Friday, July 21, 2006

BACKDATING CHARGES FILED -- "The U.S. attorney's office in San Francisco, which a week ago formed a task force to probe corporate backdating of stock-option grants, in a criminal complaint accused former Brocade Communications Systems Inc. chief executive Gregory L. Reyes and former human resources executive Stephanie Jensen of securities fraud."
CABINET MEMBER SCAMMING IRS? --
Health and Human Services Secretary Mike Leavitt and his relatives have claimed millions of dollars in tax deductions through a type of charitable foundation they created that until recently paid out very little in actual charity, tax records show.

. . . .

The tax structure used to create the foundation is called a Type III supporting organization. The Internal Revenue Service has said the category is rife with abuse, designating "supporting organizations" this year as one of its "Dirty Dozen" top tax scams, along with Internet identity theft and offshore banks. Use of the tax structure could be significantly reined in under a tax provision that was inserted into pension legislation passed by the Senate and now under negotiation with the House.

Leavitt and his brother Dane have defended the family's actions as both legal and ethical.
BONDS NOT INDICTED (YET?) -- "Barry Bonds escaped a possible perjury indictment Thursday, but actions by the U.S. attorney's office suggested the government, far from dropping its case, is trying to line up as ironclad a prosecution as possible to go after the Giants slugger."

Wednesday, July 19, 2006

BOGGED DOWN -- with other matters. Blogging light the rest of the week.
NO GOOD DEED GOES UNPUNISHED --
When a drought left pastures in a handful of Plains states parched in 2003, ranchers turned to the federal government for help. Officials at the U.S. Department of Agriculture quickly responded with what they considered an innovative plan.

They decided to dip into massive stockpiles of powdered milk that the agency had stored in warehouses nationwide as part of its milk price-support program. Livestock owners could get the protein-rich commodity free and feed it to their cattle and calves. The milk would help ranchers weather the drought while the government reduced its growing stockpile.

But within months, the program spawned a lucrative secondary market in which ranchers, feed dealers and brokers began trading the powdered milk in a daisy chain of transactions, generating millions of dollars in profits. Tens of millions of pounds of powdered milk intended solely for livestock owners in drought-stricken states went to states with no drought or were sold to middlemen in Mexico and other countries, a Washington Post investigation found.
The article explains that brokers got away with this because there was no enforcement. Sounds like a qui tam action in the making.
THE GHETTO TAX --
Drivers from low-income neighborhoods of New York, Hartford and Baltimore, insuring identical cars and with the same driving records as those from middle-class neighborhoods, paid $400 more on average for a year’s insurance.

The poor are also the main customers for appliances and furniture at “rent to own” stores, where payments are stretched out at very high interest rates; in Wisconsin, a $200 television can end up costing $700.

Those were just two examples among several cited in a report Tuesday showing that poor urban residents frequently pay hundreds if not thousands of dollars a year in extra costs for everyday necessities. The study said some of the disparities were due to real differences in the cost of doing business in poor areas, some to predatory financial practices and some to consumer ignorance.
BUSH BLOCKED ETHICS REVIEW -- "Attorney General Alberto R. Gonzales told the Senate Judiciary Committee on Tuesday that President Bush had personally decided to block the Justice Department ethics unit from examining the role played by government lawyers in approving the National Security Agency’s domestic eavesdropping program."
DHS CREDIT CARD ABUSE --
Flat-bottomed rescue boats at double the retail price, $68,500 worth of unused dog booties, hundreds of thousands of dollars’ worth of computers that somehow disappeared and a $227 beer brewing kit.

These are just a few of the questionable purchases that Congressional auditors have found by digging through half a year of credit card records from the Homeland Security Department, including records for the months immediately after Hurricanes Katrina and Rita last year.
MEDICAL DEVICE KICKBACK SETTLEMENT -- "Medtronic said it had agreed to pay the federal government $40 million to settle accusations that its spinal-implant division paid kickbacks to doctors to induce them to use its products. The DOJ said that from 1998 to 2003 the Minnesota-based medical device maker paid doctors kickbacks through 'sham consulting agreements, sham royalty agreements and lavish trips to desirable locations.'"

Tuesday, July 18, 2006

MILBERG WEISS ARRAIGNMENT -- (From yesterday:) "After the court finally found a judge who didn’t recuse him or herself from the case, Milberg Weiss Bershad & Schulman is expected to plead not guilty today to criminal charges before U.S. District Judge John Walter in Los Angeles. The two name partners individually indicted — David Bershad and Steven Schulman — are also expected to plead not guilty."
SENATE CANDIDATE UNDER INVESTIGATION? -- "It looks like the Justice Department finally may have become as fascinated by Rep. Katherine Harris' (R-FL) deeds as we have been, lo these many months. Justice Department lawyers and FBI agents have recently interviewed Ed Rollins, Harris' former Senate campaign manager, about her dealings with admitted briber Mitchell Wade and his company, MZM, the Orlando Sentinel confirms today."
ONLINE GAMBLING ARREST -- "In a sharp escalation of their crackdown on Internet gambling, United States prosecutors said yesterday that they were pressing charges against the chief executive of BetOnSports, a prominent Internet gambling company that is publicly traded in Britain, and against several other current and former company officers." See also WSJ Law Blog.

And the fallout for his company: "Shares of Betonsports Plc were halted in London after the U.K. Internet gambling company and its chief executive officer were indicted in the U.S. on criminal charges. Stock in PartyGaming Plc and Sportingbet Plc slid."
NO BRAINER -- "Bowing to criticism from Democratic and Republican House leaders, a congressionally chartered historical society dropped plans Monday to include imprisoned former Rep. Randy ''Duke'' Cunningham in a tribute to retiring members of Congress."
TROUBLE AT THE FBI -- "The Justice Department has concluded there is "reasonable cause" to believe that senior FBI officials retaliated against the bureau's highest-ranking Arabic speaker for complaining that he was cut out of terrorism cases despite his expertise."

Monday, July 17, 2006

TIED UP -- and away from the blog today. Back tomorrow, though.