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Saturday, December 27, 2014

RECENT U.S. NAVY PHOTOS

FROM:  U.S. NAVY 

SAN DIEGO (Dec. 19, 2014)  The guided-missile destroyers USS Kidd (DDG 100), left, and USS Wayne E. Meyer (DDG 108) display their lights during Naval Base San Diego's third annual Holiday Lights Open House. During the event, the public was invited to drive through and observe the decorated ships along the base's waterfront. U.S. Navy photo by Mass Communication Specialist Seaman Amanda Chavez (Released) 141219-N-LR795-026.

AIFA, Israel (Dec. 23, 2014)  Sailors aboard the guided-missile destroyer USS Cole (DDG 67) stand by their lines as a tug boat maneuvers the ship into positing for mooring in Haifa, Israel, for a scheduled port visit. Cole is conducting naval operations in the U.S. 6th Fleet area of responsibility in support of U.S. national security interests in Europe. U.S. Navy photo by Mass Communication Specialist 2nd Class John Herman (Released) 141223-N-IY142-094.





2014 WHAT HAPPENED THIS YEAR @NASA

SECRETARY HAGEL CALLS SERVICE MEMBERS ON CHRISTMAS DAY

FROM:  U.S. DEFENSE DEPARTMENT 
Hagel Calls Service Members on Christmas, Thanks Them for Service to Nation
DoD News, Defense Media Activity

WASHINGTON, Dec. 25, 2014 – Defense Secretary Chuck Hagel today called service members taking part in U.S. operations around the world to wish them a Merry Christmas, according to Pentagon Press Secretary Navy Rear Adm. John Kirby.

In a DoD News Release, Kirby said “Secretary Hagel expressed his appreciation for their service in defending the United States, and supporting our allies and partners.

“In each of the calls, Secretary Hagel noted that he knows how difficult it is to be away from home on this holiday and thanked the service members and their families for their sacrifice for the nation,” Kirby said.

Hagel spoke with representatives from each military service, including:
- Army Spc. Randolph A. Priest, of Barren Springs, Va. Priest is a communications specialist serving in Afghanistan, who is responsible for ensuring reliable communications between the headquarters and soldiers.
- Air Force Capt. Laura A. Klepper, of Palmdale, Calif.  Klepper is an F-15E weapon system officer deployed to the Central Command area of responsibility, providing combat airpower in support of regional missions. She was selected as her squadron’s flight commander of the year.

- Marine Corps Cpl. Thomas A. Vasko, Jr., of Medina, Ohio.  Vasko is an infantry advisor in Afghanistan, training allies in how to conduct patrols to prevent enemy freedom of movement and indirect fire attacks. He is also an assistant patrol leader.

- Navy Petty Officer 1st Class Taylor A. Porter, of Dayton, Wash. Porter is deployed to the Central Command area of responsibility and leads an 11-person team in ensuring aviation equipment is maintained and safe for flight. She was selected as her squadron’s maintainer of the year and led the stand-up of a unit supporting Operation Inherent Resolve.

“The secretary was delighted to be able to reach these service members, forward deployed as they are, and to wish them his best for the holiday,” Kirby said. “He asked that each pass on his best wishes to their units as well. The secretary was very grateful for the time these young leaders gave him.”

DEALER'S ALLEGED DECEPTIVE AUTO ADS HALTED BY FTC

FROM:  U.S. FEDERAL TRADE COMMISSION 
FTC Halts Texas Auto Dealer’s Deceptive Ads
Misleading Ads Claimed $1 Gets Consumers Out of Current Loan or Lease

An auto dealer in suburban Dallas has agreed to settle Federal Trade Commission charges that it used deceptive ads to promote the sale and lease of its vehicles, including an ad that claimed consumers could get out of their current loan or lease for $1.

According to the complaint, false or deceptive ads from TXVT Limited Partnership, doing business as Trophy Nissan (Trophy), violated the FTC Act as well as the Consumer Leasing Act (CLA) and Regulation M, and the Truth in Lending Act (TILA) and Regulation Z.

The FTC charged that Trophy advertised enticing prices, lease or finance terms, and promotions and then attempted to disclaim its attractive offers using small text in print and video ads. In addition to print and TV advertisements, Trophy also ran ads on its website, Facebook and Twitter. The dealership also ran print ads in a local Spanish-language newspaper, Al Dia.

Among the deceptive ads run by Trophy was one that misled consumers into thinking they could get out of their current loan or lease for only $1. The Commission’s complaint alleges the advertisement was deceptive since consumers could not get out of their loan or lease for that amount. In fact, Trophy would add the balance of any loan or lease obligation to the balance of a new loan.

In another promotion, “Max Your Tax,” Trophy claimed it would match tax refunds to use for a down payment, but the small print at the bottom of the ad disclosed it limited match refunds to no more than $1,000. The FTC alleges that Trophy failed to disclose adequately the additional terms.

As part of the proposed consent order, Trophy is prohibited from:

misrepresenting it will pay off a consumers’ trade-in;
misrepresenting material terms of any promotion or other incentive;
misrepresenting the cost of leasing or purchasing a vehicle; and
failing to clearly and conspicuously disclose material terms of a promotion or other incentive.
The proposed consent order also requires Trophy to comply with CLA and Regulation M and TILA and Regulation Z.

The case is part of the Commission’s continued efforts to protect consumers in the auto marketplace. The FTC provides a variety of resources for consumers buying or leasing a vehicle, including Are Car Ads Taking You For A Ride?

The Commission vote to issue the administrative complaint and accept the proposed consent order was 5-0. The agreement is subject to public comment for 30 days, beginning today and continuing through Jan. 22, 2015, after which the Commission will decide whether to make the proposed consent order final. Submit a comment online or through the mail.

NOTE: The Commission issues administrative complaints when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues consent orders on a final basis, they carry the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000 per day.

FORMER FBI AGENT PLEADS GUILTY IN BRIBERY CASE

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, December 23, 2014
Former FBI Special Agent Pleads Guilty to Bribery Scheme

A former FBI special agent pleaded guilty today to bribery charges, admitting that he provided internal law enforcement documents and other confidential information about a prominent citizen of Bangladesh for use by a political rival in exchange for cash.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York and Justice Department Inspector General Michael E. Horowitz made the announcement.

“Robert Lustyik discarded the FBI’s principles of ‘fidelity, bravery, and integrity,’ and sold his badge to the highest bidder,” said Assistant Attorney General Caldwell.  “Greed has no place in public service or law enforcement.  The Department of Justice will root out corruption wherever it takes hold, and hold accountable those who abuse the public’s trust for personal gain.”

“Robert Lustyik today admitted to conducting a bribery scheme in which, for his own personal gain, he secretly sold information and documents to which he had access as an FBI agent,” said U.S. Attorney Bharara.  “Lustyik betrayed our system of justice: he breached not only the law, but also his sworn oath, and the great trust and confidence placed in him by citizens and colleagues.  For his criminal conduct he now faces, as he must, serious, commensurate penalties.”

“The Department of Justice Office of the Inspector General is committed to working with our law enforcement partners to identify, investigate, and bring to justice all DOJ employees who engage misconduct,” said Inspector General Horowitz.

Robert Lustyik, 52, of Westchester County, New York, pleaded guilty to all five counts in the indictment against him, including conspiracy to engage in a bribery scheme, soliciting bribes by a public official, conspiracy to defraud the citizens of the United States and the FBI, theft of government property, and unauthorized disclosure of a Suspicious Activity Report.  Lustyik is scheduled to be sentenced by U.S. District Court Judge Vincent L. Briccetti of the Southern District of New York on April 30, 2015.

According to the complaint, indictment, court hearings, and today’s plea proceeding, Lustyik was an FBI special agent who worked on the counterintelligence squad in the White Plains Resident Agency.  Johannes Thaler was Lustyik’s friend, and Rizve Ahmed, aka, “Caesar,” was an acquaintance of Thaler.  From September 2011 through March 2012, Lustyik, Thaler and Ahmed engaged in a bribery scheme.  As part of the scheme, Lustyik and Thaler solicited payments from Ahmed, in exchange for Lustyik’s agreement to provide internal, confidential documents and other confidential information to which Lustyik had access by virtue of his position as an FBI special agent.  The documents and information pertained to a prominent citizen of Bangladesh (Individual 1), who Ahmed perceived as a political rival.  Ahmed sought, among other things, to obtain information about Individual 1, to locate and harm Individual 1 and others associated with Individual 1.

As part of the scheme, Lustyik and Thaler exchanged text messages, including messages about how to pressure Ahmed to pay them additional money in exchange for confidential information.  For example, in text messages, Lustyik told Thaler, “we need to push [Ahmed] for this meeting and get that 40 gs quick . . . . I will talk us into getting the cash . . . . I will work my magic . . . . We r sooooooo close.”  Thaler responded, “I know.  It’s all right there in front of us.  Pretty soon we’ll be having lunch in our oceanfront restaurant . . . .”

As another example, in late January 2012, Lustyik, upon learning that Ahmed was considering using a different source to obtain confidential information about Individual 1, sent a text message to Thaler stating, “I want to kill C . . . . I hung my ass out the window n we got nothing? . . . . Tell [Ahmed], I’ve got [Individual 1’s] number and I’m pissed. . . . I will put a wire on n get [Ahmed and his associates] to admit they want [a Bangladeshi political figure] offed n we sell it to Individual 1].”  Lustyik further stated, “So bottom line.  I need ten gs asap.  We gotta squeeze C.”

Thaler and Ahmed previously pleaded guilty to bribery and conspiracy to commit fraud, and are scheduled to be sentenced on Jan. 23, 2015.

The case was investigated by the Department of Justice Office of the Inspector General, and prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Benjamin Allee of the Southern District of New York.

USDA VIDEO: PEOPLES GARDEN: “WHY USE RAIN BARRELS?? - HELPFUL TIPS

Friday, December 26, 2014

PRESIDENT OBAMA AND FIRST LADY MAKE STATEMENT ON KWANZAA

FROM:   THE WHITE HOUSE 
December 26, 2014
Statement from the President and the First Lady on Kwanzaa

Michelle and I extend our warmest wishes to those celebrating Kwanzaa this holiday season.  Today begins a celebration highlighting the rich African American heritage and culture through the seven principles of Kwanzaa—unity, self-determination, collective work and responsibility, cooperative economics, purpose, creativity and faith.  During this season, families come together to reflect on blessings of the past year and look forward to the promises in the year ahead. As we remain committed to building a country that provides opportunity for all, this time of year reminds us that there is much to be thankful for.

As families around the world unite to light the Kinara today, our family extends our prayers and best wishes during this holiday season.

NOAA's GOES-East Satellite Shows Storm Systems

U.S. OFFICIAL'S OP-ED ON CORRUPTION

FROM:  THE STATE DEPARTMENT 
Stopping the Flow of Corruption
Op-Ed
Tom Malinowski
Assistant Secretary, Bureau of Democracy, Human Rights, and Labor
Washington Post
December 26, 2014

When Viktor Yanukovych fled Kiev in February, the Ukrainian leader left behind a spectacular Swiss chalet-style mansion, a golf course, dozens of antique cars and a private zoo boasting $10,000 nameplates for the animal pens. Even the Ukrainian public, painfully familiar with the corruption of its leaders, was shocked. Yanukovych had managed to keep the chalet hidden because it was owned not by him but by an anonymous shell company registered in Britain. Other corrupt leaders have used the same trick to hide billions of dollars offshore, including through companies registered in the United States.

The rise and fall of Ukraine’s top kleptocrat teaches us a couple of things about corruption.
First, in many countries, corruption and human rights are tightly bound. The chance to profit from corruption is why many authoritarian leaders seize and cling to power. It becomes the glue that holds their regimes together, giving them spoils to distribute while turning their cronies into criminals who could be exposed and punished if they turn disloyal. It is also among the issues most likely to fuel popular resistance to authoritarianism, as we’ve seen from Tunisia to Russia and Venezuela. Any strategy to promote democracy and human rights must have the fight against corruption at its heart.

Second, we can’t fight corruption abroad if we don’t stop its proceeds from flowing through our companies and banks. We already work hard to return illicitly acquired assets to benefit the citizens of such countries, generally after the leaders who stole them have left office. But this kind of “departure tax” for falling autocrats is not enough: We must do more to deny safe haven to such funds while corrupt leaders are still in power. One way to do that is to prevent the registration of anonymous shell companies on our shores.

The Treasury Department recently took a significant step toward limiting the use of such companies by proposing a regulation that would require financial institutions to collect and verify the identity of the people behind company accountholders. President Obama’s 2015 budget includes a much more far-reaching proposal: It would require all companies to identify their “beneficial ownership” — the human beings who own or control them — to the IRS as part of a routine tax filing and make that information more readily available to law enforcement. Congress should enact this proposal now to ensure that our legal and financial systems are not used to hide corruption and facilitate autocracy overseas.

The overwhelming majority of U.S. companies that have a bank account or pay taxes in the United States already disclose their beneficial ownership. Thus, they would not be burdened and would only benefit from a reform that makes registration in the United States a sure sign of legitimacy rather than a cause for suspicion.

It is foreign criminals and corrupt officials who can benefit from the ability to conceal their identities under our current financial system. They are unlikely to file a U.S. tax return, and if they register a paper legal entity in the United States, they can use it to open a bank account on an offshore island. Indeed, they can create a web of 50 anonymous entities overnight simply by calling a state company registration office, or they can even purchase “shelf” companies registered a decade ago, adopting an additional guise of establishment and credibility. When U.S. law enforcement agencies investigate corruption or other crimes, often all they have is the name of a company and a dead end.

The wildly corrupt son of Equatorial Guinea’s president, for example, allegedly set up a slew of shell companies in the United States to launder millions of dollars of bribes from international logging companies, hiding any ties to himself. Teodoro Nguema Obiang Mangue used this money to purchase a $30 million Malibu, Calif., estate, a $38 million private jet and about $2 million worth of Michael Jackson memorabilia, among other luxuries. Meanwhile, most of his compatriots live on less than $2 per day.

Corruption empowers and enriches dictators. But here is another lesson from Ukraine: It can also become their greatest political vulnerability. Authoritarian governments may be able to muster excuses for shooting demonstrators, arresting political enemies or censoring the Internet, but no cultural, patriotic or national security argument can justify thievery. Disgust with corruption can also ease the ethnic, religious and social divisions such regimes exploit to stay in power — it’s a point of agreement between southern and northern Nigerians, nationalists and liberals in Russia, Shiites and Sunnis across the Middle East.

Fighting corruption by improving financial transparency may be one of the most effective ways of promoting liberty around the world. Members of Congress who believe in that cause and who want us to do better should embrace the president’s proposal to strengthen those laws by closing the shell company loophole that enables dictators to conceal their criminality from their people and the world.

NASA VIDEO: LDSD: SUPERSONIC TEST FLIGHT (HD)

FTC ALLEGES DATA BROKER SOLD PERSONAL FINANCIAL INFORMATION TO SCAM CRIMINALS

FROM:  U.S. FEDERAL TRADE COMMISSION 
FTC Charges Data Broker with Facilitating the Theft of Millions of Dollars from Consumers' Accounts
Company Sold Personal Financial Information to Scammers

A data broker operation sold the sensitive personal information of hundreds of thousands of consumers – including Social Security and bank account numbers – to scammers who allegedly debited millions from their accounts, the Federal Trade Commission charged in a complaint filed today.

According to the FTC’s complaint, data broker LeapLab bought payday loan applications of financially strapped consumers, and then sold that information to marketers whom it knew had no legitimate need for it. At least one of those marketers, Ideal Financial Solutions – a defendant in another FTC case – allegedly used the information to withdraw millions of dollars from consumers’ accounts without their authorization.

“This case shows that the illegitimate use of sensitive financial information causes real harm to consumers,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “Defendants like those in this case harm consumers twice: first by facilitating the theft of their money and second by undermining consumers’ confidence about providing their personal information to legitimate lenders.”

The defendants collected hundreds of thousands of payday loan applications from payday loan websites known as publishers. Publishers typically offer to help consumers obtain payday loans. To do so, they ask for consumers’ sensitive financial information to evaluate their loan applications and transfer funds to their bank accounts if the loan is approved. These applications, including those bought and sold by LeapLab, contained the consumer’s name, address, phone number, employer, Social Security number, and bank account number, including the bank routing number.

The defendants sold approximately five percent of these loan applications to online lenders, who paid them between $10 and $150 per lead. According to the FTC’s complaint, however, the defendants sold the remaining 95 percent for approximately $0.50 each to third parties who were not online lenders and had no legitimate need for this financial information.

The Commission’s complaint alleges that these non-lender third parties included: marketers that made unsolicited sales offers to consumers via email, text message, or telephone call; data brokers that aggregated and then resold consumer information; and phony internet merchants like Ideal Financial Solutions. According to the FTC’s complaint, the defendants had reason to believe these marketers had no legitimate need for the sensitive information they were selling.

In the FTC’s case against Ideal Financial Solutions, between 2009 and 2013, Ideal Financial allegedly purchased information on at least 2.2 million consumers from data brokers and used it to make millions of dollars in unauthorized debits and charges for purported financial products that the consumers never purchased. LeapLab provided account information for at least 16 percent these victims.

The complaint notes that LeapLab hired a key executive from Ideal Financial as its own Chief Marketing Officer and then knew that Ideal used the information purchased from it to make unauthorized debits. Yet, the complaint alleges, the defendants continued to sell such information to Ideal.

The defendants in the case, Sitesearch Corp., LeapLab LLC; Leads Company LLC; and John Ayers, are alleged to have violated the FTC Act’s prohibition on unfair practices.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the District of Arizona, Phoenix Division.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

NSF VIDEO: HOW TO MAKE YOUR HOLIDAYS GREENER

WEST WING WEEK: 12/26/14

U.S. ATTORNEY'S OFFICE ANNOUNCES COLLECTION OF $2.3 BILLION IN FISCAL 2014

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, December 23, 2014
U.S. Attorney's Office Collects More Than $2.3 Billion In Civil And Criminal Actions In Fiscal Year 2014

(PHILADELPHIA) - U.S. Attorney Zane David Memeger announced today that the Eastern District of Pennsylvania collected $2,373,688,153 in criminal and civil actions in Fiscal Year (FY) 2014.

         

            The Department of Justice collected $24.7 billion in civil and criminal actions in FY 2014.  The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.



            “Recouping federal funds that were misspent due to fraud, including substantial health care and mortgage insurance funds, is a critical part of our mission,” said Memeger. “Our nation’s taxpayers deserve our most aggressive efforts to recover their hard-earned tax dollars that have been misappropriated.  During fiscal year 2014, we continued to honor this mission with these tremendous resolutions and collections.”



            The recoveries in the Eastern District of Pennsylvania include more than $1.6 billion in civil and criminal penalties paid by healthcare giant Johnson & Johnson (J&J) to resolve misbranding and unapproved use allegations.  J&J paid a $1.273 billion civil settlement to resolve allegations of off-label marketing for Risperdal and Invega, as well as the alleged payment of kickbacks to physicians involving Risperdal.  Janssen Pharmaceuticals, Inc. (Janssen), a subsidiary of J&J, paid $400 million in a criminal fine and forfeiture for promoting Risperdal to health care providers for unapproved uses.



            The collections also include: a $56.5 million civil settlement with Shire Pharmaceuticals LLC to resolve False Claims Act allegations; a $150 million civil settlement with Amedisys Inc. and its affiliates to resolve False Claims Act allegations; a $7.3 million civil settlement with  pharmaceutical company Astellas Pharma US, Inc., to resolve False Claims Act allegations; and a $172.9 million civil settlement with specialty pharmaceuticals company Endo Health Solutions, Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo), to resolve allegations of off-label marketing.



            Additionally, the U.S. Attorney’s office in the Eastern District of Pennsylvania, working with partner agencies and divisions, collected approximately $15 billion in asset forfeiture actions in FY 2014, which includes a $13 billion settlement with JP Morgan - the largest settlement with a single entity in American history - to resolve federal and state civil claims arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS).



            The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.



            The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud and other misconduct and collected fines imposed on individuals and corporations for violations of federal health, safety, civil rights, and environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration, and Department of Education.



            Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

SEC ISSUES ANNUAL STAFF REPORT REGARDING NRSROs

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION 
12/23/2014 05:15 PM EST

The Securities and Exchange Commission issued its annual staff report on the findings of examinations of credit rating agencies registered as nationally recognized statistical rating organizations (NRSROs) and submitted a separate report on NRSROs to Congress.

“These reports provide the most current and comprehensive picture of the credit rating industry,” said SEC Chair Mary Jo White.  “The SEC’s enhanced oversight of NRSROs, informed by risk assessment, regular examinations and policy considerations, provides increasingly robust and effective oversight of the industry, as reflected by overall improvements in compliance, documentation, and board oversight.”

The 2010 Dodd-Frank Act requires the SEC to examine each NRSRO once a year and issue an annual report summarizing the examination findings.  In addition to covering eight areas required by the Dodd-Frank Act, SEC examiners used risk assessment tools to identify specific areas of focus such as information technology, cybersecurity, or certain ratings activities.  During the 2014 examinations, the staff observed improvements concerning:

Compliance resources, monitoring, and culture
Documentation and resources for criteria and model validation
Document retention
Board of directors or governing committee oversight
The staff made recommendations for improvement in certain areas, including:

Use of affiliates or third-party contractors in the credit rating process
Management of conflicts of interest related to the rating business operations
Adherence to policies and procedures for determining or reviewing credit ratings
“The findings and recommendations in the 2014 examination report demonstrate the impact of rigorous oversight by the SEC and regular examinations by the Office of Credit Ratings,” said Thomas J. Butler, Director of the SEC’s Office of Credit Ratings.

The annual report to Congress, which is required by the Credit Rating Agency Reform Act of 2006, details the state of competition, transparency, and conflicts of interest at NRSROs.  The staff report includes a discussion of the new requirements for NRSROs adopted by the Commission in August 2014 to improve the quality of credit ratings and increase credit rating agency accountability through enhanced transparency, governance, and protections against conflicts of interest.

The following SEC staff made significant contributions to the examinations and reports:  Diane Audino, Rita Bolger, Patrick Boyle, Matthew Chan, Kristin Costello, Scott Davey, Shawn Davis, Franco Destro, Michael Gerity, Kenneth Godwin, Natalia Kaden, Julia Kiel, Russell Long, Abe Losice, Carlos Maymi, Matt Middleton, David Nicolardi, Sam Nikoomanesh, Harriet Orol, Abraham Putney, Jeremiah Roberts, Mary Ryan, Warren Tong, Evelyn Tuntono, Chris Valtin, Kevin Vasel, and Michele Wilham.  The Office of Credit Ratings appreciates the assistance provided during the examinations by Todd Scharf and Ted Shelkey of the SEC’s Office of Information Technology.

NSF MATHENATICS PRIZE WINNER WORKS TO SOLVE PROBLEMS

FROM:  NATIONAL SCIENCE FOUNDATION 
Unlocking the mysteries of mathematics
Breakthrough Prize winner has advanced the field

Évariste Galois was a 19th Century French mathematician who died at 20 after a duel over a woman. Even by then, however, his work had established him as an important force in mathematics, especially his proof that polynomial equations of any degree greater than four were impossible to solve using radicals. It is a concept whose various ramifications have engrossed serious mathematicians ever since, including Richard Taylor.

Taylor, a professor in the school of mathematics at the Institute for Advanced Study in Princeton, N.J., and a National Science Foundation (NSF)-funded scientist, has spent much of his career focusing on the relationship between Galois Groups and their representations, which measure the algebraic symmetries of equations and their relationship to geometric symmetries, a template first developed by Taylor's institute colleague Robert P. Langlands.

Translating the associations between the two ultimately can result in new ways to solve problems in both areas. "You can write a ‘dictionary' with entries connecting both subjects," Taylor says. "You can take a problem on one side and turn it into a problem on the other side--you can make hard problems simpler by turning them from algebra into geometry, or geometry into algebra."

For example, a problem known as Fermat's Last Theorem, after a 17th Century French judge and mathematician, had stymied mathematicians for more than three centuries until Andrew Wiles, a teacher of Taylor's, proved the theorem by establishing a special case of Langlands' dictionary, turning this algebraic problem into a much easier geometric problem.

It took more than one try, and Taylor helped after Wiles made an error during his first attempt. "After trying alone to fix it for a bit, he asked me to help him, and we finally found a way around the mistake," Taylor says.

Langlands' design has transformed the process of solving these once impossible mathematical problems, albeit sometimes inexplicably.

"What I find so attractive about this is that there is so much mystery here," Taylor says. "Why should we have this tool? Even when we prove it exists, it still seems mysterious, which is rare in mathematics. The proofs are long and complicated without a simple reason why it is true. It is also very beautiful, but hard to convey."

Some applications of Langlands' program have proved useful in developing error correcting codes, which allow the correction of mistakes introduced into data during storage, such as on a DVD, or during transmission via radio or cables.

"When you have a phone conversation or send a photo to someone else's phone, little errors may creep in as that message is transmitted, the result of interference," Taylor says. "If you didn't do anything, it would look or sound funny. So what they do is transmit extra information as a check, so even if errors creep in, you can correct them. There are mathematical ways to do this, some of which have been influenced by the Langlands program."

Taylor's research has been dedicated to proving instances of Langlands dictionary. Its applications include his work on, among other things, the Sato-Tate conjecture, an algebra problem that goes back about 50 years, and is a statement about the statistical distribution of certain sequences of numbers.

"Nobody had made any progress on it, but we proved it as a consequence of Langlands' dictionary," Taylor says. "Using the dictionary, we could turn it into a much easier problem about symmetry."

Taylor has received five NSF grants supporting his research between 1997 and 2012, totaling more than $2.2 million. He also recently won the $3 million Breakthrough Prize in Mathematics, launched by Facebook founder Mark Zuckerberg and Russian entrepreneur Yuri Milner, which recognized Taylor for his major advances in the field, and for contributing to communicating the importance and excitement of mathematics to the general public.

Taylor also has worked on the Taniyama-Shimura-Weil conjecture, which states that elliptic curves over the field of rational numbers are related to modular forms. Wiles initially proved the modularity theorem for semi-stable elliptic curves, which was related to Fermat's Last Theorem; later Taylor and others extended Wiles' techniques in 2001 to prove the full modularity theorem, a special case of more general conjectures resulting from Langlands' work.

"The Taniyama-Shimura Conjecture is a special case of the Langlands program," Taylor says. "Wiles proved some cases of the Taniyama-Shimura Conjecture, and from this one could deduce Fermat's Last Theorem. Later, a group of us extended this to prove the full Shimura-Taniyama Conjecture."

Taylor also is known for his proof--with Michael Harris, an American mathematician now jointly based at the Institute of Mathematics of Jussieu in Paris and Columbia University--of the Local Langlands Conjecture, part of the Langlands program, "where one focuses on one prime number at a time, surely much easier than the full program, but an essential stepping stone on the way to the full Langlands Conjectures," Taylor says.

He and his collaborators also proved the Hasse-Weil Conjecture, another part of the Langlands program, although it actually predates Langlands, he says.

"I do mathematics because of its beauty, with no thought to applications," Taylor says. However, it is quite amazing how often such curiosity-driven research has later been crucial to the development of the technology that is transforming our world."

-- Marlene Cimons, National Science Foundation
Investigators
Richard Taylor
Related Institutions/Organizations
Harvard University
Institute For Advanced Study

Thursday, December 25, 2014

Weekly Address: Happy Holidays from the President and First Lady



NOAA VIDEO: WHALE DISENTAGLEMENT NETWORK TEAMS

NASA VIDEO: NASA's NEXT GIANT LEAP

NASA VIDEO: LANDING ON A COMET - ESA's ROSETTA MISSION

Wednesday, December 24, 2014

5TH ANNIVERSARY OF NOBEL PRIZE LAUREATE LIU XIAOBO'S CONVICTION IN CHINA FOR INCITING SUBVERSION

FROM:  U.S. STATE DEPARTMENT 
Fifth Anniversary of Liu Xiaobo's Conviction
Press Statement
John Kerry
Secretary of State
Washington, DC
December 24, 2014

Nobel Peace Prize laureate and writer Liu Xiaobo today spends the fifth anniversary of his conviction for “inciting subversion” in prison, serving out an 11-year sentence.

The United States remains deeply concerned that China continues to incarcerate Liu Xiaobo and hold his wife, Liu Xia, in extralegal house arrest.

Liu Xiaobo is a courageous and eloquent spokesperson recognized throughout the world for his long and non-violent advocacy for human rights and democracy in China.

We reiterate our call on China to release Liu Xiaobo and to remove all restrictions on Liu Xia.

We also urge China to release all individuals detained for peacefully expressing their views, including Ilham Tohti and his students, and Pu Zhiqiang, Gao Zhisheng, Yang Maodong, Gao Yu, and Xu Zhiyong.

In addition, we request that Chinese leaders guarantee them the protections and freedoms to which they are entitled under China's international human rights commitments.

I raise human rights concerns in each and every one of my conversations with President Xi and other Chinese leaders, because it is too important to stand in the way of China's emergence in the community of nations.

NASA VIDEO | HOLIDAY LIGHTS ON THE SUN

USDA VIDEO: COLORFUL HOLIDAY PLANTS FROM USDA

FTC WARNS CHINA-BASED MOBILE APP DEVELOPER ABOUT COLLECTING CHILDREN'S PERSONAL INFORMATION

FROM:  U.S. FEDERAL TRADE COMMISSION 
FTC Warns Children’s App Maker BabyBus About Potential COPPA Violations
Letter Notes Company’s Apps Appear to Collect Children’s Location Info

The staff of the Federal Trade Commission sent a letter to a China-based developer of mobile applications directed to children, warning that the company may be in violation of the Children’s Online Privacy Protection Act (COPPA) Rule.

In the letter, the FTC notes that it appears the child-directed applications marketed by the company, BabyBus, appear to collect precise geolocation information about users. The letter notes that the company does not get parents’ consent before collecting children’s personal information, which would appear to violate the COPPA Rule.

The letter notes that the applications, available on the Apple App Store, Amazon App Store and Google Play, have been downloaded millions of times. The apps are clearly directed to children from ages one to six, including apps that teach letters, numbers and shapes. The letter was also sent to the three application marketplaces.

The COPPA Rule requires companies collecting personal information from children under 13 to post clear privacy policies and to notify parents and get their consent before collecting or sharing any information from a child. The rule was revised in 2013 to adapt to the growth of mobile technology aimed at children.

The letter asks the company to evaluate its apps and determine whether they may be in violation, as well as informing the company that the Commission will review the apps again in the next month to ensure they are in compliance with the rule.

The Commission vote to authorize public release of the letter was 5-0.

U.S. UN REP. POWER MAKES REMARKS ON NORTH KOREA

FROM:  U.S. STATE DEPARTMENT 
Samantha Power
U.S. Permanent Representative to the United Nations 
New York, NY
December 22, 2014

AS DELIVERED

Thank you, Mr. President, and thank you Assistant Secretary-General Simonovic and Assistant Secretary-General Zerihoun, for your informative and appropriately bleak briefings; and for the ongoing attention that your respective teams give to the situation in the DPRK, in spite of persistent obstacles put up by the North Korean government.

Today’s meeting reflects the growing consensus among Council members and UN Member States that the widespread and systematic human rights violations being committed by the North Korean government are not only deplorable in their own right, but also pose a threat to international peace and security.

A major impetus for the Security Council taking up this issue was the comprehensive report issued in February 2014 by the UN Human Rights Council Commission of Inquiry. The Commission of Inquiry conducted more than 200 confidential interviews with victims, eyewitnesses, and former officials, and held public hearings in which more than 80 witnesses gave testimony. Witness accounts were corroborated by other forms of evidence, such as satellite imagery confirming the locations of prison camps.

North Korea denied the Commission access to the country, consistent with its policy of routinely denying access to independent human rights and humanitarian groups, including the Red Cross and UN special rapporteurs. And despite repeated requests, the DPRK refused to cooperate with the inquiry.

The main finding of the Commission’s thorough and objective report is that “systematic, widespread and gross human rights violations have been and are being committed by the Democratic People’s Republic of Korea.” The Commission found that the evidence it gathered provided reasonable grounds to determine that, “crimes against humanity have been committed in the Democratic People’s Republic of Korea, pursuant to policies established at the highest level of the State.”

If you have not watched any of the hours of victims’ testimony, or read from the hundreds of pages of transcripts from the Commission’s public hearings, I urge you to do so. They show North Korea for what it is: a living nightmare.

A former prisoner of Prison Camp 15, Kim Young-soon, said she and other prisoners were so famished they picked kernels of corn from the dung of cattle to eat. She said, “If there was a day that we were able to have mouse, that was a special diet for us. We had to eat everything alive, every type of meat we could find. Everything that flew, that crawled on the ground, any grass that grew in the field.”

Ahn Myong Chul, a former guard at Prison Camp 22, spoke of guards routinely raping prisoners. In one case in which a victim became pregnant and gave birth, the former guard reported that prison officials cooked her baby and fed it to their dogs. This sounds unbelievable and unthinkable; yet this is what a former guard told the Commission of Inquiry at a public hearing. His account fits a pattern across witnesses’ testimonies of sadistic punishments meted out to prisoners whose “crime” was being raped by officials.

The Commission estimates that between 80 and 120 thousand people are being held in prison camps like the ones where so many of these crimes occurred.

Many who testified before the Commission were tortured as punishment for trying to flee North Korea. One man who was sent back to the DPRK from China described being held in prison cells that were only around 50 centimeters high, just over a foot and a half. He said the guards told him that because the prisoners were animals, they would have to crawl like animals. A woman from the city of Musan told how her brother was caught after fleeing to China. When he was returned, North Korean security officials bound his hands and chained him to the back of a truck before dragging him roughly 45 kilometers, driving three loops around the city so everyone could see, his sister testified. “When he fell down, they kept on driving,” she said.

Nor are the horrors limited to prison camps or those who try to flee. The Commission found “an almost complete denial of the right to freedom of thought, conscience and religion, as well as of the rights to freedom of opinion, expression, information and association” in the DPRK.

On December 18th, the UN General Assembly passed a resolution expressing grave concern at the Commission’s findings, and roundly condemning the DPRK’s “widespread and gross violations of human rights.” One hundred and sixteen member States voted in favor, 20 against, and 53 abstained. The resolution also encouraged the Security Council to “take appropriate action to ensure accountability, including through consideration of referral of the situation in the Democratic People’s Republic of Korea to the International Criminal Court and consideration of the scope for effective targeted sanctions against those who appear to be most responsible.”

The Security Council should demand the DPRK change its atrocious practices, which demonstrate a fundamental disregard for human rights and constitute a threat to international peace and security.

We should take this on for three reasons. First, the DPRK’s response to the Commission of Inquiry’s report – and even to the prospect of today’s session – shows that it is sensitive to criticism of its human rights record. Just look at all the different strategies North Korea has tried in the past several months to distract attention from the report, to delegitimize its findings, and to avoid scrutiny of its human rights record.

The DPRK ramped up its propaganda machine, publishing its own sham report on its human rights record, and claiming “the world’s most advantageous human rights system.” The DPRK tried to smear the reputations of hundreds of people who were brave enough to speak out about the heinous abuses they suffered, calling them “human scum bereft of even an iota of conscience.” This was in a statement North Korea sent to the Security Council today. And North Korea launched slurs against the Commission’s distinguished chairman, Justice Kirby.

The DPRK deployed threats, saying any effort to hold it more accountable for its atrocities would be met with “catastrophic consequences.”

All of North Korea’s responses – the threats, the smears, the cynical diversions – show that the government feels the need to defend its abysmal human rights record. And that is precisely why our attention is so important.

The second argument for exerting additional pressure is that when regimes warn of deadly reprisals against countries that condemn their atrocities, as the North Koreans have done, that is precisely the moment when we need stand up and not back down. Dictators who see threats are an effective tool for silencing the international community tend to be emboldened and not placated. And that holds true not only for the North Korean regime, but for human rights violators around the world who are watching how the Security Council responds to the DPRK’s threats.

The DPRK is already shockingly cavalier about dishing out threats of staging nuclear attacks, and has routinely flouted the prohibitions on proliferation imposed by the Security Council. In July, North Korea’s military threatened to launch nuclear weapons at the White House and the Pentagon, and in March 2013, it threatened to launch a pre-emptive strike on the United States, saying, “everything will be reduced to ashes and flames.”

In the most recent example of its recklessness, the DPRK carried out a significant cyber-attack on the United States in response to a Hollywood comedy portraying a farcical assassination plot. The attack destroyed systems and stole massive quantities of personal and commercial data from Sony Pictures Entertainment – not only damaging a private sector entity, but also affecting countless Americans who work for the company. The attackers also threatened Sony’s employees, actors in the film, movie theaters, and even people who dared to go to the theaters showing the movie, warning them to “Remember the 11th of September.” Not content with denying freedom of expression to its own people, the North Korean regime now seems intent on suppressing the exercise of this fundamental freedom in our nation.

North Korea also threatened the United States with “serious consequences” if our country did not conduct a joint investigation with the DPRK – into an attack that they carried out. This is absurd. Yet it is exactly the kind of behavior we have come to expect from a regime that threatened to take “merciless countermeasures” against the U.S. over a Hollywood comedy, and has no qualms about holding tens of thousands of people in harrowing gulags. We cannot give in to threats or intimidation of any kind.

Third, the international community does not need to choose between focusing on North Korea’s proliferation of nuclear weapons and focusing on its widespread and ongoing abuses against its own people. That is a false choice. We must do both. As we have seen throughout history, the way countries treat their own citizens – particularly those countries that systematically commit atrocities against their own people – tends to align closely with the way they treat other countries and the norms of our shared international system.

On November 23, a week after the UN’s Third Committee adopted its DPRK resolution, North Korea’s military said “all those involved in its adoption deserve a severe punishment” and warned, again, of “catastrophic consequences.” Now here, presumably, “all” would imply the more than 100 Member States who voted for the resolution. The military also that said if Japan “continued behaving as now, it will disappear from the world map.”

When a country threatens nuclear annihilation because it receives criticism of how it treats its own people, can there be any doubt regarding the connection between North Korea’s human rights record and international peace and security?

North Korea did not want us to meet today, and vociferously opposed the country’s human rights situation being added to the Security Council’s agenda. If the DPRK wants to be taken off the Security Council’s agenda, it can start by following the Commission of Inquiry’s recommendations to: acknowledge the systematic violations it continues to commit; immediately dismantle political prison camps and release all political prisoners; allow free and unfettered access by independent human rights observers; and hold accountable those most responsible for its systematic violations.

Knowing the utter improbability of North Korea making those and a long list of other necessary changes, it is incumbent on the Security Council to consider the Commission of Inquiry’s recommendation that the situation in North Korea be referred to the International Criminal Court and to consider other appropriate action on accountability – as 116 Member States have urged the Council to do.

In the meantime, the United States will support the efforts of the Office of the High Commissioner for Human Rights to establish a field-based office to continue documenting the DPRK’s human rights violations, as mandated by the Human Rights Council, as well as support the work of the Special Rapporteur. Both should brief the Council on new developments in future sessions on this issue.

It is also crucial that all of DPRK’s neighbors abide by the principle of non-refoulement, given the horrific abuses to which North Koreans are subjected to upon return, and provide unfettered access to the UNHCR in their countries. The United States will continue to welcome North Korean refugees to our country, and help provide assistance to North Korean asylum seekers in other countries.

It is reasonable to debate the most effective strategy to end the nightmare of North Korea’s human rights crisis. What is unconscionable in the face of these widespread abuses – and dangerous, given the threat that the situation in the DPRK poses to international peace and security – is to stay silent. Silence will not make the North Korean government end its abuses. Silence will not make the international community safer.

Today, we have broken the Council’s silence. We have begun to shine a light, and what it has revealed is terrifying. We must continue to shine that light, for as long as these abuses persist. Today’s session is another important step – but far from the last – towards accountability for the crimes being perpetrated against the people of North Korea. The Council must come back to speak regularly about the DPRK’s human rights situation – and what we can do to change it – for as long as the crimes that brought us here today persist. That is the absolute minimum we can and must do.

Thank you, Mr. President.

ATTORNEY AND WIFE SETTLE CHARGES OF TRADING ON CLIENT CONFIDENTIAL INFORMATION

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION 
Litigation Release No. 23167 / December 22, 2014

Securities and Exchange Commission v. Shivbir S. Grewal and Preetinder Grewal, Civil Action No. 8:14-CV-02026 (C.D. Cal., Dec. 22, 2014)

SEC Charges Corporate Attorney and Wife with Insider Trading On Client's Confidential Information

The SEC alleges that while serving as outside counsel to Spectrum Pharmaceuticals last year, Shivbir Grewal learned that the company was on the brink of announcing a significant decline in expected revenue due to an unanticipated drop in orders for its top-selling drug. Grewal sold his entire investment in Spectrum stock within 48 hours of getting the nonpublic information from company officials who sought the disclosure advice of his law firm. He tipped his wife Preetinder Grewal, who also sold all of her Spectrum shares on the basis of the nonpublic information. The day after Grewal sold her stock, Spectrum issued a press release revealing the expectation of decreased sales of the drug Fusilev and the consequent expectation of reduced revenue, and Spectrum's stock price fell more than 35 percent. Shivbir Grewal and his wife avoided losses of nearly $45,000 by selling ahead of the bad news.

The Grewals agreed to pay $90,000 to settle the SEC's charges, and Shivbir Grewal also agreed to be suspended from practicing as an attorney before the SEC on behalf of any publicly traded company or other entity regulated by the agency.

The SEC's complaint alleges that the Grewals violated Sections 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 as well as Rule 10b-5. Without admitting or denying the allegations, the Grewals agreed to be permanently enjoined from violating these provisions of the securities laws. Shivbir Grewal agreed to pay disgorgement of $30,343.17, prejudgment interest of $997.68, and a penalty of $30,343.17. Preetinder Grewal agreed to pay disgorgement of $14,400.05, prejudgment interest of $476.73, and a penalty of $14,400.05. The settlement is subject to court approval.

The SEC's investigation, which is continuing, is being conducted by Lance Jasper and Spencer Bendell in the Los Angeles Regional Office.

COURT ORDERS RBC TO PAY $35 MILLION FOR ILLEGAL, FICTITIOUS, NONCOMPETITIVE TRANSACTIONS

FROM:  U.S. COMMODITY FUTURES TRADING COMMISSION 
December 18, 2014
Federal Court Orders Royal Bank of Canada to Pay $35 Million Penalty for Illegal Wash Sales, Fictitious Sales, and Noncompetitive Transactions
Canadian Bank Traded Single Stock Futures and Narrow-Based Stock Index Futures on OneChicago Futures Exchange

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that on December18, 2014, Judge Alvin K. Hellerstein of the U.S. District Court for the Southern District of New York entered a Consent Order for Permanent Injunction and Civil Monetary Penalty against Royal Bank of Canada (RBC) for engaging in more than 1,000 illegal wash sales, fictitious sales, and noncompetitive transactions over a three-year period.  The Order enjoins RBC from committing future violations of the wash sale, fictitious sale, and noncompetitive transaction prohibitions of the Commodity Exchange Act and the CFTC’s Regulations, and requires RBC to pay a civil monetary penalty of $35 million.

CFTC Director of Enforcement Aitan Goelman stated: “Illegal wash trades may seem innocuous. They are not.  They provide misleading signals to the market and are thus prohibited, whether their purpose is to lessen a foreign tax bill or another reason.  This matter clearly demonstrates that the CFTC will vigorously enforce this prohibition to protect the integrity of our markets.”

The court’s Order arises from a Complaint filed by the CFTC on October 17, 2012, that charged RBC with engaging in illegal wash sales, fictitious sales, and noncompetitive transactions involving stock futures contracts, among other illegal conduct (see CFTC Press Release 6223-12, April 2, 2012).  In its Order, the court found that between June 1, 2007 and May 31, 2010, RBC knowingly executed 1,026 illegal wash sales and fictitious sales of narrow-based stock index futures (NBI) and single stock futures (SSF) contracts.  RBC conducted the transactions as block trades through its branches and internal trading accounts trading opposite two of RBC’s off-shore subsidiaries, and executed the trades on the OneChicago, LLC futures exchange in Chicago, Illinois.  The court also found that RBC’s NBI and SSF transactions were noncompetitive transactions prohibited by CFTC Regulations.

According to the Order, senior RBC personnel designed the trading strategy, which was motivated in part by tax benefits it generated for the RBC corporate group.  The Order states that, as designed, RBC and its subsidiaries entered into the NBI and SSF trades so that RBC entities would be both buyer and seller in the transactions, initiated with the express or implied understanding that they would later unwind the positions opposite each other through offset or delivery, and that the trades were equal and offsetting in all material respects:  They involved the trading of the same quantity of the same futures contracts at the same price and time, and therefore achieved a wash result for RBC.  Further, the Order states that the employees who oversaw RBC’s NBI and SSF trading knew that the trades negated the market risk inherent in normal futures transactions because the profits and losses that accrued to the RBC entities participating in the trades were ultimately consolidated in the RBC corporate group’s overall profits and losses, where they netted to zero, and were therefore economic and futures market nullities for the bank.

Finally, the Order finds that RBC’s trades were noncompetitive because RBC failed to timely report part of each trade to the OneChicago futures exchange, in violation of the exchange’s written rules.  Because the trades did not comply with the written rules of the exchange, they violated a CFTC Regulation requiring futures transactions to be executed openly and competitively on designated contract markets in accordance with the exchange’s written rules.

CFTC Division of Enforcement staff members responsible for this action are David Slovick, Lindsey Evans, Susan Gradman, Amanda Harding, Joseph Patrick, Scott Williamson, Rosemary Hollinger, and Richard Wagner. The Division of Enforcement also recognizes the contributions of CFTC Division of Market Oversight staff.

Tuesday, December 23, 2014

SECRETARY KERRY'S STATEMENT ON NORTHERN IRELAND AGREEMENT

FROM:  U.S. STATE DEPARTMENT 
Success of Northern Ireland Talks
Press Statement
John Kerry
Secretary of State
Washington, DC
December 23, 2014

The United States warmly welcomes that announcement today of an agreement among Northern Ireland's political parties, facilitated by the U.K. and Irish governments.

This is statesmanship, pure and simple, and leadership by all parties to break a political impasse and avoid a fiscal crisis by resolving complex budgetary and welfare issues. The agreement reforms institutional arrangements, which will improve governance in Northern Ireland, and advances Northern Ireland’s peace process by establishing new institutions to deal with the often divisive legacy of the past – including a Historical Investigations Unit, an Independent Commission for Information Retrieval, an Implementation and Reconciliation Group, and an Oral History Archive. The agreement on legacy issues is based largely on negotiations led last year by former Special Envoy for Northern Ireland Richard Haass.

I commend the parties for working together through some very contentious issues – and finding solutions that will promote a more peaceful and hopeful future for the people of Northern Ireland. The agreement will now go through party structures for endorsement.

The U.K. Government also played a critical role in the talks’ success by agreeing to provide financial support, including new funding to implement the arrangements for dealing with legacy issues and to promote shared and integrated education.

I applaud the parties and the two governments for securing this agreement and pledge America’s full political support for the new arrangements. I'm also particularly grateful to my Personal Representative, Senator Gary Hart, and his Deputy Greg Burton, whose deep engagement helped ensure the success of the talks. I know Senator Hart looks forward to continuing his efforts next year in support of a peaceful and prosperous Northern Ireland, and I am very lucky to have Gary devoting his time to this effort.

GEN. DEMPSEY'S END OF THE YEAR REMARKS TOTHE TROOPS

HANUKKAH AT THE WHITE HOUSE

SECRETARY KERRY'S STATEMENT ON INDIAN OCEAN TSUNAMI TENTH ANNIVERSARY

FROM:  U.S. STATE DEPARTMENT 
Marking the Tenth Anniversary of the Indian Ocean Tsunami
Press Statement
John Kerry
Secretary of State
Washington, DC
December 22, 2014

I’ll never forget hearing the news of the tsunami that struck in the Indian Ocean 10 years ago. The images were gut-wrenching: entire towns razed from Indonesia to Somalia; raging waters sweeping away people’s homes; hundreds of thousands killed and many more separated from their families.

Today of all days, we pause to remember those we lost—from farmers and fishers to travelers from our own lands. I know that there are no words to express such a horrific loss. There’s no way to wipe away the pain of parents who lost a child, or children who lost their parents and were forced to assume adult responsibilities at a tender age.

We recognize the millions of people who contributed to the recovery effort. And we honor those who have continued to work in the years since to help the victims pick up the pieces and rebuild their communities. The tsunami was one of the worst we have ever seen, but it brought out the best in all of us.

It also sounded a warning. We know that many regions are already suffering historic floods and rising sea levels. And scientists have been saying for years that climate change could mean more frequent and disastrous storms, unless we stop and reverse course. Last year I visited the Philippines and saw the devastation of Typhoon Haiyan. It is incomprehensible that that kind of storm – or worse – could become the norm. The time to act on climate change is now – before it’s too late to heed the warning.

On this day of reflection, we mourn with our friends in Asia and Africa who were affected by this terrible disaster. We commit to the hard work still ahead to help the region build safer, more resilient communities. And we pledge our best efforts to leave our children and grandchildren a safer and more sustainable planet. Future generations are counting on us.

REMARKS: DEPUTY AG COLE ON ALSTON BRIBERY CASE

FROM: U.S. JUSTICE DEPARTMENT 
Remarks for Deputy Attorney General James M. Cole Press Conference Regarding Alstom Bribery Plea
Washington, DCUnited States ~ Monday, December 22, 2014

I am joined today by Assistant Attorney General Leslie Caldwell, of the Justice Department’s Criminal Division; First Assistant United States Attorney Michael Gustafson, of the District of Connecticut; and Executive Assistant Director Robert Anderson Jr., of the FBI.  We are here to announce a historic law enforcement action that marks the end of a decade-long transnational bribery scheme – a scheme that was both concocted and concealed by Alstom, a multinational French company, and its subsidiaries in Switzerland, Connecticut, and New Jersey.

Today, those companies admit that, from at least 2000 to 2011, they bribed government officials and falsified accounting records in connection with lucrative power and transportation projects for state-owned entities across the globe.  They used bribes to secure contracts in Indonesia, Egypt, Saudi Arabia, and the Bahamas.  Altogether, Alstom paid tens of millions of dollars in bribes to win $4 billion in projects – and to secure approximately $300 million in profit for themselves.

Such rampant and flagrant wrongdoing demands an appropriately strong law enforcement response.  Today, I can announce that the Justice Department has filed a two-count criminal information in the U.S. District Court for the District of Connecticut, charging Alstom with violating the Foreign Corrupt Practices Act, or FCPA, by falsifying its books and records and failing to implement adequate internal controls.  Alstom has agreed to plead guilty to these charges, to admit its criminal conduct, and to pay a criminal penalty of more than $772 million.  If approved by the court next year, this will be the largest foreign bribery penalty in the history of the United States Department of Justice.

In addition, I can announce that Alstom’s Swiss subsidiary is pleading guilty to conspiring to violate the FCPA.  And the company’s two American subsidiaries have entered into deferred prosecution agreements and admitted that they conspired to violate the FCPA.

Alstom’s corruption scheme was sustained over more than a decade and across several continents.  It was breathtaking in its breadth, its brazenness, and its worldwide consequences.  And it is both my expectation – and my intention – that the comprehensive resolution we are announcing today will send an unmistakable message to other companies around the world: that this Department of Justice will be relentless in rooting out and punishing corruption to the fullest extent of the law, no matter how sweeping its scale or how daunting its prosecution.  Let me be very clear: corruption has no place in the global marketplace.  And today’s resolution signals that the United States will continue to play a leading role in its eradication.

The investigation and prosecution of Alstom and its subsidiaries have been exceedingly complex – and they have required the utmost skill and tenacity on the part of a wide consortium of law enforcement officials throughout the country and across the globe.  I want to thank the Criminal Division’s Fraud Section and Office of International Affairs; the U.S. Attorney’s Offices in Connecticut, Maryland, and New Jersey; the FBI’s Washington Field Office and its Resident Agency in Meriden, Connecticut; the Corruption Eradication Commission in Indonesia; the Office of the Attorney General in Switzerland; the Serious Fraud Office in the United Kingdom; as well as authorities in Germany, Italy, Singapore, Saudi Arabia, Cyprus, and Taiwan, for their tireless efforts to advance this matter.  The remarkable cross-border collaboration that these agencies made possible has led directly to today’s historic resolution.  And this outcome demonstrates our unwavering commitment to ending corporate bribery and international corruption.  Our hope is that this announcement will serve as an inspiration – and a model – for future efforts.

At this time, I’d like to introduce Assistant Attorney General [Leslie] Caldwell, who will provide additional details on today’s announcement.

NASA VIDEO: DRY ICE MOVES ON MARS

SEVEN DAY TRAIL ENDS WITH CONVICTION OF DOMINICAN DRUG TRAFFICKER

FROM:  U.S. JUSTICE DEPARTMENT 
Friday, December 19, 2014
Jury Convicts Dominican Drug Trafficker Following Seven-Day Trial

 BOSTON – A Dominican man, who most recently resided in Salem, was convicted yesterday of participating in a North Shore drug trafficking conspiracy.

Jaime Aristy, a/k/a Junito, 29, was convicted following a seven-day jury trial for conspiracy to possess with intent to distribute and distribution of cocaine, a Schedule II controlled substance.  In November 2012, Aristy was indicted.  U.S. District Court Judge Denise J. Casper scheduled sentencing for March 25, 2015.

Aristy was one of eleven defendants charged with participation in a large-scale cocaine trafficking conspiracy between 2009 and 2012.  The conspiracy included several members of the same family, including Jaime Aristy, who were involved in the distribution of multi-kilogram quantities of cocaine in Lynn, Salem, and Peabody.  The investigation included court-authorized wiretaps as well as the seizure of kilograms of cocaine, more than $100,000 in currency, and drug paraphernalia used by the criminal organization.  On Sept. 1, 2011, Aristy was arrested following a motor vehicle stop in Salem during which law enforcement officers recovered more than $93,000 in cash that was stashed in a shoe box on the back seat of the car, two cell phones used by the drug organization, and a drug ledger that reflected a series of drug transactions involving multiple kilograms of cocaine and tens of thousands of dollars.

The charging statute provides a sentence of no greater than 20 years in prison and a minimum of three years of supervised release.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement today.  The Salem Police Department and the Massachusetts State Police also assisted with the investigation.  The case was tried by Linda M. Ricci and David J. D'Addio of Ortiz’s Drug Task Force Unit.

5 CHARGED IN LIFE INSURANCE POLICIES FRAUD SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 
Department of Justice
U.S. Attorney’s Office
Northern District of California
FOR IMMEDIATE RELEASE
Thursday, December 18, 2014
Five Defendants Charged In Fraudulent Life Insurance Policies Scheme

SAN FRANCISCO – Behnam Halali, Ernesto Magat, Kraig Jilge, Karen Gagarin, and Alomkone Soundara, a/k/a Alex Soundara, were charged in an indictment unsealed yesterday in federal court in connection with a scheme involving fraudulent life insurance policies while each was employed at the American Income Life Insurance Company (AIL), announced U.S. Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Andrew Toth, and Commissioner Dave Jones of the California Department of Insurance.

According to the indictment, the defendants participated in a scheme involving the submission of applications for life insurance policies on behalf of people who did not know that a policy was applied for or issued in their name and/or did not want a life insurance policy. The defendants then shared the commissions and bonuses issued by AIL in connection with the fraudulent policies. The indictment alleges that the defendants paid recruiters to find people willing to take medical exams in exchange for approximately $100, and then took the personal information associated with those people and submitted applications for life insurance in their names, in many cases without the individuals’ knowledge. The defendants also allegedly paid people to participate in a fictitious survey of a medical exam company, and took the personal information associated with those people and submitted applications for life insurance, in many cases without the individuals’ knowledge. In some cases, the defendants allegedly created phony driver’s licenses so that they and their co-conspirators could take medical exams purporting to be the applicants. The defendants opened hundreds of bank accounts to fund the premiums on the fraudulent policies, and typically paid one to four months of premiums before letting the policies lapse, according to the Indictment. The defendants and their co-conspirators also returned verification calls to AIL purporting to be the applicants on the fraudulent applications from telephones set up exclusively for the fraudulent scheme. In an effort to avoid detection, the defendants listed addresses of gas stations and apartment complexes on many of the fraudulent applications, and fabricated the names of the beneficiaries of the policies.

Halali, 29, of San Jose; Magat, 32, of Hayward; Jilge, 30, San Jose; Gagarin, 29, of San Jose; and Soundara, 33, of Oakland, are charged with conspiracy to commit wire fraud in violation of Title 18, United States Code, Section 1349; substantive wire fraud counts, in violation of Title 18, United States, Code, Section 1343; and aggravated identity theft, in violation of Title 18, United States Code, § 1028A(a)(1). Halali, Magat, and Jilge are also charged with money laundering, in violation of Title 18, United States Code, § 1957.

The maximum statutory penalties for conspiracy to commit wire fraud and for wire fraud charges in violation of 18 U.S.C. §§ 1349 and 1343 are a prison term of 20 years, and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution. The maximum statutory penalty for aggravated identity theft in violation of 18 U.S.C. § 1028A is a mandatory prison sentence of 2 years. The maximum statutory penalties for money laundering in violation of 18 U.S.C. § 1957 is a prison term of 10 years, and a fine of $250,000 or twice the value of the criminally derived property.

All of the defendants appeared before Magistrate Judge Laurel Beeler for their initial appearances yesterday morning, and the case has been assigned to the Honorable Susan Illston, United States District Judge. The defendants are scheduled to have a follow-up appearance before Judge Beeler for ID of counsel and to finalize the defendants bail conditions tomorrow, Dec.19, 2014, at 9:30 a.m. All five defendants are also scheduled to appear before Judge Illston on Jan. 23, 2015, at 11:00 a.m.

Kim A. Berger is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Bridget Kilkenney. This prosecution is the result of an investigation by the FBI, the IRS, Criminal Investigation Division, and the California Department of Insurance.

Please note that an indictment contains only allegations. As with all defendants, Behnam Halali, Ernesto Magat, Kraig Jilge, Karen Gagarin, and Alomkone Soundara, must be presumed innocent unless and until they are proven guilty.

SBA TOUTS BRANDS IT HELPED

FROM:  U.S. SMALL BUSINESS ADMINISTRATION 
This Holiday, SBA Celebrates the Brands We Helped Build
By Maria Contreras-Sweet, SBA Administrator
Published: December 19, 2014

Thirty-six years ago, a young computer programmer working out of his parents’ garage was looking for investments so he could create the world’s most user-friendly personal computer. He came upon a financier named John Hines, who managed an Illinois-based venture capital find licensed and supported by the U.S. Small Business Administration. Hines saw the potential and invested half a million dollars in the promising startup. Two years later, the young programmer took his company public, and the VC fund sold its stake for $44 million.

The programmer in question is the late Steve Jobs, and the fund that helped seed Apple in its infancy was part of the Small Business Investment Company (SBIC) program – the SBA’s investment arm.

While the SBA is perhaps best known for our loan programs, our SBIC program has helped build many hi-tech brands that will be familiar to holiday shoppers cruising down the electronics aisle this month. America Online, Intel, Compaq and Sun Microsystems all received investments from SBIC funds in their early days.

Beyond the I-Phone and the long shadow cast by the world’s most valuable company, this year’s gift-giving season includes many SBIC investments in starring roles.  Parents helping their little ones customize their own stuffed animal at a Build-a-Bear store are shopping at a business seeded by an SBIC fund; same for those lucky souls who will awaken to a Tesla in their driveway on Christmas Day. If you’re a last-minute shopper mailing a present to a loved one through Fed Ex, you’re contributing to the legacy of the SBIC that helped build the world’s largest shipping company.

If you plan to stock up on holiday desserts at Costco or take the family to Outback Steakhouse or Quiznos for a meal – or if you burn off those calories later using Jenny Craig or Nutri-System – in each case you’ll be patronizing an SBIC success story.

Of course, our SBA loan programs have helped build some major brands, too. A former Maryland football player received a quarter-million dollar loan from SBA, and now his Under Armour products are being worn by athletes across the world.  If your Mom – like mine – loves her Yankee Candles, she may be interested to know that it was an early SBA loan that helped deliver those wonderful scents to living rooms across America.  And if your sister is angling for a new pair of shoes (Isn’t she always?), tell her that SBA helped launch Famous Footwear in Madison, Wis., in the 1960s.

For many families, Chevy Chase and the vacationing Griswalds will be an instrumental part of their holiday TV line-up this year. Here’s a fun fact: The Winnebago recreational vehicle came to life in the heartland in the 1960s, courtesy of two SBA loans.

And lest we forget the SBA’s flagship program to support small business innovators, the Small Business Innovation Research program provided early stage-funding to iRobot, creator of the Roomba vacuum cleaner. I suspect Roomba will be making some December 26th cameos as families try to clean up after the holiday stampede.

The SBA’s mission is to help small businesses grow. When companies that were once small become some of America’s biggest brands with our help, it gives all of us here at the agency a reason for holiday cheer.

Season’s greetings, everyone. I hope you and yours have a wonderful holiday. To paraphrase “Twas the Night Before Christmas…”

I heard Ben & Jerry say, as we took a big bite;

Thanks for the loan, SBA; you guys are all right.

SBA TOUTS 6 GOLDEN RULES FOR BUSINESS ON SOCIAL MEDIA

FROM:  U.S. SMALL BUSINESS ADMINISTRATION 
6 Golden Rules for Building Your Business with Social Media
By Caron_Beesley, Contributor
Published: December 17, 2014
Updated: December 17, 2014
Is your small business on social media? Is it working for you? Tried it but not convinced?

Social media is the top online activity in the U.S., according to Marketing TechBlog it also has a huge influence on consumer buying decisions. Forty-six percent of web users look towards social media when making a purchase, while 8 out of 10 SMBs report that they are using social media to drive growth.

Social media is clearly a proven channel for helping small business find and convert prospects – but it takes time and effort. Small businesses need to find ways to ways to connect, engage and drive actions.

If you’re looking for ideas to kick start or continue building your business using social media, here are six golden rules that can help.

Integrate your marketing channels

How do you get found on Twitter, Facebook or any social media platform? Well, it starts by prompting people with visual clues throughout your marketing channels, most notably your website. Ways to do this include:

Adding “Follow” buttons on your static website banners (see the top of this page)
Add social share buttons alongside content that you want to promote such as blogs or events (check out the ones on the top left of this blog)
Embed a feed on your site (take a look at the one on the SBA.gov homepage)
Don’t forget your emails, business cards, store signage and other channels
Plan your content

What should you post about? Well, what do your followers respond to best? This will vary greatly from business to business and takes time to gauge. But as a general rule people, follow brands on social media for the following top five reasons:

To get promotions and discounts
For the latest product information
Customer service (feedback, complaints, queries)
Entertaining content
The ability to offer feedback
This doesn’t mean you should spend your time using social media for promotions, instead strive for balance. Try to apply an 80:20 rule – 80 percent of your posts should focus on driving interactions while 20 percent of your posts can incorporate direct offers.

One of the easiest ways to do this is to scope out the week in advance, for example:

Mondays – Offer an exclusive promotion that’s only available to your social media followers and is redeemable with a unique code.
Tuesdays – Give a behind-the-scenes look at your business or focus on your people
Wednesdays – Create a series of helpful tips (link back to your blog to expand on the details)
Thursdays – Focus on your customers. Whether it’s responding to questions or highlighting a positive review.
Fridays – Feature industry experts or news. Retweet content, share articles or pin images that are relevant to your business.
Use photos and videos and other rich media

A visual is worth a thousand words. Look for ways to integrate images and rich media content into your social media posts. Using rich media like YouTube videos, memes, photos, and infographics can double engagementDownload Adobe Reader to read this link content.

Engage your audience

If you are posting interesting content, engagement will follow naturally. However, there are a few things you can do to encourage these relationships – listen to fans, chime in when you think you can add something, respond to comments, open the doors to shared experiences/needs, offer exclusive content (offers, downloads, etc.), encourage fans to share photos and experiences and always communicate authentically. Think of social media as a form of conversation – it’s a two-way dialog. If you’re not prepared to listen to what is being said to you, about you, or with you, then you simply aren’t “being social.”

It takes time to figure out what works. For example, you might think about using polls and surveys to engage with followers, but if you are still growing your network, you might not get the right results – yet. So, keep trying new things until you find a sweet spot.

Treat social media as a customer service tool

Customer service is a very important aspect of social media. Be prepared to monitor and respond to questions and complaints, make a point of recording feedback and sharing it with whoever owns that aspect of your business. These blogs offer more advice on this topic:

How to Use Social Media to do a Better Job of Customer Service
7 Tips for Dealing with Criticism of Your Business on Social Media
Measure

Don’t forget to measure the impact of your social media efforts. Use third party apps or Facebook’s Insights tool to monitor click-through rates. Compare these across posts to see if there’s a trend as to the type of content that’s popular. Measure engagement by tracking how many likes and shares your posts get (measured by Facebook as “reach”). Use this data to inform and adjust your content strategy.

Related resources

8 Ways to Develop Online Content for Your Business – Even if You Hate to Write
6 Quick Ways to Use Social Media for Branding
How to Use Trending Topics for Your Content Marketing
Webinar: Social Media Marketing Made Simple
Webinar: How Social Media can Help Your Business Succeed

OSHA FINDS CRUSHED SUPERMARKET WORKER'S DEATH PREVENTABLE

FROM:  U.S. DEPARTMENT OF LABOR 
News Release
OSHA News Release: [12/17/2014]
Contact Name: Ted Fitzgerald or Andre Bowser
Release Number: 14-2254-NEW

Death of Brooklyn, New York, supermarket worker preventable, OSHA finds
Citations for exit access, fall, chemical hazards to Moisha’s Kosher Discount Supermarket

NEW YORK — A 22-year-old employee of Moisha's Kosher Discount Supermarket Inc. in Brooklyn was fatally crushed between a cement wall and a forklift on June 10, 2014, as employees used an electrical pallet jack to push a broken forklift up a ramp to the supermarket's roof. While doing so, the forklift rolled back down the ramp, and then pinned the worker against the wall. An inspection by the U.S. Department of Labor's Occupational Safety and Health Administration on the same day as the fatality found that his death was preventable.

OSHA determined that the broken 8,600-pound forklift weighed twice the pallet jack's maximum capacity of 4,000 pounds; the defective forklift had not been removed from service, as required; and workers had not been trained to operate the forklift or the pallet jack safely.

"The pallet jack and forklift were not used and moved correctly, which resulted in a needless, avoidable loss of a worker's life," said Kay Gee, OSHA's area director for Brooklyn, Manhattan and Queens. "Tragically, Moisha's Kosher Discount Supermarket employees were not trained to use these machines safely and could not recognize their exposure to a deadly hazard."

OSHA's powered industrial truck standard requires that employers teach workers how to operate machines properly and ensure that they understand the training. The standard also prohibits pallet jacks and forklifts from lifting or moving objects heavier than their maximum lifting capacity.

OSHA's inspection identified nine serious violations of workplace safety standards in the supermarket's warehouse. These included blocked exit aisles and passageways; missing exit signs; misuse of portable ladders and a battery charger; lack of quick drenching eyewash for employees who worked with corrosive chemicals; and lack of a chemical hazard communication plan.
A serious violation occurs when there is substantial probability that death or serious physical harm could result from a hazard about which the employer knew or should have known.

"Nothing can bring this worker back to his loved ones. This employer must take immediate, effective steps to identify, minimize and eliminate hazardous conditions to avoid another senseless tragedy," said Robert Kulick, OSHA's regional administrator in New York.

Located at 315 Avenue M in Brooklyn, Moisha's Kosher Discount Supermarket faces $42,000 in fines. The company has 15 business days from receipt of its citations and proposed penalties to comply, meet with OSHA's area director, or contest the findings before the independent Occupational Safety and Health Review Commission.

Monday, December 22, 2014

DOD NEWS: AIRSTRIKES CONTINUE IN SYRIA, IRAQ

FROM:  U.S. DEFENSE DEPARTMENT 

Right:  141219-N-DJ750-043 INDIAN OCEAN (Dec. 19, 2014) The guided-missile destroyer USS Gridley (DDG 101) transits the Indian Ocean. Gridley is deployed in the U.S. 5th Fleet area of responsibility supporting Operation Inherent Resolve, strike operations in Iraq and Syria as directed, maritime security operations, and theater security cooperation efforts in the region. (U.S. Navy photo by Mass Communication Specialist 3rd Class Bryan Jackson/Released).

Military Airstrikes Continue Against ISIL in Syria and Iraq
DoD News, Defense Media Activity

SOUTHWEST ASIA , Dec. 22, 2014 – U.S. and partner nation military forces continued to attack Islamic State of Iraq and the Levant terrorists in Syria Dec. 22 using fighter and bomber aircraft to conduct 12 airstrikes.

Separately, U.S. and partner nation military forces conducted 10 airstrikes in Iraq Dec. 22 using fighter, bomber, and attack aircraft against the ISIL terrorists. These engagements were in support of the 7th Iraqi Army, local police and tribal fighters engaged in fighting with ISIL forces in the vicinity of Dulab.
The following is a summary of those strikes:

Syria

• Near Kobani, six airstrikes destroyed six ISIL fighting positions and struck four ISIL fighting positions and an ISIL tactical unit.

• Near Aleppo, three airstrikes destroyed artillery equipment and struck 10 ISIL buildings.

• Near Al Hasakah, two airstrikes destroyed an ISIL tactical vehicle, two ISIL trucks, an ISIL building, and two ISIL storage containers.

• Near Ar Raqqah, an airstrike destroyed an ISIL checkpoint complex.
Iraq

• Near Sinjar, three airstrikes destroyed three ISIL tactical vehicles, three ISIL trucks, five ISIL buildings and struck two large ISIL units and an ISIL tactical unit.

• Near Al Asad, two airstrikes destroyed an ISIL tactical vehicle and struck two ISIL tactical units.

• Near Tal Afar, two airstrikes destroyed an ISIL checkpoint.

• Near Ramadi, an airstrike destroyed two ISIL vehicles, an ISIL building and struck an ISIL tactical unit.

• Near Mosul, an airstrike destroyed an ISIL vehicle.

• Near Fallujah, an airstrike destroyed two ISIL buildings and struck a weapons factory complex.

All aircraft returned to base safely. Airstrike assessments are based on initial reports.

The strikes were conducted as part of Operation Inherent Resolve, the operation to eliminate the ISIL terrorist group and the threat they pose to Iraq, the region and the wider international community. The destruction of ISIL targets in Syria and Iraq further limits the terrorist group's ability to project terror and conduct operations.

Coalition nations conducting airstrikes in Iraq include the U.S., Australia, Belgium, Canada, Denmark, France, Netherlands and the United Kingdom. Coalition Nations conducting airstrikes in Syria include the U.S., Bahrain,
Jordan, Saudi Arabia, and the United Arab Emirates.

FRENCH COMPANY PLEADS GUILTY, AGREES TO PAY OVER $772 MILLION TO RESOLVE BRIBERY CHARGES

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, December 22, 2014
Alstom Pleads Guilty and Agrees to Pay $772 Million Criminal Penalty to Resolve Foreign Bribery Charges

Alstom S.A. (Alstom), a French power and transportation company, pleaded guilty today and agreed to pay a $772,290,000 fine to resolve charges related to a widespread scheme involving tens of millions of dollars in bribes in countries around the world, including Indonesia, Saudi Arabia, Egypt and the Bahamas.

Deputy Attorney General James M. Cole, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Michael J. Gustafson of the District of Connecticut and FBI Executive Assistant Director Robert Anderson Jr. made the announcement.

“Alstom’s corruption scheme was sustained over more than a decade and across several continents,” said Deputy Attorney General Cole.  “It was astounding in its breadth, its brazenness and its worldwide consequences.  And it is both my expectation – and my intention – that the comprehensive resolution we are announcing today will send an unmistakable message to other companies around the world: that this Department of Justice will be relentless in rooting out and punishing corruption to the fullest extent of the law, no matter how sweeping its scale or how daunting its prosecution.”

“This case is emblematic of how the Department of Justice will investigate and prosecute FCPA cases – and other corporate crimes,” said Assistant Attorney General Caldwell.  “We encourage companies to maintain robust compliance programs, to voluntarily disclose and eradicate misconduct when it is detected, and to cooperate in the government’s investigation.  But we will not wait for companies to act responsibly.  With cooperation or without it, the department will identify criminal activity at corporations and investigate the conduct ourselves, using all of our resources, employing every law enforcement tool, and considering all possible actions, including charges against both corporations and individuals.”

“Today’s historic resolution is an important reminder that our moral and legal mandate to stamp out corruption does not stop at any border, whether city, state or national,” said First Assistant U.S. Attorney Gustafson.  “A significant part of this illicit work was unfortunately carried out from Alstom Power’s offices in Windsor, Connecticut.  I am hopeful that this resolution, and in particular the deferred prosecution agreement with Alstom Power, will provide the company an opportunity to reshape its culture and restore its place as a respected corporate citizen.”

“This investigation spanned years and crossed continents, as agents from the FBI Washington and New Haven field offices conducted interviews and collected evidence in every corner of the globe,” said FBI Executive Assistant Director Anderson.  “The record dollar amount of the fine is a clear deterrent to companies who would engage in foreign bribery, but an even better deterrent is that we are sending executives who commit these crimes to prison.”

Alstom pleaded guilty to a two-count criminal information filed today in the U.S. District Court for the District of Connecticut, charging the company with violating the Foreign Corrupt Practices Act (FCPA) by falsifying its books and records and failing to implement adequate internal controls.  Alstom admitted its criminal conduct and agreed to pay a criminal penalty of $772,290,000.  U.S. District Judge Janet B. Arterton of the District of Connecticut scheduled a sentencing hearing for June 23, 2015 at 3pm.

In addition, Alstom Network Schweiz AG, formerly Alstom Prom (Alstom Prom), Alstom’s Swiss subsidiary, pleaded guilty to a criminal information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA.  Alstom Power Inc. (Alstom Power) and Alstom Grid Inc. (Alstom Grid), two U.S. subsidiaries, both entered into deferred prosecution agreements, admitting that they conspired to violate the anti-bribery provisions of the FCPA.  Alstom Power is headquartered in Windsor, Connecticut, and Alstom Grid, formerly Alstom T&D, was headquartered in New Jersey.

According to the companies’ admissions, Alstom, Alstom Prom, Alstom Power and Alstom Grid, through various executives and employees, paid bribes to government officials and falsified books and records in connection with power, grid and transportation projects for state-owned entities around the world, including in Indonesia, Egypt, Saudi Arabia, the Bahamas and Taiwan.  In Indonesia, for example, Alstom, Alstom Prom, and Alstom Power paid bribes to government officials – including a high-ranking member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara, the state-owned electricity company in Indonesia – in exchange for assistance in securing several contracts to provide power-related services valued at approximately $375 million.  In total, Alstom paid more than $75 million to secure $4 billion in projects around the world, with a profit to the company of approximately $300 million.  

Alstom and its subsidiaries also attempted to conceal the bribery scheme by retaining consultants purportedly to provide consulting services on behalf of the companies, but who actually served as conduits for corrupt payments to the government officials.  Internal Alstom documents refer to some of the consultants in code, including “Mr. Geneva,” “Mr. Paris,” “London,” “Quiet Man” and “Old Friend.”

The plea agreement cites many factors considered by the department in reaching the appropriate resolution, including:  Alstom’s failure to voluntarily disclose the misconduct even though it was aware of related misconduct at a U.S. subsidiary that previously resolved corruption charges with the department in connection with a power project in Italy; Alstom’s refusal to fully cooperate with the department’s investigation for several years; the breadth of the companies’ misconduct, which spanned many years, occurred in countries around the globe and in several business lines, and involved sophisticated schemes to bribe high-level government officials; Alstom’s lack of an effective compliance and ethics program at the time of the conduct; and Alstom’s prior criminal misconduct, including conduct that led to resolutions with various other governments and the World Bank.

After the department publicly charged several Alstom executives, however, Alstom began providing thorough cooperation, including assisting the department’s prosecution of other companies and individuals.

To date, the department has announced charges against five individuals, including four corporate executives of Alstom and its subsidiaries, for alleged corrupt conduct involving Alstom.  Frederic Pierucci, Alstom’s former vice president of global boiler sales, pleaded guilty on July 29, 2013, to conspiring to violate the FCPA and a charge of violating the FCPA for his role in the Indonesia bribery scheme.  David Rothschild, Alstom Power’s former vice president of regional sales, pleaded guilty on Nov. 2, 2012, to conspiracy to violate the FCPA.  William Pomponi, Alstom Power’s former vice president of regional sales, pleaded guilty on July 17, 2014, to conspiracy to violate the FCPA.  Lawrence Hoskins, Alstom’s former senior vice president for the Asia region, was charged in a second superseding indictment on July 30, 2013, and is pending trial in the District of Connecticut in June 2015.  The charges against Hoskins are merely allegations, and he is presumed innocent unless and until proven guilty.  The high-ranking member of Indonesian Parliament was also convicted in Indonesia of accepting bribes from Alstom, and is currently serving a three-year term of imprisonment.

In connection with a corrupt scheme in Egypt, Asem Elgawhary, the general manager of an entity working on behalf of the Egyptian Electricity Holding Company, a state-owned electricity company, pleaded guilty on Dec. 4, 2014, in federal court in the District of Maryland to mail fraud, conspiring to launder money, and tax fraud for accepting kickbacks from Alstom and other companies.  In his plea agreement, Elgawhary agreed to serve 42 months in prison and forfeit approximately $5.2 million in proceeds.

This case is being investigated by the FBI’s Washington Field Office, with assistance from the FBI’s Meriden, Connecticut Resident Agency, and the FBI’s Newark and Baltimore Divisions.  The department appreciates the significant cooperation provided by its law enforcement colleagues in Indonesia at the Komisi Pemberantasan Korupsi (Corruption Eradication Commission), the Office of the Attorney General in Switzerland, the Serious Fraud Office in the United Kingdom, as well as authorities in Germany, Italy, Singapore, Saudi Arabia, Cyprus and Taiwan.

The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David E. Novick of the District of Connecticut, together with Assistant U.S. Attorney Zach Intrater of the District of New Jersey on the investigation of Alstom Grid and Assistant U.S. Attorney David I. Salem of the District of Maryland on the investigation of Asem Elgawhary.  The Criminal Division’s Office of International Affairs also provided substantial assistance.