With jury picked, Johnny Depp opens U.S. libel case against ex-wife Heard

by Reuters April 14, 2022

By: Reuters

By Jan Wolfe

WASHINGTON -Lawyers for Hollywood star Johnny Depp on Tuesday gave a jury an overview of his U.S. defamation case against his ex-wife Amber Heard, the latest chapter in a long-running legal fight between the two Hollywood stars.

Opening statements kicked off in a Virginia courtroom in a lawsuit Depp, 58, brought against Heard, 35, for $50 million in 2018.

Depp alleges Heard defamed him when she penned a December 2018 opinion piece in the Washington Post about being a survivor of domestic abuse.

The article never mentioned Depp by name, but Depp lawyer Benjamin Chew told jurors on Tuesday that it was clear Heard was referencing the Hollywood leading man.

Chew told jurors Heard published the piece on the eve of the release of “Aquaman,” her biggest film yet, to drum up publicity and advance her career.

“By choosing to lie about her husband for her own personal benefit, Amber Heard forever changed Mr. Depp’s life and his reputation,” Chew said. “You will hear him tell you the dreadful impact it has had on his life.”

Heard’s piece in the Washington Post “devastated” Depp’s career, Chew said.

“Hollywood studios don’t want to deal with the public backlash from hiring someone accused of abuse — even someone with the incredible body of work and record that Mr. Depp can be proud of,” Chew said.

J. Benjamin Rottenborn, a lawyer for Heard, said in his opening statement that Depp was trying to mislead the jury with “crazy conspiracy theories.”

Rottenborn said Heard was telling the truth about “horrific” abuse she endured, but the case is really about a narrow legal question: whether Heard’s opinion piece was free speech protected by the U.S. Constitution’s First Amendment.

“That is the question, and that is what you are being asked to decide,” Rottenborn told jurors.

“Mr. Depp’s team is going to try to turn this case into a soap opera,” Rottenborn said. “Why? I’m not really sure, because the evidence isn’t pretty for Mr. Depp.”

Another of Heard’s lawyers, Elaine Bredehoft, said that during a trip to Australia in 2015, Depp dragged Heard across the floor, punched her, kicked her and then “penetrated her with a liquor bottle.”

Depp shook his head “no” in the courtroom when Bredehoft made the statement to jurors.

A state court judge in Fairfax County, Virginia, is overseeing the trial, which is expected to last six weeks. A jury was selected on Monday.

Less than two years ago Depp lost a libel case against The Sun, a British tabloid that labeled him a “wife beater.” A London High Court judge ruled he had repeatedly assaulted Heard and put her in fear for her life.

In the U.S. case, Depp and Heard both submitted long lists of potential witnesses they could put on the stand.

Heard’s list includes her ex-boyfriend and Tesla Chief Executive Elon Musk, with whom she texted about Depp. Also on the list of potential witnesses is actor James Franco.

The Washington Post is not a defendant in the case. Depp’s lawyers have said they filed the case in Fairfax County, outside the District of Columbia, because the newspaper is printed at a facility there. Heard unsuccessfully tried to transfer the case to Los Angeles, where she and Depp lived.

The United States is a difficult forum for libel plaintiffs, especially public figures like Depp, who faces several hurdles in the Virginia case. Depp must prove by clear and convincing evidence that Heard knowingly made false claims.

Depp and Heard met while making 2011 film “The Rum Diary” and married four years later. Heard accused Depp of domestic abuse after filing for divorce in 2016.

Heard is known for her roles in “Aquaman” and “Justice League.” She has brought her own libel claim against Depp, saying he smeared her by calling her a liar.

Heard’s counterclaim will be decided as part of the trial. Heard is seeking $100 million in damages from Depp, according to court papers.

In her evidence to the London High Court, Heard said Depp would turn into a jealous alter ego, “the monster,” after binging on drugs and alcohol and had threatened to kill her.

She detailed 14 occasions of extreme violence when she said the actor choked, punched, slapped, head-butted, throttled and kicked her. The London judge accepted 12 of these accounts as true.

Following the November 2020 ruling in the London libel trial, Depp was replaced with Danish actor Mads Mikkelsen in the third film in the “Fantastic Beasts” franchise, a spin-off from the “Harry Potter” books and films.

(Reporting by Jan Wolfe; Editing by Noeleen Walder, Lisa Shumaker and Howard Goller)

April 14, 2022 0 comments

Financial News

Big U.S. banks see higher net interest income as rates rise

by Reuters April 14, 2022

By: Reuters

By Elizabeth Dilts Marshall

NEW YORK – Wells Fargo & Co and JPMorgan Chase & Co reported a rise in net interest income in the first quarter, as the U.S. Federal Reserve’s rate hikes help their bread-and-butter business –taking deposits and lending.

The Fed raised rates by a quarter point in March to a 0.25%-0.5% range, and has flagged another half-point move on May 4.

These moves, aimed at tackling soaring inflation of 8.5%, are expected to bring an end to the low interest-rate environment that banks have faced for most of the past decade, particularly through the COVID-19 pandemic.

That should be good news for net interest income, a closely watched measure of how much money banks make from lending. It declined during the pandemic due to interest rate cuts and a drop in borrowing, but is now ticking up.

Wells Fargo & Co led the pack, with net interest income for the first quarter rising 5% from a year ago. The bank also lifted its expectations for 2022, saying net interest income (NII) percentage growth could hit the mid-teens.

“In January, we thought NII would be up about 8%. We’re almost doubling that to kind of the mid-teens … due to the loan growth we’ve seen, as well as the substantial move in rates,” chief financial officer Mike Santomassimo on a call with analysts. Overall loan growth was 3%.

The NII from JPMorgan Chase & Co’s core banking businesses, excluding the markets business, increased 9% from a year earlier, the bank said on Wednesday. Total NII is expected to be more than $53 billion for 2022, the bank said, roughly in line with its February guidance.

“NII is going to get much better. Things are going to normalize,” chief executive Jamie Dimon told analysts.

The bank is still running the numbers and expects to give updated guidance on NII revenue at the bank’s investor day on May 23, chief financial officer Jeremy Barnum said. Analysts expect the bank to revise its guidance upwards.

Still, some banks said the outlook for rising interest rates is not all rosy. Higher rates could weaken economic growth, crimp lending overall and discourage some companies from transactions that generate fees.

Citigroup’s NII grew 3% over the first quarter of last year, but its Chief Financial officer Mark Mason, when pressed by analysts, said it was too soon say what higher rates will mean for Citigroup’s revenue this year. He left its revenue guidance at up by a “low single-digit” percentage.

(Additional reporting by David Henry; Editing by Michelle Price and Chizu Nomiyama)

April 14, 2022 0 comments

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Republican Party withdraws from U.S. commission on presidential debates

by Reuters April 14, 2022

By: Reuters

By David Morgan and Doina Chiacu

WASHINGTON -The Republican National Committee voted unanimously on Thursday to withdraw from the Commission on Presidential Debates, saying the group that has run the debates for decades was biased and refused to enact reforms.

“We are going to find newer, better debate platforms to ensure that future nominees are not forced to go through the biased CPD in order to make their case to the American people,” the committee’s chairperson, Ronna McDaniel, said in a statement.

The RNC’s action requires Republican candidates to agree in writing to appear only in primary and general election debates sanctioned by the committee.

The nonprofit commission, founded in 1987 to codify the debates as a permanent part of presidential elections, did not immediately respond to a request for comment.

It was unclear what format future RNC-backed debates would take or whether they would take place as often as in recent decades.

The move, which followed months of wrangling between the RNC and the commission, will potentially deprive voters of seeing Republican and Democratic candidates on the same stage.

Millions of Americans usually watch the presidential debates, and many viewers say they help them make up their minds about whom to vote for, according to research by the Pew Research Center.

The Democratic National Committee, the RNC’s counterpart for President Joe Biden’s party, accused Republicans of trying to hide from voters.

“Voters can count on hearing from President Biden and Vice President (Kamala) Harris, who are proud of their records,” DNC chairperson Jaime Harrison said in a statement.

The RNC’s decision follows grievances aired by former President Donald Trump and other Republicans about the timing of debates, debate formats and the selection of moderators.

Defenders of the debates say they are an important element of the democratic process, but critics say they have become television spectacles in which viewers learn little about the candidates’ policies.

Trump refused to participate in what was supposed to be the second of three debates with Biden in 2020, after the commission switched it to a virtual contest following Trump’s COVID-19 infection.

The RNC said the commission “refused to enact simple and commonsense reforms.”

(Reporting by Doina Chiacu and David Morgan; Editing by Ross Colvin and Cynthia Osterman)

April 14, 2022 0 comments

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U.S. State Department says defense alliance expansion would promote European stability

by Reuters April 14, 2022

By: Reuters

WASHINGTON – The United States would not be concerned that an expansion of a defense alliance would do anything other than promote stability in Europe, State Department spokesman Ned Price said on Thursday.

“Without speaking to any countries in particular, we would not be concerned that the expansion of a defensive alliance would do anything other than promote stability on the European continent,” Price told a news briefing.

He was responding to a question of whether the United States would be concerned that Russia could escalate the confrontation over Ukraine if Sweden and Finland join the NATO alliance.

(Reporting by Jonathan Landay, Humeyra Pamuk and Daphne Psaledakis; Editing by Leslie Adler)

April 14, 2022 0 comments

Financial News

Inflation and rate hikes ahead: Bankers cautious on the economy

by Reuters April 14, 2022

By: Reuters

NEW YORK -Wall Street’s major banks and asset managers were cautious about the economy as they detailed how both consumers and institutional clients were struggling to deal with sky-high inflation and looming rate hikes.

The big U.S. banks are reporting results at a time of surging inflation, which is leading to predictions that the U.S. Federal Reserve will hike interest rates aggressively this year.

While that can benefit big lenders by increasing what they earn from loans, rapid rate hikes could slow the economy and scupper a nascent recovery from the pandemic.

“Higher rates are typically a positive for banks,” said Jason Ware, chief investment officer for Albion Financial Group, which holds JPMorgan shares. “But if borrowers are unable to absorb higher borrowing costs it is an offsetting benefit. There could be a headwind if they rise too much.”

Several banks started stockpiling cash to cushion potential loan losses if inflation bites.

While that showed some banks were getting more concerned about the macro environment, it was “not necessarily a prognostication we will hit bad economic times,” Ware said.

U.S. monthly consumer prices increased by the most in 16-1/2 years in March to hit 8.5% year-on-year.

Mortgage rates meanwhile have been soaring, with the average interest rate on the most popular U.S. home loan rising to more than 5% last week, the highest level since November 2018.

“All of our clients are feeling the impact of the inflationary pressures across the board,” Wells Fargo Chief Financial Officer Mike Santomassimo told reporters on a call.

While Santomassimo said that inflation has not yet shown up as a risk for the bank’s credit portfolios, the bank said that higher interest rates would hurt mortgage volumes. Mortgage loans fell 33% from a year ago on lower originations and gains from home sales.

Lower-income consumers are being the most impacted by rising energy and food prices, Wells’ CEO Charles Scharf said later on a conference call.

Scharf said that while the bank would likely see an increase in credit losses from historical lows, “we should be a net beneficiary as we will also benefit from rising rates.”

JPMorgan Chase & Co’s Chief Executive Jamie Dimon on Wednesday warned of economic uncertainties, partly arising from soaring inflation. The bank also showed weaker mortgage lending, with loans down 3%.

Albion’s Ware said, however, if inflation does come down and growth does normalize, the benchmark 10-year U.S. Treasury yield, which influences mortgage rates, could settle, which would be good for mortgage rates and borrowers.

CHANGING ECONOMIC LANDSCAPE

Many Wall Street analysts and investors believe the U.S. Federal Reserve has acted too slowly to combat high inflation and are now forecasting even more aggressive rate hikes as the central bank catches up.

Dimon expects higher rates than the market is pricing in, currently 3% at the end of 2023, he said Wednesday.

“Those are storm clouds on the horizon that may disappear, they may not,” said Dimon. “That’s a fact. And I’m quite conscious of that fact, and I do expect that alone will create volatility and concerns.”

Dimon said that the Fed’s quantitative tightening, as it reverses its pandemic-induced bond buying bonanza, will be “more substantially important than other people think” because of the huge change in investment flows as people adjust their portfolios.

Goldman Sachs CEO David Solomon meanwhile said on the company’s earnings call that he was watching inflation, stress on the supply chain, commodity prices and how U.S. households were coping with rising costs.

“We’ve also seen an increased risk of stagflation and mixed signals on consumer confidence,” said Solomon. “These cross currents will certainly create ongoing complexity in the economic outlook.”

BlackRock Inc described how clients were grappling with the changing economic landscape and adjusting their fixed income portfolios.

“Our clients are trying to understand the implications of the rapidly changing investment environment,” said Laurence D. Fink, chairman and chief executive, who pointed to Russia’s invasion of Ukraine as creating “a supply shock in commodities that is further increasing inflation.”

(Reporting by Megan Davies, Elizabeth Dilts-Marshall and David Henry; Writing by Megan Davies; Editing by Alison Williams and Andrea Ricci)

April 14, 2022 0 comments

Financial News

Fed aims to bring elevated inflation under control: Mester

by Reuters April 14, 2022

By: Reuters

(Reuters) – The Federal Reserve’s aim is to raise rates quickly enough to bring down inflation without pushing the U.S. economy into recession or damaging the strong jobs market, Cleveland Federal Reserve Bank President Loretta Mester signaled on Thursday.

“Currently, labor markets in the U.S. are very tight and inflation is very elevated,” Mester said in remarks prepared for delivery at the University of Akron in Ohio. “Our intent is to reduce accommodation at the pace necessary to bring demand into better balance with constrained supply in order to get inflation under control while sustaining the expansion in economic activity and healthy labor markets.”

The Fed last month delivered the first in what is expected to be a series of interest rate increases this year and into next to bring down 40-year high inflation. The U.S. unemployment rate is at 3.6%, only slightly above the pre-pandemic level, and job openings are at near-record levels. Fed policymakers say those figures suggest labor markets can stay strong even as borrowing costs rise.

Mester has previously said she supports using bigger than usual half-point rate hikes to lift borrowing costs quickly, to about 2.5% by the end of the year. She also supports getting an early start on reducing the Fed’s balance sheet to put further downward pressure on inflation.

She did not provide fresh details on her view of how fast the Fed should raise interest rates or on the outlook for the economy in Thursday’s speech, which was largely focused on workforce development, including how to build better programs and evaluate them adequately.

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)

April 14, 2022 0 comments

Financial News

Oil rises on news EU may phase in a ban on Russian oil imports

by Reuters April 14, 2022

By: Reuters

By Arathy Somasekhar

HOUSTON -Oil prices settled higher on Thursday after an early decline as investors covered short positions ahead of the long weekend and on news that the European Union might phase in a ban on Russian oil imports.

Brent futures settled up $2.92, or 2.68%, at $111.70 a barrel. U.S. West Texas Intermediate futures closed $2.70 or 2.59% higher at $106.95 a barrel.

Both contracts recorded their first weekly gain in April. For several weeks, prices have been the most volatile since June 2020.

The New York Times reported that the European Union was moving toward adopting a phased-in ban of Russian oil, to give Germany and other countries time to arrange alternative suppliers.

A phased-in ban would force European buyers “to seek alternative sources, some of which in the near term is being met by Strategic Petroleum Reserve releases, but in the future, more supplies coming out of the ground will be required,” Andrew Lipow of Lipow Oil Associates in Houston said.

The International Energy Agency had warned on Wednesday that roughly 3 million barrels per day of Russian oil could be shut in from May onwards due to sanctions or buyers voluntarily shunning Russian cargoes.

Major global trading houses are planning to curtail crude and fuel purchases from Russia’s state-controlled oil companies in May, Reuters reported.

Russia’s Energy Ministry said it was limiting access to its statistics on oil and gas production and exports.

Trade was going to continue to be “somewhat nervous” as the war between Russia and Ukraine continues and as countries weigh banning Russian supplies, Price Futures Group analyst Phil Flynn said.

“The big question is going to be, how many people are going to want to be short oil going into the long weekend?”

Traders also adjusted their position on Thursday as U.S. May crude options expire on Thursday.

U.S. oil production forecasts are being revised upwards despite labor and supply chain constraints as higher prices spur more drilling and well completion activity, according to industry experts.

U.S. oil rigs rose by two to 548 this week, their highest since April 2020, energy services firm Baker Hughes said in a report.

The U.S. Energy Information Administration reported on Wednesday that U.S. oil stocks rose by more than 9 million barrels last week, driven partly by releases from strategic reserves. Analysts in a Reuters poll had anticipated just an 863,000-barrel build.

However, on the demand side, Chinese refiners are set to cut crude throughput this month by about 6%, a scale last seen in the early days of the COVID-19 pandemic two years ago, to ease bulging fuel inventories during recent lockdowns, industry sources and analysts said.

(Reporting by Noah Browning in London, Mohi Narayan in New Delhi, Liz Hampton in Denver; Editing by Jason Neely, Kirsten Donovan, Jan Harvey, David Gregorio, Nick Macfie and Diane Craft)

April 14, 2022 0 comments

Financial News

Citigroup reduces forecast for potential Russia losses

by Reuters April 14, 2022

By: Reuters

By David Henry and Manya Saini

NEW YORK -Citigroup Inc could lose as much as $3 billion from its Russia exposures, $2 billion less than previously forecast, the bank said on Thursday while reporting a nearly halving of its first-quarter profit.

The bank said it had reduced its total exposure to Russia since December by $2 billion to $7.8 billion and that it would now lose no more than $3 billion in a severely adverse scenario, down from the nearly $5 billion estimated last month.

The disclosure came as Citi – the most global of the U.S. banks – added $1.9 billion to its reserves in the quarter to prepare for losses from direct exposures in Russia and the economic impact of the Ukraine war.

That pushed credit costs to $755 million, a contrast with the $2.1 billion benefit a year ago when it freed up loss reserves built during the COVID-19 pandemic.

The turn was a key factor in driving net income down 46% from a year earlier.

Still, the resulting earnings per share of $2.02 per share beat the $1.55 estimate from analysts who had feared worse.

Citi shares rose on the report and were up 1.4% in afternoon trading.

“This was in line with our hopes for what we would see,” said Patrick Kaser, a portfolio manager at Brandywine Global Investment Management and a long-time investor in the bank who said he was “pleasantly surprised.”

The reduced Russia exposure was a plus. “They appear to have navigated and managed down their risk,” Kaser said.

Revenue fell 2% to $19.2 billion, less than some analysts had expected.

A key factor was a 43% slump in investment banking revenue as last year’s rush of deals involving blank-check companies tapered off, drying up underwriting fees. Equity underwriting revenue plunged 78%.

Revenue from Treasury and Trade Solutions – Citi’s crown jewel business – rose 18% due to higher net interest income and fee growth.

“While the geopolitical and macro environment has become more volatile, we are executing the strategy we announced at our recent Investor Day,” Chief Executive Officer Jane Fraser said in the results announcement.

Fraser later told analysts she had personally felt the added challenge of the pandemic when she had what she called “a brief encounter with COVID.”

Fraser is leading an overhaul of Citi, which lags the financial performance of peers and has to carry out orders from U.S. banking regulators to fix its risk and compliance systems.

Her push has, however, driven up costs, with expenses rising 10% in the quarter excluding those for divestitures of the Asia consumer business.

BUYBACKS

Citi has been using excess capital to buy back shares. Unlike other big banks, its stock trades at a discount to its net worth, making buybacks attractive.

The bank returned $4 billion to shareholders in the quarter, including $1 billion in dividends, and its share count was 6% lower than a year earlier.

Citigroup expects to do a “modest” level of buybacks in the second quarter that would be less than the $3 billion in the first quarter, Chief Financial Officer Mark Mason told reporters after the bank posted results.

The first quarter repurchases came as Citi’s capital account was hurt by unrealized losses on securities as a result of the recent rise in interest rates.

Its Common Equity Tier 1 capital ratio fell to 11.4% from 12.2% in December. The bank expects to have the ratio back up to 12% by year-end as earnings add to its capital, Mason said.

Citi needs about $7 billion of capital to meet that goal and expects about $4 billion to come as it closes previously announced sales of consumer banking businesses in Asia, Mason told analysts.

A similar, but worse, capital ratio decline was reported by JPMorgan Chase & Co on Wednesday, deepening concerns among investors that bank buybacks would be constrained this year.

Citigroup expects additional capital to come from the sales of its consumer businesses outside of the United States.

In Mexico, the bank is finding “significant interest” from potential buyers of its Citibanamex franchise, Fraser told analysts. It could still take “a few quarters” to dispose of the asset, she said.

(Reporting by Manya Saini in Bengaluru and David Henry in New York; Editing by Aditya Soni, Matt Scuffham and Nick Zieminski)

April 14, 2022 0 comments

Top Headlines US and World News

Two killed, hundreds of homes burned in New Mexico wildfire

by Reuters April 14, 2022

By: Reuters

By Andrew Hay

(Reuters) -An elderly couple died in their home as they tried to evacuate a wildfire in Ruidoso, New Mexico, that has destroyed hundreds of houses and forced thousands to flee the mountain town, local officials said.

The remains of the couple were found on Thursday at their burned home in northeast Ruidoso after family members told police they attempted to evacuate but were unaccounted for, New Mexico State Police said in a statement.

The couple, who were not identified, were the first reported fatalities of the so-called McBride Fire that has destroyed 207 homes and burned 5,736 acres (2,321 hectares) since it started on Tuesday, according to local officials.

Fanned by spring winds gusting at up to 90 mph (144 kmph), the fire has torn through forested canyons dotted with homes,

Flames surrounded the town’s middle school on three sides on Tuesday as teachers and parents evacuated students, according to social media posts.

The fire burned within a few hundred feet of Ruidoso’s main street, and half a mile from the county hospital, before firefighters were able to block it on Wednesday.

Around 5,000 residents have fled their homes in the resort town in the Sierra Blanca mountains about 135 miles (217 km) southeast of Albuquerque, according to local officials.

“Firefighters have successfully held the fire from moving further into the town of Ruidoso at this time,” Laura Rabon, a spokeswoman for the Lincoln National Forest, told reporters.

Flames moved to the northeast on Thursday over largely unpopulated mountains and canyons. Wind gusts were expected to drop to 20 mph, aiding air attacks. Another blaze 10 miles (16 km) to the northwest known as the Nogal Fire burned six houses.

Like other southwestern states hit by climate change, New Mexico is suffering an early start to its fire season as blazes race through grassland, while tree-ring research in New Mexico’s Jemez Mountains shows forests have endured their worst drought in 500 years.

(Reporting by Andrew Hay in Taos, New Mexico; Editing by Bernadette Baum, Diane Craft and Aurora Ellis)

April 14, 2022 0 comments

Top Headlines US and World News

Planned Parenthood, ACLU sue to block Kentucky’s abortion restrictions

by Reuters April 14, 2022

By: Reuters

By Nate Raymond

(Reuters) -Abortion providers including Planned Parenthood on Thursday sued to block a sweeping new Kentucky law that forces them to stop offering the procedure until they can meet certain requirements, saying it amounted to an unconstitutional ban on abortions.

A Planned Parenthood affiliate and a clinic represented by the American Civil Liberties Union filed separate lawsuits a day after the Republican-led legislature overrode a veto by the state’s Democratic governor to enact the anti-abortion law.

The measure made Kentucky the first U.S. state without legal abortion access since the 1973 Supreme Court case Roe v. Wade established the right to end a pregnancy before the fetus is viable nationwide, abortion providers say.

The law went into effect immediately, making it “impossible” to comply with a vast amount of newly imposed requirements and regulations governing abortion that have yet to be written, the lawsuits said, describing it as “tantamount to a ban on abortion.”

The law calls for a combination birth-death or stillbirth certificate to be issued for each abortion, and it bans abortions after 15 weeks of pregnancy.

The lawsuits, by Planned Parenthood and EMW Women’s Surgical Center, argued that by giving them no time to comply, the law violated their due process rights and patients’ privacy rights.

The abortion providers are seeking a temporary restraining order to block enforcement of the law.

Kentucky Attorney General Daniel Cameron, a Republican, in a statement said he was “prepared to earnestly defend this new law against the legal challenge from Planned Parenthood and the ACLU.”

Republican-led states this year have been rapidly passing anti-abortion legislation in anticipation that the U.S. Supreme Court will back a 15-week abortion ban in Mississippi this spring.

The U.S. Supreme Court now has a 6-3 conservative majority and appeared open during arguments in December to rolling back or overturning Roe v. Wade.

Florida Governor Ron DeSantis on Thursday signed into law a ban on abortions after 15 weeks of pregnancy. On Tuesday, Oklahoma’s governor signed a near-total abortion ban into law, which would take effect this summer.

(Reporting by Nate Raymond in Boston, Editing by Alexia Garamfalvi and Aurora Ellis)

April 14, 2022 0 comments

Top Headlines US and World News

U.S. lawmakers say they have ‘serious concerns’ about face-scan contractor

by Reuters April 14, 2022

By: Reuters

WASHINGTON – Lawmakers in the U.S. House of Representatives have opened an investigation into the identity verification contractor ID.me, saying that they have “serious concerns” about the efficacy, privacy and security of technology it provides to 10 federal agencies.

A letter, first reported by the Washington Post, was sent by Representatives Carolyn Maloney, chair of the House Oversight Committee, and Jim Clyburn, the Democratic whip, to ID.me chief executive Blake Hall. It was dated Thursday.

The letter reflects unease over the use of facial recognition software to secure important transactions, including those with the Internal Revenue Service, amid concerns about privacy violations and inaccuracy.

For its part, ID.me touted its efforts in helping U.S. agencies fight government benefits fraud by foreign criminal gangs.

“We look forward to providing important information to the Committee on how ID.me has expanded access to government for disadvantaged Americans, including individuals who do not have credit history, are underbanked or are without a home,” the company said in a statement.

The lawmakers asked ID.me for information about what services it provides to federal agencies and 30 state governments, how often the technology fails to make an accurate identification, how many users’ biometric data have been collected and how long users with concerns waited for help.

They also asked how often identifications found what ID.me believed to be fraud, and if that determination was made via a human review process, artificial intelligence or both.

(Reporting by Diane Bartz; Editing by Cynthia Osterman)

April 14, 2022 0 comments

Financial News

Citigroup in preliminary talks on selling Mexico business -execs

by Reuters April 14, 2022

By: Reuters

NEW YORK -Citigroup Inc is in early talks with possible buyers of its Mexico consumer banking business Citibanamex, executives said on Thursday, while cautioning that the sale process would be complex and could take a few quarters to complete.

Citi disclosed in January that it was looking for a buyer for the unit, Mexico’s No. 3 consumer bank, which has struggled to trim costs to become more competitive with rivals like Spain’s BBVA and Santander.

Analysts have estimated that the bank, which Citi bought for $12.5 billion in 2001, could fetch between $4 billion and $8 billion.

Citi Chief Executive Jane Fraser told analysts that the bank was “attracting a lot of attention” in the talks with buyers, calling the sale a “once-in-a-lifetime opportunity.”

Various potential bidders for the business have already surfaced, including Mexico’s Grupo Financiero Banorte as well as Santander.

Chief Financial Officer Mark Mason told reporters that recent geopolitical events could make the franchise more appealing to others than when Citi first announced its intention to sell.

Mason and Fraser both said the exit process was complex and could still include an initial public offering, with the CEO adding that it was unclear whether a deal would be completed this year or next.

(Reporting by David Henry in New York and Manya Saini in Bangalore; editing by Christian Plumb and Nick Zieminski)

April 14, 2022 0 comments

Financial News

Last-minute tax tips for U.S. crypto investors

by Reuters April 14, 2022

By: Reuters

By Chris Taylor

NEW YORK – When accountant Zach Gordon gets calls from clients about how to handle cryptocurrency on their taxes, there is a common theme.

“They have absolutely no idea,” says Gordon, a principal with Grassi Advisors & Accountants in Westchester, New York.

It is not entirely their fault. The whole arena of cryptocurrencies like bitcoin is so novel and fast-growing that even the Internal Revenue Service itself has long been playing catch-up about how exactly to treat it on U.S. tax returns.

That being said, the guidance is becoming clearer, just as cryptocurrency adoption is growing. According to the Pew Research Center, 16% of U.S. adults now say they have invested in, traded or otherwise used cryptocurrencies.

“For years people almost thought of this as play money, and haven’t been so diligent about reporting it,” says Kelly Phillips Erb, a tax attorney and publisher of the site Taxgirl.com. “The IRS is super-serious about it now.”

Indeed, you might notice a mandatory little question on your 1040 tax form: “At any time during 2021 did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?”

The basic framework is to think of crypto like a stock holding. If you have held it long term, meaning over a year, profits from any sale are subject to capital gains tax. That means a tax rate of 0%, 15% or 20%, depending on your income level.

If you have not sold crypto, there is no taxable event. But with short-term holdings of less than a year, gains from a sale are treated differently — as ordinary income, with the rate determined according to your tax bracket.

If you have been buying and selling crypto through major exchanges, such as Coinbase or Robinhood, then you should be getting annual statements that will make reporting straightforward. Otherwise, be diligent about record-keeping on your own.

Where things can get trickier is that more people are receiving crypto as salary or payment for services, in which case it is treated as ordinary income, based on the value that particular day.

In a similar way, if you have used crypto to pay for goods or services, that is considered a taxable transaction, if the currency value has risen since you originally acquired it.

TurboTax has a helpful interactive calculator to figure out your potential tax hit.

A few issues to keep in mind, as we close in on the April 18 filing deadline:

DO YOUR HOMEWORK

The IRS has published answers to frequently asked questions about crypto and a basic explainer and a roundup of its publications on the subject.

Exchanges themselves often have helpful tax resources for users, such as Robinhood and Coinbase.

GIFTING STRATEGIES

One way to move crypto around without incurring taxes is to give it away. For an individual, you can give up to $15,000 a year. For charitable organizations, you can use sites like GiveCrypto.org to donate directly to those in need and get a tax deduction for your efforts.

That might be a better option than selling it yourself and subsequently giving away that cash, because then you have triggered a taxable event that falls on you.

USE LOSSES

Crypto is obviously a volatile asset class. Instead of gains, you might also have losses.

“If you have had gains from selling crypto, don’t forget you can offset your gains with losses, just like with stock,” says Lisa Greene-Lewis, a CPA and tax expert with TurboTax. “You can also offset ordinary income (like from wages) with up to $3,000 in losses, and carry forward any remaining losses.”

ASK FOR AN EXTENSION

This is admittedly a tricky subject, especially for those whose crypto involvement is frequent. So since we are already running up against this year’s filing deadline, there is no shame in asking for the standard six-month extension. You don’t even have to give a reason why.

While this will not get you out of payment – if you have a rough idea of how much you owe, you can still send that in by April 18 – it will give you ample time to consult tax professionals, sort out your obligations and properly report all transactions. “It’s better to file a complete and accurate return on extension, than a rushed and flawed one just to get it in by the deadline,” says Erb. “I would highly encourage people to take advantage of that.”

(Editing by Lauren Young and Cynthia Osterman; Follow us @ReutersMoney or at http://www.reuters.com/finance/personal-finance.)

April 14, 2022 0 comments

Breaking News Maryland News Police Blotter

47-Year-Old Shot Multiple Times In Car and Killed in Baltimore

by Kristen Harrison-Oneal April 14, 2022

By: Kristen Harrison-Oneal

BALTIMORE, MARYLAND – The Baltimore Police Department is investigating a homicide which took place on April 14th. This incident happened on the 1800 Block of Wilkins Avenue in Southern Baltimore.

According to police, “On April 14, 2022, at approximately 1:26 a.m., Southern District patrol officers were dispatched to the rear of the 1800 block of Wilkins Avenue to investigate a shooting. When officers arrived at the location, officers located a 47-year-old male victim sitting inside a vehicle suffering from multiple gunshot wounds to the body. The victim was pronounced deceased by BCFD Medic at the scene.”

If you have any information about this incident, please call the Baltimore Police Department Homicide detectives at 410-396-2100 or call the Metro Crime Stoppers tip line at 1-866-7LOCKUP.

April 14, 2022 0 comments

Top Headlines US and World News

Stranded seafarers escape Ukraine, others trapped – ILO, sources

by Reuters April 14, 2022

By: Reuters

By Emma Farge

GENEVA -Some of the estimated 1,000 seafarers trapped in Ukraine have escaped, the International Labour Organization (ILO) and industry officials told Reuters, while voicing concern for those remaining trapped onboard ships or unaccounted for.

Several foreign cargo ships have been struck by crossfire in Ukraine since the Russian invasion began on Feb. 24 and U.N. agencies have called for urgent action https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_841806/lang–en/index.htm to protect some 1,000 seafarers, including in the besieged port city of Mariupol that has been under bombardment for weeks.

An estimated 100 vessels have been prevented from departing because of risks of drifting sea mines https://shipping.nato.int/nsc/operations/news/-2022/risk-of-collateral-damage-in-the-north-western-black-sea-2, industry sources say.

Fabrizio Barcellona, seafarers’ section coordinator at the International Transport Workers’ Federation (ITF), said the “vast bulk” of the seafarers, from at least 20 countries including India, Syria, Egypt, Turkey the Philippines and Bangladesh, as well as Ukraine and Russia, had left, traveling overland to Poland and Romania.

He cited information from Philippine government sources saying seafarers of the Philippines had left. The Philippine Labour Ministry said 371 had been repatriated, 68 had resumed work outside of Ukraine, and some 15 remained there.

“A small number (of the estimated 1,000) remain stranded and unable to return home due to the ongoing threat of potential military crossfire,” Barcellona said.

An ILO spokesperson said in an email that some seafarers were still trapped on their ships, within earshot of shellfire, without giving details. Others had been disembarked, including some who were repatriated home, while others were under the protection of the Ukrainian army.

Russia said on Wednesday it had taken control of Mariupol’s trading port and had freed what it called “hostages” from vessels.

On April 11 a letter was circulated to International Maritime Organization members by Dominica maritime authorities about its ship that sank in Mariupol this month, saying the crew was hiding on other vessels “under an immense amount of intense fear and distress.”

Barcellona said the ITF, which represents some 200 seafarers’ unions, had been seeking to establish “blue corridors”, or safe passage routes, but this was impossible due to mines.

The International Committee of the Red Cross urged parties to the conflict to allow civilians, including commercial crews, to leave and said it would raise this with authorities.

(Reporting by Emma Farge, additional reporting by Neil Jerome Morales in Manila; Editing by William Maclean and David Holmes)

April 14, 2022 0 comments

Department of Justice Press Releases

Diesel Trucking Companies Conspire to Violate Clean Air Act

by DOJ Press April 14, 2022

By: DOJ Press

Denver – The U.S. Attorney’s Office for the District of Colorado announces that Pro Diesel Inc. and Endrizzi Diesel, LLC. pleaded guilty to conspiring with a Colorado-based diesel shop to remove or alter the monitoring component of emissions control systems on Class 8, commercial heavy-duty diesel trucks and semi-trucks, thereby violating the Clean Air Act.

According to plea agreements, between July 2017 and May 2020, Iowa-based Pro Diesel Inc. paid a Colorado diesel shop identified as “E.D.” more than $76,000 to disable on-board diagnostic systems on 34 Class 8 trucks. And, between January 2017 and December 2020, Missouri-based Endrizzi Diesel, LLC paid E.D. more than $149,000 to disable the diagnostic systems on approximately 60 class 8 trucks. Both diesel shops pleaded guilty to one count of violating Title 18, United States Code, Section 371.

On-board diagnostics systems (OBDs) are monitoring devices required under the Clean Air Act to be installed on vehicles to monitor emissions control systems and to ensure they are functioning properly. Tampering an OBD is frequently referred to as “tuning.” One purpose for “tuning” an OBD is to allow the vehicles to continue to seemingly operate normally while the emissions control system is disabled. This reduces the high costs associated with maintaining or repairing components of the emissions control systems on heavy-duty diesel trucks. However, as a consequence, tampered vehicles spew substantially more deleterious pollutants such as nitrogen oxides, carbon monoxide, non-methane hydrocarbons and particulate matter into the air, presenting a risk to the environment and public health. Nitrogen oxides from tailpipe emissions are a major contributor to the creation of ozone on the front range. Tests conducted by the EPA have found that completely deleting a diesel pickup truck’s emissions controls can increase the truck’s tailpipe emissions of nitrogen oxide by a factor of approximately 310 times, carbon monoxide by a factor of approximately 120 times, and non-methane hydrocarbons by a factor of approximately 1,100 times. The pollutant increase is even greater when the emission controls on Class 8 vehicles, such as the ones tampered with here, are disabled.

Through a remote connection, individuals at E.D. would run software programs to reprogram or “tune” the vehicle’s on-board diagnostic systems. These programs would tamper with, render inaccurate, and disable the monitoring functions of the OBDs so they would no longer detect malfunctions in the emissions control systems.

Defendant Pro Diesel will be sentenced by Judge Daniel Domenico on June 14, 2022. Defendant Endrizzi Diesel will be sentenced by Judge Regina Rodriguez on June 29, 2022.

These cases are being prosecuted by Assistant United States Attorney Rebecca Weber and Special Assistant United States Attorney Linda Kato.

Case numbers: 22-cr-00064-RMR, 22-cr-00062-DDD.

April 14, 2022 0 comments

Financial News

Analysis-Biden plan to aid Europe with LNG poses risk to US climate goals

by Reuters April 14, 2022

By: Reuters

By Nichola Groom and Valerie Volcovici

WASHINGTON – U.S. President Joe Biden’s plan to expand liquefied natural gas (LNG) shipments to Europe to cut the region’s dependence on Russian fuel risks undermining his administration’s climate goals by encouraging more gas production and increasing emissions, according to climate experts.

The issue reflects the tricky balance the White House must strike between global energy security issues and longer-term aspirations to usher in a broad transition away from fossil fuels to avert the worst effects of global warming.

“What we’re doing is supplanting Russian gas,” U.S. Special Envoy on Climate Change John Kerry told Reuters in an interview. “Will there be some leakage in terms of that? Yes, sure,” he said, calling it a “downside.”

Biden last month promised to increase LNG shipments to the European Union to 50 billion cubic meters per year by 2030 – more than double the amount sent there from the United States in 2021. Russia supplies about 40% of the EU’s gas needs, and the bloc is worried Moscow will use that as political leverage.

Biden’s moves are a signal for growth in a U.S. industry that has already expanded into one of the world’s top exporters of the super-cooled fuel thanks to advanced drilling techniques and prolific natural gas fields in states like Texas and Pennsylvania.

While gas burns cleaner than oil or coal, it remains a climate menace because of its tendency to escape wells, pipelines, and other infrastructure as methane. Methane is many times more potent than carbon dioxide as a greenhouse gas.

Exporting LNG yields more methane than consuming gas domestically because it requires a longer and more complex supply chain with more opportunities for leakage. It also leads to more carbon emissions from liquefaction, shipping, and regasification.

“Once you start to travel the world in tankers, that’s just a new operation. That’s just more emissions period,” said Debbie Gordon, a senior principal at the Rocky Mountain Institute’s climate program. “It’s distance and lots of different handoffs.”

She said U.S. liquefied natural gas exports to Europe could have a lower climate impact than Russian gas because Russia’s pipeline network is particularly leaky.

But the resulting extra U.S. methane emissions could still be troublesome for its climate goals.

BROAD GOALS

The United States and European Union last year pledged to slash methane emissions by 30% by 2030 and have been joined in the effort by more than 100 other nations. Biden’s broader climate goals include decarbonizing the U.S. economy by 2050.

LNG export terminals now in service are designed to remain operational well past those dates.

The White House contends it can address near-term energy security issues and still slash emissions. “This does not conflict with our climate goals,” National Security Council spokesperson Saloni Sharma said.

Kerry said the United States could also make strides cleaning up methane leaks with sound regulation and industry-led initiatives to help reduce the impact of expanded LNG.

The Biden administration plans to require oil and gas operators to detect and repair methane leaks from big wells and along pipelines, a regulation climate experts say could address the largest sources of fugitive methane but which would not address all stages of the LNG supply chain.

U.S. natural gas prices are running at 13-year highs, in part because supplies have dwindled under the weight of increased export demand.

RESEARCH UNDERWAY

While experts agree expanding LNG risks substantially boosting emissions, quantifying the risk is complex because the research is incomplete.

Recent aerial surveys of LNG export terminals in Texas and Louisiana have not shown major releases of methane, according to Riley Duren, Chief Executive of Carbon Mapper, a non-profit that surveys methane emissions.

“Most of the fugitives of methane happen upstream of the of the export terminals,” Duren said.

Duren said, however, that LNG facilities are major energy users and release substantial carbon dioxide.

He added Carbon Mapper overflights had also found at least one instance of a large methane plume coming off an LNG tanker, the result of so-called boil off where frigid liquid fuel warms into its gaseous state.

He said it was unclear how often that occurs because of the difficultly of tracking the ships.

Very little data is available on emissions from regasification and local distribution in buyer-nations.

Leading U.S. LNG exporter Cheniere Energy said it is seeking to measure its own climate impact to help the company improve its operations.

“We’re working to get a more specific understanding of the (greenhouse gas) footprint of our LNG from wellhead to end-use,” said Eben Burnham Snyder, a spokesperson for the company.

MiQ, a non-profit foundation that certifies lower-carbon gas, said it hopes to certify some U.S. shipments of LNG into Europe within the next few months after analyzing supply chain emissions.

(Reporting by Valerie Volcovici and Nichola Groom; Editing by Aurora Ellis)

April 14, 2022 0 comments

Breaking News Maryland News Police Blotter

Two Shot Including 16-Year-Old in Eastern Baltimore

by Kristen Harrison-Oneal April 14, 2022

By: Kristen Harrison-Oneal

BALTIMORE, MARYLAND – The Baltimore Police Department is investigating a double shooting which took place on April 14th. This incident happened at 11:11pm on the 1800 Block of North Castle Street in Eastern Baltimore.

According to detectives, “Officers located a 29-year-old male victim suffering from an apparent gunshot wound to the right ankle. And a second 16-year-old male victim suffered from an apparent gunshot wound to the right upper arm. Both victims were transported to an area hospital with non-life-threatening injuries. Eastern District Shooting detectives responded to the scene and assumed control over the investigation. “

If you have any information about this incident, please call 410-396-2433. or the Metro Crime Stoppers tip-line at 1-866-7LOCK-UP.

April 14, 2022 0 comments

Department of Justice Press Releases

Columbia Woman Sentenced for Meth Trafficking

by DOJ Press April 14, 2022

By: DOJ Press

JEFFERSON CITY, Mo. – A Columbia, Mo., woman was sentenced in federal court today for methamphetamine trafficking after she received a large package of methamphetamine shipped from California to distribute locally.

Cassiopeia Marie Blaise, 37, was sentenced by U.S. District Judge Stephen R. Bough to eight years in federal prison without parole.

Blaise pleaded guilty on Aug. 31, 2021, to possessing methamphetamine with the intent to distribute. Co-defendant Bryan Patton Tullous, 39, of Columbia, was sentenced on Feb. 11, 2022, to 10 years and 11 months in federal prison without parole after pleading guilty to participating in a conspiracy to distribute methamphetamine.

On April 26, 2019, law enforcement officers intercepted a package from California that had been shipped to the residence shared by Tullous and Blaise. The package contained approximately 5.6 pounds of methamphetamine in five individual packages that weighed approximately one pound (453 grams) each, for a total of 2.209 kilograms of methamphetamine. Officers conducted surveillance of the residence as the package was delivered to the front porch. Both Tullous and Blaise were outside; Blaise retrieved the package and took it inside the residence while Tullous was in a neighbor’s yard. Officers took both of them into custody and executed a search warrant of the residence. Officers found the opened package hidden under clothing at the foot of the bed in the master bedroom.

Officers also found a dozen firearms in various areas of the residence, including a loaded Smith & Wesson .380-caliber pistol laying near the package in the bedroom. In a safe in the garage, officers found a Mossberg .22-caliber rifle, a Snake Charmer 410 shotgun, a Browning .223-caliber rifle, a Bear River .38-caliber revolver, and a Charter Arms .38-caliber revolver. The Snake Charmer 410 shotgun had the stock cut off, making it useable as a pistol grip-type weapon.

Tullous admitted that he ordered the package and paid $12,000 for the methamphetamine.

This case was prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the East Central Drug Task Force, the Drug Enforcement Administration, the Missouri State Highway Patrol and the Columbia, Mo., Police Department.

April 14, 2022 0 comments

Department of Justice Press Releases

Towaoc Man Sentenced to Prison for Assaulting His Brother

by DOJ Press April 14, 2022

By: DOJ Press

DURANGO – The United States Attorney’s Office for the District of Colorado announces that a federal jury in Durango has found Alonzo Gary Summa, age 36, guilty of assault resulting in serious bodily injury and assault with a dangerous weapon. The judge sentenced him to 96 months in prison.

At trial, the government presented evidence that on August 11, 2020, Summa cut his half-brother with a knife during an argument in Towoac, Colorado, on the Ute Mountain Ute Indian Reservation. Around the time of the assault, Summa sent the victim a Facebook message that said “I suggest u watch where u go from now And watch your back…I’m comeing [sic] after u.” Summa’s assault left the victim with a seven-inch, permanent scar. Evidence presented at trial showed that the victim feared retaliation from Summa for his participation in the case. At the time of the assault, the defendant was on supervision for a federal conviction for an assault that also involved a knife, 17-cr-00147-REB.

The jury announced its verdict on November 12, 2021. Summa was sentenced by the Honorable Senior District Court Judge Robert E. Blackburn on February 11, 2022, to serve 78 months in prison, to be followed by a three-year term of supervised release. Summa was also sentenced to serve an additional 18 months in prison for violating his prior federal supervised release, which he was on at the time of this offense.

“Prosecuting violence inflicted towards family members always presents challenges, especially in a small community such as Towaoc,” said United States Attorney Cole Finegan. “Our office remains committed to holding accountable violent offenders in Indian Country.”

The Bureau of Indian Affairs at the Ute Mountain Ute Indian Reservation investigated this matter. Assistant United States Attorneys R. Josh Player and Jeffrey K. Graves handled the prosecution.

Case number: 20-cr-00262-REB-GPG

April 14, 2022 0 comments

Department of Justice Press Releases

Sex Trafficking Conspiracy Member Sentenced to Nine Years in Federal Prison

by DOJ Press April 14, 2022

By: DOJ Press

Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Lakeya Aldridge age 41, of Federalsburg, Maryland to nine years in federal prison, followed by five years of supervised release, for conspiracy to commit kidnapping.

The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Assistant Attorney General Kristen Clarke of the Department of Justice’s Civil Rights Division; Special Agent in Charge James R. Mancuso of Homeland Security Investigations (HSI) Baltimore; Colonel Woodrow W. Jones III, Superintendent of the Maryland State Police; Chief Michael McDermott of the Federalsburg Police Department; and Colonel Melissa Zebley of the Delaware State Police Department.

According to her guilty plea, in October 2018, Aldridge participated in a conspiracy to traffic Victim 1 led by Joshua Lankford, age 33, of Federalsburg, Maryland. Victim 1 had been engaging in commercial sex acts on her own before being approached by Lankford. Knowing of Victim 1’s drug addition, Lankford lured Victim 1 into performing commercial sex acts at his direction with the promise that he would help Victim 1 make more money to buy a house and attain custody of her son.

Days after luring Victim 1 to conduct commercial sex dates at his direction, Lankford recruited Aldridge, Kevonne Murphy, age 31, of Federalsburg, Maryland; and David Goodwin, age 29 of Federalsburg, Maryland to participate in the sex trafficking conspiracy. Throughout the conspiracy, Aldridge forced Victim 1 to continue to engage in commercial sex acts and maintained Victim 1 in exchange for money from Lankford.

Specifically, on October 29, 2018, the conspiracy members drove Victim 1 back to Maryland from Delaware where she continued to engage in commercial sex acts and provided all funds she was paid to the co-conspirators. After one commercial sex act, Victim 1 returned to the co-conspirators and gave them the money she had collected. Aldridge and Murphy yelled at Victim 1 for not making enough money. Fearing for her safety, Victim 1 attempted to escape by attempting to jump out of Aldridge’s moving car. Aldridge then removed her belt and another co-conspirator put it around Victim 1’s neck to prevent her from escaping. Murphy then contacted Lankford and informed him of Victim 1’s escape attempt. Subsequently, Aldridge, Lankford, and the other conspiracy members drove to railroad tracks in a dark and remote location where Aldridge and her co-conspirators physically assaulted Victim 1 with Aldridge’s belt to maintain her compliance.

After assaulting Victim 1, Aldridge and her co-conspirators transported Victim 1 to a motel in which Victim 1 was prohibited from wearing clothes for the remainder of the evening. Victim 1 was also forced to take a cold shower to cause her to suffer. Later that night, the co-conspirators drafted a sex acts sheet which listed acts that the victim would be required to perform for customers moving forward. The sex acts sheet was later recovered pursuant to a search warrant of the motel room.

As detailed in his plea agreement, on the morning of October 30, 2018, Victim 1 accessed Aldridge’s cell phone and called 911. Upon arrival at the motel room, Murphy opened the door for Delaware State police troopers. Troopers saw Victim 1 standing behind Murphy and Victim 1 began indicating that she was in distress. The three conspirators were then detained.

Report suspected instances of human trafficking and sex trafficking to HSI’s tip line at 866-DHS-2ICE (1-866-347-2423) or by completing its online tip form. Both are staffed around the clock by investigators.

United States Attorney Erek L. Barron and Assistant Attorney General Kristen Clarke commended the HSI Baltimore and Philadelphia offices, the Maryland State Police Department, the Federalsburg Police Department, and the Delaware State Police Department for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Mary W. Setzer and Leah Branch of the Department of Justice’s Human Trafficking Prosecution unit, who are prosecuting the case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit https://www.justice.gov/usao-md/human-trafficking and https://www.justice.gov/usao-md/community-outreach.

# # #

April 14, 2022 0 comments

Department of Justice Press Releases

Russian Legislator And Two Staff Members Charged With Conspiring To Have A U.S. Citizen Act As An Unregistered Agent Of The Russian Government In The United States

by DOJ Press April 14, 2022

By: DOJ Press

Damian Williams, the United States Attorney for the Southern District of New York, Matthew G. Olsen, the Assistant Attorney General for National Security, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging ALEKSANDR MIKHAYLOVICH BABAKOV, ALEKSANDR NIKOLAYEVICH VOROBEV, and MIKHAIL ALEKSEYEVICH PLISYUK, citizens of the Russian Federation (“Russia”), with conspiring to act in the United States as an unregistered agent of Russia, conspiring to violate United States sanctions, and conspiring to commit visa fraud. BABAKOV, a Deputy Chairman in the Russian legislature, VOROBEV, and PLISYUK are based in Russia and remain at large.

U.S. Attorney Damian Williams said: “Russian legislator Aleksandr Babakov and two of his staffers allegedly orchestrated a covert Russian propaganda campaign in the U.S. in order to advance Russia’s malevolent political designs against Ukraine and other countries, including the U.S. Today’s indictment demonstrates that Russia’s illegitimate actions against Ukraine extend beyond the battlefield, as political influencers under Russia’s control allegedly plotted to steer geopolitical change in Russia’s favor through surreptitious and illegal means in the U.S. and elsewhere in the West. Such malign foreign interference will be exposed, and we will pursue justice against its perpetrators.”

Assistant Attorney General Matthew G. Olsen said: “The indictment alleges that a high-ranking Putin-aligned legislator and his closest staffers, all three of whom are sanctioned, engaged in a global campaign to influence and gain access to U.S. elected officials. The Department will not hesitate to prosecute those who seek to covertly influence the American political process and evade U.S. sanctions.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “Beginning as far back as 2012, Aleksandr Babakov, an oligarch who has served as a leader in the Russian legislature along with two of his deputies, operated a nonprofit organization as a subterfuge for an international foreign influence and disinformation network to advance the interests of the Russian Government. As alleged, Babakov sought to undermine Western sanctions – including those imposed against him – promote Russia’s illicit actions designed to destroy Ukrainian sovereignty, and co-opt and cultivate relationships with U.S. politicians to advance Russia’s malign foreign policy objectives. Today’s action demonstrates the FBI’s unwavering commitment to the identification and disruption of Russian Government schemes to target the national security and foreign policy of the United States.”

According to the allegations contained in the Indictment unsealed today in Manhattan federal court[1]:

Beginning in or around January 2012 and continuing into at least June 2017, Babakov, a member of the Russian legislature, Vorobev, his Chief of Staff, and Plisyuk, another member of Babakov’s staff, operated an international foreign influence and disinformation network to advance the interests of Russia. The defendants used a nonprofit organization based in Russia, the “Institute for International Integration Studies,” as a front for this global foreign influence campaign to advance Russia’s foreign policy objectives. Through these operations aimed at influencing the course of international affairs, the defendants worked to weaken U.S. partnerships with European allies, undermine Western sanctions, and promote Russia’s illicit actions designed to destroy the sovereignty of Ukraine. The defendants schemed to affect U.S. policy towards Russia through staged events, paid propaganda, and the recruitment of at least one American citizen (“CC-1”) to do their bidding in unofficial capacities. In pursuit of these goals, the defendants sought to co-opt U.S. and European politicians and to influence public opinion in their favor, using American and European citizens as their proxies in an effort to validate them, bring them access to power, evade sanctions, and obscure their true objective to advance Russia’s foreign policy.

Among other things, the defendants contacted members of the U.S. Congress from 2012 into 2017 to seek meetings and to offer free travel to at least one Congressmember on behalf of BABAKOV, as well as other foreign officials aligned and associated with BABAKOV. For example, in 2012, at the direction of the defendants, CC-1 sought to secure a meeting for BABAKOV with multiple members of Congress, including by offering a trip to a particular Congressmember “all expenses paid” to meet with European politicians and receive “an award.” Congressmembers rebuffed these efforts.

In March 2017, the defendants sought to arrange a meeting for BABAKOV with a member of the U.S. Congress in pursuit of the objective of “strengthen[ing] the ties of cooperation between” Russia and the United States. To secure that meeting, the defendants, through CC-1, transmitted a letter drafted by CC-1 and signed by BABAKOV to a particular Congressmember.

Also in March 2017, the defendants contacted at least one member of the U.S. Congress to offer free travel to a BABAKOV-affiliated conference in Yalta, part of Russia-controlled Crimea, as a service to benefit the purported “Prime Minister of Crimea,” Sergey Aksyonov, who was organizing and attending the conference, and had been sanctioned by the United States Department of Treasury’s Office of Foreign Assets Control (“OFAC”) as a Specially Designated National since 2014 based on his role in actions and policies threatening the sovereignty of Ukraine. The defendants worked together and with their associates to organize, facilitate, and promote the Yalta conference, including by soliciting Americans to attend and present at the conference and receive funding from Aksyonov’s organizing committee, for the benefit of Akysonov and his Russia-backed purported government of Crimea. The Congressmember did not accept the offer.

In connection with these foreign influence activities, the defendants also submitted fraudulent visa applications in February 2017 seeking to travel to the United States under the false pretense of each traveling alone for a “vacation,” when in fact they planned to conduct unofficial meetings with U.S. politicians and advisors to further their influence objectives. In June 2017, OFAC sanctioned the three defendants as Specially Designated Nationals. The defendants’ visa applications were ultimately denied in January 2018, disrupting the defendants’ planned meetings in the U.S.

BABAKOV currently serves as the Deputy Chairman of the State Duma, the lower house of the Russian legislature. From approximately September 2014 to October 2021, BABAKOV served as a member of the Russian Federation Council, the upper house of the Russian legislature, and therefore had the title of “Senator.” From approximately 2003 to 2014, BABAKOV served as a member of the State Duma, where he held prominent roles such as Chair of the State Duma Commission on Legislative Provisions for Development of the Military-Industrial Complex of the Russian Federation. In or about 2011, BABAKOV joined the United Russia party, which is the political party of Russian President Vladimir Putin. On or about June 17, 2012, Putin appointed BABAKOV to be the Russian Federation’s Special Representative for Cooperation with Organizations Representing Russians Living Abroad. BABAKOV has become a leader in the “For Truth” party formed in or about 2021, which supports Putin. At all times relevant to the Indictment, VOROBEV has held the position of Chief of Staff for BABAKOV, and PLISYUK has served on BABAKOV’s staff.

* * *

BABAKOV, 59, VOROBEV, 52, and PLISYUK, 58, of Russia, are charged with one count of conspiring to have a U.S. citizen act as an unregistered agent in the United States for Russia and Russian officials without notifying the Attorney General, which carries a maximum sentence of five years in prison; one count of conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act, which carries a maximum sentence of 20 years in prison; and one count of conspiring to commit visa fraud, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division, and thanked the Department of Justice’s National Security Division, Counterintelligence and Export Control Section, for their assistance.

On March 2, 2022, the Attorney General announced the launch of Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with allies and partners, in response to Russia’s unprovoked military invasion of Ukraine. The task force will leverage all the Department’s tools and authorities against efforts to evade or undermine the economic actions taken by the U.S. government in response to Russian military aggression.

The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Kimberly J. Ravener and Kyle A. Wirshba are in charge of the case, with assistance from Trial Attorney Scott Claffee of the Counterintelligence and Export Control Section.

The charges in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

April 14, 2022 0 comments

Department of Justice Press Releases

Two Vieques Residents Plead Guilty to Concealing Over One Million Dollars in Cash on a Vessel Outfitted for Smuggling in USVI Waters

by DOJ Press April 14, 2022

By: DOJ Press

St. Thomas, USVI – Julius Alvarez-Gonzalez and Jimmy Garcia-Quinonez, of Vieques, PR, each entered guilty pleas to the charge of concealing over one million dollars in cash on a vessel outfitted for smuggling, United States Attorney Gretchen C.F. Shappert for the District of the Virgin Islands announced today.

According to court documents, on July 26, 2021, Customs and Border Protection (CBP) Air and Marine (AMO) agents stopped a vessel traveling without navigational lights, heading toward the western portion of St. Thomas, USVI. Prior to boarding, agents observed the defendants onboard the vessel. When the defendants saw the agents, they threw a large duffel bag overboard. Agents subsequently recovered and searched the duffel bag, which contained over one million dollars in US currency.

The boat captain, Defendant Alvarez, faces 33 months incarceration and Defendant Garcia faces 30 months incarceration. Both Defendants face a maximum fine of up to $250,000 dollars, and a term of supervised release of up to 3 years. Sentencing will be scheduled at a later date.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces’ (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

April 14, 2022 0 comments

Department of Justice Press Releases

Former Postal Employee Admits Fraud in Connection with Unemployment Insurance Benefits

by DOJ Press April 14, 2022

By: DOJ Press

NEWARK, N.J. – A former U.S. Postal Service USPS employee today admitted that he conspired to fraudulently obtain unemployment insurance benefits, U.S. Attorney Philip R. Sellinger announced.

Ross Clayton, 31, of Irvington, New Jersey, pleaded guilty by videoconference before U.S. District Judge Julien X. Neals to an information charging him with conspiring to commit wire fraud.

According to documents filed in the case and statements made in court:

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act created a new temporary federal unemployment insurance program called Pandemic Unemployment Assistance (PUA), which provided unemployment insurance benefits for individuals who were not eligible for other types of unemployment (the self-employed, independent contractors, gig economy workers). The CARES Act also created a new temporary federal program called Federal Pandemic Unemployment Assistance (FPUC) that provided an additional $600 weekly benefit to those eligible for PUA and regular unemployment insurance benefits.

Clayton was a USPS employee. Clayton took unemployment insurance benefits-related mail, including debit cards, from a USPS location in New Jersey and used that mail to obtain unemployment insurance benefits to which he was not entitled.

The charge of conspiring to commit wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000, twice the gross profits to Stokes or twice the gross loss suffered by the victims. Sentencing is scheduled for Sept. 7, 2022.

U.S. Attorney Sellinger credited special agents of the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Jonathan Mellone in Manhattan; and postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Postal Inspector in Charge Damon Wood, Philadelphia Division, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.

April 14, 2022 0 comments

Department of Justice Press Releases

Two Marketers Sentenced for Engaging in an Illegal Health Care Kickback Scheme

by DOJ Press April 14, 2022

By: DOJ Press

Two men were sentenced in federal court Wednesday for helping orchestrate a scheme where physicians received kickback payments in exchange for writing and referring expensive compounded drug prescriptions to OK Compounding, announced U.S. Attorney Clint Johnson.

Johnathon Yates Boyd III, 50, of Katy, Texas, was sentenced to 12 months of probation and ordered to pay $391,475.41 in restitution. Bryan Fred Woodson, 61, of Beach City, Texas, was sentenced to 12 months of probation and ordered to pay $553,232.45 in restitution.

Boyd III and Woodson each pleaded guilty to conspiracy to pay kickbacks.

It is illegal to pay or receive “kickbacks” in conjunction with federal health care insurance. Prohibitions against kickbacks are crucial to ensure that financial motives do not undermine the medical judgment of physicians and other health care providers.

Boyd III and Woodson admitted to conspiring together with Christopher Parks, 60, of Jenks, and Dr. Gary Lee, 61, of Tulsa, to enrich themselves through the scheme at the expense of the federal government.

According to court documents, Boyd III and Woodson, formed R&A Marketing Group LLC around 2012. R&A Marketing introduced its recruited physicians to OK Compounding, a pharmacy controlled and operated by Parks and Lee, for the purpose of entering into a referral relationship with the pharmacy. The conspirators provided illegal kickbacks and bribes to the physicians, and in return, the physicians wrote expensive patient prescriptions for compounded drugs and referred those prescriptions to OK Compounding. The pharmacies then submitted large claims for payment of the costly prescriptions to various federal health care programs.

Physicians were allegedly provided pre-printed prescription pads that listed compounded formula choices. They would then check a box with their preferred selection then fax it directly to OK Compounding, rather than writing a prescription tailored to the patient who could then take it to a pharmacy of their choice.

Payments to physicians were disguised through various sham business arrangements. For example, physicians would enter into agreements with a pharmacy to serve as “medical directors” or “consulting physicians.” However, physicians did not provide any services to OK Compounding nor any other pharmacies controlled by Parks and/or Lee.

In exchange for recruiting physicians to enter into contracts as “medical directors” or “consulting physicians”, R&A Marketing was paid a commission based on the reimbursed prescriptions.

Compounding prescriptions is a practice in which a pharmacist or physician combines, mixes or alters ingredients of a drug or multiple drugs to create a medication that is tailored to the specific needs of a patient. These medications are prescribed when standard Food and Drug Administration (FDA) approved drugs are unsuitable for the patient. They are also more expensive and reimbursed at a far higher rate by federal and private insurance companies. Compounded drugs are not to be mixed or marketed in bulk.

OK Compounding is no longer in operation. Charges are currently pending against Parks and Lee. They are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Veteran’s Affairs- Office of Inspector General, Defense Criminal Investigative Service, Department of Labor- Office of Inspector General (OIG), IRS- Criminal Investigation, U.S. Postal Service- OIG, FBI and the Department of Health and Human Services-OIG conducted the investigation. Assistant U.S. Attorneys Melody Noble Nelson and Richard M. Cella prosecuted the case.

April 14, 2022 0 comments

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