August 02, 2016
Long-running student loan dispute settled
The Education Department on October 7, 2010 stipulated that Robert Lepelletier, Jr. had fully discharged a disputed student loan debt incurred in the late 1970s. The discharge covered "all of the debt, including interest, penalties and collection costs," according to a filing in U.S. District Court.
The stipulation brought to an end a lawsuit filed by Lepelletier the year before. Lepelletier says he repaid the loan in the early 1980s. The Education Department, though, had been demanding payment, through the use of a collection agency.
In October 2010, Suits & Sentences reported that U.S. District Judge Richard J. Leon ruled that sovereign immunity blocked him from issuing an injunction that would stop the Education Department from employing a collection agency. Leon's interim ruling dealt with a technical issue and did not represent a judgment on the merits of the claim; McClatchy apologizes for any ambiguity.
September 30, 2013
Court dismisses Foreign Policy libel suit
A $10 million #libel suit against Foreign Policy magazine has been dismissed by a federal judge.
In a 37-page decision, U.S. District Judge Emmet Sullivan tossed the suit filed by Yasser Abbas against Foreign Policy Group and Jonathan Schanzer, the author of an article that appeared in Foreign Policy Magazine in June 2012.
Sullivan dismissed the suit using D.C.'s anti-SLAPP measure, which amounts to an early victory for Foreign Policy.
Abbas is the son of Mahmoud Abbas, the president of the Palestinian Authority, and, as Sullivan notes, "he owns and operates many businesses throughout the Middle East."
"Over the last few years," Sullivan noted, "many questions have been raised about whether his business success and political ties are linked, though he has systematically denied any such allegations."
As public scrutiny over his business and political activity has increased, Sullivan added, "Mr. Abbas has used the threat of defamation litigation to counter bad press."
The Foreign Policy article in question was entitled “The Brothers Abbas: Are the sons of the Palestinian President growing rich off their father’s system?”
The full decision merits close reading, but Sullivan sums up:
"The defendants have made a prima facie showing that Mr. Abbas’s defamation claim arises from an act in furtherance of the right of advocacy on issues of the public interest, and that Mr. Abbas has failed to demonstrate a likelihood of success on the merits of his defamation claim because the contested statements are either not capable of defamatory meaning or are protected statements of opinion."
September 27, 2013
Like a page from Breaking Bad or Tom Clancy ...
Here's one straight from AMC's thriller #BreakingBad, about a cancer-stricken chemistry teacher who became a big-time meth amphetamine cook, or one of Clancy's international techno crime and spy novels.
Five former soldiers from three countries, including a contract killer alleged to have murdered several people, all tangled in a plot to smuggle 11 pounds of cocaine into the United States. To provide security for supposed Columbian narcotics traffickers, three of them agreed to take out a Drug Enforcement Administration agent and a DEA informant, a federal indictment unveiled in New York on Friday, Sept. 27th says.
The DEA and U.S. attorney's office for the Southern District of New York announced the arrests of three of those men -- former U.S. Army soldiers Joseph Hunter and Timothy Vamvakias, and former German soldier Dennis Gogel, all being flown to New York to appear before a federal magistrate.
“The bone-chilling allegations in today's Indictment read like they were ripped from the pages of a Tom Clancy novel," said Preet Bharara, U.S. attorney for the Southern District. "The charges tell a tale of an international band of mercenary marksmen who enlisted their elite military training to serve as hired guns for evil ends. Three of the defendants were ready, willing and eager to take cold hard cash to commit the cold-blooded murders of a DEA agent and an informant. Thanks to the determined, skillful and intrepid efforts of the DEA's Special Operations Division, an international hit team has been neutralized by agents working on four continents.”
Alleged contract assassin Hunter -- also known as "Frank Robinson" (apologies to the ex-Baltimore Oriole superstar) and "Rambo," (apologies to you, too, Sylvester S.) and his cronies held meetings in Asia, Africa and the Caribbean beginning last January with two confidential DEA sources purporting to be Colombia drug traffickers, prosecutors said. Ultimately, the trio arrested Friday agreed to assassinate a DEA agent and an agency informant in Liberia for about $700,000, with Hunter collecting a $100,000 bonus for running the show. They allegedly acquired a sub-machine gun, two .22 caliber pistols and latex facemasks so they'd each look like they had a different racial origin.
They were seized after arriving in Liberia. DEA agents around the world, Royal Thai police and law enforcement agents from Liberia, Estonia, the Bahamas and Romania assisted in smashing the plot.
September 26, 2013
Arrest of Madoff accountant shines new light on Ponzi maneuverings
The FBI's arrest on Thursday, Sept. 26th of 77-year-old Paul Konigsberg, the accountant who was the only person outside Bernie Madoff's family to hold shares in Madoff Securities International Limited, peels back more layers of the biggest Ponzi scheme in U.S. history.
"Paul Konigsberg threw aside his ethical duties as an aaccountant in favor of his role as a false bookkeeper, which included allegedly participating in a scheme of back-dating client account statements to show fictitious trades and conjuring profits and losses of millions of dollars," said U.S. Attorney Preet Bharara of the Southern District of New York.
Konigsberg was charged with two counts of conspiracy, one count of making a false statement and with falsifying the books and records of a broker-dealer and an investment advisor. He faces up to 40 years in prison.
Here's a snippet of the Justice Department's summary of a superseding indictment unsealed in federal court in Manhattan, describing how he allegedly compromised his role as an attorney and certified public account, the senior tax partner of Konigsberg Wolf & Co., P.C.
"Beginning in at least the early 1990s, Madoff began to steer many of his investors towards Konigsberg’s accounting practice, particularly certain long-time investors in whose accounts Madoff executed the most glaringly fraudulent transactions. By December 2008, when Madoff’s scheme collapsed, Konigsberg Wolf provided accounting services in connection with more than approximately 300 Madoff Securities accounts. As their accountant, Konigsberg typically received duplicate copies of his client’s Madoff Securities account statements, and sometimes the only copy.
"After the death of one long-time Madoff client – who had recruited investors and had been promised by Madoff corresponding annual commission payments in the form of guaranteed returns – Madoff encouraged the client’s widow to use Konigsberg as her accountant. Konigsberg, Madoff, and Frank DiPascali, Jr. – who pleaded guilty for his role in the fraud and is cooperating with the government – agreed on an investment “strategy” for the widow’s account. Under the “strategy,” the widow’s money would be “invested” in U.S. Treasury bonds and cash equivalents for the first 11 months of each year, and then in December, DiPascali would fabricate back-dated options trades in order to generate the promised returns. For instance, one of the widow’s accounts was invested in Treasuries and money market funds in January through November of 2003, resulting in net equity at the end of November 2003 of approximately $860,000. In January 2004, however, DiPascali back-dated fake options trades purportedly executed in December 2003 to generate an additional approximately $825,000, nearly doubling the value of the account. Each December, over the course of several years, Konigsberg spoke with DiPascali to ensure that DiPascali arranged for the back-dated trades necessary to ensure the widow’s promised returns."Now nearly five years after Madoff pleaded guilty to bilking his investment clients out of $17 billion, as well as $64 billion in paper profits, more details of the giant scam keep spilling out. Nine people have pleaded guilty to date. Prosecutors have only weeks to decide who else to charge before the statute of limitations expires.
Madoff is serving a 150-year prison term.
FBI and cops set drones aloft without updating privacy guidelines
The FBI and numerous other local and federal law enforcement agencies are #exploring the use of drones – unmanned aircraft -- to conduct surveillance and crime scene examinations without risking the lives of pilots.
But in an interim, partially classified audit report released on Thursday, September 26th, Justice Department Inspector General Michael Horowitz is raising a big caution flag. His audit team asked, in essence, “Did anyone think about Americans’ privacy rights?”
The drones weigh less than 55 pounds, and they can buzz over homes and businesses with cameras trained on activity below. They cost just 25 bucks an hour to operate – a tiny fraction of the $625 hourly cost of choppers and other manned aircraft. Some agencies are experimenting with infrared cameras for nighttime use.
Between 2004, when the Justice Department acquired its first drone, and May of this year, the FBI and three other department components spent $3.7 million buying the drones, 80 percent of the money coming from the bureau, which already has them in use.
The Bureau of Alcohol, Tobacco and Firearms plans to deploy drones soon, while the Drug Enforcement Administration and United States Marshals Service acquired them for testing, but haven’t yet decided to use them domestically, the IG says.
Officials of the FBI and ATF told the auditors they see no need to develop specialized privacy protocols, and they don’t see any practical difference in using the drones for surveillance versus manned aircraft.
But the agency watchdogs concluded that a consistent department policy may be needed for the use of small drones, which can hover covertly in areas where people might expect privacy and remain there far longer than a traditional aircraft could.
The IG’s report also found that the department’s Office of Justice Programs and its Office of Community-Oriented Policing Services failed to coordinate awards of $1.2 million so that seven local law enforcement agencies and non-profit groups could purchase small drones. Recipients include police departments in Miami, Gadsden, Ala., and North Little Rock, Ark., the sheriff’s office in San Mateo County, Ca., the Sheriffs’ Association of Texas and two Kentucky research groups.
The watchdog unit said that such grants should be coordinated so those who send the drones buzzing around don’t mess up ongoing investigations.
One good thing: Justice Department officials say that, unlike the military’s drones, their newest surveillance tools are unarmed.
Humane Society loses pork program challenge
The federal #pork program has survived another challenge, as a federal judge has rejected a multi-pronged lawsuit filed by the Humane Society of the United States and allies.
Among other things, the Humane Society had challenged the Agriculture Department's approval of the National Pork Board's purchase of the slogan "Pork: The Other White Meat" from the National Pork Producers Council.
In a 34-page decision, U.S. District Judge Amy Berman Jackson concluded the Humane Society and an Iowa-based group and farmer lacked legal standing to pursue the case. The decision also shed light on how the pork program works.
Like similar programs for the milk and beef industries, among others, the pork program is funded by industry assessments.
As Jackson recounts, the Agriculture Department in 2006 approved the Pork Board's acquisition of the various "Other White Meat trademarks" for $34.587 million. The Board agreed to pay the Council $3 million a year for 20 years. In 2011, the Board got approval to shift marketing gears and adopt the slogan "Pork: Be Inspired."
The Humane Society contended the use of the pork industry check-off assessments to purchase the trademarks was improper for several reasons, including the fact that the Council would be using check-off money to lobby. Jackson, though, reasoned in part that no actual damage could be shown from lobbying.
September 25, 2013
Senators seek to reform spying
Four high-profile senators announced plans to reform the nation’s domestic surveillance practices Wednesday, signaling a renewed focus on the issue after Syria eclipsed its place on the legislative agenda.
Senators Ron Wyden, D-Ore., Mark Udall, D-Colo., Richard Blumenthal, D-Conn., and Rand Paul, R-Ky., announced joint legislation that would require extensive reforms in Foreign Intelligence law.
The legislation, which Wyden called the “most comprehensive, bipartisan intelligence reform proposal since the disclosures of last June”, would outlaw dragnet collection of email and telephone metadata, close the hotly-contested “backdoor search” provision of section 702 of the Foreign Intelligence Surveillance Act, and add a constitutional advocate to the secret FISA court.
The bill would also open avenues for American citizens to independently challenge the constitutionality of the nation’s intelligence programs, a provision that Wyden said Paul was instrumental in crafting.
Wyden and Blumenthal had previously teamed up on joint legislation to reform the secret Foreign Intelligence Surveillance Court in August. Wednesday’s announcement included Wyden’s colleague on the Senate Intelligence Committee and fellow outspoken critic of the National Security Agency Mark Udall. Tea-Party member Paul’s presence is the latest example in how the issue bridges party lines.
The announcement comes the day before Wyden and Udall will hear from Intelligence community heavy-hitters at a rare open hearing held by the Senate Intelligence Committee. Director of National Intelligence James Clapper, NSA director Gen. Keith Alexander, and Deputy Attorney General James Cole will testify before Committee members on congressional reforms to the agencies’ domestic surveillance tactics.
-- Reported by Ali Watkins.
Judge slaps CIA on document secrecy
A federal judge has chastised the CIA for “inappropriately” withholding routine documents.
In a recent decision, U.S. District Judge Beryl Howell denounced several of the CIA’s legal arguments. At one point, she accused the CIA of a “shameless twisting of the factual record.” Other assertions by the agency, she called “dead wrong” and “implausible.”
A non-profit law firm that specializes in national security cases sued the CIA and five other federal agencies over documents concerning compliance with open records laws.
Sounds straightforward. But the firm, known as National Security Counselors, said the CIA dodged its responsibilities under the Freedom of Information Act and mounted “an extended campaign of misrepresentation” related to information it holds.
At one point, an “unidentified third party” handed the firm two classified documents related to the lawsuit, prompting the FBI to confiscate them. Eventually, the CIA provided redacted versions.
The CIA, meanwhile, asserted it could keep secret the records being sought by the firm under a Cold War-era law that created the spy agency and allowed it to withhold personnel information such as salaries and the number of employees.
Howell, who is a federal judge in Washington, D.C., dismissed that argument.
“The CIA has been reading that provision too broadly,” the judge wrote in her August 15 decision, adding, “as a result, the CIA has inappropriately withheld information.”
Kel McClanahan, the executive director of the firm, described the lawsuit as a public service because “virtually nothing is known” about how the CIA handles such requests.“It’s laughable that the Agency thought that the training and guidance materials its FOIA analysts use when deciding how to comply with the law are so secret that nobody can know them,” he said, adding “agencies like the CIA just play a numbers game, ignoring setbacks in court with full knowledge that for every aggressive litigant, there are hundreds of requesters who won’t know any better and will just roll over.”
So far, the six agencies have released thousands of pages of documents to the firm. However, many of the documents are others’ requests for documents. More than 400 documents are still being sought.
In keeping with the agency’s secretive ways, a CIA spokesman refused to comment on the ruling. A court filing said “defendant Central Intelligence Agency (“CIA”) continues to review that opinion and is still determining how to proceed.”
Auditors blast ATF undercover tobacco business
#ATF undercover business operations suffer from a "serious lack of oversight," according to a critical new audit by the Justice Department's Office of Inspector General.
The highly critical report issued Wednesday examined so-called "churning" operations, in which Bureau of Alcohol, Tobacco, Firearms and Explosives investigators use proceeds generated from undercover operations to offset expenses related to the same operations.
This is big business for the ATF; the OIG auditors examined 20 of the 36 churning investigations conducted by ATF between February 2006 and June 2011 that generated total reported revenues of nearly $162 million. All of the operations involved tobacco sales.
"We found that ATF proceeded with churning investigations without proper approval, misused the proceeds from churning investigations, and failed to account properly for cigarettes and assets purchased during churning investigations," the OIG audit states.
One of the cases, a particularly big one, was never authorized by headquarters. Problems ensured, auditors found.
"The unauthorized churning investigation sold approximately $15 million of cigarettes in an 18-month period," auditors noted, adding that "the confidential informant was allowed to keep more than $4.9 million of the $5.2 million of gross profit generated from sales of tobacco to criminal targets."
Auditors further found they were "unable to reconcile the disposition of 2.1 million of the more than 9.9 million cartons of cigarettes purchased for those 20 investigations."
In the wake of the scathing audit, ATF officials have revised policies and procedures for administering churning investigations.
"Under current policy, income-generating undercover operations are subject to detailed and rigorous application, review, approval. and oversight mechanisms," ATF officials stated in their official audit response.
The ATF officials added that "readers of the report may inaccurately conclude that these historical problems continue to the current day. They do not."
During these undercover investigations, auditors recounted, ATF purchased cigarettes from manufacturers, and agents or informants then sold them to criminal targets at or below wholesale cost. The targets allegedly would transport the contraband cigarettes to a high-tax state, where they would be sold without collecting the proper state and local taxes.
September 24, 2013
Senate intelligence committee holds NSA spy hearing
The Senate Intelligence Committee will hold its first public hearing Thursday related to NSA’s once secret collection of telephone and internet data since the existence of the program was disclosed last June.
The committee previously discussed the matter behind closed doors after former NSA contractor Edward Snowden leaked details about the agency's programs to the media. This time, committee members will talk publicly about proposed reforms to the Foreign Intelligence Surveillance Act that are meant to quell criticism about the data collection.
Since Snowden’s leaks to the media, the Obama administration has declassified documents that detailed NSA violations, including the collection of tens of thousands of emails of Americans in a program designed to target foreigners.
In response, the secret court that oversees NSA surveillance programs, the Foreign Intelligence Surveillance Court, ruled the program unconstitutional, forcing the NSA to change its practices.
Administration officials have downplayed the violations although some members of Congress have said they demonstrate NSA has needs more aggressive oversight.
So far, Senate Judiciary Committee chairwoman Dianne Feinstein has defended the NSA, saying her “committee has never identified an instance in which the NSA has intentionally abused its authority to conduct surveillance for inappropriate purposes.”
In an opinion piece in the Washington Post, Feinstein also pointed to the NSA’s disclosure that 54 terrorist “events” had been prevented as a result of the program. The agency, however, has provided scant details on the instances.
Despite her support for the program, she said her committee would consider reforms that would require NSA to publish a wide range of information about its activities.
Meanwhile, intelligence committee members Sens. Ron Wyden, D-Ore., Tom Udall, D-N.M., and Richard Blumenthal, D-Conn., have introduced legislation that would require the FISA court to hear evidence from a public interest legal advocate “whose client would be the Constitution.”
-- Reported by Marisa Taylor
ABOUT THIS BLOG
"Suits & Sentences" is a legal affairs blog written by Michael Doyle, a reporter for McClatchy's Washington Bureau. He was a Knight Journalism Fellow at Yale Law School, where he earned a Master of Studies in Law; he also earned a Masters in Government from The Johns Hopkins University with a thesis on the Freedom of Information Act. He teaches journalism as an adjunct instructor at The George Washington University's School of Media and Public Affairs.
Follow Mike on Twitter: @MichaelDoyle10
- Long-running student loan dispute settled
- Court dismisses Foreign Policy libel suit
- Like a page from Breaking Bad or Tom Clancy ...
- Arrest of Madoff accountant shines new light on Ponzi maneuverings
- FBI and cops set drones aloft without updating privacy guidelines
- Humane Society loses pork program challenge
- Senators seek to reform spying
- Judge slaps CIA on document secrecy
- Auditors blast ATF undercover tobacco business
- Senate intelligence committee holds NSA spy hearing
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