Archive for the ‘fraud’ Category

Why AIG Can Legally Be Made To Repay Government

March 18, 2009

PRESIDENT OBAMA on Monday instructed the Treasury Department to “pursue every single legal avenue” to recover $165 million in bonus payments the insurance giant A.I.G. recently made to nearly 400 employees in its financial products unit. A.I.G. has, of course, received $170 billion in bailout funds and yet continues to incur extraordinary losses — some $62 billion last quarter alone.

By LAWRENCE A. CUNNINGHAM
New York Times Op-Ed

A.I.G. insisted it was legally obligated to make the bonus payments and that failure to pay would breach its contracts with employees and expose it to penalties under state employee protection laws. The company also warned that breaching the agreements would amount to defaulting on numerous other business contracts, at staggering cost.

Amid this standoff, there has been an explosion of outrage against perceived excessive compensation to those who precipitated the financial crisis. Some lawmakers have threatened to impose a 100 percent tax on the A.I.G. bonuses and Senator Chuck Grassley, Republican of Iowa, even wildly suggested that the company’s executives consider suicide for their culpability. But moral outrage and public rebuke do not provide legal grounds for backing out of a contract.

If the government is serious about finding a legitimate basis for abrogating these payments, officials must look to basic legal principles. And if A.I.G. is serious that it is legally bound to pay these bonuses, it must do more than say nonpayment would expose it to damages or penalties. Nor is it enough to invoke the sanctity of contracts, because our legal and business system recognizes plenty of valid excuses from contractual duty and even justification for breaching.

There are numerous issues both sides must contend with to evaluate whether A.I.G. was bound to or excused from its payment duties. First, the specific promises that employees made or conditions stated in their agreements must be examined. Determining what promises exist requires only reading the contracts; identifying conditions (which will likely offer more wiggle room in A.I.G.’s duty to pay) requires both reading the contracts and understanding any negotiations that preceded them.

Subpoenas issued by Andrew Cuomo, the New York attorney general, have put much of this vital information into the hands of government officials. Those officials would do well to compare the provisions in these contracts to the job performance of the employees who received bonuses. If employees did not meet stated performance goals, they would be in breach of contract and A.I.G. would not have to pay.

Likewise, A.I.G. has stated that these agreements expressly state that if employees are terminated for cause, they are not entitled to any bonus payments. It follows then that the contracts may preserve the company’s power to deny bonuses to employees who could be terminated for cause but have not yet been.

Apart from specific contractual terms, there are other reasons A.I.G. might rescind these bonuses. They include the nondisclosure of important material information — for instance, if an employee failed to be absolutely candid about the size and risk of trading positions taken on the company’s behalf.

Findings of fraud on the part of an employee would certainly also excuse A.I.G.’s duty to pay.

Read the rest:
http://www.nytimes.com/2009/0
3/18/opinion/18cunningham.html

Obama: Steroids, Stimulus, and Lincoln

February 14, 2009

The establishment’s admiration for Honest Abe appears to grow in proportion to its dishonesty. A week of low national deceptions culminated in celebrations of Lincoln’s 200th birthday. Out came historians known for plagiarizing to deliver pious speeches before politicians who lie.

It is like an endless Charlie Rose panel, with the usual strained and pretentious throat-clearing. “Somehow Lincoln has worked himself into Obama’s heart and mind, and it’s a good thing to have Lincoln as your mentor,” Doris Kearns Goodwin, the Pulitzer Prize-winning plagiarist, said to the press.

By George Neumayr
American Spectator

This revival of Lincoln nostalgia has to be a form of delusional self-aggrandizement. Obama seems to be encouraging this renewed cult of Lincoln in egotistical anticipation of his own. Lincoln made “my story possible,” he said. CNN teed up its coverage with the modest title, “From Lincoln to Obama.”

A nodding liberal elite trots out Goodwin to extol Lincoln’s virtues of probity while presiding over an age of non-stop fraud — an age that solves recession by printing money, solves crime by repealing laws, solves illiteracy by eliminating tests, and solves homelessness by mandating bad loans.

And they are shocked at Alex Rodriguez? Why? Haven’t they noticed that lying has become the national pastime? He cheated on the field; they cheat in Congressional offices, board rooms, and bureaucracies. He took steroids; they take special-interests stimulus.

Nothing is what it appears, not even the inevitable confessions which are as carefully contrived as the crimes. A daily, indistinct mass of dishonesty washes over the public in a boring cycle of indifferent sin and contrition. Every crime, no matter how high or low, is merely a “mistake,” something on the order of lost car keys.

Read the rest:
http://spectator.org/archives/2009/0
2/13/steroids-stimulus-and-lincoln

Lots of Stimulus Money Will Likely Be Wasted, Looted

February 6, 2009

A friend at the Congressional Budget Office told us, “This much stimulus money will slosh around a lot and a lot will likely be wasted.  That’s what we know.”

News headlines are already are gleefully saying the Bush Tarp and bailout were subject to a lot of waste.  But the stimulus is so much larger than previous measures it is hard to imagine that it could have less waste than previous bill……

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Bush Paid Too Much in Bailout

Associated Press

The Bush administration overpaid tens of billions of dollars for stocks and other assets in its massive bailout last year of Wall Street banks and financial institutions, a new study by a government watchdog says.

The Congressional Oversight Panel, in a report released Friday, said last year’s overpayments amounted to a taxpayer-financed $78 billion subsidy of the firms.

The findings added to the frustrations of lawmakers already wary of the $700 billion rescue plan, known as the Troubled Asset Relief Program. Congress approved the plan last fall, but members of both parties criticized spending decisions by the Bush administration and former Treasury Secretary Henry Paulson.

Financially ailing insurance giant American International Group, which the Treasury Department deemed to be too big to be allowed to fail, received $40 billion from the Treasury for assets valued at $14.8 billion, the oversight panel found.

In December, in response to questions from the oversight panel, the department wrote that the value of preferred stock purchased by the government was “at or near par,” meaning Treasury paid $1 for every $1 dollar of asset.

“The way the Treasury secretary described it does not fit with the numbers that were produced in our much more extensive valuation analysis,” panel chairwoman Elizabeth Warren told reporters Friday. “The secretary of the Treasury described it in December that these were par transaction and that is not supported by the numbers.”

The continued scrutiny comes as new Treasury Secretary Timothy Geithner prepares to place the Obama administration’s imprint on the program with a sweeping new framework for helping banks, loosening credit and helping reduce foreclosures. Geithner plans to unveil the changes Monday.

Read the rest:
http://news.yahoo.com/s/ap/20090206/a
p_on_go_ca_st_pe/bailout_oversight

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The following is from NPR:

When congressional leaders began to assemble the mammoth economic stimulus bill, top Democrats and the Obama administration decided that there would be no earmarks: no “special projects,” no pork-barrel spending. In so doing, they gave up some control over how the money is spent, leaving the decision to public servants around the country.

“Someone has to decide how money gets spent. It’s either going to be Congress or the executive branch or states or municipalities,” says Fred Wertheimer of the congressional watchdog group Democracy 21.

Lawmakers had good reasons for stripping earmarks from the bill, Wertheimer says, because “they are simply going to become huge targets for attacking the credibility of the package, and they may very well end up as abusive earmarks.”

It was a wise political decision, he says. But pulling earmarks out of the bill changes the balance of power in the government. If members of Congress aren’t writing into the bill how the money will be spent, then someone else must make those decisions — or, in this case, a lot of people.

“Because there is so much money here, and in so many different forms, there is no single pathway for the money to go out to states and localities,” says Sarah Binder of the Brookings Institution.

‘This Is An Emergency’

When this bill passes, a Niagara Falls of money will flow out of Washington and into the accounts of state highway commissioners, governors and legislatures, local school boards, county executives — even mayors, Binder says.

“It raises a whole host of questions about how efficiently money can be spent, how effectively it will be spent, how quickly money can be spent, just because there’s no set process here for determining how money will get out the door to create jobs or, as the president said, to save jobs,” she says.

U.S. Rep. David Obey (D-WI), the chairman of the House Appropriations Committee, helped write the bill and says he doesn’t like being asked about earmarks.

“We simply made a decision, which took about three seconds, not to have earmarks in the bill,” he says. “And with all due respect, that’s the least important question facing us on putting together this package.”

Leaving out the earmarks does mean Congress will have less control over how the money is spent. But, Obey says, “So what? This is an emergency. We’ve got to simply find a way to get this done as fast as possible and as well as possible, and that’s what we’re doing.”

That doesn’t mean Congress will be responsible if the money is spent badly, he says.

“The person who spends the money badly will be responsible. We are simply trying to build as many protections in as possible,” Obey says. “We have more oversight built into this package than any package in the history of man. If money is spent badly, we want to know about it so we can hold accountable the people who made that choice. And guess what? Regardless of what we do, there will be some stupid decisions made.”

How To Avoid Disappointment?

As it stands now, says David Walker, a former U.S. comptroller general, the bill appears to have no mechanism for directing spending. It’s left up to those state and local officials, who may or may not have the ideas or the means to spend it appropriately. And that will lead to “a series of disappointments that it’s too late to do anything about,” Walker says.

The bill does make it possible for lawmakers and the public to track the money — but only after it’s spent. And that, he says, will lead to bad surprises.

Take, for example, the giant bank bailout known as TARP. That spending has gone all wrong, Walker says. Though the inspector general and the Government Accountability Office are keeping track of the billions spent there, “they’re basically reporting on what didn’t happen,” he says.

“Well, it’s a little bit late,” he says. “And so the question is, what are you going to do on a prospective basis? I mean, you can’t change history. What are you going to do on a prospective basis to minimize the possibility of being disappointed again?”

http://www.npr.org/templates/story
/story.php?storyId=100304449

Related:
Americans Resent Obama’s Tone, Stimulus Bloat, Tax Cheats and Lobbyists

Michelle:
http://michellemalkin.com/2009/02/06/
senate-switchboard-all-circuits-are-busy/

http://righttruth.typepad.com/right_truth
/2009/02/jobs-for-citizens-imagine-that.html

French Beauty Aid is Fermented Glob: “Magique Fromage” Earns Promoter Arrest

January 20, 2009

Many women and even some men will try just about anything to become more beautiful.

But a fermented glop pushed by a French marketeer is being called   “Magique Fromage” (Magic Cheese) after investigators found absolutely no medicinal value in the slime.

Even as an ingredient for expensive moisturizers and shampoos, the smelly slime is just worthless  “Magique Fromage.”

But it could be good on crackers and with a light Bordeaux…..

 

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PARIS (Reuters) – France is investigating what it says is a scam mounted by a French woman who sold thousands of Chileans kits to make “magic cheese” for French beauty products, an official said on Tuesday.

Gilberte Van Erpe, who was arrested and placed under investigation in France last year, is suspected of setting up a vast pyramid scheme, telling buyers the fermented mass produced by the kits could be sold to cosmetics companies in France.

A French investigator, examining magistrate Sylvie Gagnard, will fly to Chile to register the lawsuits of thousands of people who claim they were victimized, said Isabelle Montagne, a spokeswoman for the public prosecutor‘s office.

“We call it the ‘case of the magic cheese’,” Montagne said.

“She swindled people, she abused their trust to make them believe that she could commercialize that material.”

Van Erpe, who is under custody in France and accused of fraud and money laundering, could not be reached for comment.

The spokeswoman said three other people also were arrested last year and placed under investigation for their role in the suspected fraud, conducted through a company called Fermex.

Media have reported that Van Erpe ran a similar scheme in Peru in 2003 to 2004 and then moved on to operate in Chile from 2004 to 2006.

Claiming that the fermented substance was all the rage in Paris as an ingredient for expensive moisturizers and shampoos, Van Erpe charged clients some 300 euros ($389) for the kits, which had a market value of about 3 euros, media said.

However, the product never made it to French cosmetics labs and most investors lost their money, the spokeswoman said.

Le Parisien newspaper said Van Erpe made about 30 million euros from her activities. It also said 5,000 Peruvians and 4,500 Chileans had filed lawsuits, but Montagne was unable to confirm that figure.

(Editing by Michael Roddy)

A feta cheese merchant slices a piece of feta in this file photo, ... 
Could it be magic? 

Oprah, Worth $1.5 Billion or More, Fails To Do Her Work

December 30, 2008

Oprah is starting to remind me of the scum of Wall Street that got away with huge money while the customer got screwed.

In Oprah’s case, the customer is you and me.  Oprah’s work is to check out and bring us good things to read and watch.

Because of her poor research, Oprah got taken.  Then she took us all for a ride.

More precisely, Oprah allowed herself to be taken.

Again.

Oprah, like many of us, often fails to do her homework.

But the lesson of credibility, often learned once some or all credibility is lost, is that to remain in high esteem in the kind of work Oprah Winfrey has chosen, one must be right most of the time.

And that means even the Queen of daytime TV has to do her homework — or just make sure her staff does theirs.

Oprah gets paid handsomely for doing her homework.  She just doesn’t always do it.

Related:
Oprah’s Literary Liars Club: Who Is Responsible?

Forbes reported during 2007 that Oprah’s yearly pay was $260 Million — and that she was worth $1.5 Billion

Oprah was, frankly, taken in by a fraud when she discovered Herman Rosenblat’s memoir, “Angel at the Fence.”

By dubbing a fraud “the single greatest love story” ever featured by Oprah, the megastar calls into question her exact criteria for greatness.

Just as Oprah was shocked to find evil behavior at her girls’ school in Africa, Oprah got a black eye on a book because she never really investigated its lineage.

The Oprah Winfrey Leadership Academy for Girls had Oprah’s money and Oprah’s prestige and Oprah’s cachet but none of Oprah’s supervision, direction or involvement.

And Oprah cried when she found out what was going on at her school.

Cha-ching.

Well, the buck stops here.

Oprah is a fraud.

We hope Oprah has enough sense (and time) to sort all this out and do her homework with more diligence.

People trust you, Oprah, which brings certain responsibility…..You have all the money anyone could want: now how about trying to be real.  Honest.  A semi-journalist.
 


Photo: Getty Images 

By Richard Rusher
Peace and Freedom

Related:
http://princesimon.wordpress.com/2008/
12/30/oprah-winfrey-duped-again-holoc
aust-greatest-love-story-is-fake/

http://hillbuzz.wordpress.com/2008/12
/29/why-is-oprah-so-damn-stupid/?refe
rer=sphere_related_content/

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Professor Ken Waltzer, the director of Michigan State University’s Jewish Studies program, said the book “Angel at the Fence,” “was at the far end of implausibility, yet until yesterday, no one connected with packaging, promoting, and disseminating it asked questions about or investigated it. Some actively resisted such investigation and tried to shut mine down.”

By Emily Friedman
ABC News

Unfortunately for Oprah Winfrey, some stories really are too good to be true.

Herman Rosenblat’s memoir, “Angel at the Fence,” deemed by Winfrey as “the single greatest love story” she’s ever featured on her show, may now be coined by some as the single phoniest love story, after the author admitted he fabricated the story of how he and his wife met at a Nazi concentration camp.

They did not, as Rosenblat falsely wrote in the book, meet at a concentration camp during World War II, where Rosenblat claimed his wife had thrown him apples and bread over the barbed-wire fence that separated them.

In reality, Rosenblat and his wife, Roma, were set up on a blind date in New York years after the war was over.

Read the rest:
http://abcnews.go.com/Entertainment/story?id=6543206&page=1

Related from CNN:
http://www.cnn.com/2008/US/12/30/
holocaust.hoax.love.story/index.html

U.S. In For More Global Anger Over $50 Billion Fraud

December 15, 2008

Big and small, he “took” them all. Bernard Madoff’s Ponzi scheme is another blow to America’s reputation, integrity….

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The list of investors who say they were duped in one of Wall Street‘s biggest Ponzi schemes is growing, snaring some of the world’s biggest banking institutions and hedge funds, the super rich and the famous, pensioners and charities.

The alleged victims who sunk cash into veteran Wall Street money manager Bernard Madoff’s investment pool include real estate magnate Mortimer Zuckerman, the foundation of Nobel laureate Elie Wiesel, and a charity of movie director Steven Spielberg, according to the Wall Street Journal.


Above: Steven Spielberg

By JOE BEL BRUNO and JANE WARDELL, AP Business Writers

Among the world’s biggest banking institutions, Britain’s HSBC Holdings PLC, Royal Bank of Scotland Group PLC and Man Group PLC, Spain’s Grupo Santander SA, France‘s BNP Paribas and Japan’s Nomura Holdings all reported that they had fallen victim to Madoff’s alleged $50 billion Ponzi scheme.

The 70-year-old Madoff (MAY-doff), well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested Thursday in what prosecutors say was a $50 billion scheme to defraud investors. Some investors claim they’ve been wiped out, while others are still likely to come forward.

“There were a lot of very sophisticated people who were duped, and that happens a great deal when you’ve had somebody decide to be unscrupulous,” said Harvey Pitt, a former chairman of the Securities and Exchange Commission, a regulator in charge of monitoring investment funds like the one Madoff operated.

Read the rest:
http://news.yahoo.com/s/ap/20081215/
ap_on_bi_ge/wall_street_arrest

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Some of the world’s biggest banks have revealed that they are victims of a fraud which has lost $50bn (£33bn).

Bernard Madoff has been charged with fraud in what is being described as one of the biggest-ever such cases.

Bernard Madoff in 1999 - AP Photo/The New York Times, Ruby Washington
Above: Mr Madoff is the former chairman of the Nasdaq stock exchange

Among the banks which have been affected are Britain’s RBS, Spain’s Santander and France’s BNP Paribas.

One of the City’s best-known fund managers has criticised US financial regulators for failing to detect the alleged fraud.
Nicola Horlick, boss of Bramdean investments, said US regulators had “fallen down on the job”.

Mrs Horlick told the BBC: “I think now it is very difficult for people to invest in things that are meant to be regulated in America, because they haven fallen down in the job.”

FROM THE TODAY PROGRAMME

“This is the biggest financial scandal, probably in the history of the markets – $50bn is a huge amount of money,” she said.

Banks and financial institutions across the world had investments with Bernard Madoff:

Read the rest from the BBC:
http://news.bbc.co.uk/2/hi/business/7783236.stm

Wall Street sign