International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Friday, January 31, 2020

The UK Govt (Parliament and HMRC) Deals With Tax Avoidance Schemes So Differently than the U.S.

In September 2019, the Government commissioned Sir Amyas Morse to lead the independent loan charge review. The loan charge is designed to tackle disguised remuneration tax avoidance schemes. These are tax arrangements that seek to avoid income tax and national insurance contributions by paying scheme users income in the form of loans, usually via an offshore trust, with no expectation that the loans will ever be repaid.

On 20 December 2019, the Government published the review and the Government’s response to the review. The Government accepted all but one of the review’s recommendations (HCWS14).

HM Revenue & Customs (HMRC) has today published draft legislation to give effect to these changes, alongside explanatory notes and a tax information and impact note. These can be found using the links below.

The draft legislation and explanatory notes: https://www.

The tax information and impact note: uk/government/collections/tax-information-and-impact-notes-tiins

HMRC will hold an informal four-week consultation on the draft legislation to invite views from stakeholders. The Government intend to legislate for the changes in the forthcoming Finance Bill, which will be introduced after the Budget.

The draft legislation that the Government have published today does not cover the Government’s commitment that HMRC will repay settlements where voluntary restitution has been paid by individuals and employers for years no longer subject to the loan charge because the year is unprotected. Legislation giving effect to this commitment, together with details of the repayment scheme, will be published separately ahead of the Finance Bill. The scheme will be legislated for at the earliest opportunity in the Finance Bill, alongside the other changes to the loan charge.

HMRC has also published further guidance for taxpayers on the changes to the loan charge following Sir Amyas’s review. This supplements the guidance published on 20 December.

Find out how the changes to the loan charge affect you

Disguised remuneration: guidance following the outcome of the independent loan charge review

January 31, 2020 in Tax Compliance | Permalink | Comments (0)

Thursday, January 30, 2020

Russian National Pleads Guilty to Running Online Criminal Marketplace

A Russian national pleaded guilty today to charges related to his operation of two websites devoted to the facilitation of payment card fraud, computer hacking and other crimes.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger for the Eastern District of Virginia and Special Agent in Charge Matthew S. Miller of the U.S. Secret Service’s Washington Field Office made the announcement.

Aleksei Burkov, 29, pleaded guilty before Senior U.S. District Judge T.S. Ellis III to access device fraud and conspiracy to commit computer intrusion, identity theft, wire and access device fraud and money laundering.  Sentencing is scheduled for May 8, 2020.

According to court documents, Burkov ran a website called “Cardplanet” that sold payment card numbers (e.g., debit and credit cards) that had been stolen primarily through computer intrusions.  Many of the cards offered for sale belonged to U.S. citizens.  The stolen credit card data sold on Burkov’s site has resulted in over $20 million in fraudulent purchases made on U.S. credit cards.

Additionally, Burkov ran another website that served as an invite-only club where elite cybercriminals could advertise stolen goods, such as personal identifying information and malicious software, and criminal services, such as money laundering and hacking services.  To obtain membership in Burkov’s cybercrime forum, prospective members needed three existing members to “vouch” for their good reputation among cybercriminals and to provide a sum of money, normally $5,000, as insurance.  These measures were designed to keep law enforcement from accessing Burkov’s cybercrime forum and to ensure that members of the forum honored any deals made while conducting business on the forum.

Burkov was arrested at Ben-Gurion airport near Tel Aviv in December 2015.  An Israeli district court approved his extradition in 2017. He was extradited to the United States from Israel on Nov. 11, 2019, after appeals to the Israeli Supreme Court and the Israeli High Court of Justice were denied.

January 30, 2020 in AML | Permalink | Comments (0)

HMRC v Hicks: how much diligence must the accountant due regarding the tax scheme?

Factual background (read case here)

12. The underlying facts were not in dispute and can be summarised as follows. It will be seen later in this decision, however, that HMRC contest certain other findings of fact by the FTT.

13. Mr Hicks was one of a number of participants in the Montpelier Scheme. The Montpelier Scheme was marketed by Montpelier Tax Consultants (IOM) Ltd (“Montpelier”) and was disclosed to HMRC on Form AAG 1 under the Disclosure of Tax Avoidance Scheme Rules (“DOTAS”) received by HMRC on 24 September 2008. The Form AAG 1 stated that the arrangement was available to self-employed derivative traders who worked at least 10 hours per week on average in the trade. The trader acquired dividend rights with the intention that the cost of such rights was a deductible expense of the trade but the dividend income was not taxable as a result of section 730 Income and Corporation Taxes Act (“section 730”).

14. Under the Montpelier Scheme, Mr Hicks entered into a contract to acquire the rights to 5 dividends (all payable on 5 February 2009) of £300,000 each at a total cost of £1,498,035. Entities controlled by Montpelier lent Mr Hicks the funds to acquire the right to acquire the dividends. On 27 February 2009, Mr Hicks paid Montpelier an up-front fee of £75,000 pursuant to a Professional Service Agreement (“PSA”). The PSA stated that a further £75,000 was contingent upon agreement of the losses by HMRC. Mr Hicks claimed the deduction in full (i.e. £150,000 in respect of the fees) in his 2008/09 accounts.

15. In his tax returns, Mr Hicks relied on section 730 to exclude the receipt of the £1.5 million dividend income from his trading income during the income tax year ended on 5 April 2009. By excluding the dividend income under section 730 (and deducting the fees paid under the PSA) Mr Hicks’ taxable profit of £425,899 was reduced to nil and a loss of £1,221,867 was created. This loss was carried forward under section 83 Income Tax Act 2007 to reduce the taxable profits of his trade (i.e. his pre-existing derivatives trade) in the two subsequent years from £483,696 to nil (2009/10) and £348,594 to nil (2010/11). Therefore, Mr Hicks claimed that his participation in the Montpelier Scheme reduced his taxable profits of £1,258,189 for 10 the three relevant tax years to nil.

(read full case and its disposition here)

January 30, 2020 in Tax Compliance | Permalink | Comments (0)

Wednesday, January 29, 2020

Members of $11 Million International Telemarketing Scheme Sentenced to Prison

Three individuals were sentenced to prison for their roles in an $11 million telemarketing scheme that defrauded primarily elderly victims in the United States from call centers in Costa Rica.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray of the Western District of North Carolina, Inspector in Charge David M. McGinnis of the U.S. Postal Inspection Service’s Charlotte Division, Special Agent in Charge Bryant Jackson of IRS Criminal Investigation’s (CI) Cincinnati Field Office, Special Agent in Charge Matthew D. Line of IRS-CI’s Charlotte Field Office and Special Agent in Charge John Strong of the FBI’s Charlotte Field Office made the announcement.

Donald Dodt, 76, originally of Cleveland, Ohio, Thomas Sniffen, 58, originally of Peekskill, New York, and Michael Saxon, 50, originally of Ontario, Canada, were sentenced by U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina to 90 months, 114 months and 75 months in prison, respectively.  Judge Cogburn also ordered restitution in the amount of $7 million for Dodt, $11,236,857.65 for Sniffen and $2,593,574.02 for Saxon to be paid jointly and severally with their co-conspirators.     

Following a five-day trial in May 2019, Dodt was found guilty of one count of conspiracy to commit wire fraud and mail fraud, two counts of mail fraud, eight counts of wire fraud, one count of conspiracy to commit international money laundering and 10 counts of international money laundering.  In April 2019, Sniffen pleaded guilty to all charges in the 31-count indictment charging conspiracy to commit mail and wire fraud, substantive counts of mail fraud and wire fraud, international money laundering and conspiracy to commit international money laundering.  In May 2019, Saxon pleaded guilty pursuant to a plea agreement to one count of conspiracy to commit mail and wire fraud, one count of mail fraud and one count of conspiracy to commit international money laundering. 

According to the evidence presented at both Dodt’s trial and the sentencing hearings, and the factual bases in support of Sniffen’s and Saxon’s guilty pleas, Dodt, Sniffen and Saxon conspired together to commit the fraud and worked in a call center in Costa Rica.  While falsely posing as federal judges, representatives of the District of Columbia Department of Consumer and Regulatory Affairs and other federal agencies, including the U.S. Federal Trade Commission, they contacted victims in the United States — primarily senior citizens — to tell them that that they had supposedly won a substantial “sweepstakes” prize.  After convincing victims that they stood to receive a significant financial reward, the members of the conspiracy told victims that they needed to make a series of up-front cash payments before collecting, purportedly for items like insurance fees, taxes and import fees.  The co-conspirators used a variety of means to conceal their identity, such as Voice over Internet Protocol (VoIP) services provided by Dodt that made it appear as if they were calling from Washington, D.C., and other places in the United States.

At sentencing, it was determined that Dodt, Sniffen, Saxon and their co-conspirators collectively stole more than $11 million in total from victims.

January 29, 2020 in AML | Permalink | Comments (0)

Tuesday, January 28, 2020

Miami-Based Businessman Pleads Guilty to FCPA and Money Laundering Violations in Scheme Involving PetroEcuador Officials

An Ecuadorian businessman living in Miami, Florida, pleaded guilty today in connection with a $4.4 million bribery and money laundering scheme that funneled bribes to public officials of Empresa Pública de Hidrocarburos del Ecuador (PetroEcuador), the state-owned and state-controlled oil company of Ecuador, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office.

Armengol Alfonso Cevallos Diaz (Cevallos), 57, pleaded guilty before U.S. District Judge Rodney Smith of the Southern District of Florida to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one count of conspiracy to commit money laundering.  Sentencing is scheduled for April 2, 2020.   

Cevallos admitted at the plea hearing that, from 2012 through 2015, he conspired with others to pay bribes of $4.4 million to PetroEcuador officials by using the mails and means and instrumentalities of interstate commerce, including U.S.-based companies and U.S.-based bank accounts, in order to obtain and retain business.  Cevallos also admitted that he conspired with others to conceal and promote the bribe scheme by laundering funds through Miami-based shell companies and bank accounts and by purchasing properties in the Miami area for the benefit of certain PetroEcuador officials.  Specifically, as alleged in the indictment, Cevallos admitted that he solicited and intermediated bribe payments from an oil services company for the benefit of PetroEcuador officials, and that he helped launder those bribes and others he had paid to PetroEcuador officials on behalf of Ecuadorian contractors and his own companies. 

Today’s plea follows 12 public charges and guilty pleas against other individuals in the department’s ongoing investigation into bribery and money laundering involving PetroEcuador.  The individuals who have been charged to date for their roles in the bribery and money laundering schemes include former PetroEcuador officials who received and concealed the bribe payments, businessmen and contractors who paid the bribes to obtain lucrative oil services contracts from PetroEcuador, and financial advisors and other intermediaries who enabled and facilitated the bribery through the use of U.S. and offshore companies and bank accounts. 

The FBI’s International Corruption Squad in Miami is investigating the case.  Assistant Chiefs David Fuhr and Lorinda Laryea and Trial Attorneys Jonathan Robell and Katherine Raut of the Criminal Division’s Fraud Section and Trial Attorneys Mary Ann McCarthy and Randall Warden of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) are prosecuting the case.

IRS-Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Marshals Service and the Criminal Division’s Office of International Affairs have provided significant assistance in this case, as have public authorities in, among other countries, Ecuador and Panama.

MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.

January 28, 2020 in AML | Permalink | Comments (0)

Global tax chiefs undertake unprecedented multi-country day of action to tackle international tax evasion

A globally coordinated day of action to put a stop to the suspected facilitation of offshore tax evasion has been undertaken this week across the United Kingdom (UK), United States (US), Canada, Australia and the Netherlands. Stoke-on-Trent man, 59, first to be arrested in £200 million global tax fraud swoop stretching from UK to Australia

The action occurred as part of a series of investigations in multiple countries into an international financial institution located in Central America, whose products and services are believed to be facilitating money laundering and tax evasion for customers across the globe.

It is believed that through this institution a number of clients may be using a sophisticated system to conceal and transfer wealth anonymously to evade their tax obligations and launder the proceeds of crime.

The coordinated day of action involved evidence, intelligence and information collection activities such as search warrants, interviews and subpoenas. Significant information was obtained as a result and investigations are ongoing. It is expected that further criminal, civil and regulatory action will arise from these actions in each country.

This is the first major operational activity for the Joint Chiefs of Global Tax Enforcement, known as the J5, formed in mid-2018 to lead the fight against international tax crime and money laundering. This group brings together leaders of tax enforcement authorities from Australia, Canada, the UK, US and the Netherlands.

"This is the first coordinated set of enforcement actions undertaken on a global scale by the J5 – the first of many," said Don Fort, US Chief, Internal Revenue Service Criminal Investigation.

"Working with the J5 countries who all have the same goal, we are able to broaden our reach, speed up our investigations and have an exponentially larger impact on global tax administration. Tax cheats in the US and abroad should be on notice that their days of non-compliance are over," Fort said.

Australian Tax Office (ATO) Deputy Commissioner and Australia's J5 Chief, Will Day, said that this operation shows that the collaboration between the J5 countries is working. "Today's action shows the power of our combined efforts in tackling global tax crime, fraud and evasion."

"This multi-agency, multi-country activity should degrade the confidence of anyone who was considering an offshore location as a way to evade tax or launder the proceeds of crime."

The ATO has commenced investigations into Australian based clients of this institution who are suspected to have undeclared income. The Australian Criminal Intelligence Commission (ACIC) is playing a supportive intelligence role, and investigations into more clients may follow.

"Never before have criminals been at such risk of being detected as they are now. Our increased collaboration, data analytics and intelligence sharing mean there is no place worldwide you can hide your money to avoid contributing your obligations," Day said.

Hans van der Vlist, Chief and General Director Fiscal Information and Investigation Service (FIOD), the Netherlands, said, "This is the first outcome of an operational collaboration between five countries on tackling professional enablers that facilitate offshore tax crime.

The international investigation started on information obtained by the Netherlands. By sharing this information and working together an international impact is created. Together as the J5 we will try to close the net on tax criminals."

Canada Revenue Agency (CRA) Chief Eric Ferron said, "I am very pleased with the role the CRA is playing in what will be the first of many major operational activities for the J5. This coordinated operation shows that the collaboration between J5 countries is working. Tax evaders beware; today's action shows that through our combined efforts we are making it increasingly difficult for taxpayers to hide their money and avoid paying their fair share."

Simon York, Chief and Director of Her Majesty's Revenue and Customs (HMRC)'s Fraud Investigation Service said, "Tax evasion is a global problem that needs a global response and that is what the J5 provides. This kind of international action shows that we can, and we will take on the most collaboration underlines our commitment to tackling these harmful, sophisticated and complex crimes and that we are committed to levelling the playing field for honest businesses and taxpayers.

"International tax evasion robs our public services of vital funds, undermines economies and, left unchecked, can enrich the dishonest at the expense of the honest majority.

Working together, HMRC and our J5 partners are closing the net on tax criminals, wherever they are, to ensure nobody is beyond our reach. The message to them is clear – the J5 are closing in."

January 28, 2020 in Tax Compliance | Permalink | Comments (0)

Monday, January 27, 2020

California Real Estate Developer Sentenced to 15 Months for Making Conduit Contributions in Two U.S. Congressional Campaigns

Oakland-area real estate developer James Tong was sentenced to 15 months today for funneling tens of thousands of dollars of his own money through straw donors into two consecutive congressional campaigns for a member of the U.S. House of Representatives.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, United States Attorney David L. Anderson for the Northern District of California, and Special Agent in Charge John F. Bennett of the FBI’s San Francisco Field Office made the announcement. 

Tong, 74, of Fremont, California, was sentenced by U.S. District Judge Jon S. Tigar of the Northern District of California.

A federal jury convicted Tong on Oct. 8, 2019, of two counts of making contributions to a federal campaign in the names of other individuals.  According to the evidence presented at trial, in 2012 and 2013 Tong made $38,000 in conduit contributions to the initial and reelection campaigns of a candidate who was running for the U.S. House of Representatives.  Tong provided envelopes of cash to his bank manager and another business associate and directed them to give the cash to individuals in the community, who then used Tong’s cash to write checks in their own names to the campaign for the U.S. congressional candidate Tong was supporting.  Tong leveraged financial obligations and the implied loss of business opportunities to induce his bank manager and business associate to distribute cash in the community to be donated.  The network of straw donors included dozens of conduits, including at least one foreign national who was not eligible to make donations to federal elections.  Tong also directed his middlemen to conceal the scheme by instructing the straw donors not to deposit the cash; and he later directed one of the middlemen to withhold information from the FBI after he was interviewed. 

On Aug. 31, 2017, a federal grand jury indicted Tong charging him with two counts of making and causing campaign contributions in the name of another, in violation of 52 U.S.C. §§ 30122 and 30109(d)(1)(D).  The jury found Tong guilty of both counts.

As part of the sentence, Judge Tigar found that Tong obstructed justice when he told his middlemen to not deposit cash given to them. Judge Tigar also sentenced the defendant to a one-year period of supervised release and a $380,000 fine. 

January 27, 2020 in AML | Permalink | Comments (0)

Saturday, January 25, 2020

University of South Carolina School of Law is searching for a Graduate Program Director

The University of South Carolina School of Law is searching for a Graduate Program Director who will be responsible for all aspects of the School of Law’s non-J.D. graduate program, including program oversight, marketing and recruitment, admissions, student affairs, career services, and former student relations. The Director’s initial responsibilities will focus upon implementation of a Master of Studies in Law (MSL) in Health Systems Law and a Health Care Compliance Certificate program.

Attached please find the hiring advertisement. The position has been posted in the Chronicle of Higher Education and Diverse Jobs

I would greatly appreciate it if you could please distribute this announcement to your contacts who may be interested in the position. Interested parties can contact me at or 803-777-5011 to express their interest or if they have any questions regarding the position or application process.

January 25, 2020 in Education | Permalink | Comments (0)

Friday, January 24, 2020

The top frauds of 2019

Each year, the FTC takes a hard look at the number of reports people make to our Consumer Sentinel Network. In fact, during 2019, we got more than 3.2 million reports to the FTC from you. We’ve read what you’ve said, and crunched the numbers. Here’s what you told us in 2019.

  • Imposter scams was the number one fraud reported to Sentinel in 2019. People reported losing more than $667 million to imposters, who often pretended to be calling from the government or a well-known business, a romantic interest, or a family member with an emergency. When people lost money, they most frequently reported paying scammers with a gift card.
  • Social Security imposters were the top government imposter scam reported. There were 166,190 reports about the Social Security scam, and the median individual loss was $1,500.
  • Phone calls were the number one way people reported being contacted by scammers. While most people said they hung up on those calls, those who lost money reported a median loss of $1,000 in 2019.

You might wonder what, besides these numbers, comes out of reporting scams and other consumer issues to the FTC. Well, because of your reports, the FTC and its law enforcement partners are able to investigate the people and companies that trick people into paying money. Your reports help build and bring those cases, which also helps us enforce laws that stop scams and other dishonest business practices that take people’s money.

In fact, during 2019, FTC law enforcement actions led to more than $232 million in refunds to people who lost money. More than 1.9 million people cashed checks mailed by the FTC. And, in the last four years, people have cashed more than one billion dollars in FTC refund checks. That’s real money back into people’s pockets.

So if you’ve spotted a scam, keep telling us about it at If you need more information about these top frauds, visit, and

Curious about exploring Consumer Sentinel data, or just want to see what’s happening in your state? Check out this new video to learn how.

January 24, 2020 in AML | Permalink | Comments (0)

Thursday, January 23, 2020

Former Police Detective and FBI Task Force Officer Indicted for Bribery and Other Offenses

A veteran detective for the Carlisle, Pennsylvania Police Department, who was also a task force officer with the FBI and a member of the Cumberland County Drug Task Force, was indicted by a federal grand jury for bribery, drug distribution, fraud and making false statements.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Bruce D. Brandler of the Middle District of Pennsylvania, Special Agent in Charge Guido Modano of the Department of Justice Office of the Inspector General’s New York Field Office and Special Agent in Charge Michael Harpster of the FBI’s Philadelphia Field Office made the announcement.   

The indictment alleges that Christopher Collare, 52, of Blythewood, South Carolina, used his official position to obtain sex from two women in exchange for agreeing to take actions in prosecutions.  In 2015, Collare allegedly agreed to accept sex or money in exchange for not appearing at an evidentiary hearing so that a criminal charge would be dismissed.  In 2018, Collare allegedly agreed to accept sexual favors in exchange for taking steps to help reduce a potential sentence.

The indictment also alleges that Collare distributed heroin in 2016. The indictment alleges that between 2011 and 2018 he defrauded the Borough of Carlisle and the Cumberland County Drug Task Force by providing confidential informants with drugs and allowing informants to retain drugs that they had obtained during controlled buys.

The indictment further alleges that Collare lied on a federal form he completed during the process of becoming an FBI task force officer and that he made multiple false statements in an interview with federal agents in May 2018.

January 23, 2020 in AML | Permalink | Comments (0)

Friday, January 17, 2020

Former Member of Barbados Parliament and Minister of Industry Found Guilty of Receiving and Laundering Bribes from Barbadian Insurance Company

A former member of the Barbados Parliament, who also served as the Minister of Industry of Barbados, was found guilty today by a federal jury for his role in a scheme to launder bribes paid to him by executives of the Insurance Corporation of Barbados Limited (ICBL). 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue of the Eastern District of New York and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office made the announcement.

Following a one-week trial and two hours of jury deliberations, Donville Inniss, 54, a U.S. legal permanent resident who resided in Tampa, Florida, and Barbados, was found guilty of two counts of money laundering and one count of conspiracy to commit money laundering.   Sentencing has not yet been scheduled.

According to the evidence presented at trial, in 2015 and 2016, Inniss took part in a scheme to launder into the United States approximately $36,000 in bribes that he received from high-level executives of ICBL.  At the time, Inniss was a member of the Parliament of Barbados and the Minister of Industry, International Business, Commerce, and Small Business Development of Barbados.  The trial evidence demonstrated that, in exchange for the bribes, Inniss leveraged his position as the Minister of Industry to enable ICBL to obtain two insurance contracts from the Barbados government to insure over $100 million worth of government property.  To conceal the bribes, Inniss arranged to receive them through a U.S. bank account in the name of his friend’s dental company, which had an address in Elmont, New York.  The trial evidence further showed that Inniss used a personal email account to communicate with an executive from ICBL in connection with the bribe payments and the laundering of the money through the dental company in New York.

The FBI’s International Corruption Squad in New York City investigated the case.  In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption.  Trial Attorney Gerald M. Moody Jr. of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys David Gopstein and Sylvia Shweder of the Eastern District of New York prosecuted the case.  The Criminal Division’s Office of International Affairs also provided assistance in this matter.  The Department appreciates the cooperation provided by its law enforcement colleagues in Barbados during this investigation.

January 17, 2020 in AML | Permalink | Comments (0)

Thursday, January 16, 2020

Resmed Corp. to Pay the United States $37.5 Million for Allegedly Causing False Claims Related to the Sale of Equipment for Sleep Apnea and Other Sleep-Related Disorders

ResMed Corp., a manufacturer of durable medical equipment (DME) based in San Diego, California, has agreed to pay more than $37.5 million to resolve alleged False Claims Act violations for paying kickbacks to DME suppliers, sleep labs and other health care providers, the Department of Justice announced today.    

“Paying any type of illegal remuneration to induce patient referrals undermines the integrity of our nation’s health care system,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “When a patient receives a prescription for a device to treat a health care condition, the patient deserves to know that the device was selected based on quality of care considerations and not on unlawful payments from equipment manufacturers.”

The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE.  Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act.

The settlement resolves allegations that ResMed (a) provided DME companies with free telephone call center services and other free patient outreach services that enabled these companies to order resupplies for their patients with sleep apnea, (b) provided sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines, (c) arranged for, and fully guaranteed the payments due on, interest-free loans that DME supplies acquired from third-party financial institutions for the purchase of ResMed equipment, and (d) provided non-sleep specialist physicians free home sleep testing devices referred to as “ApneaLink.”

“This settlement represents another example of our district’s commitment to prosecuting violations of the False Claims Act and the Anti-Kickback Statute,” said Lance Crick, Acting U. S. Attorney for the District of South Carolina.  “Medical decisions should be based on what is in the best interest of the patient and not based on financial incentives and related schemes.”

“Medical decisions should always be made without outside influence caused by cash payments, free goods, or other types of illegal remuneration, and we will continue to take action to prevent attempts to induce medical decisions through illegal kickbacks,” said Katherine L. Parker, Civil Chief, U.S. Attorney’s Office for the Southern District of California.  “We applaud the whistleblower for coming forward and notifying the United States.”

“Illegal kickbacks in the federal healthcare system create an unfair marketplace and the potential that medical decisions are not based on what is best for patients,” said U.S. Attorney Peter E. Deegan Jr. for the Northern District of Iowa.  “This settlement is another sign of our office’s dedication to fair and full enforcement of the False Claims Act.”

“When companies give free equipment to doctors for the sole purpose of generating business and increasing their bottom lines, federal health insurance programs should not foot the bills.  This case rights that alleged wrong by ResMed,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York.  “We will continue to work with our law enforcement partners to hold accountable companies that put profits before patients.”

Contemporaneous with the civil settlement, ResMed entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General.  The CIA requires, among other things, that ResMed implement additional controls around its product pricing and sales and that ResMed conduct internal and external monitoring of its arrangements with referral sources.

The agreement resolves five lawsuits originally brought by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims.  The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in the recovery.  The whistleblowers will collectively receive a roughly $6.2 million share of the settlement. 

“The government contended ResMed provided free goods and services to companies in order to sell more medical equipment bought by taxpayers,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “The OIG’s integrity agreement with ResMed is designed to ensure such alleged behavior will not be repeated.”

“I applaud the Department of Justice and the U.S. Attorneys' for their continued efforts to hold health care providers accountable to the American taxpayer," said Army Lt. Gen. Ron Place, Director of the Defense Health Agency. “The efforts of the Department of Justice safeguard the health care benefit for our service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department, and other state and federal agencies to investigate all those who participated in fraudulent practices.”

This settlement was the result of a coordinated effort by the Civil Division of the United States Department of Justice; the U.S. Attorney’s Offices for the District of South Carolina, the Southern District of California, the Northern District of Iowa, and the Eastern District of New York; the Department of Health and Human Services, Office of Counsel to the Inspector General and Office of Investigations; the Defense Criminal Investigative Service; the Defense Health Agency Office of General Counsel; the Federal Bureau of Investigation; and the National Association of Medicaid Fraud Control Units.  

The lawsuits resolved by this settlement are captioned United States, et al., ex rel. Ameer v. ResMed, Inc., et al., Case No. 2:15-CV-04842-MBS (D.S.C.); United States, et al., ex rel. Baker v. ResMed, Inc., et al., Case No. 3:16-CV-00987-MBS (D.S.C.); United States, et al., ex rel. Ross v. ResMed, Inc., Case No. 16-CV-1988-W (JLB) (S.D. Cal.); United States ex rel. Meyer v. ResMed, Inc., et al., Case No. 17-CV-12-MWB (N.D. Iowa); and United States, et al., ex rel. Ottavio, et al. v. ResMed, Inc., Case No. CV 17-5734 (E.D.N.Y.).  

January 16, 2020 | Permalink | Comments (0)

Wednesday, January 15, 2020

Former Dutch Martinair Air Cargo Executive Extradited to USA From Italy for Criminal Price-Fixing

Case Marks Antitrust Division’s Most Recent Successful Extradition on Antitrust Charges

Maria Christina “Meta” Ullings, the former senior vice president of cargo sales and marketing for Martinair N.V. (Martinair Cargo) and a Dutch national, was extradited from Italy, the Department of Justice announced today.

On Sept. 21, 2010, in the U.S. District Court for the Northern District of Georgia in Atlanta, Ullings was indicted for participating in a long-running worldwide conspiracy to fix prices of air cargo. A fugitive for almost 10 years, Ullings was apprehended by Italian authorities in July 2019 while visiting Sicily. Ullings initially contested extradition in the Italian courts, but after the Court of Appeals of Palermo ruled that she be extradited, she waived her appeal. She arrived in Atlanta on Jan. 10 and made her initial appearance today in the U.S. District Court for the Northern District of Georgia.

“This extradition ruling by the Italian courts – the seventh country to extradite a defendant in an Antitrust Division case in recent years, and the second to do so based solely on an antitrust charge – demonstrates that those who violate U.S. antitrust laws and seek to evade justice will find no place to hide,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “The Division appreciates the cooperation of the Italian authorities in this matter.  With the assistance of our law enforcement colleagues at home and around the world, the Division will aggressively pursue every avenue available in bringing price fixers to justice.”

According to the indictment, Ullings conspired with others to suppress and eliminate competition by fixing and coordinating certain surcharges, including fuel surcharges, charged to customers located in the United States and elsewhere for air cargo shipments.  These air cargo shipments included heavy equipment, perishable commodities, and consumer goods destined for American consumers and shipped by American producers.  Ullings is alleged to have participated in the conspiracy from at least as early as January 2001 until at least February 2006. 

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.

Including Ullings, a total of 22 airlines and 21 executives have been charged in the Justice Department’s investigation into price fixing in the air transportation industry.  To date, more than $1.8 billion in criminal fines have been imposed and seven executives have been sentenced to serve prison time.

Ullings is charged with violating the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. 

January 15, 2020 in Financial Regulation | Permalink | Comments (0)

Monday, January 13, 2020

Gross Domestic Product by State, Third Quarter 2019

Texas Was the Fastest Growing State in the Third Quarter

Real gross domestic product (GDP) increased in 49 states and the District of Columbia in the third quarter of 2019, according to statistics released today by the U.S. Bureau of Economic Analysis. The percent change in real GDP in the third quarter ranged from 4.0 percent in Texas to 0.0 percent in Delaware (table 1).

Percent Change in Real GDP by State, 2019:Q2-2019:Q3

Nondurable goods manufacturing; retail trade; and professional, scientific, and technical services were the leading contributors to the increase in real GDP nationally (table 2).

  • Nondurable goods manufacturing increased 10.1 percent for the nation and contributed to growth in all 50 states. This industry was the leading contributor to growth in Texas, the fastest growing state (GDP by Industry table 1).
  • Retail trade increased 8.2 percent for the nation and contributed to growth in all 50 states and the District of Columbia.
  • Professional, scientific, and technical services increased 5.6 percent for the nation and contributed to growth in all 50 states and the District of Columbia.

In contrast, finance and insurance decreased 5.3 percent for the nation, subtracting from growth in all 50 states and the District of Columbia. This industry was the leading contributor to slow growth in New York and in Delaware–the slowest growing state.

January 13, 2020 in Economics | Permalink | Comments (0)

Friday, January 10, 2020

Florida Businessman Sentenced to 48 Months in Prison for Role in Venezuela Bribery Scheme

A former general manager and partial owner of a Florida-based energy company was sentenced to 48 months in prison for his role in a scheme to corruptly secure contracts from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA).

Juan Jose Hernandez Comerma (Hernandez), 54, of Weston, Florida, pleaded guilty Jan. 10, 2017, to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one count of violating the FCPA. 

Today, U.S. District Judge Gray H. Miller of the Southern District of Texas imposed the four-year term and further ordered Hernandez to pay a fine of $127,000 and forfeit $3 million. 

According to admissions made in connection with Hernandez’s plea, Hernandez conspired with U.S.-based businessmen Abraham Jose Shiera Bastidas (Shiera) and Roberto Enrique Rincon Fernandez (Rincon) to pay bribes and other things of value to PDVSA purchasing analysts. This ensured that Shiera’s and Rincon’s companies were placed on PDVSA bidding panels, which enabled the companies to win lucrative energy contracts with PDVSA. From 2008 until 2012, while employee, and later, partial owner, of one of Shiera’s companies, Hernandez provided recreational travel and entertainment and offered bribes to PDVSA officials, including Alfonzo Eliezer Gravina Munoz (Gravina), based on a percentage of contracts the officials helped to award to Shiera’s companies.  

Rincon, Shiera and Gravina have all also pleaded guilty in the case and await sentencing.

Hernandez is the sixth defendant to be sentenced by Judge Miller as part of a larger, ongoing U.S. government investigation into bribery at PDVSA. Including Hernandez, Rincon, Shiera, and Gravina, to date, the Justice Department has announced charges against 25 individuals, 19 of whom have pleaded guilty in connection with the investigation.

HSI in Houston is conducting the ongoing investigation with assistance from HSI in Boston. Trial Attorneys Jeremy R. Sanders, Sarah E. Edwards and Sonali D. Patel of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys John Pearson and Robert S. Johnson of the Southern District of Texas are prosecuting the case. Assistant U.S. Attorney Kristine Rollinson of the Southern District of Texas is handling the forfeiture aspects of the case.

January 10, 2020 in AML | Permalink | Comments (0)

Thursday, January 9, 2020

Employment Opportunities - Teaching and Research Associate with focus on Transfer Pricing or Digital Taxation

We are pleased to announce that the Institute for Austrian and International Tax Law, WU is offering two positions of

  • teaching and research associates with focus on transfer pricing
  • teaching and research associates with focus on digital taxation 

The deadline for applications is January 29, 2020.
We would be delighted if you applied for this position and please kindly distribute this announcement to other qualified colleagues.
If you would like to apply, or you know somebody who may be interested for the position with focus on transfer pricing  (HERE) , please send your application only online under (Reference Number 531), no later than January 29, 2020
If you would like to apply, or you know somebody who may be interested for the position with focus on digital taxation (HERE), please send your application only online under (Reference Number 530), no later than January 29, 2020
For more information on the position, please see our website under Further Information: or direct your queries to Ms. Theodora Stergidou (

January 9, 2020 in Academia | Permalink | Comments (0)

Ministry of Finance Reports on 2019/20 First Half Fiscal Performance and Provides Updated Economic Review

The Ministry of Finance today reported on the 2019/20 First Half Fiscal Performance and provided an updated Economic Review for 2019.  Highlights include:

  • Total Revenues of $545.4 million (Up $7.9 million versus First Half 2018/19)
  • Total Expenditure of $552.9 million (Down $31.4 million versus First Half 2018/19)
  • Interest Expense of $58.3 million (Down $3.4 million versus First Half 2018/19)
  • Deficit of $7.6 million (Down $39.2 million versus First Half 2018/19)

2019/20 First Half Fiscal Performance:

The headline numbers for the 2019/20 National Budget are as follows: a revenue target of $1.12 billion; current expenditure of $1.05 billion, including debt service; capital expenditure of $64.7 million; and a projected surplus of $7.4 million.

Revenues for the six months ending September 2019 are $545.4 million; this is $7.8 million (1.4%) higher than in September 2018.  It should be noted that the increase in revenue is due to a larger collection in Customs Duty, Payroll Tax, Foreign Currency Purchase Tax, Telecommunication Receipts and Passenger Tax which are offset by lower receipts in Land Tax, Hotel Occupancy Tax, Stamp Duty, Civil Aviation Receipts and All Other Receipts.

In general total revenues are tracking slightly below budget estimates, however the strength in Payroll Tax and Passenger Tax receipts increases the chances of meeting the total revenue target for the current fiscal year.

Current expenditures, excluding debt service, are presently tracking 0.05% or $0.2 million below budget estimates. It should be noted that in certain instances expenditures are not made evenly over the year which may distort actuals when compared to budget;. The $463.7 million spent in the first six months of 2019/20 represents approximately 49.9% of the total current account budget of $929.9 million and are over $200,000 less than the first six months of 2018/19.

Capital expenditures for the period ending September 2019 are $4.4 million higher than in September 2018. This is primarily due to a new capital grant for WEDCO to develop King’s Wharf and various other on-going Ministry of Public Works development projects.

Total current and capital spending to date, excluding debt service, is $4.2 (0.85%) million higher than last year’s spending.

Interest expenses are tracking 5.8% or $3.4 million lower than 2018.  This is due to lower debt levels and strategic Asset/Liability Management by the government in which relatively expensive debt has been refinanced by less expensive debt.

The $58.3 million paid in interest expense represents 10.7% of the revenue collected for the period which beats September 2018 in which 11.5% of the revenue collect was used to pay interest.

For the first six months of 2019/20 Government incurred a deficit of $7.6 million, compared to a deficit of $46.8 for the corresponding period in 2018/19. This deficit was financed by a Credit Facility with a local financial institution.

Gross debt at the end of September 2019 stood at $2.7 billion. Net of the Sinking Fund debt was $2.56 billion. During this period Government had to borrow $88.5 million to make good on its guarantee and purchase the interest of the Tranche B lenders for the Caroline Bay project. In October the Government incurred an additional $81.5 million in borrowing to make good on its guarantee and purchase the interest of the Tranche C lenders for the Caroline Bay project.

The Caroline Bay project will result in the Government incurring additional interest expenses of approximately $4.0 million in this fiscal year and other expenses relating to professional services and the amount owed to contractors and sub-contractors associated with this project.

The increase in borrowing runs counter to the plan that was outlined in this Government’s budget statement in February which stated that we had no plans to incur any additional long-term borrowings in this fiscal year. While this turn of events was unplanned, the Government’s commitment to being prudent stewards of the public purse remains unchanged.

Bermuda Economy 2019: Mid-Year Economic Review

Summary Economic Indicators: Mid-Year Economic Review 2019

 *Comparative data over the first half of 2019, except when otherwise indicated.

  • The year to date (August) average Consumer Price Index was 1.0% and the 12 month average rate was 1.0%. The primarily causes of inflation during the last twelve months were increased costs in Health Insurance premiums of 3.1% in April and increases in the average costs of various food items throughout the year.
  • Imports increased by 15.2% over the first two quarters of the year to register at $603 million. The majority of the increase can be attributed to a $65.5 million or 88.3% gain in the imports for machinery due in large part to BELCO's new generator. The other category that contributed significantly to the rise in the level of imports was finished equipment.  
  • Air arrivals during the first three quarters of 2019 fell by 4.5% while the number of cruise passengers increased by 14.2% over the same time period.  Total visitor arrivals were up 7.4% versus a year ago.
  • Total air visitor spending in the first nine months rose by $12.1 million or 3.8% settling at $327.5 million.
  • There were 12,015 international companies and partnerships registered in Bermuda as of September 2019, representing a 1.2% decrease compared to the 2018 total of 12,156.
  • 476 new international companies and partnerships were registered in Bermuda during the first nine months of 2019 representing a 19.2% decrease when compared to the 2018 registrations of 589.
  • Total value of new construction projects started for the first six months of this year fell by 19.3% from $62.1 million to $50.1 million. This decrease was due largely to Government funded projects which began in the first half of 2018 not being duplicated to the same extent in 2019.
  • The estimated value of construction work put in place was $136.4 million, an increase of 20.3%. The majority of the growth can be attributed to work performed on hotels and guest houses.
  • Based on preliminary estimates from the Office of the Tax Commissioner, employment income for the first 6 months of 2019 increased by $72.9 million to $1.885 billion, an increase of 4.0% when compared to the first 6 months of 2018. This level of compensation represents one of the highest on record.
  • Total retail sales for the first seven months of 2019 decreased by 1.5% or $9.8 million to register at $656.3 million.
  • Bermuda's Balance of Payments for the second quarter of 2019 recorded a surplus on the current account of $161 million, which was $29 million less than the corresponding surplus in 2018. The decrease in the current account surplus was due in large part to an $11 million decline in financial services and a $10 million decrease in employee compensation.
  • Based on figures released by the Bermuda Monetary Authority, Bermuda's money supply contracted by 1.5%, or $52 million, year over year at the end of the first quarter of 2019. The money supply declined mainly due to a decline in local customer deposit liabilities which were down 2.0% or $64.7 million.
  • The Banking sector's total assets declined by 0.5% or $0.1 billion at the end of March 2019. The reduction was driven by a decrease in investments which fell by 4.3% or $0.4 billion over the past year.
  • Loans & Advances fell marginally by 1.2% over the first quarter of 2019 while customer deposits contracted by 1.6% or $0.3 billion for the same time period.

Over the course of 2019, the economy has experienced a shift in the outcomes of a few of the indicators when compared to 2018. This year air arrivals are down after experiencing a revival over the last few years and imports and employment income have grown after declining last year. However, total visitor numbers, construction levels and the low level of inflation continue to have a positive effect on the economy. Conversely, retail sales and international company registrations continue to offset the positive aspects of the economy. Throughout the economic swings, the Government continues to make a concerted effort to stimulate domestic spending and foreign investment in Bermuda through targeted investment strategies and diversification of business development initiatives. This should lead to higher employment numbers providing sustained economic growth in most sectors.

Current Account Expenditure

January 9, 2020 | Permalink | Comments (0)

Wednesday, January 8, 2020

U.S. International Trade in Goods and Services, November 2019

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $43.1 billion in November, down $3.9 billion from $46.9 billion in October, revised.

U.S. International Trade in Goods and Services Deficit
Deficit: $43.1 Billion -8.2%°
Exports: $208.6 Billion +0.7%°
Imports: $251.7 Billion -1.0%°

Next release: February 5, 2020

(°) Statistical significance is not applicable or not measurable. Data adjusted for seasonality but not price changes

Source: U.S. Census Bureau, U.S. Bureau of Economic Analysis; U.S. International Trade in Goods and Services, January 7, 2020

Goods and Services Trade Deficit, Seasonally adjusted

Exports, Imports, and Balance (exhibit 1)

November exports were $208.6 billion, $1.4 billion more than October exports. November imports were $251.7 billion, $2.5 billion less than October imports.

The November decrease in the goods and services deficit reflected a decrease in the goods deficit of $3.9 billion to $63.9 billion and a decrease in the services surplus of less than $0.1 billion to $20.8 billion.

Year-to-date, the goods and services deficit decreased $3.9 billion, or 0.7 percent, from the same period in 2018. Exports decreased less than $0.1 billion or less than 0.1 percent. Imports decreased $3.9 billion or 0.1 percent.

Three-Month Moving Averages 

The average goods and services deficit decreased $3.5 billion to $47.0 billion for the three months ending in November.

  • Average exports decreased $0.2 billion to $207.8 billion in November.
  • Average imports decreased $3.7 billion to $254.9 billion in November.

Year-over-year, the average goods and services deficit decreased $8.4 billion from the three months ending in November 2018.

  • Average exports decreased $1.5 billion from November 2018.
  • Average imports decreased $9.9 billion from November 2018.


Exports of goods increased $1.0 billion to $137.2 billion in November.

   Exports of goods on a Census basis increased $1.0 billion.

  • Capital goods increased $0.6 billion.
    • Drilling and oilfield equipment increased $0.4 billion.
    • Civilian aircraft engines increased $0.3 billion.
  • Consumer goods increased $0.5 billion.
    • Jewelry increased $0.4 billion.
    • Gem diamonds increased $0.3 billion.
  • Automotive vehicles, parts, and engines increased $0.4 billion.
  • Other goods decreased $0.5 billion.

   Net balance of payments adjustments decreased less than $0.1 billion.

Exports of services increased $0.4 billion to $71.5 billion in November.

  • Other business services increased $0.1 billion.
  • Transport increased $0.1 billion.
  • Travel increased $0.1 billion.


Imports of goods decreased $2.9 billion to $201.1 billion in November.

   Imports of goods on a Census basis decreased $2.7 billion.

  • Capital goods decreased $1.2 billion.
    • Civilian aircraft decreased $0.6 billion.
    • Computers decreased $0.6 billion.
  • Consumer goods decreased $1.0 billion.
    • Cell phones and other household goods decreased $0.5 billion.
    • Artwork and other collectibles decreased $0.3 billion.
  • Other goods decreased $0.8 billion.
  • Industrial supplies and materials decreased $0.6 billion.
  • Automotive vehicles, parts, and engines increased $1.1 billion.
    • Automotive parts and accessories increased $0.5 billion.
    • Trucks, buses, and special purpose vehicles increased $0.3 billion.

   Net balance of payments adjustments decreased $0.2 billion.

Imports of services increased $0.4 billion to $50.7 billion in November.

  • Travel increased $0.1 billion.
  • Transport increased $0.1 billion.

Real Goods in 2012 Dollars – Census Basis 

The real goods deficit decreased $3.7 billion to $75.3 billion in November.

  • Real exports of goods increased $0.7 billion to $148.7 billion.
  • Real imports of goods decreased $3.0 billion to $224.0 billion.

Goods by Selected Countries and Areas: Monthly – Census Basis

The November figures show surpluses, in billions of dollars, with South and Central America ($4.9), Hong Kong ($1.8), Brazil ($1.7), United Kingdom ($1.3), OPEC ($0.7), Singapore ($0.6), and Saudi Arabia ($0.1). Deficits were recorded, in billions of dollars, with China ($25.6), European Union ($13.5), Mexico ($8.5), Japan ($5.7), Germany ($5.2), India ($2.4), Italy ($2.3), Taiwan ($1.7), Canada ($1.7), South Korea ($1.2), and France ($1.2).

  • The deficit with China decreased $2.2 billion to $25.6 billion in November. Exports increased $1.4 billion to $8.9 billion and imports decreased $0.8 billion to $34.5 billion.
  • The deficit with Canada decreased $1.6 billion to $1.7 billion in November. Exports increased $0.1 billion to $24.0 billion and imports decreased $1.5 billion to $25.7 billion.
  • The deficit with Japan increased $1.3 billion to $5.7 billion in November. Exports decreased $0.6 billion to $5.8 billion and imports increased $0.7 billion to $11.6 billion.

*             *             *

All statistics referenced are seasonally adjusted; statistics are on a balance of payments basis unless otherwise specified. Additional statistics, including not seasonally adjusted statistics and details for goods on a Census basis, are available in exhibits 1-20b of this release. For information on data sources, definitions, and revision procedures, see the explanatory notes in this release. The full release can be found at or The full schedule is available in the Census Bureau's Economic Briefing Room at or on BEA's website at

*             *             *

Next release: February 5, 2020, at 8:30 A.M. EST
U.S. International Trade in Goods and Services, December 2019

January 8, 2020 | Permalink | Comments (0)