Daily Archives: April 5, 2016

Leader of Justice Department’s financial crisis investigations stepping down

Stuart Delery, the third in command at the Department of Justice and leader of the DOJ’s investigations into the conduct of banks during the financial crisis, is stepping down to pursue interests in the private sector.

Delery took over as Acting Associate Attorney General when Tony West stepped down in 2014.

In his time as the lead of the DOJ’s Civil Division, Delery oversaw massive settlements with several financial institutions for their business practices during the financial crisis, including a $200 million settlement with U.S. Bancorp for False Claims Act Violations, a $601 million settlement with HSBC over charges that the bank engaged in mortgage origination, servicing and foreclosure abuses, a $50 million settlementwith JPMorgan Chase over improperly signed bankruptcy documents, and others.

According to the DOJ, Delery is leaving the DOJ later this month, and a report fromBloomberg states that a replacement for Delery is waiting in the wings.

From Bloomberg:

Assistant Attorney General Bill Baer, who heads the antitrust division, will likely be named to replace him on an acting basis, according to a person familiar with the matter, who asked not to be named because the selection isn’t public.

Read on.

Bernie Sanders Called Out Panama As A ‘World Leader’ In Tax Evasion Years Ago


U.S. Senator Bernie Sanders

19 hours ago

Bernie opposed the 2011 Panama Free Trade Agreement because he was worried it would increasingly allow wealthy Americans and large corporations to evade U.S. taxes by stashing their cash in offshore tax havens. Now with the release of the Panama Papers it appears he was right. They show that over 214,000 offshore companies are using Panama to evade taxes. That is unacceptable, and that has got to change.


Americans show up in the Panama Papers, too

No politicians of note are in files but plenty of others

Among them: Retirees, scammers, and tax evaders

All find a use for secrecy of offshore companies

Determining a precise number of Americans in the data is difficult. There are at least 200 scanned individual U.S. passports. Some appear to be American retirees purchasing real estate in places like Costa Rica and Panama. Also in the database, about 3,500 shareholders of offshore companies who list U.S. addresses. And almost 3,100 companies are tied to offshore professionals based in Miami, New York, and other parts of the United States.

Further complicating matters, some U.S. citizens enjoy dual citizenship and open accounts under foreign passports. Others appeared to be American retirees purchasing real estate in places like Costa Rica and Panama.

Among the cases McClatchy and its partners found:

▪ Robert Miracle of Bellevue, Wash., is in the files. He was indicted for a $65-million Seattle-area Ponzi scheme involving investment in Indonesian oilfields, with new investors’ money allegedly used to pay off past investors. Miracle was sentenced on May 13, 2011, to 13 years in prison after pleading guilty to wire fraud and tax evasion.

Miracle’s company was called Mcube Petroleum, and it remained an active shareholder in several offshore companies in the British Virgin Islands up until he pleaded guilty. The offshores were created by Mossack Fonseca.

▪ Benjamin Wey is a U.S. citizen and president of New York Global Group. He was indicted last year, along with his Swiss banker, Seref Dogan Erbek, on securities fraud charges. Wey’s alleged scheme to conceal a true ownership interest in publicly traded companies was at the heart of the charges. Wey is accused of using offshores set up with Mossack Fonseca to disguise complicated transactions between Chinese operating companies and publicly traded U.S. shell companies.

The two “are believed to have profited in the tens of millions, while victim shareholders were left holding the bill,” Diego Rodriguez, an FBI official involved in the case, said in a statement at the time of indictment.

▪ Florida billionaire Igor Olenicoff, a commercial real estate mogul, appears in the data as a shareholder of Olen Oil Management Limited. He raised a national stir in 2007 after being sentenced to just two years of probation for tax evasion. He paid a $52 million fine after not declaring more than $200 million in offshore shell companies. More recently, he was found guilty in 2014 for making replicas of a pricey sculpture and was ordered to make restitution to the sculptors whose work he had copied.

▪ There’s Anthony J. Gumbiner, the Dallas-area chairman of Hallwood Group Inc. He’s a British national with deep Texas ties who settled an insider trading case in 1996 with the Securities and Exchange Commission, paying $1.7 million in penalties at the time.

A jetsetter in the 1980s, Gumbiner was known for his lavish lifestyle in Monte Carlo. More recently, he’s been tied up in litigation over oilfield investments. His Hallwood Energy filed for Chapter 11 bankruptcy protection in 2009.

It wasn’t until 2015 that the law firm seemed to catch on to Gumbiner’s legal problems and started to conduct enhanced background checks. By then his offshore companies had been inactive since 2011.

▪ And there’s John Michael “Red” Crim, author of the self-published books “From Here to Malta,” and “I’ve Been Arrested, Now What?”

Federal jurors in Philadelphia in January 2008 convicted Crim and two associates in a plot to have investors use phony trusts to cheat the IRS out of roughly $10 million in tax revenue.

Iceland’s Prime Minister Resigns, First Casualty of #PanamaPapers

Who else is next?

Iceland’s prime minister, Sigmundur Davíð Gunnlaugsson, resigned on Tuesday, becoming the first leader to be forced from office over the secret financial dealings revealed by the Panama Papers leak.

The prime minister, who was elected as a reformer in 2009, promising transparency following the ruinous collapse of three Icelandic banks the year before, failed to disclose that his family secretly held bonds worth millions of dollars in the same banks, through a shell company in the British Virgin Islands.

Gunnlaugsson told members of his Progressive Party that he would be replaced by the minister of fisheries, Sigurður Ingi Jóhannesson, according to Reykjavik Media, a local investigative site whose founder, Jóhannes Kr. Kristjánsson, confronted the prime minister during an on-camera interview on Sunday.

Read on.

Victim in Wall St. Scheme Was a Classmate of Its Accused Architect

When Andrew Caspersen sought money for an investment that federal authorities said duped investors out of tens of millions of dollars, one of the people the former Wall Street executive turned to was a college classmate atPrinceton University.

James McIntyre, a managing director at the hedge fund Moore Capital Management, is the previously unidentified individual who federal prosecutors said last week invested — and lost — $400,000 in Mr. Caspersen’s scheme and also recommended that a charitable trust affiliated with Moore Capital invest nearly $25 million.

Mr. McIntyre did not return requests for comment. His identity as a victim in the scheme, however, was confirmed by two people with direct knowledge of the case who spoke on condition of anonymity because they were not authorized to speak publicly.

He and Mr. Caspersen attended Princeton together and graduated in 1999. Each found his own path to work for a Wall Street firm after graduate school: Mr. Caspersen went to Harvard Law School, and Mr. McIntyre received his M.B.A. from Columbia University. Along with their wives, both men shared an interest in Latin America and were donors to Princeton in Latin America, a nonprofit organization that funds projects and fellowships in the region for students, as recently as 2011.

Read on.

Meet Mr. Cooper, an established mortgage company with an altered ego

COPPELL — Inside the airy lobby, long robin’s egg blue banners bear encouragement to be, “Challengers. Champions. Cheerleaders.”

In a stairwell nearby, employees bustle past while Kevin Dahlstrom points out a soaring, crayon-box bright mural of an open hand.

It was painted by the Spanish artist Adrian Torres as part of an artists in residence program — a concept he “shamelessly stole” from Facebook, Dahlstrom notes.

Visitors may not realize this is the nerve center of Nationstar, one of the country’s biggest nonbank mortgage servicers. And odds are that even if they do, their feelings about an institution like Nationstar — vaguely bankish, closely associated with the mortgage crisis that shattered the economy — won’t be positive.

But will they like Mr. Cooper?

Not Mr. Cooper, as in, “Hangin’ with …” or the guy in “High Noon.”

It’s “Mr. Cooper,” as in Nationstar’s exhaustively researched, head-turning-by-design new identity.

Executives at Nationstar have spent more than a year and roughly $5 million on the branding overhaul in hopes that consumers will see the new name as an extension of the company’s new ethos: Personable, customer-focused and easily navigable online.

Read on.

U.S. Supreme Court rejects Wal-Mart, Wells Fargo class action appeals

he U.S. Supreme Court on Monday rejected two corporate challenges in class action cases, refusing to hear bids by Wal-Mart Stores Inc (WMT.N) and Wells Fargo & Co to throw out large judgments against them.

Wal-Mart had sought to get rid of a $187 million class action judgment over the retailer’s treatment of workers in Pennsylvania. Wells Fargo & Co wanted the justices to toss a $203 million judgment over allegations the bank had imposed excessive overdraft fees.

The court’s decisions on whether to hear the cases had been on hold pending its action in a separate class action case involving Tyson Foods Inc.

Read on.