest bank, Wegelin & Co., has been sentenced and ordered to pay the U.S. government approximately $58 million for conspiring with its U.S. clients and others to evade income taxes in the first-ever such sentence for a foreign bank. The Swiss private bank was sentenced Monday in a Manhattan federal court by U.S. District Judge Jed Rakoff. The bank had been charged with conspiring to hide approximately $1.5 billion in secret Swiss bank accounts held by U.S. customers, and the income generated in those accounts, from the Internal Revenue Service. Together with the April 2012 forfeiture of more than $16.2 million from Wegelin’s U.S. correspondent bank account, this amounts to a total recovery to the United States of approximately $74 million.


    China: new leaders, new opportunities to tackle corruption

    In China, only bribes that are greater than 10,000 yuan (US$1,590) are illegal. Paying an official or civil servant anything below that figure is not a punishable offence.
    The renewed fight against corruption should start with halting the bribery of government and public officials. From paying bribes to gain a competitive edge in education to luxurious gift-giving to officials, China faces many hurdles to alter this practice. From 2007 to 2012, more than 15,000 civil servants were allegedly involvedin 13,000 of the 81,000 commercial bribery cases investigated by authorities – and totalling approximately 22.2 billion yuan (US$3.6 billion).

    The Most Extensive Collection Of FCPA Scholarship Between Two Covers

    “The FCPA At Thirty-Five and Its Impact on Global Business.”  A full-day symposium at The Ohio State University Moritz College of Law included presentations from top DOJ officials, leading academics from both the U.S. and U.K., and experienced practitioners on various aspects of the Foreign Corrupt Practices Act and related topics. Copies of the presentations are available on this site.

    Holding politicians to account: Slovenia's prime minister ousted

    In early January the independent anti-corruption commission in Slovenia released a report critical of the prime minister and the leader of the opposition that found they had “systematically and repeatedly violated the law by failing to properly report their assets to the commission”, and for not reporting a private real-estate deal with a company that has government contracts. The news sparked a public outcry with calls for their resignations and shone a spotlight on the role of asset declarations in preventing corruption in politics. On 27 February Prime Minister Janez Janša was ousted in a parliamentary vote of no confidence. People had taken to the streets to complain about the corruption in the government. The focus of their anger became Janša and other politicians facing allegations of corruption. But instead of justifying the increase in his assets, as reported in the anti-corruption commission report, Janša attacked the commission and its members.

    Luxury villas, designer labels: jailed Mexico union boss' U.S. oasis

    The house Gordillo's corporation bought in 2010 for $4.08 million is under construction, with outside siding panels in place but the interior raw. At the rear, a swimming pool next to the bay sits empty with construction gear around it. Right after the purchase, contractors tore down the 5,328 square foot house there and filed plans to build a 7,168 sq ft house with a 642 sq ft garage, 935 sq ft decks, an elevator and four fireplaces, according to the planning documents.

    If Mexico wants to launch anti-corruption crusade, there are plenty of officials to go after

     Enrique Pena Nieto, told a national television audience that his 3-month-old government would not abide by the misuse of union funds. “The resources of the unions belong to their members, not their leaders. They must be used for the benefit of the workers,” he said. But analysts here say they don’t see Gordillo’s arrest as the onset of a campaign against graft. Instead, they say Gordillo’s arrest may be nothing more than Pena Nieto targeting a political foe. They note that Pena Nieto’s Institutional Revolutionary Party, known by its Spanish initials as the PRI, has shown a remarkably high tolerance for corruption. Late last year, for example, a PRI governor allegedly walked out of office with tens of millions of dollars, and the party took no action against him. “Elba Esther Gordillo did not fall because of corruption, rather because she did not accept the educational reform,” Carmelo Teran Montero, a retired army general, wrote in an essay for the Center for Analysis and Military Opinion, a think tank in Mexico City. He was referring to a bill passed the day before Gordillo’s arrest that removed the authority for hiring and firing teachers from the union and gave it to the government. Prior to his election July 1, Pena Nieto said his party is no longer the vehicle for corruption and authoritarianism that it was when it ruled Mexico for 71 uninterrupted years, before being ousted in 2000. He has pledged to install an anti-corruption commission and promised zero tolerance for graft. Yet Pena Nieto would only have to look inside own party for more examples of the malfeasance for which prosecutors accuse Gordillo, analysts said.

    Mexican president says justice will be done in union boss's case

    The investigation of teachers union boss Elba Esther Gordillo and her associates "should continue until the final consequences," Mexican President Enrique Peña Nieto said...The law "applies to everyone equally, and no one can be above the law," Peña Nieto said in an address to the nation Wednesday night during which he never mentioned the powerful union boss by name. The 68-year-old Gordillo is the leader of the SNTE teachers union, the largest union inLatin America, and was considered the most powerful woman in Mexico. Peña Nieto's comments were his first on the case since the arrest of Gordillo, who allegedly used union funds to pay her personal expenses.

    Stolen millions bought plastic surgery

    Ex-USAID contractor, wife sentenced in $1 million embezzlement

    A former deputy director at a private contractor that did business with the U.S. Agency for International Development (USAID) was sentenced Friday to 51 months in prison in the embezzlement of more than $1 million from a program meant to address global health problems. Mark Adams, 44, and his wife, Latasha Bell, 36, both of Fort Washington, each pled guilty in October before U.S. District Judge Beryl A. Howell in federal court in D.C. to one count of conspiracy to commit wire and mail fraud. Court records show the couple used money intended to save lives from terrible diseases to, among other things, renovate their home and buy luxury automobiles...

    Court records show he also admitted that his false invoices generated more than $1.08 million in fraudulent payments between 2006 and 2010. The bogus invoices claimed to bill for services from Bell and companies controlled by Adams’s friends, including co-conspirator Everett Lipscomb Jr. But the records show that the work and services claimed on the invoices were not provided...Adams and Bell also used fraudulent invoices to pay a home renovation contractor to complete an extensive renovation of their home. In another instance, the records show, Adams and Bell received funds that they used to buy a luxury automobile.

    Founder of World's Largest Church Indicted for Alleged Stock Scheme

    The founding pastor of the world's largest Pentecostal congregation is being indicted on charges of breach of trust for costing the church more than $9 million in a stock scheme gone awry. South Korean news sources report that prosecutors have indicted David Yonggi Cho, founder of Yoido Full Gospel Church which has more than 1 million congregants, for a stock scheme in which he arranged for the church to buy his son Cho Hee-jun’s stock "at a rate three to four times lower than market value." Prosecutors also found evidence that Cho has accrued $5.5 billion in tax debt.Cho first came under investigation in 2011, when church elders accused him of embezzling $20 million. Cho also has been criticized forprivatizing church assets.

    REPORT: Violations of the Rule of Law Fuel Tolerance of Bribery in the Americas (PDF, 9 pp)

    Executive Summary: Understanding citizen attitudes toward bribery is
    important for identifying the micro-foundations of democracy and the rule of law. This Insights report tests a rational-actor model of bribe justification using public opinion data from the Americas. In line with this model, the evidence suggests that where citizens detect norms of corruption and law disobedience, they are more likely to see bribery as a justifiable behavior.
    Specifically, support for bribe justification increases with having been
    asked to pay a bribe, perceptions of corruption, distrust of the justice
    system, doubts that police protect citizens, and the rejection of the rule of law. These results point to the strategic dilemmas citizens face in contexts where anti-corruption and law-obedience norms are not firmly established. They further point to both the importance of and challenges inherent to efforts to reform institutions, laws, and policies that reflect and motivate adherence to the rule of law in the Americas.

    Wal-Mart probe hits Kimco Realty

    Kimco Realty Corp. (NYSE: KIM), a real estate investment trust, is headquartered in New Hyde Park, New York. It owns interests in 896 shopping centers and has holdings in Puerto Rico, Canada, Mexico, and South America. It said it received the subpoena on January 28 'from the Enforcement Division of the SEC in connection with an investigation, In the Matter of Wal-Mart Stores, Inc., that the SEC Staff is currently conducting with respect to possible violations of the Foreign Corrupt Practices Act.'

    Nigeria Lost $400bn to Corruption in 33 Years, Says Ministry Official

    The Deputy Director in charge of Reforms in the Ministry of Petroleum Resources, Mr. John Magbadelo, Thursday stated that Nigeria had lost over $400 billion to corruption between 1966 and 1999. Magbadelo, who was the reviewer of the book titled: ‘Anti-Corruption Campaign in Nigeria (1999-2007): The Politics of a Failed Reform,’ authored by a lecturer at the University of Ibadan, Mr. David Enweremadu, made the disclosure at the launch of the book in Abuja. While blaming the inability of the country to make meaningful progress in its several endeavours, he said: “It is at the very heart of our country’s failings in every sphere since its emancipation from colonial rule. “The cancerous rot which has continued to impair the growth potentials of the country seems to have defied every therapy.”

    Ex-Haiti dictator 'Baby Doc' Duvalier faces corruption charges for first time since revolt

    Former Haitian dictator Jean-Claude "Baby Doc" Duvalier faced corruption and human rights charges in a court on Thursday for the first time since a popular revolt forced him into exile in 1986, and denied responsibility for abuses under his 15-year rule. Individual government officials "had their own authority," the 61-year-old Duvalier said when asked about his role as head of state from 1971 to 1986. "Under my authority, children could go to school, there was no insecurity." Duvalier, who had boycotted three previous court hearings, struck a mostly defiant tone during a four-hour grilling by a panel of three judges in a packed and sweltering courtroom...
    Duvalier, who inherited the title "President For Life" at the age of 19, is alleged to have fled Haiti with more than $100 million stashed in European bank accounts in 1986 after street demonstrations and riots broke out in a number of cities. 

    HONG KONG: Rafael Hui faces new corruption charge

    Former government number two Rafael Hui Si-yan is to face a new charge that he “concealed” alleged corrupt payments of more than HK$11 million when Hong Kong’s biggest ever corruption case returns to court next week. The new charge comes seven days before ex-chief secretary, Hui, 64, and the billionaire Kwok brothers – who head the property giant Sun Hung Kai Properties – are due to return to court to enter pleas in the case which has attracted global publicity. Prosecutors have also amended the original charges to allege that the brothers who run SHKP – the world’s biggest property developer by market value – Thomas Kwok Ping-kwong, 61, and Raymond Kwok Ping-luen, 59, – paid Hui HK$8.5 million in bribes, HK$150,000 more than was outlined in the original charges.

    A Legal Secret Weapon May Help Hold Deloitte US Firm Liable for ChinaCast Fraud

    ChinaCast was a Delaware company traded on NASDAQ that has a significant number of US investors. The company’s operations, providing post-secondary education and e-learning services, are inChina. According to a recently filed lawsuit, Deloitte Touche Tohmatsu CPA Ltd (DTTC) in Beijing, Peoples Republic of Chinasigned the ChinaCast audit opinion but not until, according to the complaint, Deloitte’s US firm agreed the company’s disclosures were in accordance with Generally Accepted Accounting Principles (GAAP) and SEC reporting requirements.

    NASDAQ delisted ChinaCast in June of 2012 for failure to file timely reports with the SEC. The company, and its executives who weren’t accused of fraud, was too busy investigating several claims of accounting fraud and embezzlement. The investment funds suing ChinaCast executives, directors and Deloitte firms claim Deloitte US controlled the DTTC audit of ChinaCast because one of Deloitte US’s partners was a key audit team member, charged with providing technical expertise and the ultimate responsibility for US GAAP issues.

    Dow Chemical Loses $1 Billion Tax Shelter Case

    The Justice Department has won a tax shelter case involving Dow Chemical, in which the company was accused of creating approximately $1 billion in phony tax deductions in a scheme designed by Goldman Sachs and lawyers at King & Spalding.  A federal court in Baton Rouge, La., on Monday rejected two tax shelter transactions entered into by Dow Chemical that purported to create approximately $1 billion in phony tax deductions.  In addition to rejecting the tax benefits from the shelter transactions, Chief Judge Brian A. Jackson also imposed penalties. The schemes were allegedly created by Goldman Sachs and the law firm of King & Spalding, according to prosecutors, and involved creating a partnership that Dow operated out of its European headquarters in Switzerland...
    The judge noted that “tax law deals in economic realities, not legal abstractions.” Jackson also wrote that penalties were appropriate because any reasonable and prudent person should have known that the artificial tax benefits created by the scheme were “too good to be true.”  He noted in his opinion that “Dow viewed its tax department as a profit center,” and had at its disposal “numerous lawyers and tax professionals.”  

    U.N. Report Flags Afghanistan Fraud

    The United Nations agency that administers a trust fund bankrolling Afghanistan's police allowed procurement fraud to flourish for several years, according to an internal U.N. report seen by The Wall Street Journal. The report, which hasn't been made public, casts new light on possible mismanagement at a U.N. office that has channeled billions of dollars into the country since 2002. It also raises new questions about the international community's role in Afghanistan at a delicate moment: U.S. and international troops are departing next year, just as the country is bracing for a high-stakes election to pick President Hamid Karzai's successor. At issue is the Law and Order Trust Fund for Afghanistan, or Lotfa, a fund administered by the U.N. Development Program that covers payroll and benefits for the Afghan National Police. Started in 2002, Lotfa has overseen the delivery of around $2.5 billion to help bankroll and build the Afghan police force. Last year, international monitors raised concerns about suspected fraud at the fund, allegations first reported by The Wall Street Journal. The reports caused a major credibility problem for the U.N. in Afghanistan: Lotfa had previously been touted as a model for international assistance. At the time, the European Union put tens of millions of dollars in anticipated donations to Lotfa on hold amid the investigation.

    Slovenian parliament ousts PM over corruption

    In the end, it was not protests and strikes against austerity that led to Jansa's expulsion only a year since he took over in the wake of December 2011 early elections, but another corruption scandal. A state anti-graft commission published a report on January 8 alleging that Jansa had failed to declare $285,000 in assets to parliament. He denied any wrongdoing and refused to resign despite calls from allies, but also failed to provide a credible explanation for his increased wealth.


    Mexico's Larger-Than-Life Teachers Union Chief Will Remain Behind Bars

    Elba Esther Gordillo will remain behind bars, a Mexican judge decided today.

    Gordillo's arrest, yesterday, shocked the country. She is the president of Mexico's national teacher's union and considered the most powerful woman in the country, having the ability to sway both small, local elections and even presidential ones.

    According the Mexican blog Animal Politico, Gordillo did not speak during her first public appearance behind bars, but a judge decided against granting her bail because her alleged crimes are "grave."

    Reuters Analysis: Mexican union boss arrest sounds warning to reform foes

    The arrest of Mexico's best-known trade union leader on fraud charges has thrown down the gauntlet to powerful interests standing between President Enrique Pena Nieto and his plans to shake up Latin America's second-biggest economy. For a generation, even presidents shied away from taking on teachers' union boss Elba Esther Gordillo, making her Mexico's most prominent female politician and a formidable enemy to those who accused her of fostering corruption rather than education. Pena Nieto, who has been in office for less than three months, crossed that line on Tuesday when police arrested the 68-year-old Gordillo and three other people with her at Toluca airport near Mexico City. A former grandee of the ruling Institutional Revolutionary Party, or PRI, Gordillo faces charges of embezzling around $200 million from union coffers and using it to buy property in the United States and pay for luxury goods, expensive designer clothes, works of art and plastic surgery.

    Powerful Leader of Mexican Teachers' Union Arrested

    The leader of Mexico’s powerful teachers’ union, the largest labor syndicate in Latin America, has been arrested on accusations that she embezzled millions of dollars in union funds for personal expenses, including California residences, cosmetic surgery and artwork, the country’s attorney general announced Tuesday night.
    Elba Esther Gordillo

    The arrest of the union boss, Elba Esther Gordillo, a bombastic figure viewed as a kingmaker among politicians for her ability to deliver votes and suppress enemies, stunned a nation accustomed to seeing powerful figures escape scrutiny despite whispers of their spending habits. “She was this mixture of political patron, incredibly powerful union boss and very, very wildly ‘entrepreneurial,’ ” said Gabriel Guerra, a political analyst in Mexico City. Ms. Gordillo was arrested a day after President Enrique Peña Nieto signed into law sweeping changes in education law, designed to break the union’s grip on hiring and the administration of schools, and a day before the union planned to meet on a strategy to fight the changes. The timing of the arrest is sure to raise questions; Mexican presidents have been known to use the power of federal prosecutors to go after rivals, only for the cases to fall apart eventually.

    The Econoimist - La Maestra in detention

    MEXICANS have long wondered how Elba Esther Gordillo, the leader of the country’s powerful teachers’ union, is able to maintain her taste for designer clothes and accessories on a public servant’s salary. On February 26th federal prosecutorsannounced that they believed they had found the explanation: an alleged scam to embezzle union funds worth 2.6 billion pesos ($200m). Ms Gordillo, who likes to be known as “la Maestra” (“the Teacher”), was arrested at an airport just outside Mexico City. Jesús Murillo Karam, the attorney general, said that Ms Gordillo had spent some of the money on a private aeroplane, designer clothes, art, property and plastic surgery. According to prosecutors, the embezzlement took place between 2008 and 2011, and involved funds being sent through Switzerland and the United States. Ms Gordillo has been the head of the 1.5m-member National Union of Education Workers (SNTE) for 23 years. In October she was elected unopposed for another six-year term. Her arrest comes a day after Enrique Peña Nieto, the new president, signed into law a major education reform designed to prise the recruitment and training of teachers out of the hands of the union. Ms Gordillo and her members had strongly opposed the measure.

    McClatchy: Union boss Elba Esther Gordillo keeps a stranglehold on Mexico's schools

     Elba Esther Gordillo, the 67-year-old “president for life” of the national teachers union in Mexico, rarely ventures out in public without designer outfits and handbags from Chanel, Prada, Louis Vuitton and Hermes. She flaunts wealth and power, and she can walk through the gates of Los Pinos, the Mexican White House, at any time. Sitting presidents fear and court her. Routinely ranked as the least popular of the nation’s most prominent figures, friends and enemies alike know her simply as “Elba Esther” or “The Teacher.”
    Her opaque and strong-arm style and the personal fortune she’s amassed underscore how the old Mexico of corrupt power and privilege, which reigned in the 20th century, still endures in pockets even as the nation inches toward modernity...
     In 2006, the newspaper Reforma said Gordillo had taken 125 teachers and union underlings, along with their children, on a seven-day Pacific cruise aboard the Pride of Hawaii, later staying at the Hilton Hawaiian Village. When the media revealed that she’d ordered 59 Hummers for her top aides in 2008, she announced that she’d raffle the vehicles and pay for renovations at 10 schools...
     Journalistic investigations over the years have identified 64 Mexico City mansions, office buildings, rural ranches and overseas properties that are thought to be linked to Gordillo or her immediate family. Among them is a six-bedroom home in La Jolla, Calif., that Gordillo purchased for nearly $1.7 million, according to a March report in Mexico’s newsweekly Proceso. The home has seven baths, a three-car garage, a pool and a private dock on a river, the magazine reported...

    McClatchy - Mexico arrests Elba Esther Gordillo, powerful teachers union boss, on corruption charges

    BBC - Mexico union leader Elba Esther Gordillo arrested

    Guardian - Mexican teachers' union boss arrested for alleged embezzlement of £100m

    Union leader in Mexico charged with embezzling dues for plastic surgery

    Mexican union leader arrested on corruption charges is a rival to president

    Elba Esther Gordillo: From Wikipedia, the free encyclopedia

    AnimalPolitico's "Palenque" forum >>> ¿Qué opinan de la detención de Elba Esther Gordillo?

    Andres Oppenheimer: Mexico's education reform may prove historic

    The Web of Union Money for Elba Esther Gordillo

     Gordillo faces charges of embezzling around $200 million from union coffers and using it to buy property in the United States and pay for luxury goods, expensive designer clothes, works of art and plastic surgery.

    Corruption Esthetics


    CHINA: Technology used to combat graft

    China has improved the way it deals with corruption and is increasingly using technology to combat graft, but experts say preventing the technology from being abused must also be taken into consideration. The Chinese Academy of Social Sciences published a report on China's rule of law on Monday, which stated that the country's disciplinary authorities at every level have developed and applied technology to their anti-corruption work, such as online approval platforms and bribery record systems.

    In 2012, a system tracking companies and people who pay bribes was put into effect, which means prosecutors can check nationwide bribery information online, according to the report, adding that the country has made great progress on bribery prevention in this way. The government in Hainan province developed an online system to prevent officials from intervening in administrative examination and approval, while Ningbo city's government, in Zhejiang province, also carried out electronic monitoring of administrations, the report said.

    VIET NAM: Anti-corruption during 2013: More of the same challenges

    Over the past seven years, the Anti-Corruption Law has played a significant and important role in improving anti-corruption measures, but has not significantly reduced the occurrence Anti-Corruption during 2013: More of the same challenges of corruption. On the positive side, it has enhanced the discourse on the importance of transparency to reduce opportunities for corruption. And indeed, today corruption is recognized by the Party and the Government as a political and development issue.
    Findings from different assessments reinforce that there are still many disadvantages and shortcomings in the implementation and enforcement of different anti-corruption provisions. 
    This is particularly relevant in terms of further reducing opportunities for corruption and implementing a less discretionary application of rules and procedures to deal with corrupt behaviors. Corruption is seen as a systemic, wide-spreading problem that is challenging the legitimacy of the political regime and jeopardizing human development gains and Vietnam’s middle-income status.

    The victims of corruption have a human face. When someone falls sick and household members have to give bribes to receive medical services, it is the poorest who suffer most since their incomes are less disposable and limit their opportunities to access health.

    Spain's Corruption Scandals: The Crisis of the Royal Family

    The sense of disillusionment extends to the monarchy. For decades after he effectively ended the coup by going on television to assure the country that the rebel officers holding parliament at gunpoint did not have his support, King Juan Carlos enjoyed high approval polls and preferential treatment from the press. But in the past couple of years, public perception of him, especially among young people with no memory of that night, has shifted. Although no public-opinion polls about Juan Carlos have been conducted since October 2011 (when, for the first time, his approval ratings dropped below 50%), in a recent survey 57.8% of 18- to 29-year-olds said they would like Spain to be a republic rather than a constitutional monarchy. An expensive hunting trip to Botswana, during which he broke his hip and had to be flown on an emergency flight back to Spain, helped erode Juan Carlos’ personal prestige, coming as it did during the economic crisis. But even more damning has been the indictment of his son-in-law.

    Corruption in Chinese Army Erodes Effectiveness, General Writes

    Corruption in the Chinese military, which may include officers who drive luxury cars, live in opulent homes and pay for vacations with public funds, undermines the army’s effectiveness, a retired major general wrote in a commentary. Corruption hurt China more than a century ago, when its modern naval fleet was defeated by Japan, Major General Luo Yuan wrote... “Combat effectiveness is more undermined by corruption than anything,” Luo wrote. “It is hard to imagine that a corrupt army can vanquish the enemy and win victory.”

    BBC Documentary Exposes Corruption and Abuse in Afghan Police Force

    A BBC documentary has uncovered evidence of abuse by the Afghan police force in Helmand province. Reporter Ben Anderson spent five weeks following a group of US Marines who are advising the police in Sangin district before the hand-over of power is completed there next month. He discovered evidence of some shocking behavior including corruption, kidnap, drug use, murder and child abuse.

    Wal-Mart Bribery Scandal Puts Spotlight on U.S. Anti-Corruption Law

    Now a major Wal-Mart bribery scandal in Mexico has cast a spotlight on the FCPA. The company confirmed last year that it was the subject of investigations by the Justice Department and the Securities and Exchange Commission after a New York Times bombshell investigation reported that Wal-Mart had paid bribes to Mexican officials to open more stores in the country.   A just-published Bloomberg Government Study by Global Business Director Sandy Reback and Quantitative Analyst Miguel Garrido suggests that the Wal-Mart investigation may be part of a longer and larger trend in FCPA enforcement.

    Princess Cristina of Spain may be named in corruption case

    As a financial scandal engulfs the royal family and politicians begin to call for his abdication, Spain's King Juan Carlos faces one of the worst weeks in his 37-year reign, with prosecutors set to ask a judge to formally name his daughter Princess Cristina as a suspect in a multimillion-euro fraud and money-laundering case...

    The growing scandal surrounding the king's daughter and her husband, who were given the title of Dukes of Palma by the king after she married theOlympic-medal winning handball player in 1997, has reached a new peak as Urdangarin prepares to appear before Castro to answer more questions about the multimillion-euro deals struck by the supposedly not-for-profit Nóos Institute with regional governments in Valencia and the Balearic Islands.

    Those questions will probably centre on testimony given by Torres last week – including dozens of emails that allegedly show that the king tried to help his son-in-law land potentially succulent, if legal, contracts. Torres reportedly has hundreds of emails stored, and has slowly been releasing them in what is widely seen as an attempt to pressure the royal family to help him avoid punishment.

    Indonesian party chairman resigns over corruption scandal

    The chairman of SBY's ruling Democratic Party, Anas Urbaningrum, has resigned over a multi-million dollar corruption scandal. He's accused of accepting a bribe to rig the bidding process for the construction of a major sports centre - an allegation he strongly denies...This is one of the fallout events from a corruption case that began now well over 18 months ago involving the Democrat Party, that's the party of Susilo Bambang Yudhoyono, the Democrat Party's Treasurer and parliamentarian, a man called Muhammad Nazaruddin. And he made a number of allegations against not only Anas Urbaningrum, who has now resigned as the chairman of the party as you mentioned, but also against the Minister for Youth and Sport and he also resigned last December and is also facing trial, and there's been other parliamentarians who have been found guilty on those charges. And much of it is connected to either of two matters; the first is the building of a dormitory for athletes at the Southeast Asian Games, which took place in Pekanbaru in late 2011. And the second case was the building of a sports stadium in Hambalang in West Java. 

    UGANDA: High-profile corruption scandals registered under the National Resistance Movement

    Age-old vice. As the country grapples with increasing cases of corruption, where billions of shillings have been lost to mainly government the Sunday Monitor brings some of the most high-ranking cases of corruption since President Museveni took control of the country in 1986.

    How far will China's crackdown on corruption go?


    Excessive consumption and corruption, especially on the part of state officials who are supposed to be public servants, does make a mockery of the "serve the people" ethos at the heart of good governance. China faces a destabilising inequality gap, so the waste of public resources on empty gestures - like showy motorcades, honour guards, over-the-top banquets, glitzy hotel receptions and lavish gift- giving - not only squanders funds needed elsewhere, but fuels indignation while eroding social harmony and self-respect.

    Despite his revolutionary communist pedigree, it is unlikely that Xi will be saying "Farewell, my tycoon" any time soon, though. The get-rich-quick ethos launched by the canny "capitalist roader" Deng Xiaoping is still the default ideology in a nation bereft of meaningful ideology. Fawning over the rich and powerful and dispensing bribes to officials, typically in the hope of cementing connections, has already become a way of life. Laws that are mercilessly enforced when applied to little people rarely apply to the rich and connected in so-called communist China. The corruption and crony capitalism openly promoted by Deng's successor, Jiang Zemin, still runs deep, even though Jiang has been out of the limelight for a decade.

    The Dean of Corruption

    Cecilia Chang, the St. John’s fund-raiser who committed suicide after her epic fraud was exposed, tried to keep her superiors happy with gifts of watches, vacations, custom suits, and fine wine. It worked, for a while.

    Chang was fantastically corrupt, there can be no doubt. The details of her fraud are outlandish, grotesque. She charged her bookie’s daughter’s wedding to the university, disguising the roughly $14,000 expense as a business charge; she had St. John’s pay almost $58,000 for her son’s law-school tuition, plus textbooks and lunches. But Chang was something more than a simple con artist, deceiving her employers for personal gain. She was deeply embedded in the institution—she’d built herself a nest and had feathered it well, while taking elaborate care of those around her. She seems to have been sincere—if ­deluded—in her belief that she’d earned the life she’d built. ..

     She spent tens of thousands of dollars on Father Harrington and tens of thousands more on his chief of staff, Rob Wile. Wile had a credit card on Chang’s account, and in five years, according to credit-card statements, he charged roughly $45,000 to it—some at Prada and Lanvin and ­Ferragamo—even during the period when he was signing off on Chang’s expenses. The gifts to Father Harrington included suits from the finest Hong Kong tailors, a watch from Patek Philippe, cases of expensive wine, and a Caribbean vacation, some of which Chang coyly suggested were underwritten by unnamed “friends of the university,” though in fact they were billed to St. John’s itself, concealed as legitimate business expenses. “She took care of everyone that she met,” says one investigator. “Everyone that she needed.” In Chang’s mind, according to her testimony, her methods and extravagant, ­university-funded lifestyle were accepted, if unacknowledged, as the way she did business. Chang operated her own completely independent fiefdom within the university, one with its own set of rules—she rarely even set foot on campus. Officials didn’t question that. Nor did they insist on identifying the supposedly generous “friends” underwriting their expensive perks.

    Corruption in Government, Business Can Be Found Everywhere

    Corruption is a common and pervasive human flaw. In every society, there are people who will act improperly if they think that they won’t get caught. Nations enact laws to try to curb corrupt activities, but the lure of money - and power, in some circumstances - is irresistible to many.  If there is money, if there is power, there is the likelihood of corruption - whether blatant, or hidden, whether in government, in private business or among individuals. Corruption is so vast, and so pervasive, that the numbers are staggering.  An international anti-corruption monitoring group called Global Financial Integrity says that in the years from 2001 through 2010, developing nations experienced a total of $5.86 trillion in illicit funds leaving those countries. The leading nation among them was China, where the total that decade hit $2.75 trillion. Mexico was second on the list, with $476 billion in illicit outflows. Russia was fifth at $152 billion. Nigeria was the top African nation on the GFI list, at number seven, with an illicit outflow of $129 billion.

    Bernie Madoff: 'The Banks Had To Know What I Was Doing'

    In an email penned from jail, one of the biggest Ponzi schemers in history told Fox Business Network that those responsible for recouping his victims’ money should keep going after the banks where he had accounts. “The Banks had to know what I was doing regarding the fraud,” Madoff wrote in the email.


    Zimbabwe's disappearing diamonds

    Once a month, sometimes more, a VIP-configured Airbus jetted into Lanseria International Airport, a small and privately-owned base facility near Johannesburg, South Africa. The plane, an Airbus 319CJ, also stopped at Zimbabwe’s Harare airport. It carried important people and was widely believed to ferry some precious—and illicit–cargo: Zimbabwe’s conflict diamonds. The diamonds came from one of the largest diamond troves in history: Marange. Spanning 173,000 acres and priced at $800 billion in rough diamonds, Marange’s concentration of treasure is eight times higher than average, at more than 1,000 carats per hundred tons.  The plane, first identified in report by the British nonprofit organization Global Witness, has played an integral role in moving the diamonds out of Zimbabwe. Money from their export has gone to cement the hold of President Robert Mugabe, and arm Zimbabwe’s notorious secret police—responsible for killing, raping and maiming thousands of artisanal miners in an operation to clear out Marange in 2008.



    The first comprehensive on-line fraud-fighting information repository for auditors, accountants, fraud examiners, white-collar crime attorneys, prosecutors, ethics and compliance professionals and academicians.

    Click here to go to Fraud Resource Net - Enhanced Fraud Detection, Fraud Prevention and Audit Knowledge Center

    8 TED Talks on fighting corruption

    Afra Raymond: . “It’s not just like Wall Street. Trinidad and Tobago is a place with different laws of physics.”

    Peter Eigen: How to expose the corrupt

    Heather Brooke: My battle to expose government corruption

    Shaffi Mather: A new way to fight corruption

    Ngozi Okonjo-Iweala: Want to help Africa? Do business here

    Sanjay Pradhan: How open data is changing international aid

    George Ayittey: “Cheetahs” vs. “hippos” in African politics

    David Bismark: E-voting without fraud

    Christian Leader Arrested for Using Retirement To Tackle Uganda's Corruption

    Following an arrest earlier this month, one of Uganda's most recognized Christian leaders could face charges as a result of his retiring early to work with the Black Monday Movement, a campaign against political corruption in the government. Police arrested David Zac Niringiye, who recently retired after serving as assistant bishop of the Anglican Church of Uganda in Kampala, on Feb. 4 after he distributed "materials denouncing corruption to students at Makerere University in Kampala."

    Spain's King Unpopular: Approval Of Juan Carlos At New Low After Austerity, Corruption Scandal

    A corruption scandal engulfing Juan Carlos' son-in-law, Inaki Urdangarin, has angered Spaniards in a time of crushing austerity. But the aging Juan Carlos himself has seemed increasingly out of touch with his people as they try to keep afloat in Europe's economic storm. Urdangarin, married to the 75-year-old king's second daughter, Princess Cristina, is accused of using his position to embezzle several million dollars in public contracts assigned to a nonprofit foundation he set up. The 45-year-old businessman, who denies any wrongdoing, faces questioning along with his wife's personal secretary. He gives closed-door testimony on Saturday before an investigating magistrate. Juan Carlos, whose health has been declining along with his reputation, and the Spanish monarchy are facing one of their biggest crises ever.

    Corruption Reigns In Spain; King's Son-In-Law Accused Of Embezzling

    Russian central banker slams vast criminal cash exports

    Russia's central bank chief said nearly $50 billion, or 2.5 percent of the national income, had been sent abroad illegally in 2012, much of it controlled by a single group of people - whom he did not identify. Wednesday's findings by the Bank of Russia, one of the country's most respected institutions, amounted to an indictment of lawlessness and corruption in the system of "Kremlin capitalism" that has taken hold under President Vladimir Putin.


    The following statistics are highlights based upon our analysis in The 2011 Marquet Report on Embezzlement:

     Vermont had the highest Embezzlement Propensity Factor* followed by Connecticut Pennsylvania, Montana, Virginia, Iowa and Idaho – identifying these states as having the highest risk for loss to embezzlement in 2011;
     The financial services industry suffered the greatest losses due to major embezzlements;
     Non-profits and religious organizations combined accounted for about one-sixth of all the major embezzlement incidents in the 2011 study;
     The average loss for 2011 was about $750,000; the median loss was $340,000;
     Nearly three-quarters of the incidents (72.3%) were committed by employees who held finance/ bookkeeping & accounting positions;
     The average scheme lasted nearly 5 years;
     The most common embezzlement scheme involved the issuance of forged or unauthorized company checks;
     Nearly 22% of the cases in which a motivating factor was known involve perpetrators who reportedly had gambling issues;
     5% of the cases involved perpetrators who had a prior criminal history; The average embezzler in this study stole $15,189 per month from their employer;
     Nearly two-thirds (64%) of the incidents involved female perpetrators;
     Male perpetrators, on average, embezzled about 25 percent more than females
     Nearly 90 percent of the cases involved individual perpetrators;
     The average adjusted age** of perpetrators at the commencement of their embezzlement was just under 43 years;
     40 – 49 year olds caused the greatest overall losses;
     Most major embezzlers appear to have been motivated by a desire to live a relatively more lavish lifestyle, rather than driven by financial woes; and,
     The average prison sentence was 4 1/3 years (52 months) for convicted major

    Stanford investor body accuses Antigua of aiding Ponzi scheme

    The Official Stanford Investors Committee and the court-appointed receiver of Allen Stanford's financial empire have sued Antigua and Barbuda, the Eastern Caribbean Central Bank and 23 former Stanford Financial Group Co executives, accusing them of

    assisting in the financier's $7 billion Ponzi scheme.

    The committee is seeking at least $90 million of transfers to Antigua, according to the complaint filed on February 15 in U.S. Federal Court in Dallas. It also is seeking punitive damages. It accuses Antigua and Barbuda of shielding Stanford's activities in exchange for loans that were not repaid and real estate. The suit accuses the twin-island nation of being a "'blood brother' to Stanford, and an integral component of Stanford's fraudulent enterprise", according to court documents....

    "Bribes are necessary" - Berlusconi

    “Bribes are a phenomenon that exist and it’s useless to deny the existence of these necessary situations when you are negotiating with third world countries and regimes”
    Former Italian Prime Minister Silvio Berlusconi has shocked the Italian media with his views on bribery and their necessity in doing business in Third World markets. The Italian political scene has been rocked by a series of corruption scandals, while the ongoing election campaign adds to the intensity of the media inquiries in the unsavory business practices of former allies of Berlusconi.

    Fighting corruption in Italy is an uphill struggle

    The current scandal of Monte dei Paschi di Siena (MPS), Italy’s third biggest bank, is a good illustration of how a lack of transparency negatively affects the fight against corruption in Italy. In general, ordinary citizens have little means to monitor and evaluate what goes on in either the public or private sectors. This is because there is no legislation guaranteeing citizens access to information, though some of the candidates for the next parliamentary election have committed to include the approval of the Freedom Information Act in the agenda of the parliament. In the case of the MPS scandal, there is also very little information available on the relationship between political parties and the ‘banking foundations’ that came into being in 1990 and have evolved primarily into what in the United States would be considered political action committees (PACs).

    China rulers struggle with corruption culture

    China’s lunar new year holiday is the busiest time of year for the Zhengzhou East long-distance bus station. But officials in Shuyuanjie village, the district that owns it, complain that every bus rolling out of the station is a reminder of the revenue lost through corruption. Fan Jianhui, the local Communist party secretary, has seized control of the station to run as his private business and despite street protests and complaints by local officials, there has been no investigation into his activities. The case illustrates the struggles of China’s ruling party to ensure basic standards of governance even as its new leaders pledge to root out corruption. Xi Jinping, the new party chief, said last month that the party must fight “tigers and flies at the same time”, adding that no exception would be made in probing graft no matter who was involved. Orders for cadres to cut down on extravagant banquets and adopt a more humble lifestyle have resonated with the public. The speedy investigation and suspension of some officials exposed for alleged corruption on the country’s vibrant social media has raised expectations. But most experts caution that the party will not get far while it refuses outside scrutiny.

    THE GLASS FLOOR: "Pink-Collar" Crime on the Rise

    On Valentine’s Day, Rita Crundwell was sentenced for her role in the largest municipal fraud in U.S. history.

    Small Town Swindle

    In this May 7, 2012, file photo, Rita Crundwell, former comptroller for Dixon, Illinois, leaves federal court in Rockford, Ill., with her attorney Paul Gaziano. (Robert Ray/AP, file)

    Once known as one of the leading American quarter horse breeders, Crundwell embezzled more than $53 million from the town of Dixon, Illinois, which has a population of 16,000 and an annual budget between $6 and $8 million. Crundwell, who was Dixon’s comptroller, carried on her scheme for 20 years, but it was discovered only when a Dixon city clerk opened a letter revealing that Crundwell had set up a secret bank account and was embezzling city monies to finance her lavish lifestyle...

    Pink-collar crime is unquestionably on the ascent. The term generally refers to the rise of women involved in white-collar crime, but it’s also a theory introduced by criminology professor Kathleen Daly during the 1980s to describe the types of embezzlement crimes typically committed by females. Based on my research as a forensic accountant and fraud investigator, I’ve watched this trend swell over the years.

    While perhaps no pink-collar crime has been as scandalous as Crundwell’s, she is far from alone. In fact, according to the 2011 Marquet Report on Embezzlement, women are more likely to embezzle than men. Based on a review of 473 major embezzlement cases in the United States in 2011 alone, nearly two thirds of the cases involved female perpetrators. Among the top 10 cases, five involved “pink-collar criminals” who pocketed anywhere from $4.8 to $16 million.

    Before Crundwell, the largest municipal fraud was also an embezzlement case committed by a woman named Harriette Walters. Walters was convicted of embezzling $48 million over 20 years in her role as a tax-assessment manager for the District of Columbia. She is currently serving a 16 1/2-year sentence in a West Virginia federal prison.

    American videtapes Mexican Federal policeman accepting bribe

    Despite serial corruption allegations, Brazil's old guard just keeps coming back

    The president of Brazil’s Senate has the power to sideline his enemies’ projects and deny them opportunities for patronage. That is why 56 senators voted for Mr Calheiros and only 18 against—even though Aécio Neves and Eduardo Campos, two probable opposition presidential candidates in 2014, had urged their parties to vote for a hastily chosen alternative. Dilma Rousseff, the president, has taken a hard line in the past by sacking ministers facing allegations of corruption. And her Workers’ Party is angry about what it sees as bias: last year’s trial of the mensalão (big monthly stipend) vote-buying scandal saw many of its members handed unexpectedly harsh sentences. But realpolitik prevailed. With the PMDB behind Mr Calheiros, Ms Rousseff accepted his candidacy and telephoned to congratulate him when he won.

    The missing $20 trillion: How to stop companies and people dodging tax

    Reform should thus focus on rich-world financial centres as well as Caribbean islands, and should distinguish between illegal activities (laundering and outright tax evasion) and legal ones (fancy accounting to avoid tax). The best weapon against illegal activities is transparency, which boils down to collecting more information and sharing it better. Thanks in large part to America’s FATCA, small offshore centres are handing over more data to their clients’ home countries—while America remains shamefully reluctant to share information with the Latin American countries whose citizens hold deposits in Miami. That must change. Everyone could do more to crack down on the use of nominee shareholders and directors to hide the provenance of money. And they should make sure that information about the true “beneficial” owners of companies is collected, kept up-to-date and made more readily available to investigators in cases of suspected wrongdoing. There are costs to openness, but they are outweighed by the benefits of shining light on the shady corners of finance.

    Ex-Congressman And Wife To Plead Guilty To Federal Fraud Charges

    In a spectacular fall from political prominence, former U.S. Rep. Jesse Jackson Jr. and his wife agreed Friday to plead guilty to federal charges growing out of what prosecutors said was a scheme to use $750,000 in campaign funds for lavish personal expenses, including a $43,000 gold watch and furs. Federal prosecutors filed one charge of conspiracy against the former Chicago congressman and charged his ex-alderman wife, Sandra, with one count of filing false joint federal income tax returns for the years 2006 through 2011 that knowingly understated the income the couple received. Both agreed to plead guilty in plea deals with federal prosecutors...Jackson used campaign money to buy such things as a $43,350 on a gold-plated, men’s Rolex watch and $9,587.64 on children’s furniture, according to court papers filed in the case. His wife spent $5,150 on fur capes and parkas, the document said... Jackson filed false financial reports with the U.S. House of Representatives in an attempt to conceal his and his wife’s conversion of campaign funds for their personal benefit.

    Graduate School for Corruption Studies

    Those interested in corruption and academia can get a Master’s degree for their efforts. The  International Anti-Corruption Academy, which launched in Laxenburg, Austria, in 2010, announced on Thursday the 30-person inaugural class of its new Master’s in Anti-Corruption Studies. The two-year, part-time program will serve as an enhancement to professional development, the academy said.

    Click here to go to the website of The International Anti-Corruption Academy

    Accounting risk clouds big U.S. business bets in China

    Tales of shady business practices abound in China - fake revenues, phony invoices, sham factories - but until recently, the problem seemed confined mostly to Chinese companies.No longer.  

    Concern is growing about risks to U.S.-based multinationals in a country where American audit regulators are locked out by the Chinese government and bribery and fraud are routine.

    Questions about transparency and integrity weigh heavily on China, the world's second-largest economy, as it assumes greater economic leadership and responsibility. These doubts test its ability to adhere to international standards.

    Stories of business deception - confirmed by corporate sleuths, former business executives, court filings and experts on accounting in China - are commonplace.

    Afghan corruption imperils future success

    The U.S. has spent more on reconstruction in Afghanistan than in any other foreign country, says John Sopko, special inspector general for Afghanistan reconstruction. Sopko says the U.S. is spending about $28 million a day on reconstruction projects, which has amounted to close to $100 billion over the past decade... much of the reconstruction effort has been wasted because of mismanagement and corruption. Recently, Sopko said that his agency's job is to protect U.S. funds from fraud, mismanagement and abuse. Then he noted a series of abuses where buildings collapsed, where contractors disappeared with funds, and where projects were funded in areas that could never be monitored for security reasons. He admitted, "We are at risk of wasting billions of dollars."

    A Photographic Tour Of Russian Corruption

    Russia's corruption is the stuff of legend, and, despite the country leaving the "Wild East"-tag of the 1990s behind, still endemic...This corruption effects people's daily life in countless ways, and that is exactly what photographer Misha Friedman wanted to look at it his new project, "Photo51 — Is Corruption in Russia's DNA?"..."Without the patron-client transaction, business and education, police and military, medical and judicial operations, don’t happen. With time, it got so I couldn’t pass anything — a building, a traffic intersection, an abandoned farm — without becoming hyper alert to the way it embodied corruption’s creep into every organ of civic society. In a way, my sense of alertness was a mirror for the paranoia and arrogance that weaves corruption so thoroughly into the logistics of people’s daily lives." (Click on the title above for a selection of photos with Friedman's own captions below).

    Click for full exhibit: "Photo51 Is Corruption in Russia's DNA?"

    HSBC Reputation "Crushed" by Mexican Money Laundering, CEO Says

    Survey of China's 24 most corrupt officials in 2012

    2012 was the annus horribilis of the “trial by Weibo” of government officials, their public humiliation and ultimate sacking in disgrace. More than ever before, last year witnessed multiple cases where government officials were implicated in sex videos and other corruption scandals that first appeared in full public view on the Chinese Internet and led ultimately to their dismissal. If it wasn’t already before, the public image of government officials of various ranks in China was in crisis in 2012.

    In light of this situation, the Crisis Management Research Center at Renmin University (中国人民大学危机管理研究中心) in Beijing earlier in January this year published a report entitled “The Public Image Crisis of Government Officials” (官员形象危机2012报告). As the Yanzhao Evening News (燕赵晚报) from Hebei province today explains in a front page story, the Crisis Management Research Center surveyed 24 cases of corruption that became public knowledge on the Chinese Internet in 2012 so as to divine some trends and patterns in corrupt behavior among government officials in China. Their findings included that 95% of corrupt government officials keep mistresses, and more than 60% of these corrupt officials are openly cohabiting with their mistresses. Yet this is merely the beginning.

    Among other findings, the Crisis Management Research Center report highlighted the following personal characteristics of the officials involved as well as aspects of the investigations that were carried out:

    Age: Twelve of the 24 officials were older than 50 (although the age of the officials in question could not be exactly verified in eight cases). Interestingly, the oldest corrupt official among the 24 was Bo Xilai, who was aged 63 at the time of being investigated for corruption. The youngest person among the 24 was a 25-year-old village official from Sichuan province.
    Rank: The majority of the 24 cases involved officials holding the rank of Party secretary at the county level. As a former member of the Politburo, Bo Xilai was the highest ranking, followed by Li Chuncheng, the former deputy secretary of the Sichuan provincial Party committee.
    Timing of exposure: Of the 24 officials, there were only six for whom it was not possible to verify exactly when their misdeeds became widespread knowledge on the Internet. The first man to be “outed” in 2012 was Yang Cunhu (杨存虎), former Party secretary for Jingle county (静乐县) in Shanxi province, whose womanizing and apparent “caught in the act” (床照风波) misdeeds became known on Weibo in January. Yet the floodgates only opened in October 2012 when He Guoqiang (贺国强), Politburo member and secretary for Party disciplinary inspection, announced that 660,000 Party officials had been investigated for corruption in the preceding five years, and 24,000 officials had been transferred to judicial authorities as criminal suspects. On the eve of the 18th Party Congress, He’s statement was interpreted as a sign of a new offensive from the highest levels against corruption in the Party, and the dominoes of corrupt officials immediately began to fall one after the other, totaling 13 cases in the three months up to December alone.
    Main grounds for investigation: Eight of the 24 corrupt officials were sent down for crimes that involved women, e.g. rape or intercourse with minors. These included Lei Zhengfu, Li Xingong, and Yang Cunhu. The rest of the cases involved economic crimes. There’s also some peculiar cases, e.g. that of Yang Dacai (杨达才), a.k.a. “Watch Brother”, who faced “trial by Weibo” and ultimate dismissal for being seen wearing various expensive watches.
    Length of time from exposure to dismissal: Of the 18 cases where the time of first exposure and investigation could be exactly determined, the shortest length of time was 12 hours, and the longest 40 days.

    Can Rajoy hang on to his job?

    It is a storm that some politicians would be unable to survive. But Mariano Rajoy the Spanish prime minister, and his People's Party (PP) seem determined to bluster their way past the growing weight of evidence that, for a long time, they ran a double accounting system designed to dodge party funding laws and used it to pay senior party members regular cash extras which they may, or may not, have declared to tax authorities. Guilt cannot yet be assumed, but Spaniards deserve a proper explanation. The reaction so far has been of denial and knee-jerk aggression. María Dolores de Cospedal, the party secretary general, is threatening to sue El País, a newspaper, and any other media outlets that repeat the allegations, which are accompanied by copies of handwritten, detailed accounts over a decade in which €7.5m ($10.2m) allegedly went through accounts that were kept hidden from authorities. The party will need deep pockets if it is to carry out the threat, because almost all Spanish media are running with the story. The revelations about the alleged double accounting did not start in El País, which published the documents on January 31st. El Mundo, which is not normally considered anti-PP, had already reported that five former senior officials had confirmed to the paper that the party's top people had taken regular cash-in-hand payments. A former PP deputy, Jorge Trías Sagnier, then confirmed the news.

    HSBC Holdings Plc’s reputation was “crushed” after it agreed to pay $1.92 billion to settle U.S. probes of money laundering in places such as Mexico, Chief Executive Officer Stuart Gulliver said. “I’ve been in the firm 33 years and this gives me absolutely no pleasure whatsoever,” he told U.K. lawmakers in London today. “You shouldn’t be under any illusion as to how seriously we take this and how upsetting this whole thing has been. We’ve crushed our reputation with the Mexican events.” The settlement included a deferred prosecution agreement with the U.S. Department of Justice. The U.K.’s Financial Services Authority said the London-based bank will have to employ an independent monitor to oversee compliance with anti- money laundering requirements. HSBC’s Mexican branches had become so well-known to drug traffickers as the place to launder proceeds from illicit sales that cartels began using special boxes to speed transactions, U.S. prosecutors have said.

    Brazilian Congress elects leaders probed for corruption

    In a country that has taken big strides toward greater transparency in government in recent years, the Brazilian Congress is out of step. The lower chamber of Congress voted overwhelmingly on Monday for Henrique Alves to become its speaker, even though he is under investigation for graft. The selection of Alves came after the Senate chose a new leader who is also accused of corruption. Ordinary Brazilians see the choices as a step backward in an unprecedented clean-up in Brazilian politics in the past two years that saw six ministers fired because of corruption allegations and a judiciary crackdown on political graft. Alves is a veteran of 42 years in Congress who survived corruption allegations a decade ago when his ex-wife said in a bitter divorce that he had stashed $15 million in offshore accounts. Prosecutors are still investigating her allegations. On Friday the Senate chose Renan Calheiros as its president. He was forced to resign from the post in 2007 due to a scandal involving payments by a lobbyist to maintain his former mistress. "The extracurricular activities of these two characters are well known," said political scientist David Fleischer of the University of Brasilia. "Their election is bad for Congress' worsening reputation." Both men represent states in the poorer northeast of Brazil where traditional crony politics still prevail. They belong to the largest political party, the PMDB, the most important ally in President Dilma Rousseff's coalition government. Rousseff established a reputation for not tolerating corruption by firing six ministers in her first year in office in 2011, which made her very popular among middle-class Brazilians despite a stagnating economy in the once-booming Latin American nation. She distanced herself from corruption scandals that have implicated officials in the government of her mentor and predecessor Luiz Inacio Lula da Silva. But it is the judiciary that has made the biggest splash in recent efforts to clean up Brazilian politics. In a landmark case, the Supreme Court convicted leaders of the ruling Workers' Party for buying votes in Congress to support Lula's government a decade ago. It was Brazil's biggest political corruption case and the Supreme Court did not hesitate in convicting Lula's close political associates, including his former chief of staff Jose Dirceu.

    China bans ads for pricey gifts in anti-corruption push

    Chinese radio and television stations are to ban advertisements for expensive gifts such as watches, rare stamps and gold coins, the Xinhua state news agency said on Wednesday, as part of a push by the government to crack down on extravagance and waste. Such advertisements had "publicized incorrect values and helped create a bad social ethos", the State Administration of Radio, Film and Television (SARFT) said in a release, Xinhua said. The ban comes after repeated calls from Xi Jinping, China's president-in-waiting, for a renewed fight against graft. But it could take a toll on luxury product manufacturers who advertise on Chinese television and radio.


    UK Department for International Development launches plan to clamp down on corruption

    The Department for International Development published anti-corruption strategies for 26 countries, the Palestinian territories and Central Asia in response to the Independent Commission on Aid Impact’s recommendation in 2011 for DfID to develop an “explicit” anti-corruption strategy for high-risk countries. Some of DfID’s top recipients of bilateral aid in 2012, such as the top five Ethiopia, India, Bangladesh, Pakistan and Nigeria  are included in the list. Also included are Uganda and Sierra Leone, which were embroiled in alleged funding misdeeds late last year. Several donors suspended support to the Ugandan government after a report in October revealed some €12 million ($16.4 million) in foreign aid had been misallocated. While no U.K. money was embezzled, DfID froze all financial aid to the government. All aid to the government will remain frozen “until the present corruption case is satisfactorily resolved...

    Texas Medicaid Fraud Recovery Tops $1 Billion

    The Texas attorney general's office is touting a new state record — $1 billion in Medicaid fraud recoveries over the last 10 years.

    About $400 million of the state's recoveries were returned to Texas' coffers. The federal government, which provides roughly 60 percent of funding for the state's Medicaid program for low-income Texans, received the remaining recoveries. Texas has ramped up Medicaid fraud investigations in recent years, and the majority of the state's cases have been resolved with the help of private whistleblowers, who can receive up to 25 percent of a fraud settlement by referring the case to the state.

    More than half of the $1 billion recovered in litigation has come from suits against drug companies accused of misreporting the costs of their drugs to Medicaid providers. On Jan. 4, Pfizer Inc. and Endo Pharmaceuticals agreed to a $36 million settlement with the state over charges that the companies falsely reported market prices for some drugs. 

    How to use big data to tackle public sector fraud

    Three tips for public managers to minimise fraud:

    • Review and secure your core data assets - simply identify what's worth stealing. Note the value to the fraudster may not be the same as the loss to you.

    • Review your IT security - does everybody need admin rights, are your telephone extension numbers the same as your pins?

    • Start saving data even if you think it's of low value - for example, log files and deleted transactions. The subtle behaviours of a successful organised fraudster are hard to spot by eye but increasingly easy to spot with the right technology.

    US Attorney General Cites "Egregious" Conduct by McGraw-Hill, Standard & Poors

    The U.S. is seeking as much as $5 billion in penalties from McGraw-Hill Cos. (MHP) and its Standard & Poor’s unit as punishment for inflated credit ratings that Attorney General Eric Holder said were central to the worst financial crisis since the Great Depression. Holder, flanked today in Washington by state attorneys general who also filed suit against the New York-based company, said S&P made false representations, concealed facts and manipulated ratings criteria and credit models for profit.  “This alleged conduct is egregious -- and goes to the very heart of the recent financial crisis,” Holder said... S&P rated more than $2.8 trillion of residential mortgage- backed securities and about $1.2 trillion of collateralized-debt obligations from September 2004 through October 2007, according to the complaint. S&P downplayed the risks on portions of the securities to gain more business from the investment banks that issued them, the U.S. said.

    Griffiths Energy to Pay Record Fine for Bribery

    Griffiths Energy International Inc. agreed to pay a C$10.35 million fine for bribing an official in Chad by signing two consulting contracts with a company owned by the official’s wife. The fine is a record amount collected by the Royal  Canadian Mounted Police, which has been ramping up investigations and prosecutions under the country’s Corruption of Foreign Public Officials Act. In court documents filed Tuesday in Provincial Court in Calgary, oil and gas company Griffiths admitted former company executives offered improper awards and benefits to a company owned by Nouracham Niam, the wife of Chad’s ambassador to Canada, Mahamoud Adam Bechir. The bribes, which totaled $2 million, were made as consulting contracts to the wife’s company, Chad Oil Consulting LLC, between Aug. 30, 2009, and Feb. 9, 2011, according to the documents. Bechir also is Chad’s ambassador to the United States...“The fine reflects that GEI made these payments in order to persuade the Ambassador to exercise his influence to assist GEI entering Chad,” the court documents said. “The Crown is not alleging and GEI is not admitting that any influence was actually realized.” Griffiths in January 2011 signed a contract with the government of Chad giving it exclusive rights to explore and develop oil and gas reserves in the Borogop and Doseo blocks after agreeing to pay the government a signature bonus of $40 million. Sentencing in the case is scheduled for Friday, at which time the company will plead guilty to one count of bribery, according to the filing. The company said Wednesday it would have no comment until after Friday’s court appearance. As part of the agreement, the company pledged to adopt a “robust” anti-corruption compliance program and to strengthen existing internal controls. The bribes were made by financier and investment banker Brad Griffiths, who was chief executive of Griffiths Energy at the time, and two others, court documents said. Griffiths died in July 2011 in a boating accident...

    Caterpillar Considers "All Options" as Chinese Accounting Probe Continues

    Caterpillar Inc., the largest maker of construction and mining equipment, said it is considering “all options” to recover losses from false accounting at a Chinese business that led to a $580 million writedown. The company is also seeing how it can hold those responsible to account for the “multiyear, coordinated accounting misconduct,” chairman and CEO Doug Oberhelman said Monday...

    Caterpillar, which revealed the discrepancy on Jan. 18, said yesterday it first became concerned about issues at its Zhengzhou Siwei Mechanical & Electrical Manufacturing Co. unit after a count of physical inventory. That assessment took place in November, a month after Caterpillar completed its purchase of Siwei’s parent ERA Mining Machinery Ltd. for HK$6.15 billion ($793 million). The takeover was Peoria, Illinois-based Caterpillar’s largest Asian deal and among $10.3 billion of acquisitions announced by Oberhelman since he became CEO in 2010. Caterpillar says it has replaced the management at Siwei, which makes hydraulic roof supports used in underground coal mining. The U.S. company said it doesn’t comment on pending or potential litigation. “When we put our own team in place, the way we operate, we get to the bottom of it,” CFO Brad Halverson said in a telephone interview yesterday. Those responsible “purposefully misled their auditors and us.”

    Corruption and Cover-Up in the Kremlin: The Anatoly Serdyukov Case

    At the World Economic Forum at Davos on Wednesday, Russian Prime Minister Dmitry Medvedev was asked the inevitable question about Sergei Magnitsky, the Russian attorney who exposed a $230 million tax fraud perpetrated by organized criminals and Russian state officials, only to then be blamed for the crime himself. He died in prison in 2009, when Medvedev was president, after being tortured and denied medical attention, as Medvedev's own Presidential Human Rights Council concluded. Magnitsky's name has since been woven into US human rights law following the passage and presidential signing of a bill that would sanction and blacklist Russians complicit in his persecution as well as any other individuals credibly accused of "gross violations of human rights," such as, say, Chechen dictator Ramzan Kadyrov. This legislation has driven the Kremlin to paroxysms of anti-American hysteria, culminating in the Duma's recent ban on American adoptions of Russian orphans.

    Wal-Mart Accused of Using Mexican Governor to Push Bribes

    Wal-Mart Stores Inc.’s (WMT) Mexican unit used a current state governor there to facilitate $156,000 in bribes meant to help open stores, an ex-lawyer for the retailer told company officials in 2005, according to documents released by members of the U.S. Congress. The payments were negotiated by Graco Ramirez Garrido Abreu, who at the time served as a federal lawmaker for the state of Morelos, a Wal-Mart summary of the accusations stated. It was released Jan. 10 by Democratic Representatives Henry Waxman of California and Elijah Cummings of Maryland, whose staff is investigating the lawyer’s allegations. The accusations by attorney Sergio Cicero Zapata, who alleged Ramirez was “the main contact person” to speed needed permissions from the Urban Development Ministry, came in a summary of an Oct. 13, 2005 meeting with the retailer’s officials. Cicero, a 28-year veteran of the company, told them he set up the bribery scheme while employed by Wal-Mart. He was forced out in 2004 after colleagues questioned his oversight of payments to consultants in company-related real-estate deals. Governor Ramirez denied Cicero’s claims

    Corruption in Russia as a Business

    Many experts admit that in recent years corruption in Russia has become a business. In the 1990s, businessmen had to pay different criminal groups to provide a “krysha” (literally,  “roof”, i.e. protection). Nowadays, this “protective” function is performed by officials. Currently, most public purchases, public contracts and any other services that are done for the government or for state-owned enterprises involve bribes and kickbacks. Not surprisingly, the cost of public works in Russia (e.g. repair and building of roads and pipelines, construction of buildings, etc.) is much higher, sometimes several times higher, than in any other European country. In the end, the Russian population pays for this corruption. For example, some experts believe that the rapid increases in tariffs for housing, water, gas and electricity, which significantly outpace the rate of inflation, are a direct result of high volumes of corruption at the highest levels.

    According to official data from Rosstat (which are believed to significantly understate the degree of corruption,) the number of registered bribery cases increased from 2,700 in 1990 to 13,100 in 2009, and declined slightly to 12,000 in 2010. Therefore, even a government agency has officially registered a 4.5-fold increase in corruption levels during the past 20 years.  However, 65 percent of those convicted under anticorruption statutes have received only conditional sentences, meaning that in practical terms, they have paid no penalty for their misdeeds.

    Do India's political parties condone corruption?

    Last year, India's most respected election watchdog Association for Democratic Reforms informed us that nearly a third of MPs - 158 of 543 - in the parliament faced criminal charges...the watchdog found that a third of all lawmakers at the centre and all states - or 1,448 of 4,835 - faced criminal charges. A total of 641 declared serious criminal cases like rape, murder, attempt to murder, kidnapping, robbery and extortion, among other things...All parties appear to be responsible for this disturbing state of affairs. The Congress party, which has promised people stronger anti-corruption laws, actually gave tickets to 24 candidates facing corruption charges in general and state assembly polls in the last five years. The main opposition Bharatiya Janata Party (BJP) gave tickets to five such candidates. Six key regional parties gave away tickets to 35 such candidates.

    Spain Is Disgusted With Corruption But Can Anything Be Done About It? a country that has long accepted kickbacks as the price of doing business, it’s worth asking: What will it take before Spain does something about its corruption problem?The latest scandal broke on Jan. 16, when Swiss officials reported that they had found accounts containing 22 million euros registered to Luis Bárcenas, former treasurer of Spain’s ruling Popular Party. Appointed by PP leader Mariano Rajoy in 2008, Bárcenas was forced to resign a year later for his possible role in another major corruption case, called Gürtel, and it was not immediately clear how he might have amassed that amount legally. Bárcenas has denied any wrong doing and said he was “holding the amount for investors,” though in a conversation that was wiretapped by police during the Gürtel investigation, an unidentified man claims he bribed Bárcenas for around 6 million euros.

    When Corruption Helps the Bottom Line

    Most investors would agree that less corruption and more transparency in financial markets are good things. But in a contrarian way, a high degree of corruption in foreign markets can actually be beneficial. And that may provide an interesting counterargument to recent enforcement actions...

    Our finding that investing conditions are extremely favorable in Denmark, one of the most transparent countries, makes logical sense. What is surprising is that the most corrupt countries like Venezuela (which is at the very bottom of our list at No. 49) are actually better for investors than moderately corrupt countries like Morocco or Mexico. This finding points to a “perverse level playing field” where potential investors in these extremely corrupt countries know who is in charge and can thereby succeed and prosper. But in moderately corrupt countries, it is unclear who is in charge and how to play the game.

    SPECIAL REPORT: Corporate Fraud & Corruption

    Corrupt and fraudulent behaviour is a major concern for regulators around the world, taking the forms of financial and accounting fraud, money laundering, bribery, and market abuse, among others. With more countries implementing new anti-corruption laws and more resources dedicated to enforcement, prosecution can result in civil penalties, disgorgement of profits, and possible imprisonment. But along with the law, fraud prevention is reliant on the predisposition of companies, investors and lenders to perform proper due diligence and institute an ethical corporate conscience. Businesses must do everything in their power to manage internal controls and avoid non-compliance with regulations.


    Even in an era of financial deception -- of firms peddling bad mortgages, hedge-fund managers trading on inside information and banks laundering money for drug cartels and terrorists -- the manipulation of Libor stands out for its breadth and audacity. Details are only now revealing just how far-reaching the scam was. “Pretty much anything you could do to increase the revenue of your organization appeared legitimate,” says Martin Taylor, chief executive officer of London-based Barclays Plc from 1994 to 1998. “Here was the market doing something blatantly dishonest. I never imagined that people in the financial markets were saints, but you expect some moral standards.” Where Libor is set each day affects what families pay on their mortgages, the interest on savings accounts and returns on corporate bonds. Now, banks are facing a reckoning, as prosecutors make arrests, regulators impose fines and lawyers around the world file lawsuits claiming the manipulation pushed homeowners into poverty and deprived brokerage firms of profits.

    Libor Lies Revealed in Rigging of $300 Trillion Benchmark

    Feds targeting Medicare fraud, political corruption in probes of eye doctor, Sen. Bob Menendez

    An eye doctor is at the center of parallel federal investigations, one into alleged Medicare fraud and the other into possible political corruption.

    The high-profile federal raid on a South Florida ophthalmologist’s office was more about potential Medicare fraud than about U.S. Sen. Bob Menendez, a longtime friend of Dr. Salomon Melgen. Joining FBI agents on the two-day raid at the doctor’s West Palm Beach eye center: a team of investigators from the U.S. Department of Health and Human Services, which investigates Medicare wrongdoing. The FBI is separately examining the ties between Menendez, a New Jersey Democrat, and Melgen in a parallel corruption investigation launched last year, The Miami Herald has learned. FBI agents are investigating the allegations of a shadowy tipster who claimed the doctor flew Menendez on his plane to the Dominican Republic. Earlier this month, Menendez quietly sent a $58,500 personal check to Melgen’s company to reimburse the cost of two flights to and from the Dominican Republic, the senator’s office confirmed Wednesday. The tipster’s most explosive charge: that the two allegedly hired underage prostitutes.

    Read more here:

    Spanish Government Rocked By 'Secret' Accounts That Allegedly Show Massive Corruption

    El Pais Spain
    Spanish prime minister Mariano Rajoy and his government have been rocked today by documents published in El Pais that appear to show his party receiving a large amount of "secret" donations. El Pais claims that the documents show a series of payments from well known businessmen to the conservative People’s Party for more than a decade, with the last payment in 2009. According to the Guardian, one document appears to show Rajoy himself receiving payments totaling €250,000 ($340,000) that had been hidden from tax authorities. The scandal revolves around former treasurer Luis Bárcenas, who is under investigation for allegedly having €22 million ($30 million) in a Swiss bank account. Bárcenas is alleged to have kept a double accounting system for the party to hide the payments. For the Spanish government this timing is bad — CNN notes that just one day ago there was a parliamentary debate over how to stop corruption. The country is currently suffering from one of the worst unemployment rates in Europe, and has seen widespread protests on the streets of its major cities.

    El Pais Screenshot

    Spanish prime minister Rajoy accused of hiding secret income

    Corruption case threatens Spain's ruling party - and its economy

    Former Peregrine CEO Wasendorf gets 50 years in prison

    A U.S. judge on Thursday sentenced the founder of Peregrine Financial Group to 50 years in prison for looting hundreds of millions of dollars from the brokerage, saying his customers would probably never recover the money they lost. Russell Wasendorf Sr., who had tried to kill himself just before the fraud was uncovered, received the maximum sentence allowed by law and was ordered to pay $215.5 million in restitution for his nearly 20-year scheme.

    Australia MP arrested on 150 charges of fraud

    Craig Thomson is accused of misusing funds of the union which he headed before joining parliament to pay for prostitutes and lavish hospitality. Mr Thomson was suspended from the governing Labor Party last year and sits in parliament as an independent. The charges relate to Mr Thomson's time as head of the Health Services Union. Fraud detectives arrested him at his electoral office in New South Wales, after an 18-month investigation into allegations that he improperly used union funds on prostitutes, entertainment, air travel and cash withdrawals in excess of $100,000.


    DOJ Prosecution Of Individuals - Are Other Factors At Play?

    • Since 2008, the DOJ has charged 77 individuals with FCPA criminal offenses.
    • 61% of the individuals charged by the DOJ with FCPA criminal offenses since 2008 have been in just four cases and 77% of the individuals charged by the DOJ since 2008 have been in just seven cases.
    • There have been 53 corporate DOJ FCPA enforcement actions since 2008 and of the 53 corporate DOJ FCPA enforcement actions, 39 (or 74%) have not  (at least yet) resulted in any DOJ charges against company employees.

    These statistics should cause alarm, including at the DOJ as it has long recognized that a corporate-fine only enforcement program is not effective and does not adequately deter future FCPA violations...

    If a corporate DOJ FCPA enforcement action is the result of a criminal indictment or resulted in a guilty plea by the corporate entity to FCPA violations, there is a 83% chance that related criminal charges will be brought against a company employee.  If a corporate DOJ FCPA enforcement action is resolved solely with an NPA or DPA, there is a 6.5% chance that criminal charges will be brought against a company employee.

    A Summary Of FCPA Enforcement Statistics

    This...summarizes, in one spot, the various Foreign Corrupt Practices Act facts and figures published over the past few weeks...just three unique historical events (Iraq Oil for Food, Bonny Island, Nigeria conduct, and Panalpina-related issues) served as the foundation for 35% of all corporate FCPA enforcement actions between 2007-2011 and resulted in 55% of settlement amounts in corporate enforcement actions between 2007-2011.  Adding just the 2008 Siemens enforcement action to the settlement amount calculation, results in just four unique historical events accounting for 77% of settlement amounts in corporate enforcement actions between 2007-2011....61% of the individuals charged by the DOJ with FCPA criminal offenses since 2008 have been in just four cases and 77% of the individuals charged by the DOJ since 2008 have been in just seven cases.  There have been 53 corporate DOJ FCPA enforcement actions since 2008 and in 39 actions (or 74%) there have not (at least yet) been any DOJ charges against company employees.  Of the individuals charged by the DOJ with FCPA criminal offenses since 2008, 70% were employees or otherwise affiliated with private business entities even though 79% of corporate DOJ FCPA enforcement actions during the same time period were against publicly traded corporations.  In short, a private entity DOJ FCPA enforcement action is approximately three times more likely to have a related DOJ FCPA criminal prosecution of an individual than a public entity DOJ FCPA enforcement action...since NPAs and DPAs were first introduced to the FCPA context, 83% of corporate DOJ enforcement actions that were the result of a criminal indictment or resulted in a guilty plea by the corporate entity to FCPA violations resulted in related criminal charges of company employees.  By comparison, only 6.5% of corporate DOJ FCPA enforcement actions resolved solely with an NPA or DPA resulted in related criminal charges of company employees...64% of the individuals charged by the SEC with FCPA civil offenses since 2008 have been in just five cases.  There have been 57 corporate SEC FCPA enforcement actions since 2008 and in 45 actions (or 79%) there have not (at least yet) been any SEC charges against company employees.  

    Chevron Paying At Least $326,000 Bribe to Ecuadorian Judge For False Testimony

    In press statements, Chevron has admitted it will pay at least $326,000 to a former disgraced Ecuador judge for false testimony designed to help the oil giant evade a $19 billion judgment against the company for the world's worst oil contamination. Last week the Ecuadorian plaintiffs, who won the judgment, revealed in a press release that Chevron had offered lucrative benefits packages to former Ecuadorian judges in return for false testimony in order to undermine the environmental trial that led to the $19 billion verdict. Chevron's $326,000 payment to a former disgraced Ecuador judge, Alberto Guerra Bastides, includes a $38,000 one-time payment for Guerra's erroneous affidavit, immigration from Ecuador to Miami, Florida, a generous $12,000 a month salary, plus an undetermined amount in health insurance and legal costs -- a package of kickbacks and bribes similar to the ones offered to Chevron contractor Diego Borja, who secretly videotaped another Ecuador judge and falsely accused him of taking a bribe. Borja, who Chevron has paid at least $2.2 million since 2009, later recanted his story in a conversation with a friend after Chevron re-located him from Ecuador to California then Texas. The new effort – which representatives of the plaintiffs said was tantamount to bribery – comes at a time when Chevron seems increasingly prone to use desperate measures to shore up its ailing legal position after an Ecuador court found it guilty of deliberately dumping billions of gallons of toxic waste when it operated in Ecuador from 1964 to 1992. Chevron now faces seizure actions targeting an estimated $15 billion of assets in Canada and Brazil, while an Argentine court recently froze millions of dollars of company assets in that country.

    Karen Hinton, the U.S. spokesperson for the Ecuadorian plaintiffs, said: "Alberto Guerra is a disgraced former Ecuadorian judge who is being paid hundreds of thousands of dollars by Chevron to make false allegations about the Ecuador trial court judgment. In exchange for living the good life in Miami at Chevron’s expense, Guerra is now trying to carve out a role in the company’s ongoing Nixon-style dirty tricks campaign to evade paying its $19 billion legal obligation for creating the world’s worst environmental catastrophe. This obligation is owed by Chevron to the indigenous and farmer communities in Ecuador whose cultures have been decimated by the company’s greedy and reckless practice of discharging billions of gallons of toxic waste into the environment. "By its repeated actions of subterfuge, Chevron has shown that it is more than willing to violate the law to escape being held accountable for its environmental crimes and fraudulent cover-up in Ecuador. We note that Chevron’s campaign in Ecuador to bribe judges and illegally pressure the government to quash the legal case already has cost the company a multi-billion dollar punitive damages penalty and could result in the loss of billions of dollars worth of strategic company assets in seizure actions around the globe."


    Ponzi Schemes After Madoff: A Sad Story Continues

    It has been almost exactly four years since Bernie Madoff was revealed as the operator of the largest Ponzi scheme in history (estimated at $64.8 billion by prosecutors). One might think that with all the publicity and news coverage, people would have become more cautious and avoid falling prey to investment fraudsters. Unfortunately, a review of the list of SEC enforcement actions against Ponzi schemes suggests otherwise. To summarize, in each of the years from 2010 to 2012 (through December 10th), there were 13 to 16 enforcement actions with total amounts ranging from $1.5 to $2.7 billion. A summary of the enforcement actions is shown... (in the text of this article - click on headline). While the SEC has clearly become better at identifying Ponzi schemes after Madoff, the same cannot be said for the population at large. P.T. Barnum’s famous saying about the frequency of the birth of suckers comes to mind.

    Some Ponzi schemes are so outrageous that they would truly be humorous if they did not involve the wrecking of lives. Here is one of my favorite examples which I wrote about a few months ago, When Truth is Stranger than Fiction. A common element among Ponzi schemes is their targeting of an affinity-based group. For example, Madoff famously pursued the Jewish community, especially those connected to certain Florida country clubs. The Ponzi operators do not simply exploit the human emotion of greed, but they take full advantage of peoples’ longing to belong to a group that they perceive as desirable. Madoff was a master of creating an aura of exclusivity around his fund.

    Since fiscal year 2010, the SEC has brought more than 100 enforcement actions against nearly 200 individuals and 250 entities for carrying out Ponzi schemes (Click here for examples)

    Financial Stars Behind Bars?

    Hardly a day goes by without a settlement between a bank and a US government agency or regulator. The latest one is between Bank of America and the government-backed mortgage underwriter Fannie Mae: $3.55 billion in cash; $6.75 billion in repurchases of bad mortgages that Countrywide, later acquired by BoA, sold to Fannie; and an additional $1.3 billion in cash to resolve Fannie’s servicing issues with BoA. And yet, as in most settlements, BoA did not admit any fault. Was BoA tripped up by bad luck or sloppiness? Or did it and other financial institutions behave with intent to defraud investors? As a result of the settlement, we will never learn the truth (at least the version that is established beyond a reasonable doubt in open court). In each settlement, the investigations are stopped, and whatever has been found is sealed. Fortunately, academic research may be able to shed some light on this important matter. In a recent paper, the economists Tomasz Piskorski, Amit Seru, and James Witkin compare the characteristics of securitized mortgages as they were disclosed to investors at the time of sale with these loans’ characteristics as they were recorded in the banks’ proprietary databases. The data cover non-agency residential mortgages, which are not the same as those targeted by the settlement, and the data come from a pool of banks, so we do not know which banks were present. But their data are similar enough to enable us to learn a lot about what was going on.

    Governments fall short in fighting defense corruption: survey

    More than two-thirds of countries, including many of the world's largest arms traders, have inadequate safeguards to prevent corruption in their defense sectors, a survey by an anti-corruption watchdog said on Tuesday.

    Germany and Australia are the only countries out of 82 surveyed by Transparency International UK with strong anti-corruption mechanisms, according to what the watchdog says is the first index measuring how governments counter corruption in defense.

    Fifty-seven of the countries, almost 70 percent, had poor controls against corruption, according to the survey, which rated governments by criteria such as the strength of parliamentary oversight of defense policy and the standards expected of defense firms.

    The 82 countries surveyed account for 94 per cent of global military expenditure in 2011, worth $1.6 trillion, while the global cost of corruption in the defense sector is estimated to be at least $20 billion a year, the watchdog said.

    State funding for political parties leads to arrogance, corruption and authoritarianism

    One of the saddest consequences of the Westminster expenses revelations is that sensible people are now wondering whether there might, after all, be something in the idea of state funding for political parties. Perhaps you are one of them. Perhaps you imagine that, for all its disadvantages, it would at least take some of the sleaze out of the system. Perhaps you have reluctantly concluded that it would be a lesser evil than making parties dependent on trade unions and wealthy donors. If your thoughts are trending that way, my friend, look at what is happening in Brussels. Since 2003, the European Parliament has paid for pan-European political parties. There are currently 13, and each is funded in proportion to the number of MEPs who support it. The little ones might get a couple of hundred thousand euros a year. The behemoths – the Party of European Socialists and the European People's Party – qualify for several millions. Europe's various fascist movements recently buried their mutual loathing for long enough to set up such a party, which means that they qualify for, by my reckoning, a little under €300,000 a year. Most MEPs have reacted with drooling horror. But, under the current system, there is no question that the BNP, Jobbik and the rest are eligible for their share. The best legal brains in the European Parliament examined the matter, but could find no loophole. Shaven-headed losers who spend their time trolling blogs from their mothers' basements are as entitled to representation as anyone else, and their representatives can't be distinguished in law from other duly elected MEPs. When the law doesn't serve their purpose, Euro-integrationists are quick to discard it. They are currently amending the rules so that a party can be deprived of funds if it fails to uphold 'European values'. Who will determine whether it meets the criteria? In the last analysis, a plenary vote of the European Parliament. In other words, the question of whether a party qualifies will be in the hands of its political opponents, who will have a direct financial interest in barring it since, if it is dissolved, its share of the funding will be divided among the other parties. If that doesn't alarm you, it should. The de-registration of opposition movements is the favoured tactic of dictators the world over. Most autocracies now hold regular elections: Iran, China, Zimbabwe. But participation in those elections is restricted to approved parties. A Polish MEP, shocked by the current proposal, told me: 'This is exactly what the Communists did. They didn't ban elections. They just banned the people they didn't like from contesting the elections'.

    Russia puts dead lawyer on trial for corruption

    RUSSIA is preparing to put lawyer Sergei Magnitsky on trial – even though he died in 2009 – in the latest twist in a case that has become symbolic of rampant corruption in the country and which has severely strained relations with the United States.

    The posthumous trial has already provoked outrage among rights groups, who see the whistleblower’s case as indicative of the rampant judicial abuse, outrageous corruption, and blurred boundaries between the state and organised crime that have plagued Russia under president Vladimir Putin.

    Russian prosecutors accuse Mr Magnitsky and his former client, London-based investor William Browder, of a $230 million tax fraud carried out through subsidiaries of Browder’s company, Hermitage Capital Management.

    Mr Magnitsky claimed in 2008 that the fraud was committed by an organised crime group which colluded with corrupt interior ministry officials to register themselves as the owners of three Hermitage subsidiaries, and then claim a $230m (about £146m) tax rebate. Mr Magnitsky was arrested by the same officials and accused of stealing the money himself. A year later, Mr Magnitsky, 37, died in jail of pancreatitis, after what supporters claim was a systematic torture campaign.

    Davos 2013: WEF report urges Russia to tackle corruption and step up reform

    Corruption has gone unabated in the country despite a significant increase in GDP, while growing spending on an ever-larger government apparatus has failed to improve the delivery of public services in sectors ranging from health to infrastructure

    Davos 2013: tackling corruption the unconventional way

    How do you tackle corruption? To that age-old question, Rahul Bajaj, the Indian billionaire businessman, has some unconventional answers: “Stop prosecuting givers of small bribes, ban criminals from standing for election, and use the e-ID to transfer benefits directly from the government to the receiver.” Bajaj was addressing a meeting at the World Economic Forum on how to achieve EM growth in a global slowdown. Corruption was the biggest issue singled out – and the Indian subcontinent figured large. Indicative of the problem was a private aside from an executive at a large European car manufacturer. “We’d be interested in becoming active in Pakistan,” the executive, who preferred to stay anonymous, told beyondbrics. “But there’s no way we’ll do it. Corruption is too widespread.” That was reflected in the debate. “Sixty per cent of what people said was about corruption,” Huguette Labelle, chair of Transparency International and panelist in the discussion, told beyondbrics. “Yet I find that very encouraging. It shows people take corruption increasingly serious, understanding that it impacts growth.”

    Crime, corruption, and law enforcement in the USA

    "...65 million people with criminal records are contributing to high unemployment and under-employment rates due to increased use of background checks in recent years. Many of the millions of people with previous criminal records who lost their jobs during the economic distress of the last four years obtained their original employment in prior eras when employers viewed background checks as expensive and unnecessary. Suddenly, despite possessing strong experience, required skill sets, and qualifications from previous employment, these candidates are faced with dim prospects for obtaining positions similar to their former jobs, according to a report from the National Employment Law Project...

    Each year 13 million people are admitted and released from local jails, with another 700,000 transferred to – or released from - state and federal prisons. There are 2.3 million convicts incarcerated in U.S. jails...

    For the 65 million with criminal records, 46 million on food stamps, and the 25 million unemployed and under-employed people in America, the harsh realization that the (US Government) has failed to prosecute a single case against those responsible for the financial crisis is proof that in...America money can buy immunity from the nation’s laws."

    Corruption Is Latest Threat to Spain, Eurozone

    Recent bond market stabilityis now being overshadowed bya corruption scandal within Spain’s ruling partythat could destabilize the government and initiate another wave of crisis in the Eurozone.

    Spain is ruled by the center-right Partido Popular (PP). The party won a landslide victory in November 2011 and returned to power after more than 7 years in opposition. Allegedly, corruption has been common among the party ranks for around 20 years, regardless of the group’s political situation. Bribes ranging from EUR 5,000 to EUR 15,000 have been commonplace, even among the highest ranks, and it has been alleged that even top politicians may have been aware of these “under-the-table” transactions and perhaps even approved them. Luis Bárcenas, who managed the party’s finances, is thought to have EUR 22 million stashed away in a Swiss bank account. However, this squirreled money is just the tip of the iceberg, according to various articles in the Spanish press. Coverage of corruption hasn’t been limited to the left-leaning papers, either. It was also reported by the right-leaning El Mundo.

    Prime Minister vows that most corruption cases in Russia will end with guilty verdicts

    Russian Prime Minister Dmitry Medvedev said that most of the 50,000 corruption cases in the country would end with guilty verdicts. “Fifty thousand cases have been opened on charges of corruption,” Medvedev told Bloomberg. “I think it’s a lot. A considerable part of them will reach the court and end with guilty verdicts. What else is this if not the fight against corruption?” He stressed that corruption is “a state of mentality” and “not only government officials”. “Corruption also means those who bring money. Corruption in our country exists not only in the executive branch but also in everyday life.

    South Korean President's brother gets two-year jail term

    A South Korean court on Thursday sentenced the elder brother of President Lee Myung-Bak to two years in jail after convicting him on corruption charges. The Seoul central district court also ordered Lee Sang-Deuk, 77, to pay fines totalling 750 million won ($701,600) -- the same sum he was found guilty of taking in kickbacks from bankers and a businessman. Lee, a six-term lawmaker, was arrested in July last year on graft charges and allegedly helping troubled banks avoid audits. His activities were linked to a major corruption scandal in early 2011 when four savings banks were suspended for inadequate liquidity, triggering a wider probe. So far 16 savings banks have been suspended and four bankers have committed suicide.

    Red flags revealed in filings of firm linked to Caterpillar fraud

    A Chinese mining equipment company at the centre of an alleged accounting fraud was also involved in a web of insider loans and asset transfers prior to its purchase by Caterpillar Inc., public filings show.
    The transactions, while not illegal, should have sounded warnings about the company's finances when the U.S. firm came calling last year, corporate governance experts said.
    The world's largest maker of tractors and excavators said last week it was writing off most of the $654 million value of its purchase of ERA Mining Machinery Ltd. after uncovering "deliberate, multi-year, coordinated accounting misconduct" at its subsidiary Zhengzhou Siwei.
    Caterpillar said an internal investigation had uncovered improper accounting of inventories, revenue recognition and cost allocation at Siwei, designed to overstate the profitability of the business in the years before it bought it.
    Corporate disclosures from ERA filed prior to the takeover show some unusual transactions, including directors lending the company cash at relatively high interest rates and asset-shuffling between Siwei and related parties. Investors and corporate governance experts say these were potential red flags that should have prompted Caterpillar and its team of lawyers, accountants and bankers to ask some searching questions before pulling the trigger on the deal.

    CHINA: Xi's anti-corruption resolution arouses public expectations


    Xi Jinping, general secretary of the Central Committee of the Communist Party of China (CPC), on Tuesday told members of the CPC's disciplinary arm that the CPC will unswervingly fight corruption and work to restrain official power. The most quoted phrase from Xi's speech was "Power should be restricted by a cage of regulations," which some believe connects with the theories of classic Western political philosophers. Xi explained that such a cage refers to sound disciplinary, prevention and guarantee mechanisms to ensure that people do not dare to, are not able to and cannot easily commit corruption. The speech has received a warm welcome, as well as comments indicating increased expectations, from public intellectuals and netizens.


    Seizing the Moment: The world's leading nations are convening a meeting on the fight against corruption. Here's what they ought to be discussing.

     First of all, the problem of political finance needs to be attacked boldly. Across the world, the raising of political funds for campaign-related purposes is probably the largest single source of corruption. The widespread recognition of the issue of political funding in the 2012 election in the United States has advanced the case for reform. But the problem may run even deeper elsewhere. (It costs $10 million to run a constituency-based campaign in India, for example.) Action has to be domestic, and Brazil has shown the way with the imprisonment of 29 congressmen for taking bribes under President Lula in 2005 and 2006. The minimal step would be to outlaw cross-border political funding, as has already been done in the United States, the United Kingdom, and several other countries. Here international collaboration is both practical and necessary. Similarly critical is the behavior of international companies -- not just the usual suspects in the Fortune 500, but also thousands of other firms that affect the business culture in every country. That the problem remains entrenched is demonstrated not least by the recent scandal surrounding Walmart in Mexico. But there are some signs of progress. 

    Prosecutors: Peregrine Financial fraud loss exceeds $215M

    Peregrine Financial Group's former chief executive stole more than $215 million from customers of his now-defunct futures brokerage and should be sentenced to the maximum 50 years in jail, U.S. prosecutors said Tuesday. Russell Wasendorf Sr., 64, who founded the firm, has pleaded guilty to embezzlement but wants a lighter sentence, saying that the loss was less than $200 million and that he used "very basic, simple means" to carry out his fraud, according to documents filed by U.S. prosecutors. Wasendorf, whose attempted suicide sent his firm into bankruptcy last July, is in jail in Iowa and will be sentenced Jan. 31. U.S. prosecutors say the large loss, the sophisticated nature of the crime and the sheer number of victims -- more than 10,000 -- justify his spending the rest of his life behind bars. "While some of defendant's individual acts might be characterized as simple in isolation, they were part of an exceedingly complex scheme whereby defendant's entire business was used as a mechanism to gather and purloin investor funds," prosecutors said in their sentencing memorandum...

    The Face of Corruption in Africa: Case of The Lutheran Church in Tanzania

    On November 26, 2011, the North Central Diocese of the Evangelical Lutheran Church of Tanzania (NCD-ELCT) took over the operation of Peace House Secondary School (PHS) in Arusha, Tanzania. Prior to the take-over, PHS was funded, built, owned and operated by Peace House Africa (PHA), a Minnesota-based non-profit. What you may not be aware of is that the NCD under the direction of Bishop Thomas Laiser and General Secretary Israel Karyongi, literally stole the school from PHA at gunpoint. The following day, the American Managing Director and staff were evicted from the country by the Immigration Authorities, who had been influenced by the Bishop. Bishop Laiser has issued many false public statements attempting to justify the stealing of the school. However, in the end it was simple armed robbery of a $6 million PHA investment in Africa, meant for the benefit of orphan kids. The school has now been converted to a private, for-profit school charging tuition that is totally unaffordable to destitute students.

    RUSSIA: When the crowd fights corruption

    In Russia, citizens are cleaning up business and government. When the World Economic Forum recently surveyed leaders to identify the greatest impediments to conducting business in developing countries, they cited corruption as the biggest hurdle in Russia, the second-biggest in India and the fifth-biggest in both China and South Africa. Governments in some emerging markets have taken action. Legislators and courts in Brazil, China, India and other countries are starting to take on vote-buying, contract-rigging, election-fixing and other types of illegal activities. Private citizens are also joining the fight against corruption. Some are making the effort via for-profit ventures; others take a grass roots approach, using the power of the Internet to shine a light on corrupt practices in government. We have been studying this new breed of citizen-driven initiatives in China, India, Russia and Turkey because business leaders can no longer ignore them: These initiatives are raising public awareness as never before and demand that CEOs pay attention. We focus in this article on RosPil, a web-based effort to expose corruption in Russia. Founded in 2010 by Alexey Navalny, a lawyer turned anti-corruption activist, RosPil crowdsources its activities by distributing tasks to anonymous participants who identify requests for government tenders that are designed to generate kickbacks. As Navalny’s efforts gain popular support in Russia, they raise issues for business that are not easy to address.

    Anti-Corruption Views - Probity among personnel: Halting corruption in the ranks

    The risk of defence personnel carrying out corrupt acts is important. Armed forces exist to protect a country’s citizens. Corruption among personnel breaks a bond of trust between citizens and the military. It harms soldiers, sailors, and airmen too, and can cause divisions in the ranks. Troops who can afford to pay bribes to progress in their career might gain rewards over those who resist the temptation to be corrupt.

    Insider Trading Enforcement and Deterrence

    Federal prosecutors all around the country are relying on new sources of evidence – detailed trading data which is being mined for suspicious trade patterns.  Computerized reviews of trading activity help to identify suspects and then traditional investigative techniques may be used such as examining bank records or conducting witness interviews. The government’s trial record in prosecutions of insider trading defendants is extremely impressive.  It is hard to remember a high profile case they have lost.  Juries can understand the issue of trading on confidential information and the cases are far less complex than typical white collar fraud cases. Interestingly, as sentences in insider trading cases have increased, insider trading continues, some estimate at even higher rates.  Longer sentences and high-profile prosecutions do not appear to be deterring the criminal conduct.  The potential punishment is not the deterrent but the fact of getting caught.  

    Former Compliance Officer Accuses Siemens of Undermining 2008 Anti-Bribery Agreement | Just Anti-Corruption

    A former compliance officer of Siemens AG in China filed a lawsuit this week in the Southern District of New York accusing the German engineering giant of deliberately undermining an internal anti-corruption program created as part of record 2008 foreign bribery settlement...

    Revolving door swings freely in America's statehouses

    In Illinois and 14 other states, there aren’t any laws preventing legislators from resigning one day and registering as lobbyists the next, according to data compiled by the National Conference of State Legislatures. Most other states impose “cooling off” periods of one or two years during which legislators or government officials are restricted from lobbying or taking certain private-sector jobs. But a review by the State Integrity Investigation found that in several of those states, including Florida, Indiana and Utah, to name a few, the rules are riddled with loopholes, narrowly written or loosely enforced. And so in many states, it is simply common practice for lawmakers and other officials to cash in on their expertise and connections by lobbying or consulting for the private sector immediately after leaving office. Ethics experts say this “revolving door” erodes public trust in government and corrupts policy-making.

    EU corruption amounts to Euro 120 billion in bribes a year

    A 2012 poll by Eurobarometer showed that 74% of Europeans thought corruption was a major problem in their country, findings supported by studies carried out by  Transparency International , which asked people about the contacts they had with various institutions, such as police, judiciary, medics and so on. They also asked which of these had transactions involved payment of a bribe. The results show that around 20 million bribes are paid to officials in the 18 EU nations covered by the report. This breaks down into the following:

    Medical services (8.1 million cases), utilities (2.8 m), education system (1.9 m), registry and permit services (1.8 m), tax revenue (1.8m), police (1.5 m), land services (1.4 m), judiciary (0.8 m) and customs (0.6m).

    There are regional variations in the figures, but with over 8 million needing to pay a bribe to gain medical treatment, the problem is deeply rooted and serious.

    The  European Commission  estimate the cost of corruption is equivalent to 1% of EU GDP, some €120 billion. When it comes to tackling systemic corruption there seems to be little co-ordination and a lack of political will in some states. As the Commission informed deputies, “To date there is no mechanism in place monitoring the existence, and assessing the effectiveness, of anti-corruption policies at EU and Member State level in a coherent crosscutting manner.”


    Brazilian corruption: far from over

    Congress is considering a constitutional amendment that would limit the investigative powers of the Federal Public Prosecutors’ Office – precisely the institution that prepared the mensalão case for prosecution. The idea behind the amendment – sponsored by congressman Lourival Mendes, a former district police chief – is that only the police should have powers of investigation. He argues:

    “The lack of clear rules defining the role of the public law enforcement agencies in the legal process has caused major legal problems for the country.” He has a point. Brazil’s system of awarding public prosecutors immense investigative independence does sometimes lead to chaos...But the independent public prosecutor system, introduced after the end of Brazil’s military dictatorship, is designed for exactly that – to create an extra layer of accountability in society that cannot be tampered with by politicians, the police or the army...Critics of the amendment have dubbed it the “bill of impunity”. They say the police, already struggling with a huge caseload, will be overwhelmed if they also have to take on the burden of the public prosecutors’ office. The result would be that many cases of public interest would never be investigated.


    Corruption impedes development in Africa

    PAN African Parliament President Bethel Amadi said on Wednesday that corruption continued to "derail government programmes and sustainable development on our continent"..."Yes, corruption exists and it has been there for many years, but we won’t accept it as a part of life ... We need to find ways to speak up, find ways to limit it, and it has been reduced in many areas," Mr Amadi said. United Nations Development Programme democratic governance director Geraldine Fraser-Moleketi said the February talks were a response to growing calls, especially from civil society, to "discuss governance and accountability bottlenecks" in progress towards the goals. Africa, Asia and most of South and Central America show a high degree of corruption in Transparency International’s Corruption Perceptions Index. South Africa has fallen 31 places on the index in the 11 years to 2012, and ranked behind Ghana, Namibia, Rwanda and Lesotho in last year’s edition of the index. It is now ranked 69th of 176 countries.


    The FBI arrested the former FEMA Director of Human Resources due to public corruption the director allegedly engaged in while serving in the post. Timothy W. Cannon, 63, could be facing up to five years behind bars after pleading guilty to a charge of conflict of interest for offering a lucrative federal contract to a company in exchange for later employment with the same company--a contract that was ultimately supervised by Cannon himself.

    Pakistan Supreme Court Orders Arrest of Prime Minister

    In its order issued Tuesday, the Supreme Court ordered the National Accountability Bureau, a government body that investigates graft, to arrest Mr. Ashraf and 15 other senior current or former officials, including a former finance minister and a former finance secretary. The case relates to allegations that Mr. Ashraf took millions of dollars in kickbacks as part of a deal to build two electricity power plants while serving as minister for water and power between March 2008 and February 2011. A court prosecution in the case been ongoing for over one year, so it was the timing of the arrest order that raised eyebrows. It started in December 2011 when two senior opposition figures filed a petition against Mr. Ashraf in the Supreme Court; four months later the court ruled that the plants were illegal, ordered their closure, and instituted proceedings against Mr. Ashraf. The case has particular political resonance because Pakistan’s energy crisis, which has seen severe electricity rationing across the country, is the source of some of the main complaints against the government.

    Pakistan's anti-corruption chief refuses court order to arrest prime minister in graft case

    Special IG for Afghan reconstruction cites rampant fraud, waste

    Much of the $28 million the United States spends daily to build up Afghanistan is thrown at projects without planning, and little attention is paid to whether the work ever gets done right, the U.S. official in charge of oversight of Afghan reconstruction said Thursday. Meanwhile, security is so bad in many areas that keeping watch over projects is nearly impossible, while bribes and corruption continue to flourish, said John Sopko, who in July took over the job of Special Inspector General for Afghan Reconstruction, or SIGAR. In his first public speech since his appointment, he painted a grim picture of the state of the U.S. campaign to remake Afghanistan, an effort that has cost thousands of U.S. lives and hundreds of billions of dollars. The quarterly reports that Sopko, a longtime prosecutor and congressional counsel, has since issued form a counterpoint to more optimistic assessments coming from the Pentagon and other parts of the U.S. government. In order to wisely use U.S. taxpayer money to reconstruct Afghanistan, U.S. military and civilian officials need to start asking tough but simple questions, Sopko told an audience at the Stimson Center, a Washington, D.C.-based think tank focused on global security issues. “Are these programs and buildings needed? Have you asked the Afghans if they want them?” he said. “Have we designed them to meet any specific needs that the Afghans have? And have we designed them in such a way that they can be sustainable in the future?”

    Protecting donor income from fraud and corruption is better to take preventative measures and in this regard there are many courses of action available to a charity. These may include assessing their use of enthusiastic but unqualified volunteers as opposed to experienced paid professionals, testing and evaluating their internal controls, seeking compliance advice in respect of donor programmes, joint venture and agency due diligence, reviewing anti-money laundering and bribery and corruption policies. It is important to remember that fraud and corruption are carried out by people who believe they have the justification to condone such acts and the motivation to carry them out. For an anti-fraud culture to truly permeate a charity, the charity must establish robust recruitment practices so that it can build a workforce that is trustworthy and co-operative, with employees at all levels who see fraud prevention and detection as part of their daily responsibilities. Furthermore, the charity can ensure employees' fraud awareness by implementing an effective employee anti-fraud education program, ethics policy and code of conduct. It is vital that employees understand the importance of and feel comfortable in accessing whistleblower lines to communicate their suspicions pertaining to fraud and corruption.

    The Inside Story: Walmart and the shadow of corruption

    This is the inside story of how things came to a pass in Walmart's fledgling Indian operations: where it is conducting a full-blown internal investigation, where it has suspended five officials while the probe is on, where it has stopped dealing with the 24 'consultants' and where it has put its expansion on hold. The India story is based on interviews with three people with direct knowledge of the situation. They asked not to be named due to the sensitivity of the matter.
    ET corroborated their narration with Walmart's consultants, suppliers and vendors, who too declined to speak on record for similar reasons. This is how it all unravelled in
    Walmart India


    Hello 2013: to fight corruption, China must fight the causes of corruption

    The most effective way to contain corruption is the prevention of corrupt activities rather than the prosecution of corrupt officials.

    Unfortunately, in China today, fighting corruption has largely relied on the prosecution of corrupt officials rather than reforming the political, economic and social systems which provide fertile soil for corruption. This is because the financial benefits of countless rent-seeking opportunities are so large that no one wishes to reform the system.

    Furthermore, fighting corruption is just like a wolf chasing a herd of sheep. Any sheep running slowly and left behind by the rest of the herd gets caught by the wolf. In other words, only those individual corrupt officials who fail to become members of corruption groups are vulnerable to prosecution; and those who are able to be part of a corruption group can protect each other effectively to avoid being investigated and prosecuted.

    As a result, dealing with corruption in China will rely on the party’s ability and willingness to reform the political system so that power is not highly concentrated and controlled by one person or a group of people. In addition, any political group with common economic interests should be broken up by moving people around to different positions on a regular basis. The media should be allowed to investigate and freely criticise wrong-doing by party and state officials.

    GAO finds relatively few, but serious, cases of corruption at Customs and Border Protection

    “The GAO report confirms that not only is corruption still a problem, CBP still lacks adequate controls to detect corruption, such as post-employment polygraphing,” McCaul said. “While CBP polygraphs all new hires, they do not test incumbent employees, whom the CBP Acting Chief Operating Officer has said can become corrupt during their tenure — on average about 8.8 years into service.”

    State Department: Oil rule "directly advances" US foreign policy

    The State Department is throwing its weight behind controversial Securities and Exchange Commission (SEC) rules that will force oil, gas and mining companies to disclose payments to foreign governments. “The rule directly advances our foreign policy interests in increasing transparency and reducing corruption, particularly in the oil, gas and minerals sectors,” a State Department spokesman said.

    “Corruption and mismanagement of these resources can impede economic growth, reduce opportunities for U.S. trade and investment, divert critically-needed funding from social services and other government activities, and contribute to instability and conflict,” State Department spokesman John Finn said.


    Australian Police reopen bribery cases

    The Australian Federal Police will reopen corruption inquiries into major Australian companies OZ Minerals and Cochlear, after searing criticism that it was lax in its investigations. The OECD reported in October that it was ''seriously concerned'' about the ''extremely low'' enforcement of anti-foreign-bribery laws in Australia. The head of the AFP's special references unit, Commander Errol Raiser, said last week: ''We are going to review a medical equipment case and [what the OECD called] the joint-venture-buyout case.'' Fairfax Media understands Cochlear is the medical equipment company and has confirmed Australian miner OZ Minerals is the company referred to by the OECD in the buyout case. OZ Minerals will be targeted following discussions with the OECD about the AFP's previous investigation of alleged foreign bribery in OZ Minerals' Cambodian goldmining operations.

    Bernie Madoff and the Ethics of Giftedness

    Much like a professional athlete who turns to “juicing” to rise to the top, Madoff began to apply his financial acumen in a more sinister manner, officially defrauding his investors (which included Holocaust survivor charities) of over $18 billion. But as he has said in interviews, it really was never about the money. Said Madoff, “We made a very nice living. I didn’t need the investment-advisory business. I took it on and got myself involved in it, but if you think I woke up one morning and said, ‘Well, listen, I need to be able to buy a boat and a plane, and this is what I’m going to do,’ that’s wrong. ” Madoff’s subtext? It was never about the money. It was about respect.

    Before long, Madoff’s too-good-to-be-true returns did result in the recognition he craved. “The chairman of Banco Santander came down to see me, the chairman of Credit Suisse came down, the chairman of UBS came down; I had all of these major banks” he says, “It is a head trip. (Those people) sitting there, telling you, ‘You can do this.’ It feeds your ego. All of a sudden, these banks which wouldn’t give you the time of day, they’re willing to give you a billion dollars.” Now Madoff was special, but as we have seen, with recognition comes the tenuous task of maintaining the label. Madoff became a prisoner of his own need to be recognized. He said of living this lie, “It was a nightmare for me. I wish they caught me six years ago. Eight years ago.” Even in the face of this torment, he was unable to free himself from his need to be thought of highly by his peers, the Wall Street insiders who had never really accepted the Jewish kid from Brooklyn as one of their own.

    Will Jordan Be the First Arab Monarchy to Fall? Why the US needs to focus on corruption to save America's most reliable Arab ally

    For the past two years, the kingdom has been contending with persistent protests focused on the sluggish economy and corruption - an issue that may, for the first time, unite East Bankers with Palestinian-origin protesters. While Jordan's perennially feeble economy will take some time to improve, in order to ensure the long-term survival of the monarchy, Washington should encourage King Abdullah to take bold steps now to root out the corruption and insulate his regime. Transparency International ranks Jordan 58 out of 176 countries on its annual "Corruption Perception Index," among the best scores in the Middle East. Still, corruption is a hot button issue in Jordan, a topic that resonates with both the monarchy's traditional tribal supporters and Islamist detractors. In Jordan, a small state where gossip travels quickly and where internet penetration is high, reports of graft and of palace excess have been become ubiquitous over the last decade. Ask Jordanians about corruption and they will lament the absence of transparency in the near-sales of government lands -- the Amman headquarters of the Jordanian Armed Forces and the King Hussein Medical Center, for example -- and the non-competitive privatization process of the national phosphate industry. They will complain about a lack of accountability for the enormous financial penalty associated with the signing and subsequent cancellation of a government concession to establish a casino on the shores of the Dead Sea. You might even hear about Khaled Shaheen, a convicted businessman serving three years in prison for graft, who inexplicably was permitted to leave Jordan for extended medical treatment in the U.S. -- until he was subsequently observed shopping with his family at Harrod's in London.


    Big China Short Shows Downside of Kleptocracy

    It doesn’t take much to cast doubt on a Chinese company’s financial reports these days. The country is a kleptocracy run by -- and for the benefit of -- the Communist Party elite, who have allowed securities fraud to flourish. In addition to tolerating frauds by Chinese companies with U.S. or Canadian stock listings, China’s government routinely obstructs overseas regulators’ investigations. Muddy Waters, a tiny research firm led by an American short seller named Carson Block, has done more to expose Chinese stock scams, including Sino-Forest Corp., than all of the world’s governments combined. It is only prudent for investors to start with the assumption that the books of every publicly traded Chinese company are cooked. (To be fair, the same also may be true of the world’s biggest banks.) Capital markets work best when the information that companies report is credible. When it isn’t, and when laws don’t exist or aren’t enforced, investor confidence is easily shaken. Even an obscure news report about an anonymous letter can have the ring of truth and send a big manufacturer’s stock careening.

    E-mails suggest Walmart CEO knew of Mexico bribes in 2005

    Walmart Stores Inc.’s chief executive, Mike Duke, found out in 2005 that the retailer’s Mexico unit was handing out bribes to local officials, according to e-mails obtained by lawmakers. The e-mails contradict earlier claims by Walmart senior executives that they were not aware of bribes being made by the company. Democratic congressmen Elijah E. Cummings and Henry A. Waxman, who are investigating bribery charges at Walmart’s Mexico division, on Thursday released e-mails that indicate that Duke and other senior Walmart officials were informed multiple times starting in 2005 about bribes being made in the country. US law forbids American companies from bribing foreign officials. The lawmakers shared the e-mails, which they said they got from a confidential source, with Walmart on Wednesday, and sent a letter to Duke asking for a meeting to discuss them. ‘‘It would be a serious matter if the CEO of one of our nation’s largest companies failed to address allegations of a bribery scheme,’’ according to the letter written by Waxman and Cummings to Duke. Allegations first surfaced in April that Walmart failed to notify law enforcement that company officials authorized millions of dollars in bribes in Mexico to speed up getting building permits and gain other favors. Walmart has been working with government officials in the United States and Mexico on that investigation.

    FBI takes probe into Universal payments to Manila-sources

    The FBI has sent agents to Manila in a widening of its investigation into millions of dollars of payments made by Japan's Universal Entertainment Corp to a politically connected consultant in relation to its casino project in the Philippines, sources with knowledge of the matter said. Agents from the Las Vegas office of the U.S. Federal Bureau of Investigation have been in Manila over the past week working with the National Bureau of Investigation (NBI), the local agency tasked with looking into the payments as a potential bribery case, the sources said. Philippine President Benigno Aquino had ordered an official investigation in November to see if the payments were made in relation to the $2 billion casino resort being developed by Universal on Manila Bay. The investigation has focused on $40 million transferred to Rodolfo Soriano, a close confidante to the former head of the Philippine gaming authority, during the same time Universal sought and won key concessions for its project in 2010.

    Anti-Corruption Views - Money Laundering and HSBC - How it affects you

    According to legal documents for the case, HSBC admitted that it failed to apply legally required money laundering controls to $200 trillion in wire transfers alone, in only a three year period, $670 billion of which came from Mexico.  $200 trillion – that is approximately 3 times world GDP.  In addition to that, they failed to have legally required controls in place with respect to the purchase of $9.4 billion in cash, a high risk business, from the Mexican subsidiary, and other HSBC offices conspired to illegally clear $660 million in transactions from countries not permitted to access the U.S. financial system like Iran and Libya.  Financing of terrorism should spring to mind as a real concern. HSBC further admitted that “at least $881 million in drug trafficking proceeds, including proceeds of drug trafficking by the Sinaloa Cartel in Mexico and the Norte del Valle Cartel in Columbia, were laundered through HSBC Bank U.S.A without being detected.”  The question everyone in the world should be asking right now is what other criminal money might have been among the $200 trillion that flowed through the bank, unchecked and unchallenged?For this, HSBC was fined a mere $1.9 billion (remember, there is over $200 trillion being handled in ways that violate multiple U.S. laws here) and not one person is being prosecuted.


    SEC Charges KPMG Auditors with Failed Bank Audit during Financial Crisis

    The SEC had previously charged three former executives at the bank, TierOne Bank, responsible for the scheme. Two executives agreed to settle the SEC’s charges, and the case continues against the other. The new charges in the SEC’s case are against KPMG partner John J. Aesoph and senior manager Darren M. Bennett. The SEC’s investigation found that they failed to appropriately scrutinize management’s estimates of TierOne’s allowance for loan and lease losses (known as ALLL). Due to the financial crisis and problems in the real estate market, this was one of the highest risk areas of the audit, yet Aesoph and Bennett failed to obtain sufficient evidence supporting management’s estimates of fair value of the collateral underlying the bank’s troubled loans. Instead, they relied on stale information and management’s representations, and they failed to heed numerous red flags when issuing unqualified opinions on TierOne’s 2008 financial statements and the bank’s internal controls over its financial reporting.

    Banks to Pay $8.5 Billion to Speed Up Housing Relief

    Federal regulators on Monday reached an $8.5 billion settlement with 10 major lenders to resolve claims of foreclosure abuses, including the use of flawed paperwork and bungled loan modifications that may have led to wrongful evictions. The settlement, which includes the nation’s largest lenders, like Bank of America, JPMorgan Chase, Wells Fargo and Citigroup, concludes weeks of negotiations between the banks and the federal regulators, led by the Office of the Comptroller of the Currency. It is intended to end a troubled foreclosure review of millions of loan files that was mandated by the banking regulators. Among the problems that came to light in the last several years were sloppy record-keeping and so-called robo-signing, in which foreclosures were made based on forged or unreviewed documents.

    Notably, four banks — Ally Financial, HSBC, OneWest Bank and Everbank — originally part of the negotiations, didn’t sign onto the deal. Under the settlement, $3.3 billion in cash relief will go to borrowers who went through foreclosure in 2009 and 2010. The remaining $5.2 billion will be directed to homeowners in danger of losing their homes and will be used to reduce the amount of principal owed or the monthly payments, for example. Payments under the settlement, which covers 3.8 million households, could be as much as $125,000.

    Eight people charged in £35m corruption case

    Eight people were charged on Tuesday following a long running
    investigation into corruption and other offences at the Halifax Bank of
    Scotland branch in Reading, Berkshire. Two former employees
    of HBOS – rescued by Lloyds during the 2008 banking crisis – along
    with six others were charged over business loans worth around £35m.

    FATCA: A new era of financial transparency

    The IRS's powerful new tool chips away at bank secrecy

    Since 2008, the U.S. government has been aggressively moving against U.S. taxpayers who have undeclared foreign accounts. Through a variety of mechanisms, the government has obtained information about U.S. account holders and their assets from jurisdictions previously thought nearly impenetrable. These recent developments portend the eventual erosion of traditional concepts of bank secrecy and increased transparency among nations regarding financial information.  One manifestation of this activity is the Foreign Account Tax Compliance Act (FATCA), which was signed into law in early 2010 as part of the Hiring Incentives to Restore Employment Act, P.L. 111-147. FATCA seeks to promote compliance with U.S. law by requiring foreign financial institutions to report information regarding U.S. persons maintaining accounts, and by directing that U.S. taxpayers report certain specified foreign financial assets with their tax filings. For financial institutions and many other foreign businesses and individuals, it is one of the most important (and complex) tax laws to go into effect in many years. The IRS has issued guidance on FATCA, and more is undoubtedly forthcoming. FATCA takes direct aim at U.S. taxpayers who have not properly reported their foreign financial accounts and certain other non-U.S. assets.

    Madoff Aside, Financial Fraud Defies Policing

    Problems persist with policing the financial industry, even after the wave of rules enacted since the collapse of Bernard L. Madoff’s giant Ponzi scheme in 2008. And the challenge of oversight is not becoming any easier, with the ranks of financial advisers swelling. As new regulations crimp profits, big banks like Wells Fargo are ramping up their brokerage businesses in an effort to make up for lost revenue. Amid the renewed focus, banks have spent millions of dollars to beef up their compliance systems and improve their oversight. Regulators, too, have bolstered their efforts, increasing enforcement and adopting new measures. Every month, the Financial Industry Regulatory Authority, a Wall Street watchdog, penalizes more than 100 brokers for various actions, including unauthorized trading and fraudulent activities, as well as smaller violations. “Theft, Ponzi schemes and other financial scams continue to happen at an alarming rate,” said Thomas Ajamie, a plaintiff’s lawyer...

    Corruption threat to China housing plan

    A high-profile effort by the Chinese government to build affordable houses for the millions priced-out of the country's property market is marred by official corruption, state run media said on Saturday. China in 2010 launched a massive “affordable housing” drive as part of an effort to defuse widespread discontent about the country's house prices, which have skyrocketed over the last decade. The program, which aims to build 36 million affordable units by 2015, was championed by Li Keqiang, who assumed the ruling Communist Party's second most powerful post in November and is set to succeed Wen Jiabao as premier in March. China invested more than 820 billion yuan (US$129 billion) in the program last year, official media said. But government officials have “easily amassed dozens” of newly-built affordable apartments, and “have taken away housing units specifically intended for disadvantaged groups,” according to state-run news agency Xinhua.

    Opinion: Corruption as China's top priority

    Chosen to lead the cleanup is Wang Qishan, 64, who until recently was China's economic-finance czar and now is chief of the Party's anti-corruption body. Wang's political skills will be put to test in his new job. Corruption has long been a major public complaint, and there is certainly no shortage of cases. In the past five years, China has punished 668,400 people for "Party discipline violations" and more than 24,600 suspects have been referred for investigation, according to China Daily. There are various ways to acquire ill-gotten wealth and just as many to hide them. Some spirit millions of cash out of the country. Others stash them in luxury villas, expensive jewelries and accessories -- or business ventures by relatives and associates. Still others blow their loot enjoying sybaritic lifestyles, lavishing wealth on mistresses or simply gambling it away in casinos.

    Chinese anti-corruption drive nets official with 47 mistresses

    An anti-corruption drive in China has netted suspects that include an executive accused of cavorting with gigolos, a young woman who owns 11 apartments, a provincial official with 47 mistresses and a vice-mayor with ties to a drug gang. Many alleged misdeeds were exposed by internet users – mostly whistleblowers and rogue journalists – and promulgated via unusually freewheeling coverage in state-owned media. Another, less vaunted government clampdown – this one on dissenting views – leaves little hope for a Chinese people-power renaissance. Over the past week authorities have surreptitiously replaced an outspoken editorial in a liberal newspaper with brazen propaganda, scrubbed an open letter calling for constitutional governance from the internet, and closed down an outspoken Beijing-based magazine for advocating political reform. Communist party secretary Xi Jinping said corruption could lead to the “end of the party”. His administration has ruthlessly singled out venal officials and is implementing a series of regulations to limit displays of official waste. Yet analysts say that Xi’s anti-graft drive is only skin-deep, and that party leaders will be hard pressed to eradicate corruption while maintaining their perennially hard line on dissent.

    Xi Jinping Calls for Anti-Graft Campaign in China por NTDTV

    What Technology Can and Cannot Do In the Fight Against Corruption

    There are a slew of newly organized and emergent efforts to tackle various forms of corruption, particularly by using new technology, from the global — such as the Open Government Partnership, the Extractive Industries Transparency Initiative and Transparency International — to the very local — such as ipaidabribe and its various clones. These efforts have also benefited from a number of traditional players, like state and independent regulators, apparently becoming more aggressive in enforcing laws. These efforts should be applauded as corruption often disproportionately punishes the most economically and socially marginalized. Low level bribes create barriers to services. High level bribes rob treasuries of revenue or effective infrastructure that can support growth or pay for social programs. It's also great to see mainstream media talk report on corruption as a general issue, rather than just the scandal of the day. The Economist is unfortunately unusual in that it has a very good track record in this space. There are a few words of caution I would like to add to the conversation.

    JPMorgan ordered to comply with probe of Madoff

    The Treasury Department watchdog ordered JPMorgan Chase & Co to work with U.S. regulators seeking documents in connection with a probe into the bank's relationship with convicted Ponzi schemer Bernard Madoff, in a warning letter dated December 21...the Office of the Comptroller of the Currency has been unable to get documents it requested. JPMorgan has argued it does not have to turn over certain kinds of documents to the OCC because it would impinge on its attorney-client privilege rights, according to the letter.

    UK Prime Minister urges global action on tax avoidance

    The world’s most powerful leaders must mount a concerted effort to prevent multinational companies such as Starbucks and Amazon legally avoid large corporation tax bills, David Cameron will urge in his role as president of the G8. The Prime Minister vowed to make “damn sure” that multinational firms paid their fair share of tax on their UK operations. He is to use Britain’s presidency of the G8 group of the most industrialised nations, which began this week, to discuss ways of stopping global companies moving their money through different jurisdictions to minimise tax payments.

    China plans vigorous 2013 anti-corruption fight

    China's Communist Party promises to fight official corruption, which has become a major problem in the country, more vigorously in 2013. The anti-graft drive by the party will include heightened efforts to wean its members away from extravagance, bureaucratic behaviors and abuse of power..."The fight against corruption is still arduous under the new circumstances, and a small number of party members have a weak sense of responsibility...

    China's anti-corruption drive is a sideshow

    China is finally tackling corruption, that is good news. Corruption has become so pervasive that it is jeopardising social stability, leading to misallocation of resources and capital and stymying the progress that China has made in raising the general level of prosperity and wellbeing. Wang Qishan, who is spearheading the anti-corruption campaign, is an apt choice for the task. He knows how financing in China works, having run China Construction Bank. Because of his age, the 64-year-old will be on the Politburo Standing Committee for only one term, which means he has little to lose. And he has no children...
    High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. But those who do business in China remain sceptical. To many, the anti-corruption drive is merely a form of score-settling. Money continues to leave China, as more and more wealthy people put their money out of the reach of their peers. The stock market in China has always been influenced more by capital flows than by economic fundamentals. That means the beneficiaries of the anti-corruption campaign are more likely to be Hong Kong property developers than listed Chinese companies. That is also why the hedge fund managers who like luxury goods as a proxy for the growth of corruption in China continue to hold the shares of companies such as Richemont and Prada. Mainland sales of watches and jewellery may go down but sales offshore are likely to continue as prudent Chinese continue their extravagant purchases – just not in China itself.

    Philippines May Curb Pursuit of Marcos Wealth

    A commission that has been pursuing the wealth of the former dictator Ferdinand E. Marcos should be abolished, despite the fact that much of his allegedly ill-gotten wealth has not been recovered, the agency’s head said...Investigators have accused the Marcos family and their associates a of plundering an estimated $10 billion from the Philippines while millions of Filipinos suffered in grinding poverty...Mrs. Marcos, 83, is now a member of the House of Representatives, while her son, Ferdinand Marcos Jr., is a senator. Her daughter, Imee Marcos, is the governor of a northern province where the family is still well regarded...Some of the largest companies in the Philippines are controlled by people who were his close associates, and have been accused by investigators of helping the family plunder billions from the country. No member of the Marcos family, who all deny wrongdoing, has been convicted in connection with plundered wealth, nor have any of their associates...Mr. Bautista, the head of the commission, noted that the agency had recovered 164 billion pesos (about $4 billion) since its creation, including a 150-carat ruby and a diamond tiara, hundreds of millions of dollars hidden in Swiss bank accounts and prime real estate in New York City.

    Former Israeli Foreign Minister formally charged with corruption

    Avigdor Lieberman, Israel's former hardline foreign minister, has been formally charged in a corruption indictment that could end his political career and alter the course of next year's election...The country's Attorney General, Yehuda Weinstein, officially filed the fraud and breach of trust charges that prompted Mr Lieberman's sudden resignation after they were first announced earlier this month. But the indictment will also seek to convict Mr Lieberman of "moral turpitude" after a spurned former political ally turned on him by providing police investigators with additional incriminating evidence. Mr Lieberman, is accused of intervening to promote an Israeli diplomat to be ambassador to Latvia, in reward for a tip-off about a separate long-running criminal investigation into bribery and money laundering allegations the foreign minister had been facing. Those allegations led to no formal charges due to insufficient evidence...But all that changed last week after police interviewed Danny Ayalon, the deputy foreign minister...Mr Ayalon, who will now become a chief witness for the prosecution, allegedly told officers that Mr Lieberman – contrary to his insistence that he had played no active role – had instructed him to promote the diplomat, Zeev Ben-Aryeh despite competition from better-qualified candidates.




    This website is dedicated to providing a reference source on the scourge that is whirling across planet Earth destroying governments, businesses, cities, families and imperiling civilized culture by agregating and making available on one site sources of news, analysis and opinion about corruption.
    Criteria for inclusion on this site of "BIG Corruption" cases: 
  • Very High level corporate and/or government official(s) involved;
  • Very Large amount of money lost;
  • International financing/aid agency program; 
  • Global impact on numerous countries/businesses/investors; and/or
  • Classic example that can be used in training/seminarsmajor cases of global fraud and corruption.
  • As a news agregator website this site primarily serves to gather for research and educational purposes in one single place news and information specifically pertinent to major global corruption in business and government. The news items, views, editorials and opinions summarized or reported on this website are taken from the general media and reputable blogs, websites, etc., and are exclusively the responsibility of the original sources and/or authors. In accordance with Title 17 U. S. C. Section 107, any copyrighted work on this website is distributed under fair use without profit or payment to those who have expressed an interest in receiving the included information for nonprofit research and educational purposes only. Ref:
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