Wiadomości
2009-06-13
FRAUD NEWS JUNE 2009
FRAUD NEWS JUNE 2009
Three jailed over UK visa fraud
in west London have been jailed over what is said to be one of the UK's biggest visa scams.
Rakhi Shahi, 31, was found guilty of conspiracy to defraud, handling criminal property and immigration offences at Isleworth Crown Court.
Jatinder Kumar Sharma, 44, her husband, admitted his part in the scam in March.
Neelam Sharma, 38, (...)
Three jailed over UK visa fraud
in west London have been jailed over what is said to be one of the UK's biggest visa scams.
Rakhi Shahi, 31, was found guilty of conspiracy to defraud, handling criminal property and immigration offences at Isleworth Crown Court.
Jatinder Kumar Sharma, 44, her husband, admitted his part in the scam in March.
Neelam Sharma, 38, (...)
FRAUD NEWS JUNE 2009
Three jailed over UK visa fraud
in west London have been jailed over what is said to be one of the UK's biggest visa scams.
Rakhi Shahi, 31, was found guilty of conspiracy to defraud, handling criminal property and immigration offences at Isleworth Crown Court.
Jatinder Kumar Sharma, 44, her husband, admitted his part in the scam in March.
Neelam Sharma, 38, also thought to be Sharma's wife, was found guilty of handling some of the cash in the scam.
But she was cleared of conspiracy to defraud and immigration offences.
Both women had denied the charges. All three lived in Clarence Street in Southall, from where they ran their consultancy Univisas.
Shahi, an illegal immigrant, was jailed for eight years while Neelam Sharma was jailed for four years for money laundering.
Jatinder Kumar Sharma was jailed for seven years.
He admitted seeking or obtaining leave to enter or remain in the UK by deception, possession of identity document with intent, conspiracy to defraud, possessing criminal property and two counts of theft.
The court heard he has been married to Neelam Sharma for about 20 years and recently also married Shahi. Both marriages took place in India.
Sentencing Judge Richard McGregor-Johnson said the criticisms of the government agencies were "plainly well founded".
"The checks were woefully inadequate and frequently non-existent.
"You (the defendants) saw the weaknesses in those systems and dishonestly exploited them."
'Damning indictment'
The group created thousands of bogus documents including college degree certificates, tax and wage forms, references and academic records, to secure UK visas including student visas.
The scam exploited the Highly Skilled Migrant Programme, the International Graduate Scheme and other leave-to-remain visa applications.
Police suspect the company secured visas for at least 1,000 people, mostly from the Indian sub-continent, using a network of bogus colleges in London, Manchester, Bradford and Essex.
Eight Pakistani terror suspects who were arrested earlier this year during raids in Manchester and Liverpool are also thought to have used a similar scam to gain UK visas.
The UK Border Agency, the Home Office and the Office of the Immigration Services Commissioner (OISC) were criticised for a "shambolic" system which the fraudsters exploited.
Prosecutor Francis Sheridan told the court the evidence against the trio presented a "damning indictment" of failures of the UK's border controls.
The court heard Home office employees failed to spot discrepancies in employment certificates and wage slips and that some students appeared to have attended two full-time courses simultaneously.
Several applicants gave the same address and in one case one person's sex changed in the middle of the immigration process.
'Major international conspiracy'
Last February the Metropolitan Police and the UK Border Agency raided Univisas' office and found 90,000 documents, including false university certificates and pay slips.
Officers also found passports, 150 ink stamps and £22,500 in cash and seized 980 individual files.
The court heard the fraudsters charged hundreds and thousands of pounds as fees and were confident enough to offer a money-back guarantee to clients.
The scam garnered more than £1.5m in two years, of which police have so far been able to seize £420,000.
Jatinder Sharma was caught when he offered to get an undercover newspaper reporter a post-graduate diploma in business administration and other papers for about £4,000.
Following the verdict Tony Smith, the regional director of the UK Border Agency, said: "This was one of the largest joint investigations ever undertaken by the UK Border Agency and police.
"We believe we have cracked a major international conspiracy to facilitate the entry of illegal immigrants into the UK.
"Those behind it showed total disregard for the law, and their motives were purely financial."
UK companies linked to Iraqi reconstruction fraud inquiry
June 4, 2009
Tim Reid in Washington and Adam Fresco
Two British companies have been linked to a multi million-pound fraud concerning a “ghost” delivery of equipment to Iraq, as part of a US investigation into how billions of dollars in reconstruction funds went missing.
The companies are named in court papers, seen by The Times, involving an American businessman who pleaded guilty in April to being part of the scam. Together, it is alleged, they received .5 million for dozens of armoured vehicles that were meant for the Iraqi Interior Ministry but which were never delivered.
A former British Army officer and a retired senior officer in the Metropolitan Police are both mentioned for their role in the alleged fraud.
The case is one of dozens in which American investigators are trying to determine how billions of dollars were spent in the early days of the US-led Coalition Provisional Authority, when money was carted around stuffed into sports bags during a period that one official described as “the Wild West”.
According to the documents, in June 2004 a British company called Zeroline was awarded a military contract to deliver 51 vehicles to Iraq for the sum of ,480,550. US federal prosecutors say that after Zeroline was awarded the contract, it subcontracted the building and delivery of the vehicles to Alchemie Technology Group, based in London, and its subsidiary, APTx Vehicle Systems.
Benjamin Kafka, who pleaded guilty to his role in the scam, is listed on Alchemie’s website as president of its North American operations.
A month before the vehicles were meant to be delivered — in June 2005 — prosecutors allege that Zeroline and Alchemie presented false documents to JPMorgan Chase Bank in London, claiming payment for the vehicles even though they had neither been built nor handed over.
The bill of lading — a document to show that a cargo has been placed in transportation — was from a fake company called GNX Logistics, located at Kafka’s address in Massachusetts.
Alchemie’s chief executive, des-cribed as a former British Army officer, sent the false bill of lading to Kafka. “Kafka knew and permitted and others to create a false bill of lading indicating shipment and receipt of the vehicles on a business form of a non-existent entity called GNX,” court documents state.
In December 2005, US officials terminated the contract for non-performance, unaware that payment had been made six months earlier.
Zeroline’s address is given as 11 Station Road South, in Great Yarmouth. When The Times called the offices of Zeroline, a woman said that there was no one available. Subsequent calls went unanswered. The address is a shabby, sprawling bungalow and is thought to belong to a Peter Tarrant and his wife. One neighbour said that Mr Tarrant had “not been around for a while — I heard that he was in Dubai for several months last year”.
Calls to the offices of Alchemie in London were referred to Simon Ratcliffe, a solicitor from Greene and Greene, based in Suffolk. He said that he could not comment on whether his clients were being investigated in America or any other aspect of the claims.
BACKGROUND
How US lost billions in Wild West gamble to rebuild Iraq
From Tim Reid in Washington
AN AUDIT of US reconstruction spending in Iraq has uncovered spectacular misuse of tens of millions of dollars in cash, including bundles of money stashed in filing cabinets, a US soldier who gambled away thousands and stacks of newly minted notes distributed without receipts.
The audit, released yesterday by the US Special Inspector General for Iraq Reconstruction, describes a country in the months after the overthrow of Saddam Hussein awash with dollars, and a Wild West atmosphere where even multimillion-dollar contracts were paid for in cash.
The findings come after a report last year by the inspector general which stated that nearly billion (£5 billion) of Iraq’s oil revenue disbursed by the US-led Coalition Provisional Authority (CPA), which governed Iraq until mid-2004, cannot be accounted for.
The huge sums in cash were paid out with little or no supervision, and often without any paperwork, yesterday’s audit found. The report found problems with nearly 2,000 contracts worth .1 million.
In one case, a US soldier gambled away more than ,000 while accompanying the Iraqi Olympic boxing team to the Philippines. In others, “one contracting officer kept approximately million in cash in a safe in his office bathroom”, the report says, “while a paying agent kept approximately 8,000 in cash in an unlocked footlocker”.
The lack of supervision had tragic consequences. A contract for 2,800 to refurbish the Hilla General Hospital was paid in full by a US official, even though the work was not finished. Instead of replacing a central lift, as demanded in the contract, workers only tinkered with the existing mechanism. Three months later the lift crashed, killing three Iraqis.
Cash was stolen during insurgent raids but never reported, the audit found. In another case, a contractor was paid 8,140 to refurbish completely the Hilla Olympic swimming pool. The contractor simply polished some of the pumps and piping to make it look as if new hardware had been installed. The pool has never reopened.
More than 160 vehicles worth about .3 million could not be traced because there was no proper documentation. Another project, a 3,000 contract to install an internet service in Ramadi, was cancelled because officials could not oversee it. But the contractor had already been paid.
A separate congressional inquiry has uncovered the sums of cash airlifted into Iraq after the invasion. Desperate for money, and with no banking system to receive wire transfers, the CPA, led by Paul Bremer, received UN approval to fund reconstruction with billion of seized Iraqi oil proceeds, most of it held in the US Federal Reserve in New York.
Soon, large quantities of cash began arriving in Baghdad, shipped in on C17 cargo planes. The cash arrived on pallets loaded with shrink-wrapped bundles of crisp 0 bills. The parcels, which soon became known as “bricks”, were handed out “like candy”, one Democrat congressman said.
In all, billion in cash, weighing 363 tonnes, was flown into Iraq. On December 12, 2003, one single flight to Iraq contained .5 billion in cash, the largest single Federal Reserve payout in US history, according to Henry Waxman, the Democrat congressman who is investigated the funding.
The US has so far spent 6 billion on the Iraq war. The CPA was allocated billion in US and Iraqi funds, and spent .7 billion of UN-administered Iraqi oil money.
FRITTERED AWAY
8,140 paid to contractor to refurbish Olympic swimming pool in Hilla. Work never done
2,800 paid to repair Hilla hospital. Much of work never done, including renewing central lift. Three people later died when lift crashed
,000 gambled away by US soldier assigned as assistant to Iraqi Olympic boxing team on trip to Philippines
million locked in a the bathroom safe of a US official
8,000 stashed away in an unlocked foot locker
3,000 paid for internet installation in Ramadi. Work never done
BACKGROUND
American faces Iraq fraud charge
By David Charter
The defendants were identified as Robert Stein, funding officer for the Coalition Provisional Authority in 2003 and 2004, and Philip Bloom, the owner of numerous construction and service companies.
These multimillion-dollar bribery and fraud charges are the first of a dozen similar corruption cases arising from the postwar reconstruction of Iraq, American officials said yesterday. Mr Bloom, who ran three companies competing for contracts, was charged with paying “bribes, kickbacks and gratuities” of at least 0,000 (£116,500) a month to members of the Coalition Provisional Authority and their spouses.
The case and others like it are likely to fuel further criticism of the reconstruction effort in Iraq, which has already cost .4 billion.
With the help of the alleged co-conspirators and others, Mr Bloom is said to have submitted multiple bids on the same contracts, using the names of different companies.
National Australia Bank Fraud Case Gets U.S. High Court Query
By Greg Stohr
June 1 (Bloomberg)
- The U.S. Supreme Court signaled it may consider how far the country’s securities fraud laws extend overseas, asking the Obama administration for advice on a shareholder lawsuit against National Australia Bank Ltd.
Australian shareholders of Melbourne-based NAB want the justices to review a federal appeals court’s decision that the suit was beyond the jurisdiction of U.S. courts. The investors’ appeal says HomeSide Lending Inc., formerly a Florida-based mortgage-service subsidiary of NAB, fraudulently overvalued its assets, eventually forcing .2 billion in writedowns.
Should the high court take up the case, it would become one of the top business disputes of the nine-month term that starts in October. The U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and the Securities and Exchange Commission all filed briefs when the dispute was before the 2nd U.S. Circuit Court of Appeals in New York.
The justices directed their request today to U.S. Solicitor General Elena Kagan, the administration’s top courtroom lawyer. She will receive input from the SEC, which supported the investors at the appeals court.
The case stems from NAB’s disclosure in 2001 that interest- rate assumptions used by HomeSide in a valuation model were incorrect and caused inflated estimates of mortgage-servicing fees. Writedowns in 2001 caused the bank’s American depositary receipts to fall more than 11 percent.
Fraud in the U.S.
The shareholders contend that the core of the alleged fraud occurred in the U.S., giving American courts jurisdiction to consider the case and apply U.S. securities laws.
“Every false statement made by NAB concerning HomeSide’s operations, results and value was a repetition of the false financial information that HomeSide concocted in Florida for the very purpose of misleading NAB’s shareholders,” the appeal argued.
The 2nd Circuit rejected that reasoning, noting in its 3-0 ruling that NAB compiled and issued its public statements in Australia.
“The actions taken and the actions not taken by NAB in Australia were, in our view, significantly more central to the fraud and more directly responsible for the harm to investors than the manipulation of the numbers in Florida,” the three- judge panel said.
NAB told the Supreme Court that “every single one” of the alleged misstatements and omissions were made in Australia by the parent company. NAB acquired HomeSide in 1998, then sold it to Washington Mutual Inc. in 2002.
Courts around the country have used different standards to determine whether judges can consider so-called “foreign cubed” lawsuits, those that involve non-U.S. plaintiffs, corporations and markets.
The case is Morrison v. National Australia Bank, 08-1191.
Last Updated: June 1, 2009 10:03 EDT
Bagger points finger at Swedish partner
WEDNESDAY, 10 JUNE 2009 15:46 KR NEWS
Denmark’s biggest fraud trial started today with Stein Bagger implicating Swedish businessman Mikael Ljungman as his co-conspirator
A reserved Stein Bagger appeared before Lyngby District Court today admitting his guilt in the massive fraud case that saw him defraud investors of 831 million kroner through his former company IT Factory via a complex leasing scheme.
As the list of 61 counts of fraud and forging of documents were read out, Bagger answered with a steady stream of ‘that’s right’, I forged that’ and ‘I did it’.
And as expected, the 42-year-old defendant confirmed that Swedish businessman Mikael Ljungman was his partner in the scam.
The two met in Stockholm in 2007 and it was Ljungman who lent Bagger his car and credit card when the Danish businessman went on the run to the States. Berlingske Tidende reports that according to the public prosecutor for serious economic crime, Ljungman’s involvement in keeping the leasing carousel running netted him up to 266 million kroner.
Ljungman has been charged as an accomplice and was arrested in Sweden at the end of April, but has denied all charges.
‘This is a clear scam and we’re both aware of it,’ said Bagger today of his involvement with Ljungman.
Bagger told the court that he received almost two million euro in cash from Ljungman between September 2007 and July 2008. Bagger picked up money from a Swedish courier at a Copenhagen Airport restaurant numerous times, as well as at the exclusive French Fregate hotel.
But the more Bagger needed the cash, the more Ljungman apparently wanted from the leasing scheme.
‘I was in a very difficult private situation…and he said that if I was going to get the cash, then the price was doubled. I really needed the money so I accepted it ,’ said Bagger.
When the two cheated Danish company Captive Finance, Ljungman allegedly took 66 percent of the profit, or 5.4 million kroner, while Bagger got the remaining third, 1.7 million kroner.
Having acknowledged all charges, Bagger now faces two more days in court before receiving a possible sentence of up to 12 years on Friday.
Three jailed over UK visa fraud
in west London have been jailed over what is said to be one of the UK's biggest visa scams.
Rakhi Shahi, 31, was found guilty of conspiracy to defraud, handling criminal property and immigration offences at Isleworth Crown Court.
Jatinder Kumar Sharma, 44, her husband, admitted his part in the scam in March.
Neelam Sharma, 38, also thought to be Sharma's wife, was found guilty of handling some of the cash in the scam.
But she was cleared of conspiracy to defraud and immigration offences.
Both women had denied the charges. All three lived in Clarence Street in Southall, from where they ran their consultancy Univisas.
Shahi, an illegal immigrant, was jailed for eight years while Neelam Sharma was jailed for four years for money laundering.
Jatinder Kumar Sharma was jailed for seven years.
He admitted seeking or obtaining leave to enter or remain in the UK by deception, possession of identity document with intent, conspiracy to defraud, possessing criminal property and two counts of theft.
The court heard he has been married to Neelam Sharma for about 20 years and recently also married Shahi. Both marriages took place in India.
Sentencing Judge Richard McGregor-Johnson said the criticisms of the government agencies were "plainly well founded".
"The checks were woefully inadequate and frequently non-existent.
"You (the defendants) saw the weaknesses in those systems and dishonestly exploited them."
'Damning indictment'
The group created thousands of bogus documents including college degree certificates, tax and wage forms, references and academic records, to secure UK visas including student visas.
The scam exploited the Highly Skilled Migrant Programme, the International Graduate Scheme and other leave-to-remain visa applications.
Police suspect the company secured visas for at least 1,000 people, mostly from the Indian sub-continent, using a network of bogus colleges in London, Manchester, Bradford and Essex.
Eight Pakistani terror suspects who were arrested earlier this year during raids in Manchester and Liverpool are also thought to have used a similar scam to gain UK visas.
The UK Border Agency, the Home Office and the Office of the Immigration Services Commissioner (OISC) were criticised for a "shambolic" system which the fraudsters exploited.
Prosecutor Francis Sheridan told the court the evidence against the trio presented a "damning indictment" of failures of the UK's border controls.
The court heard Home office employees failed to spot discrepancies in employment certificates and wage slips and that some students appeared to have attended two full-time courses simultaneously.
Several applicants gave the same address and in one case one person's sex changed in the middle of the immigration process.
'Major international conspiracy'
Last February the Metropolitan Police and the UK Border Agency raided Univisas' office and found 90,000 documents, including false university certificates and pay slips.
Officers also found passports, 150 ink stamps and £22,500 in cash and seized 980 individual files.
The court heard the fraudsters charged hundreds and thousands of pounds as fees and were confident enough to offer a money-back guarantee to clients.
The scam garnered more than £1.5m in two years, of which police have so far been able to seize £420,000.
Jatinder Sharma was caught when he offered to get an undercover newspaper reporter a post-graduate diploma in business administration and other papers for about £4,000.
Following the verdict Tony Smith, the regional director of the UK Border Agency, said: "This was one of the largest joint investigations ever undertaken by the UK Border Agency and police.
"We believe we have cracked a major international conspiracy to facilitate the entry of illegal immigrants into the UK.
"Those behind it showed total disregard for the law, and their motives were purely financial."
UK companies linked to Iraqi reconstruction fraud inquiry
June 4, 2009
Tim Reid in Washington and Adam Fresco
Two British companies have been linked to a multi million-pound fraud concerning a “ghost” delivery of equipment to Iraq, as part of a US investigation into how billions of dollars in reconstruction funds went missing.
The companies are named in court papers, seen by The Times, involving an American businessman who pleaded guilty in April to being part of the scam. Together, it is alleged, they received .5 million for dozens of armoured vehicles that were meant for the Iraqi Interior Ministry but which were never delivered.
A former British Army officer and a retired senior officer in the Metropolitan Police are both mentioned for their role in the alleged fraud.
The case is one of dozens in which American investigators are trying to determine how billions of dollars were spent in the early days of the US-led Coalition Provisional Authority, when money was carted around stuffed into sports bags during a period that one official described as “the Wild West”.
According to the documents, in June 2004 a British company called Zeroline was awarded a military contract to deliver 51 vehicles to Iraq for the sum of ,480,550. US federal prosecutors say that after Zeroline was awarded the contract, it subcontracted the building and delivery of the vehicles to Alchemie Technology Group, based in London, and its subsidiary, APTx Vehicle Systems.
Benjamin Kafka, who pleaded guilty to his role in the scam, is listed on Alchemie’s website as president of its North American operations.
A month before the vehicles were meant to be delivered — in June 2005 — prosecutors allege that Zeroline and Alchemie presented false documents to JPMorgan Chase Bank in London, claiming payment for the vehicles even though they had neither been built nor handed over.
The bill of lading — a document to show that a cargo has been placed in transportation — was from a fake company called GNX Logistics, located at Kafka’s address in Massachusetts.
Alchemie’s chief executive, des-cribed as a former British Army officer, sent the false bill of lading to Kafka. “Kafka knew and permitted and others to create a false bill of lading indicating shipment and receipt of the vehicles on a business form of a non-existent entity called GNX,” court documents state.
In December 2005, US officials terminated the contract for non-performance, unaware that payment had been made six months earlier.
Zeroline’s address is given as 11 Station Road South, in Great Yarmouth. When The Times called the offices of Zeroline, a woman said that there was no one available. Subsequent calls went unanswered. The address is a shabby, sprawling bungalow and is thought to belong to a Peter Tarrant and his wife. One neighbour said that Mr Tarrant had “not been around for a while — I heard that he was in Dubai for several months last year”.
Calls to the offices of Alchemie in London were referred to Simon Ratcliffe, a solicitor from Greene and Greene, based in Suffolk. He said that he could not comment on whether his clients were being investigated in America or any other aspect of the claims.
BACKGROUND
How US lost billions in Wild West gamble to rebuild Iraq
From Tim Reid in Washington
AN AUDIT of US reconstruction spending in Iraq has uncovered spectacular misuse of tens of millions of dollars in cash, including bundles of money stashed in filing cabinets, a US soldier who gambled away thousands and stacks of newly minted notes distributed without receipts.
The audit, released yesterday by the US Special Inspector General for Iraq Reconstruction, describes a country in the months after the overthrow of Saddam Hussein awash with dollars, and a Wild West atmosphere where even multimillion-dollar contracts were paid for in cash.
The findings come after a report last year by the inspector general which stated that nearly billion (£5 billion) of Iraq’s oil revenue disbursed by the US-led Coalition Provisional Authority (CPA), which governed Iraq until mid-2004, cannot be accounted for.
The huge sums in cash were paid out with little or no supervision, and often without any paperwork, yesterday’s audit found. The report found problems with nearly 2,000 contracts worth .1 million.
In one case, a US soldier gambled away more than ,000 while accompanying the Iraqi Olympic boxing team to the Philippines. In others, “one contracting officer kept approximately million in cash in a safe in his office bathroom”, the report says, “while a paying agent kept approximately 8,000 in cash in an unlocked footlocker”.
The lack of supervision had tragic consequences. A contract for 2,800 to refurbish the Hilla General Hospital was paid in full by a US official, even though the work was not finished. Instead of replacing a central lift, as demanded in the contract, workers only tinkered with the existing mechanism. Three months later the lift crashed, killing three Iraqis.
Cash was stolen during insurgent raids but never reported, the audit found. In another case, a contractor was paid 8,140 to refurbish completely the Hilla Olympic swimming pool. The contractor simply polished some of the pumps and piping to make it look as if new hardware had been installed. The pool has never reopened.
More than 160 vehicles worth about .3 million could not be traced because there was no proper documentation. Another project, a 3,000 contract to install an internet service in Ramadi, was cancelled because officials could not oversee it. But the contractor had already been paid.
A separate congressional inquiry has uncovered the sums of cash airlifted into Iraq after the invasion. Desperate for money, and with no banking system to receive wire transfers, the CPA, led by Paul Bremer, received UN approval to fund reconstruction with billion of seized Iraqi oil proceeds, most of it held in the US Federal Reserve in New York.
Soon, large quantities of cash began arriving in Baghdad, shipped in on C17 cargo planes. The cash arrived on pallets loaded with shrink-wrapped bundles of crisp 0 bills. The parcels, which soon became known as “bricks”, were handed out “like candy”, one Democrat congressman said.
In all, billion in cash, weighing 363 tonnes, was flown into Iraq. On December 12, 2003, one single flight to Iraq contained .5 billion in cash, the largest single Federal Reserve payout in US history, according to Henry Waxman, the Democrat congressman who is investigated the funding.
The US has so far spent 6 billion on the Iraq war. The CPA was allocated billion in US and Iraqi funds, and spent .7 billion of UN-administered Iraqi oil money.
FRITTERED AWAY
8,140 paid to contractor to refurbish Olympic swimming pool in Hilla. Work never done
2,800 paid to repair Hilla hospital. Much of work never done, including renewing central lift. Three people later died when lift crashed
,000 gambled away by US soldier assigned as assistant to Iraqi Olympic boxing team on trip to Philippines
million locked in a the bathroom safe of a US official
8,000 stashed away in an unlocked foot locker
3,000 paid for internet installation in Ramadi. Work never done
BACKGROUND
American faces Iraq fraud charge
By David Charter
The defendants were identified as Robert Stein, funding officer for the Coalition Provisional Authority in 2003 and 2004, and Philip Bloom, the owner of numerous construction and service companies.
These multimillion-dollar bribery and fraud charges are the first of a dozen similar corruption cases arising from the postwar reconstruction of Iraq, American officials said yesterday. Mr Bloom, who ran three companies competing for contracts, was charged with paying “bribes, kickbacks and gratuities” of at least 0,000 (£116,500) a month to members of the Coalition Provisional Authority and their spouses.
The case and others like it are likely to fuel further criticism of the reconstruction effort in Iraq, which has already cost .4 billion.
With the help of the alleged co-conspirators and others, Mr Bloom is said to have submitted multiple bids on the same contracts, using the names of different companies.
National Australia Bank Fraud Case Gets U.S. High Court Query
By Greg Stohr
June 1 (Bloomberg)
- The U.S. Supreme Court signaled it may consider how far the country’s securities fraud laws extend overseas, asking the Obama administration for advice on a shareholder lawsuit against National Australia Bank Ltd.
Australian shareholders of Melbourne-based NAB want the justices to review a federal appeals court’s decision that the suit was beyond the jurisdiction of U.S. courts. The investors’ appeal says HomeSide Lending Inc., formerly a Florida-based mortgage-service subsidiary of NAB, fraudulently overvalued its assets, eventually forcing .2 billion in writedowns.
Should the high court take up the case, it would become one of the top business disputes of the nine-month term that starts in October. The U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and the Securities and Exchange Commission all filed briefs when the dispute was before the 2nd U.S. Circuit Court of Appeals in New York.
The justices directed their request today to U.S. Solicitor General Elena Kagan, the administration’s top courtroom lawyer. She will receive input from the SEC, which supported the investors at the appeals court.
The case stems from NAB’s disclosure in 2001 that interest- rate assumptions used by HomeSide in a valuation model were incorrect and caused inflated estimates of mortgage-servicing fees. Writedowns in 2001 caused the bank’s American depositary receipts to fall more than 11 percent.
Fraud in the U.S.
The shareholders contend that the core of the alleged fraud occurred in the U.S., giving American courts jurisdiction to consider the case and apply U.S. securities laws.
“Every false statement made by NAB concerning HomeSide’s operations, results and value was a repetition of the false financial information that HomeSide concocted in Florida for the very purpose of misleading NAB’s shareholders,” the appeal argued.
The 2nd Circuit rejected that reasoning, noting in its 3-0 ruling that NAB compiled and issued its public statements in Australia.
“The actions taken and the actions not taken by NAB in Australia were, in our view, significantly more central to the fraud and more directly responsible for the harm to investors than the manipulation of the numbers in Florida,” the three- judge panel said.
NAB told the Supreme Court that “every single one” of the alleged misstatements and omissions were made in Australia by the parent company. NAB acquired HomeSide in 1998, then sold it to Washington Mutual Inc. in 2002.
Courts around the country have used different standards to determine whether judges can consider so-called “foreign cubed” lawsuits, those that involve non-U.S. plaintiffs, corporations and markets.
The case is Morrison v. National Australia Bank, 08-1191.
Last Updated: June 1, 2009 10:03 EDT
Bagger points finger at Swedish partner
WEDNESDAY, 10 JUNE 2009 15:46 KR NEWS
Denmark’s biggest fraud trial started today with Stein Bagger implicating Swedish businessman Mikael Ljungman as his co-conspirator
A reserved Stein Bagger appeared before Lyngby District Court today admitting his guilt in the massive fraud case that saw him defraud investors of 831 million kroner through his former company IT Factory via a complex leasing scheme.
As the list of 61 counts of fraud and forging of documents were read out, Bagger answered with a steady stream of ‘that’s right’, I forged that’ and ‘I did it’.
And as expected, the 42-year-old defendant confirmed that Swedish businessman Mikael Ljungman was his partner in the scam.
The two met in Stockholm in 2007 and it was Ljungman who lent Bagger his car and credit card when the Danish businessman went on the run to the States. Berlingske Tidende reports that according to the public prosecutor for serious economic crime, Ljungman’s involvement in keeping the leasing carousel running netted him up to 266 million kroner.
Ljungman has been charged as an accomplice and was arrested in Sweden at the end of April, but has denied all charges.
‘This is a clear scam and we’re both aware of it,’ said Bagger today of his involvement with Ljungman.
Bagger told the court that he received almost two million euro in cash from Ljungman between September 2007 and July 2008. Bagger picked up money from a Swedish courier at a Copenhagen Airport restaurant numerous times, as well as at the exclusive French Fregate hotel.
But the more Bagger needed the cash, the more Ljungman apparently wanted from the leasing scheme.
‘I was in a very difficult private situation…and he said that if I was going to get the cash, then the price was doubled. I really needed the money so I accepted it ,’ said Bagger.
When the two cheated Danish company Captive Finance, Ljungman allegedly took 66 percent of the profit, or 5.4 million kroner, while Bagger got the remaining third, 1.7 million kroner.
Having acknowledged all charges, Bagger now faces two more days in court before receiving a possible sentence of up to 12 years on Friday.