Tuesday, October 11, 2005

Defense Procurement Problems in Iraq

The United States is not the only country with defense procurement problems.  According to an AP report here, Iraq also appears to have financial management problems in the military.  The "government of former Prime Minister Iyad Allawihas" is alleged to have suffered an "alleged disappearance or misappropriation of $1 billion in military procurement funds." Obviously this is not particularly helpful for a country that is heavily dependent upon its military.  So far the defense minister and others have been arrested. One has to wonder if in the turmoil of setting up a new government, compliance issues were considered.

(esp)

October 11, 2005 in International | Permalink | TrackBack (0)

Monday, October 10, 2005

Will a Former Expert Witness Turn on Milberg Weiss?

John Torkelsen, who served as an expert witness for Milberg Weiss in a number of class actions on issues related to damages, may become a witness against the firm now that he appears to have entered into an agreement with the government to plead guilty to a charge of giving false information to the SBA.  Torkelsen lost most of his credibility as an expert when it was revealed a few years ago that he received contingent fee payments from attorneys for securities class action plaintiffs, a definite no-no for an expert witness, and his guilty plea may result in him providing information about the practices of Milberg Weiss and former partner William Lerach in a scheme to make secret payments to named plaintiffs in cases.  While the investigation of Milberg Weiss and Lerach continues, the longer it goes on, the more the alleged misconduct starts to bump into the five-year statute of limitations.  A story in The Recorder (available on Law.Com here) discusses Torkelsen's plea and possible cooperation. (ph)

October 10, 2005 in Investigations | Permalink

Former General Re CEO Gets Notice of Possible SEC Securities Fraud Suit

Former General Re CEO Ronald Ferguson joined a slew of other executives at the firm, both current and former, who have received Wells Notices from the SEC that the Enforcement Division staff intends to recommend that the Commission file a securities fraud suit (earlier post here).  The notices are related to the American International Group-General Re "finite insurance" transaction that resulted in AIG improperly accounting for its insurance reserves.  Ferguson left General Re in 2001, and Berkshire Hathaway, which owns General Re, terminated his consulting contract in May when he refused to cooperate in the investigation by the SEC and U.S. Attorney for the Southern District of New York by stating that he would take the Fifth Amendment in response to questions.  A Berkshire Hathaway press release (here) states that Ferguson has received his Wells Notice, and the question now is whether the federal prosecutors will seek criminal charges in addition to any civil enforcement action.  (ph)

October 10, 2005 in AIG, Civil Enforcement, Securities | Permalink | TrackBack (0)

Another Salvo in the Battle Between Tom DeLay and Ronnie Earle

To describe the attacks on Travis County District Attorney Ronnie Earle as vituperative is an understatement, and the latest round from former House Majority Leader Tom DeLay seeks the dismissal of the most recent money laundering indictment because of prosecutorial misconduct.  After the first conspiracy indictment, Earle's office sought a second one, perhaps on more legally defensible grounds, but a Travis Country grand jury returned a "no bill," meaning a majority of the grand jurors voted not to indict DeLay.  A few days later, a different grand jury in the county returned the money laundering indictment, which is presumptively valid.  DeLay's attorney, Dick DeGuerin, has filed a motion to dismiss the indictment on the ground that the Travis County D.A.'s office tried to cover-up the earlier grand jury's refusal to indict.  DeGuerin asserted that the prosecutor "engaged in an extraordinarily irregular and desperate attempt to contrive a viable charge" -- just like everything else in Texas, the rhetoric is bigger.  While the money laundering charge may be questionable, at least in the eyes of the defense, the grand jury system permits a prosecutor to seek an indictment from different grand juries so long as a majority find probable cause that the defendant committed a crime, and a "no bill" from one grand jury does have any preclusive effect.  This may be a fight best left for a trial on the merits. A CNN.Com story (here) discusses DeLay's latest filing. (ph)

October 10, 2005 in Grand Jury, Prosecutions | Permalink | TrackBack (0)

Will Rove's Discussions with President Bush Be a Subject of the Grand Jury Investigation?

Karl Rove's fourth appearance before the grand jury could involve inquiry into his discussion in with President Bush about the release of Valerie Plame's identity as a CIA operative.  While it was known that the President asked Rove about the leak, recent media reports (AP story here and National Journal story here) indicates that the President questioned Rove specifically about his own role in any effort to engineer the disclosure of Plame's status with the CIA to the media to undermine the position of her husband, Joseph Wilson. Rove denied any involvement to the President, and that was later reflected in the statement of White House spokesman Scott McClellan to the press and the President's own statement in the investigation.  As this blog noted back on Aug. 12 (here), a false statement to the President could be the basis for a Sec. 1001 charge because the President's inquiry is a matter within the jurisdiction of the Executive branch.  The questioning of Rove could involve not only what he said to reporters who wrote about Plame, but whether he misled the President.  (ph)

Addendum - Karl Rove's attorney denies that Rove circulated name "to punish [Valerie Plame's] husband."  See CNN here.  (esp)

October 10, 2005 in Grand Jury, Investigations | Permalink | TrackBack (0)

More Hurricane Relief Fraud

The aftermath of Hurricanes Katrina and Rita certainly presents plenty of opportunities for people to lie to get some of that "free" federal money. A press release from the U.S. Attorney's Office for the Eastern District of Texas (here) reports on the mail fraud charge filed against Joseph Johnson:

Johnson allegedly devised a scheme to defraud the Federal Emergency Management Agency (FEMA) by submitting a false claim that he was a resident of the Beaumont area and entitled to receive disaster relief benefits because his residence had been destroyed and he was in need of emergency food shelter and clothing, none of which was true.

(ph)

October 10, 2005 in Fraud | Permalink | TrackBack (0)

Sunday, October 9, 2005

Former Homeland Security Official Pleads Guilty

A Press Release of the United States Attorney for the District of Columbia reports of a former official of the Department of Homeland Security pleading guilty to a misdemeanor conflict of interest charge.  According to the press release,

"[b]etween late 2003 and early 2004, [the former official], in her capacity as a DHS official, participated in the procurement contract bidding process with a company that she also was in negotiations with for employment. [She] ultimately accepted and began employment with the company."

The possible punishment here is a maximum of one year in prison and a "fine of up to $100,000."

(esp)

October 9, 2005 in Prosecutions | Permalink | TrackBack (0)

Former GSA Chief Indicted

The DOJ issued a press release here formalizing via indictment the criminal complaint previously filed against "David H. Safavian, the former chief of staff for the General Services Administration (GSA)."  Safavian faces "charges of obstructing a GSA proceeding, obstructing a U.S. Senate proceeding, and making false statements."  (see post here).

(esp)

October 9, 2005 in Prosecutions | Permalink | TrackBack (0)