Posts Tagged With Asset Forfeiture

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Department of Justice Seeks Forfeiture for Bribe Payments to the Republic of Chad’s Former Ambassador to the United States and Canada

On June 30, DOJ filed a complaint seeking the civil forfeiture of approximately $34 million from Griffiths Energy International Inc. (“Griffiths Energy”), a Canadian energy company that was allegedly using bribes to  influence the award of Chadian oil development rights in exchange for shares in the company.  The complaint alleges that Griffiths Energy used $34 million in company shares to bribe Chad’s Ambassador to the United States and Canada.  Allegedly, Ambassador Mahamoud Adam Bechir, along
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New York Securities Lawyer Sentenced to 18 Months in Prison for Orchestrating Stock Manipulation Scheme

On May 26, Adam S. Gottbetter, a New York corporate and securities lawyer, was sentenced to 18 months in prison for orchestrating a stock market manipulation scheme designed to artificially inflate the stock price of two publicly traded companies.  Gottbetter conspired with others to manipulate the price and volume of securities to, among other things, make the companies more attractive to potential investors in various private offerings that Gottbetter would broker. The scheme also involved
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Ripple Labs Inc. Resolves Criminal Investigation

On May 5, Ripple Labs Inc. (“Ripple”), along with its wholly owned subsidiary XRP II, LLC (“XRP II”), reached a non-prosecution agreement with the U.S. Attorney’s Office in the Northern District of California to resolve a criminal investigation.  Ripple is the developer and seller of XRP, the second most used form of digital currency.  The U.S. Attorney’s Office investigated allegations that Ripple and XRP II failed to comply with laws regulating the exchange of virtual
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Schlumberger Oilfield Holdings Ltd. Plead Guilty and Agrees to Pay Over $232.7 Million for Violating U.S. Sanctions by Facilitating Trade with Iran and Sudan

On April 30, Schlumberger Oilfield Holdings Ltd. (“SOHL”)—a wholly owned subsidiary of Schlumberger Ltd.—pled guilty to facilitating illegal transactions with Iran and Sudan.  As part of the plea agreement, SOHL agreed to forfeit more than $77 million and pay a $155.1 million fine—the largest criminal fine in connection with an International Emergency Economic Powers Act prosecution to date.  In the agreed-upon statement of facts, the company acknowledged that its U.S. employees (1) approved capital expenditure
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Attorney General Restricts Use of Asset Forfeiture in Structuring Offenses

On March 31, Attorney General Holder announced that DOJ would narrow the circumstances in which it seeks forfeiture in connection with “structuring” offenses.  Structuring occurs when, instead of conducting a single transaction in an amount that would require a financial institution to make a report or maintain a record, a violator conducts a series of currency transactions, purposely keeping each transaction at an amount below the relevant threshold to avoid triggering the record-keeping requirement.  Although
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CEO and Managing Director of U.S. Broker-Dealer Sentenced for International Bribery Scheme

On March 27, the former chief executive officer and a former managing director of Direct Access Partners, a U.S. broker-dealer, were each sentenced to four years in prison for bribing a senior official in Venezuela’s state economic development bank—known as “Bandes”—in exchange for trading business that generated more than $60 million in commissions.  In addition to their prison sentences, the men, Benito Chinea and Joseph DeMeneses, were respectively ordered to pay $3.6 million and $2.7
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Commerzbank AG Admits to Sanctions and Bank Secrecy Violations, Forfeits $563 Million and Pays $79 Million Fine

On March 12, Commerzbank AG, a global financial institution, and its U.S. branch entered into a DPA for violations of the International Emergency Economic Powers Act and the Bank Secrecy Act and agreed to forfeit $563 million and pay a $79 million fine.  The bank moved $263 million through the U.S. financial system on behalf of Iranian and Sudanese businesses. It used non transparent payment messages, amended payments to avoid U.S. sanctions filters, and employed
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President of Investment Advisory Firm Sentenced to Six Years in Prison for Investment Fraud Scheme

On February 13, James Tagliaferri, the former president of TAG Virgin Islands, was sentenced to six years in prison in connection with a multimillion-dollar scheme to defraud his clients.  As part of the scheme, Tagliaferri (1) accepted undisclosed compensation in exchange for investing his clients’ funds in certain securities; (2) used client funds for illegitimate purposes, such as to pay other clients; and (3) placed fictitious instruments in client accounts.  In total, Tagliaferri caused clients
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Former Hedge Fund Controller Pled Guilty to Embezzlement

On January 29, Lawrence J. Herzing pled guilty to one count of wire fraud.  Herzing embezzled more than $9 million from Contrarian Capital Management, the hedge fund where he worked.  Between 2004 and 2013, Herzing used his position at the hedge fund on 32 occasions to wire money from his employer to accounts that he controlled.  Herzing’s sentencing is scheduled for April 24, 2015. United States v. Herzing, 14-mj-00247 (D. Conn.). DOJ Press Release
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Chief Compliance Officer Sentenced for Fraud Scheme Worth Hundreds of Millions of Dollars

On January 8, Deborah Duffy, the former Chief Compliance Officer of WG Trading Company, LP (“WG Trading”), was sentenced in the Southern District of New York to time served after pleading guilty to conspiracy, securities fraud, and money laundering on July 21, 2009.  Duffy was also ordered to forfeit $1,272,841 and pay a restitution amount to be determined.  According to the government, Duffy maintained the books and records for WG Trading, a fraudulent commodities trading
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CEO and Managing Director of U.S. Broker-Dealer Plead Guilty to Massive International Bribery Scheme

On December 14, the former chief executive officer and former managing director of a U.S. broker-dealer (the “Broker-Dealer”) pled guilty to bribery charges arising from their scheme to pay bribes to Maria De Los Angeles Gonzalez De Hernandez, who was a senior official in Venezuela’s state economic development bank, Banco de Desarrollo Económico y Social de Venezuela (Bandes), in return for trading business that generated more than $60 million in commissions.  As alleged in court
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Former Director of Operations for Bernard L. Madoff Investment Securities and Four Employees Sentenced for Role in Madoff’s Massive Fraud

  • On December 8, following a six-month trial and conviction in the Southern District of New York, Daniel Bonventre, the former Director of Operations for Bernard L. Madoff Investment Securities LLC, was sentenced to 10 years in prison for his role in Madoff’s multibillion dollar Ponzi scheme and ordered to forfeit more than $155.5 billion.  According to the Government, Bonventre directed that false entries be made in the general ledger that concealed the scope of Madoff

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Chief Technology Officer of Liberty Reserve Sentenced to Five Years in Prison

On December 12, Mark Marmilev, the former chief technology officer of Liberty Reserve, was sentenced in the Southern District of New York to five years in prison for conspiring to operate an unlicensed money transmitting business that processed more than $16 billion through Liberty Reserve’s digital currency system.  According to the Government, Liberty Reserve was created, structured, and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes, and Marmilev
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Assistant Attorney General Leslie R. Caldwell Speaks at American Conference Institute’s 31st International Conference on the Foreign Corrupt Practices Act (FCPA)

On November 19, Leslie R. Caldwell, the Assistant Attorney General for the Criminal Division, spoke at the American Conference Institute’s 31st International Conference on the FCPA.  Ms. Caldwell began her remarks by noting that there have been significant changes in the Division’s FCPA work.  First, Ms. Caldwell emphasized that, due to the expertise and knowledge acquired over the years, the Department can investigate FCPA cases much more quickly and is better equipped to prosecute
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Deputy Attorney General James M. Cole Speaks at Arab Forum on Asset Recovery

On November 3, James M. Cole, the Deputy Attorney General, spoke at the Third Arab Forum on Asset Recovery in Geneva, Switzerland.  Mr. Cole began by stressing the harm to communities and institutions caused by corruption, noting that corruption “undermines and weakens that which is the basis of modern society – the rule of law.”  Turning to additional work that must be done, Mr. Cole provided a series of steps that must be undertaken, including
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Investment Fund Manager Pleads Guilty to Securities Fraud for Operating $17 Million Ponzi Scheme

On November 10, James M. Peister pleaded guilty in the Eastern District of New York to securities fraud for operating a $17.9 million Ponzi scheme.  Peister deceived investors about the stability and performance of their investments in a fund that he founded and managed to prevent them from seeking to redeem their interests.  Pursuant to his plea agreement with the Government, Peister agreed to pay $9.7 million in restitution to the victims of his fraud
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Former SAC Capital Portfolio Manager Mathew Martoma Sentenced for Insider Trading

On September 8, Judge Paul G. Gardephe of the Southern District of New York sentenced Mathew Martoma, a former portfolio manager of CR Intrinsic Investors, LLC, a division of SAC Capital, to nine years in prison stemming from his participation in an insider trading scheme.  In addition, Martoma was ordered to pay $9.3 million in forfeiture.  Martoma was convicted in February of one count of conspiracy to commit securities fraud and two counts of securities
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Former ArthroCare Executives Sentenced for $750 Million Securities Fraud Scheme

On August 29, Michael Baker, the former CEO of ArthroCare Corporation, and Michael Gluk, ArthroCare’s former CFO, were sentenced in the Western District of Texas to 20 years and 10 years in prison, respectively, following their June 2014 convictions for wire fraud and securities fraud and Baker’s conviction for making false statements to the SEC during its investigation of the conduct.  Baker and Gluk were also ordered to forfeit approximately $22 million in profit from
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Former Executive and Vendor of Aéropostale Sentenced in Bribery Scheme

On August 20, Christopher Finazzo, the former Executive Vice President and Chief Merchandising Officer of the retailer Aéropostale, Inc., was sentenced to eight years in prison following an April 2013 conviction of 16 counts of fraud and bribery in the Eastern District of New York.  Finazzo was also ordered to forfeit more than $25 million to the government and pay over $13.5 million in restitution to Aéropostale.  According to the government, for over ten years
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Former Credit Suisse VP Sentenced to Time Served, Ordered to Forfeit $150,000 for Concealing Mortgage-Backed Securities Losses

On July 31, former Credit Suisse Vice President Salmaan Siddiqui was sentenced in the Southern District of New York to time served and $150,000 in forfeiture in connection with a scheme to hide more than $100 million in losses in mortgage-backed securities.  Siddiqui pled guilty in February 2012 to falsifying books and records at the bank.  According to the government, in 2007 and 2008, Siddiqui and his co-conspirators fraudulently inflated the value of various mortgage-backed
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Attorney Sentenced to Six Months for Tax Fraud

On July 30, former Jenkens & Gilchrist P.C. attorney Erwin Mayer, who pled guilty in 2010 in the Southern District of New York to participating in a $7 billion tax shelter scheme, was sentenced to six months in prison and ordered (along with his co-defendants) to forfeit $220 million.  Jenkens & Gilchrist closed in 2007 after entering into a nonprosecution agreement with the Department.  According to the government, Mayer helped develop and market fraudulent tax
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Stock Trader Gets Eighteen Months for Inside Trades Involving Microsoft

On July 25, a Seattle stock trader who pled guilty to trading on inside information he received from an employee of Microsoft Corp., including information regarding Microsoft’s 2012 investment in Barnes & Noble’s e-reader business, was sentenced to one and a half years in prison.  The trader, Sean Stokke, was also ordered to forfeit the $410,000 in illicit profits he obtained from the trades.  According to the government, Stokke provided the Microsoft employee, Brian Jorgensen,
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Hedge Fund Manager Pleads Guilty to Fraud

On April 25, Stephen Walsh, managing partner and co-founder of WG Trading Co. LP, pled guilty to securities fraud based on his role in a $554 million scheme.  He agreed to forfeit approximately $50.7 million and faces up to 20 years in prison.  According to court documents, Walsh solicited $7.6 billion in funds from investors with the understanding that it would be invested in an “equity index arbitrage” program that Walsh and his partner, Paul
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