Category: Enforcement Actions

The US central bank has said it failed to act with “sufficient force and urgency” in its oversight of Silicon Valley Bank, which collapsed last month in the country’s biggest bank failure since 2008.

The conclusion is one of the main findings from the Federal Reserve’s investigation of the episode.

It sparked global fears about the state of the banking industry.

The review comes as another US lender, First Republic, remains in trouble.

US regulators are reported to be working on a potential rescue for the struggling firm, which was the 14th largest bank in the US at the end of last year.

A United States judge has ordered a South African executive to pay more than US$3.4 billion (S$4.5 billion) in restitution and fines for a fraud scheme involving Bitcoin – the highest-ever civil monetary penalty in any US Commodity Futures Trading Commission (CFTC) case.

Cornelius Johannes Steynberg, the founder and chief executive officer of Mirror Trading International Proprietary, committed fraud tied to retail foreign currency transactions, among other violations, the agency said in a statement that announced the order by US District Judge Lee Yeakel.

On April 26, after months awaiting a response, Japan’s Foreign Ministry announced it had received confirmation from Myanmar’s military junta that it misused two Japan-funded civilian vessels to transport soldiers and weapons in Rakhine State in September 2022.

A Japanese Foreign Ministry spokesperson said Japan protested the misuse and the junta “expressed regret over the situation,” saying it will do its “utmost to prevent recurrence.”

Human Rights Watch first revealed the incident in October 2022 after analyzing letters from Myanmar officials that stated that two of three vessels delivered by Japan between 2017 and 2019 had been used to transport more than 100 soldiers and materiel to the town of Buthidaung in Rakhine State, where the military is fighting the Arakan Army, an ethnic armed group. The Japanese government had been requesting information from the junta following that reporting.

Two commanders in the Massachusetts Air National Guard were temporarily suspended last week in connection with a federal investigation into alleged classified intelligence leaker Jack Teixeira, the Air Force confirmed Thursday.

Col. Sean Riley, commander of the 102nd Intelligence Wing at Otis Air National Guard Base on Cape Cod, suspended the head of the subordinate 102nd Intelligence Support Squadron where Teixeira worked. The commander in charge of supporting airmen like Teixeira, who are mobilized on full-time, active-duty Title 10 orders, was suspended as well, according to Air Force spokesperson Rose Riley.

In addition to temporarily removing the commanders from their jobs, the Department of the Air Force has also revoked their access to classified networks and information, Riley told Air Force Times. Reuters first reported the development on Wednesday.

The alleged boss of one of Italy’s biggest mafia syndicates has been arrested by police at a cathedral in the northern city of Genoa.

Pasquale Bonavota has been wanted by police since 2018 after fleeing an arrest warrant for murder and mafia association.

Police say the 49-year-old leads the notorious ‘Ndrangheta mafia.

The group is Italy’s most powerful mafia family and is said to control the bulk of Europe’s cocaine supplies.

Pasquale Bonavota – whom newspaper La Stampa describes as the “baby boss” – had been at the city’s cathedral when arrested and was carrying a fake ID, according to local media reports.

He is one of the defendants in an ongoing “maxi-trial,” in which more than 300 people face charges related to organised crime.

More than three years after his arrest, Charles Lieber, the former chair of Harvard University’s chemistry department, has avoided prison for failing to disclose funding from China. For hiding his affiliation with a Chinese university, as well as income tax and foreign bank account reporting violations, Lieber was sentenced yesterday to time served, two years of supervised release with six…

A filing with the U.S. Securities and Exchange Commission shows Meta is preparing for a stop on its EU-U.S. data flows and a EU General Data Protection Regulation fine. The company’s Q1 2023 earnings report explained to investors the impacts of the imminent final decision from Ireland’s Data Protection Commission on the legality of its EU-U.S. transfers.
The DPC order, expected to be formally published by 12 May, could force a halt to Facebook’s EU operations if adequacy for the DPF is not granted before the order takes effect. Additionally, Meta is planning for a potentially steep monetary fine and corrective measures from the DPC after recommendations from the European Data Protection Board.
“We expect the Irish Data Protection Commission to issue a decision in May in its previously disclosed inquiry relating to transatlantic data transfers of Facebook EU/EEA user data, including a suspension order for such transfers and a fine,” Meta explained in its report.
IAPP Vice President and Chief Knowledge Officer Caitlin Fennessy, CIPP/US, said the expected stop transfers order and any yet-to-be-announced corrective measures could prove more meaningful than even a record penalty, noting curtailed data flows and subsequent change in data-driven business model “could have even larger financial implications for Meta and thousands of other companies.”
A new data transfer mechanism to replace the EU-U.S. Privacy Shield Framework remains the top solution for Meta’s transfer woes.
The timeline for finalization of a new mechanism remains undetermined as the European Commission works toward a final adequacy decision with the U.S. under the proposed EU-U.S. Data Privacy Framework. European Commissioner for Justice Didier Reynders previously indicated the DPF could be finalized as early as July, which could be just in time if the order includes a three-month implementation window, as some previous orders have.
“Our ongoing consultations with policymakers on both sides of the Atlantic continue to indicate that the proposed new EU-U.S. Data Privacy Framework will be fully implemented before the deadline for suspension of such transfers, but we cannot exclude the possibility that it will not be completed in time,” Meta wrote. “We will also evaluate whether and to what extent the (DPC) decision could otherwise impact our data processing operations even after a new data privacy framework is in force.”  
In the wider scope of the looming order, Fennessy said, “This could lead EU businesses to demand data localization from U.S. business partners or to switch to domestic alternatives. Such shifts could well outlast the adequacy process. Privacy professionals across sectors should prepare their CEOs and boards for significant data transfer disruptions in the months to come.”
Case origins
In July 2020, the Court of Justice of the European Union invalidated Privacy Shield and cast a shadow over the use of standard contractual clauses in what’s commonly known as the “Schrems II” decision. In the wake of the CJEU decision, the DPC initiated an “own volition” inquiry under Ireland’s Data Protection Act to consider whether Facebook’s data transfers to the U.S. were legal.
Meta’s legal challenges to the DPC’s inquiry were denied by the High Court of Ireland in May 2021. That paved the way for the DPC to reach its draft decision to halt Meta from transferring personal data from the EU to the U.S. through its use of standard contractual clauses. The draft decision was sent to EU data protection authorities July 2022.
Meta responded by claiming its Facebook and Instagram operations in the EU may be shuttered pending the final decision and the timeline for a Privacy Shield replacement.
Delivery of the decision to DPAs triggered two EU General Data Protection Regulation-mandated processes concerning the European Data Protection Board. The EDPB first took up an Article 60 process that provided DPAs a month to deliberate, comment, or express “relevant or reasoned objection,” on the DPC’s draft decision. Objections were made, forcing an Article 65 dispute resolution among board members.
The EDPB’s binding Article 65 decision issued 13 April resolved data protection authorities’ differences on “whether an administrative fine and/or an additional order to bring processing into compliance must be included in the Irish DPA’s final decision.”
The DPC has one month to adopt its final decision based on the EDPB’s opinion and legal analysis. Irish Data Protection Commissioner Helen Dixon recently said she expects the final decision to be published no later than 12 May.

The Kremlin warned on Wednesday that Russia could widen the list of foreign companies subject to temporary asset seizures in case of the “expropriation” of Russian assets abroad.

The comments came after Putin signed a presidential decree approving the takeover of operations of two Western energy groups in Russia — Finland’s Fortum and Germany’s Uniper — and threatened to do the same with others.

“If necessary, the list of companies could be expanded,” Kremlin spokesman Dmitry Peskov told reporters, a day after President Vladimir Putin signed a decree allowing asset seizures.

As a result of action by the Federal Trade Commission and the Commonwealth of Pennsylvania, debt collection company International Credit Recovery, Inc. (ICR), officer Richard Diorio, Jr., and manager Cynthia Powell, have agreed to a permanent ban from the debt collection industry after being charged with engaging in bogus debt collection efforts against businesses and non-profits. 

The FTC and Pennsylvania alleged that ICR was a key part of a telemarketing scheme run by American Future Systems, Inc., (AFS), which also does business as Progressive Business Publications and the Center for Education and Employment Law. ICR allegedly collected on debts AFS claimed organizations such as businesses, schools, fire and police departments, and non-profits owed for book and newsletter subscriptions they did not order.

 “The defendants in the case were the second half of a one-two punch that targeted small businesses, non-profits and first responders, first with bogus subscription bills and then bogus debt collection,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We’re proud to work with our partners in Pennsylvania to hold them accountable.”

“Through collaboration with our federal partners, we reached an agreement that ensures Pennsylvanians will be protected from these callous defendants that preyed on emergency-responder and non-for-profit organizations to fulfill their selfish greed,” Pennsylvania Attorney General Michelle Henry said.

The FTC and Pennsylvania charged that, in connection with its debt collection activities, ICR contacted consumers that it knew or had reason to know did not agree to order paid subscriptions. They also charged that ICR used false or unsubstantiated representations to try to get consumers to pay, and that ICR illegally threatened consumers if they did not pay.

The court order, which was agreed to by the defendants to settle the case, permanently bans them from the debt collection industry, as well as requires them to cooperate since the case will continue against the other defendants AFS, Progressive Business Publications of New Jersey, Inc. and Edward Satell.

The Commission vote approving the stipulated final order was 3-0-1, with Commissioner Christine S. Wilson not participating. The vote on this matter closed on March 23, 2023, prior to Commissioner Wilson’s departure from the Commission. The U.S. District Court for the Eastern District of Pennsylvania approved the settlement.

NOTE: Stipulated final orders or injunctions have the force of law when approved and signed by the District Court judge.

This matter is being handled by the FTC’s East Central Region.

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I’m going to write about mifepristone and the legal troubles around it, and I will probably regret doing so. That’s partly because the situation is changing – this dispute is now before the US supreme court, and for better or worse, they will have the last word. But as of this writing, that last word hasn’t been handed down, and…

The US Supreme Court rejected Wednesday the claim of sovereign immunity by a Turkish bank accused of violating Iran sanctions, in a case that has added tensions to ties between Washington and Ankara.

Halkbank was hit with US criminal charges in 2019 that it took part in a yearlong scheme to launder billions of dollars worth of Iranian oil and natural gas proceeds, violating sanctions on Iran.

The funds were used to buy gold and the transactions were disguised as food and medicine purchases in order to fall under a humanitarian exemption to the sanctions, according to court documents.

As part of the scheme, Halkbank allegedly used front companies to funnel $20 billion to Iran, including $1 billion through the US financial system, the US Justice Department said.

The United States charged the bank with six counts of fraud, money laundering, and sanctions offenses, calling it one of the most serious sanctions-breaking cases it has seen.

LOS ANGELES – A former doctor has been sentenced to 84 months in federal prison for scheming to defraud private insurance companies and the Tricare health care program for U.S. military service members by fraudulently submitting nearly $120 million in claims related to the 1-800-GET-THIN Lap-Band surgery business, the Justice Department announced today.

Julian Omidi, 54, of West Hollywood, was sentenced Monday evening by United States District Judge Dolly M. Gee.

Judge Gee also sentenced Surgery Center Management LLC (SCM), an Omidi-controlled Beverly Hills-based company, to five years’ probation. A separate hearing on restitution and forfeiture in this case, along with SCM’s fine, is expected in the coming weeks. 

A Pennsylvania grand jury in recent months accused nine men with connections to the Jehovah’s Witnesses of child sexual abuse in what some consider the nation’s most comprehensive investigation yet into abuse within the faith.

The sets of charges filed in October and February have fueled speculation the jury may make public more about what it has uncovered from a four-year investigation.

A similar grand jury investigation into child sexual abuse by Catholic priests culminated in a lengthy 2018 report that concluded hundreds of priests had abused children in Pennsylvania over seven decades and church officials had covered it up, and more recently a similar report was issued in Maryland.

But documents made public so far include nothing about what critics have long maintained has been a systemic cover-up and mishandling of child molestation within the Jehovah’s Witnesses.

  LONDON (AP) — A diamond and art dealer was sanctioned Tuesday by the U.K. and U.S. governments for allegedly funding Lebanon’s militant Hezbollah group. The U.K. Treasury said it froze Nazem Ahmad’s assets in the U.K. because he financed the Iranian-backed Shiite militant organization that has been designated an international terrorist group. Under the sanctions, no one in the…

  After years of watching U.S. President Donald Trump flout democratic norms and the rule of law, it is easy to feel a sense of vindication from his indictment in early April by Manhattan District Attorney Alvin Bragg for falsifying business records. Few objective observers doubt that the facts support this indictment or one of the many other potential indictments…