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False social media statements get former Alfi CEO in trouble

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Administrator
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investor relations COVID 19

Washington D.C. — The Securities and Exchange Commission today charged Paul A. Pereira, the former CEO and co-founder of Alfi, Inc., with making materially false and misleading statements on social media about the company’s financial and performance metrics in an attempt to boost the now defunct company’s stock price.

According to the SEC’s complaint, while serving as the CEO of Alfi, a Florida-based advertising technology company, and under the pseudonym “Uptix12,” Pereira allegedly posted shortly after Alfi’s May 2021 initial public offering that he “wouldn’t doubt” that Alfi “has $10 mm to $20 mm in revenues already in their back pocket,” when, in reality, the company was set to report only $17,450 in revenue. Soon thereafter, in another alleged attempt to boost Alfi’s stock price, Pereira stated in a YouTube interview that the company was entering into a contract with the founder of a successful restaurant chain to deploy Alfi technology in the founder’s restaurants. In fact, as alleged, the restaurant chain founder never discussed such a contract with Pereira or any other Alfi personnel. The complaint further alleges that, on August 17, 2021, with the company’s stock price opening at its lowest level in nearly two months, Pereira made false and misleading statements on social media and in a company-issued press release about the company’s advertising inventory, including that “available advertising inventory by the end of 2021 is expected to be in excess of $100 million.” Contrary to Pereira’s statements, according to the complaint, the company had less than $5 million in advertising inventory at the time, and Pereira did not have a reasonable basis to believe that Alfi would achieve $100 million in advertising inventory by the end of 2021. The company filed for bankruptcy in October 2022.

“As alleged in our complaint, Pereira tried to boost the company’s stock price through his false and misleading statements,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “This case further demonstrates the SEC’s commitment to holding officers of public companies accountable when they violate their legal obligation of candor and fair and full disclosure to investors.”

The SEC’s complaint, filed in the U.S. District Court for the Southern District of Florida, charges Pereira with violating the anti-fraud provisions of the federal securities laws. The SEC seeks a permanent injunction, an officer-and-director bar, and a civil penalty against Pereira.

The SEC’s investigation was conducted by Alex Charap with assistance from Kathleen Strandell, and it was supervised by Jessica M. Weissman, Fernando Torres, and Glenn S. Gordon, all of the Miami Regional Office. The SEC’s litigation is being led by Russell O’Brien and Mr. Charap and supervised by Teresa Verges.

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Press release by SEC.

Husband of Energy Company Manager Charged with Insider Trading

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Administrator
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"3D Judges Gavel" by ccPixs.com is marked with CC BY 2.0.
Spouse purchased stock using non-public information about planned merger

Washington D.C. — The Securities and Exchange Commission this week charged Tyler Loudon of Houston, Texas, with insider trading ahead of a February 2023 announcement that London-based oil and gas company BP p.l.c. agreed to acquire TravelCenters of America Inc., a full-service truck stop and travel center company headquartered in Ohio. Loudon allegedly made $1.76 million in illegal profits from his trading.

According to the SEC’s complaint, Loudon allegedly misappropriated material, nonpublic information about the proposed acquisition from his wife, a BP mergers and acquisitions manager who worked on the planned deal. The SEC alleges that Loudon overheard several of his wife’s work-related conversations about the merger while she was working remotely. Without his wife’s knowledge, Loudon purchased 46,450 shares of TravelCenters stock before the merger was announced on February 16, 2023. As a result of the announcement, TravelCenters stock rose nearly 71 percent. Loudon allegedly immediately sold all of his TravelCenters shares for a profit of $1.76 million.

“We allege that Mr. Loudon took advantage of his remote working conditions and his wife’s trust to profit from information he knew was confidential,” said Eric Werner, Regional Director of the SEC’s Fort Worth Regional Office. “The SEC remains committed to prosecuting such malfeasance.”

The SEC’s complaint, filed in U.S. District Court for the Southern District of Texas, charges Loudon with violating the antifraud provisions of the federal securities laws. Without denying the allegations in the SEC’s complaint, Loudon consented to the entry of a partial judgment, subject to court approval, permanently enjoining him from violating the antifraud provisions of the federal securities laws, imposing an officer and director bar, and ordering that he pay disgorgement with prejudgment interest and a civil penalty in amounts to be determined by the Court.

In a parallel action, the U.S. Attorney’s Office for the Southern District of Texas today announced criminal charges against Loudon.

The SEC’s ongoing investigation is being conducted by Julia Huseman and Jamie Haussecker of the SEC’s Fort Worth Regional Office, under the supervision of Jim Etri and B. David Fraser. The litigation will be led by Jason Rose and supervised by Keefe Bernstein. The SEC appreciates the assistance of the Financial Industry Regulatory Authority, the FBI, and the U.S. Attorney’s Office for the Southern District of Texas.

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Press release by SEC.

Featured image: by ccPixs.com

Foreign National Pleads Guilty to Role in Cybercrime Schemes Involving Tens of Millions of Dollars in Losses

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Administrator
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A Ukrainian national pleaded guilty last week to his role in two separate and wide-ranging malware schemes involving tens of millions of dollars in losses.

“Vyacheslav Igorevich Penchukov was a leader of two prolific malware groups that infected thousands of computers with malicious software. These criminal groups stole millions of dollars from their victims and even attacked a major hospital with ransomware, leaving it unable to provide critical care to patients for over two weeks,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “Before his arrest and extradition to the United States, the defendant was a fugitive on the FBI’s most wanted list for nearly a decade. Today’s guilty pleas should serve as a clear warning: the Justice Department will never stop in its pursuit of cybercriminals.”

According to court documents, Vyacheslav Igorevich Penchukov, also known as Vyacheslav Igoravich Andreev and Tank, 37, of Donetsk, helped lead a wide-ranging racketeering enterprise and conspiracy that infected thousands of business computers with malicious software known as “Zeus” beginning in May 2009. After installing “Zeus” without authorization on victims’ computers, the enterprise then used the malicious software to capture bank account information, passwords, personal identification numbers, and similar information necessary to log into online banking accounts. Penchukov and his co-conspirators then falsely represented to banks that they were employees of the victims and authorized to make transfers of funds from the victims’ bank accounts, causing the banks to make unauthorized transfers of funds from the victims’ accounts, resulting in millions of dollars in losses to the victims. The enterprise used residents of the United States and elsewhere as “money mules” to receive wired funds from victims’ bank accounts into their own bank accounts, who then withdrew and wired funds overseas to accounts controlled by Penchukov’s co-conspirators.

Penchukov was charged with these offenses in the District of Nebraska. Given the severity of the charges in the case and the harm posed to American victims, Penchukov was added to the FBI’s Cyber Most Wanted List.

“The U.S. Attorney’s Office for the District of Nebraska, in concert with the U.S. Attorney’s Office for the Eastern District of North Carolina and Justice Department’s Computer Crime and Intellectual Property Section, successfully coordinated the prosecution and plea of Penchukov,” said U.S. Attorney Susan T. Lehr for the District of Nebraska. “This case demonstrates that cybercrime can affect anyone, no matter where they are. It also demonstrates that no matter where the cybercriminals are, the department can and will bring them to justice.”

Despite being added to the FBI’s Cyber Most Wanted List, Penchukov returned to criminal activity by helping lead a conspiracy that infected victim computers with IcedID or Bokbot, a new malware, from at least November 2018 through February 2021. IcedID was a sophisticated form of malicious software that collected and transmitted personal information from victims, including credentials for banking accounts. Penchukov and his co-conspirators used this information to steal from IcedID’s victims. IcedID also provided access to infected computers for other forms of malicious software, including ransomware. One such victim of this ransomware attack was the University of Vermont Medical Center, causing the loss of over $30 million from this victim alone, and left the medical center unable to provide many critical patient services for over two weeks, creating a risk of death or serious bodily injury to patients. Penchukov was charged with these offenses in the Eastern District of North Carolina.

“Malware like IcedID bleeds billions from the American economy and puts our critical infrastructure and national security at risk,” said U.S. Attorney Michael Easley for the Eastern District of North Carolina. “The Justice Department and FBI Cyber Squad won’t stand by and watch it happen, and won’t quit coming for the world’s most wanted cybercriminals, no matter where they are in the world. This operation removed a key player from one of the world’s most notorious cybercriminal rings. Extradition is real. Anyone who infects American computers had better be prepared to answer to an American judge.”

“Core to the FBI’s cyber strategy is our willingness to play the long game and take players off the field. Vyacheslav Penchukov was a prolific criminal for over a decade and his criminal activities caused millions in damages,” said Assistant Director Bryan Vorndran of the FBI’s Cyber Division. “The FBI would like to thank our partners in both public and private sectors, and domestically and globally, for helping us bring Penchukov to justice.”

Penchukov was arrested in Switzerland in 2022 and extradited to the United States in 2023.

Penchukov pleaded guilty to one count of conspiracy to commit a racketeer influenced and corrupt organizations (RICO) act offense for his leadership role in the “Zeus” enterprise. Penchukov (as Andreev) also pleaded guilty to one count of conspiracy to commit wire fraud for his leadership role in the IcedID malware group. He is scheduled to be sentenced on May 9 and faces a maximum penalty of 20 years in prison for each count. A federal judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI Omaha and Charlotte Field Offices are investigating the case.

Assistant Deputy Chief William A. Hall Jr. and Senior Counsels Frank Lin and Ryan K.J. Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section, Assistant U.S. Attorney John E. Higgins for the District of Nebraska, and Assistant U.S. Attorney Brad DeVoe for the Eastern District of North Carolina are prosecuting the case.

The Justice Department’s Office of International Affairs worked with the Swiss Federal Office of Justice to secure the arrest and extradition of Penchukov.

Press Release by DOJ.

Featured image: by fd.

Six Men Sentenced for Roles in $20M COVID-19 Relief Fraud Ring

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Administrator
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"Cash" by 401(K) 2013 is marked with CC BY-SA 2.0.

Six Texas men were sentenced a few days ago for their roles in a conspiracy to fraudulently obtain more than $20 million in forgivable Paycheck Protection Program (PPP) loans that the Small Business Administration (SBA) guaranteed under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Hamza Abbas, 31, Ammas Uddin, 31, and Arham Uddin, 27, all of Richmond, were sentenced to three years and eight months, one year and six months, and one year and six months in prison, respectively; Syed Ali, 55, of Sugar Land, was sentenced to two years in prison; and Muhammad Anis, 55, and Jesus Acosta Perez, 33, both of Houston, were sentenced to one year and nine months and one year and one day in prison, respectively. All six defendants previously pleaded guilty.

According to court documents, the defendants conspired together and with others to fraudulently obtain PPP loans by, among other means, supplying information about their businesses to be used to submit false and fraudulent PPP loan applications. Specifically, the PPP loan applications falsified the numbers of employees and the average monthly payroll expenses of the applicant businesses. The loan applications also included fraudulent bank records and fake federal tax forms in support of the PPP loan applications. Abbas also recruited others into the conspiracy and created fraudulent bank records that were used in support of the loan applications in exchange for kickbacks.

The defendants also laundered a portion of the fraudulent proceeds by writing checks from companies that received PPP loans to fake employees. These fake paychecks were cashed at certain cash checking businesses, including one owned by another co-conspirator.

In January, three other individuals who previously pleaded guilty were sentenced for their roles in the loan fraud scheme. Raheel Malik, 43, of Sugar Land, was sentenced to one year and six months in prison; Nishant Patel, 41, of Houston, was sentenced to two years in prison; and Harjeet Sing, 50, of Katy, was sentenced to five years of probation.

In October 2023, seven other individuals were sentenced for their roles in the loan fraud conspiracy, including the ringleader, Amir Aqeel, 55, of Houston, who was sentenced to 15 years in prison.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas, Special Agent in Charge Brady Ipock of the SBA Office of Inspector General (SBA-OIG) Central Region, Special Agent in Charge Catherine Huber of the Federal Housing Finance Agency Office of Inspector General’s (FHFA-OIG) Central Region, Special Agent in Charge Mark Dawson of Homeland Security Investigations (HSI) Houston, Special Agent in Charge Anand Ramlall of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG) Dallas Region, and Special Agent in Charge Gary Smith of the Treasury Inspector General for Tax Administration (TIGTA) Gulf States Field Division made the announcement.

The SBA-OIG, FHFA-OIG, HSI, FDIC-OIG, and TIGTA are investigating the cases.

Trial Attorneys Kate McCarthy, Louis Manzo, Spencer Ryan, Della Sentilles, and Randall Warden of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Rodolfo Ramirez and Kristine Rollinson for the Southern District of Texas are prosecuting the cases.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Justice Department’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP. Since the inception of the CARES Act, the Fraud Section has prosecuted over 200 defendants in more than 130 criminal cases and has seized over $78 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at www.justice.gov/criminal-fraud/ppp-fraud.

Press Release by DOJ.

Featured image: by 401(K) 2013.

Donald Trump apuesta por endurecer la política migratoria

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Administrator
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¿Cómo se presenta la economía estadounidense en 2024?

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Administrator
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Featured image: Images_of_Money

Sigue agravándose la crisis por consumo y sobredosis de drogas en EE. UU.

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Administrator
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"Medical supplies and equipment" by DFID - UK Department for International Development is marked with CC BY 2.0.

Featured image: DFID – UK

Doctor Convicted of $2.8M Medicare Fraud Scheme

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Administrator
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"Clariant Medical Masterbatches" by Clariant International Ltd. is marked with CC BY-NC-ND 2.0.

A federal jury convicted a California man yesterday for his role in a scheme to defraud Medicare by billing $2.8 million for hospice services that patients did not need.

According to court documents and evidence presented at trial, Dr. John Thropay, 74, of Arcadia, was the medical director of several hospice companies, including Blue Sky Hospice Inc. located in Van Nuys, California. From October 2014 to March 2016, Thropay fraudulently certified Medicare patients of Blue Sky as having terminal illnesses that the patients did not have so that Blue Sky Hospice could bill Medicare for hospice services. In 2015, Thropay was listed as attending provider for more hospice claims paid by Medicare than any other provider in the nation.

The jury convicted Thropay of one count of conspiracy to commit health care fraud and four counts of health care fraud. He is scheduled to be sentenced on May 28 and faces a maximum penalty of 10 years in prison on each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, Special Agent in Charge Timothy B. DeFrancesca of the Department of Health and Human Services Office of Inspector General (HHS-OIG), and Acting Assistant Director in Charge Amir Ehsaei of the FBI Los Angeles Field Office made the announcement.

HHS-OIG and the FBI investigated the case.

Assistant Deputy Chief Niall M. O’Donnell and Trial Attorney Eric C. Schmale of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, the program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.

Press Release by DOJ.

Featured image: Clariant International Ltd.

Two Individuals Convicted for $11M COVID-19 Relief Fraud Scheme

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Administrator
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covid recession

A federal jury in Atlanta convicted a Georgia man and woman yesterday for their roles in an over $11 million Paycheck Protection Program (PPP) fraud scheme.

Teldrin Foster, 42, of Decatur, was convicted of bank fraud, wire fraud, conspiracy to commit bank fraud and wire fraud, false statements to a federally insured financial institution, and money laundering in connection with 14 loan applications.

Carla Jackson, 55, of Tucker, was convicted of two counts of money laundering in connection with laundering the proceeds of a PPP loan.

According to court documents and evidence presented at trial, between April and August 2020, Foster and co-conspirators submitted, or assisted in the submission of, PPP loan applications on behalf of 14 businesses seeking loans of approximately $800,000 for each company. In the loan applications, the co-conspirators certified that each applicant business was in operation on Feb. 15, 2020, and had employees for whom it paid salaries and payroll taxes or that it paid independent contractors; that the funds would be used to retain workers and maintain payroll or to make mortgage interest payments, lease payments, and utility payments; and that the information provided in the application and in all supporting documents was true and accurate in all material respects. The co-conspirators reported that each business had approximately 60 employees and approximately $300,000 in average monthly payroll expenses. To support these payroll figures, each business’s loan application was accompanied by an IRS Form 941, which employers use to report payroll taxes. In reality, each Form 941 was fraudulent.

After the PPP loan proceeds were deposited into the businesses’ accounts, Jackson and others laundered certain of the funds through a series of transactions that were devised to disguise the origins of the funds and how the funds were spent.

The defendants face a maximum penalty of 20 years in prison on each of the wire fraud and money laundering charges and a maximum penalty of 30 years in prison on each of the bank fraud and false statement to a federally insured bank charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia, Assistant Director Michael D. Nordwall of the FBI’s Criminal Investigative Division, Acting Special Agent in Charge Demetrius Hardeman of the IRS Criminal Investigation (IRS-CI) Atlanta Field Office, and Special Agent in Charge Amaleka McCall-Brathwaite of the Small Business Administration Office of Inspector General (SBA-OIG) Eastern Region made the announcement.

The FBI, IRS-CI, and SBA-OIG investigated the case.

Trial Attorney Siji Moore of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Tal Chaiken and Samir Kaushal for the Northern District of Georgia are prosecuting the case.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Justice Department in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit www.justice.gov/coronavirus.

Press Release by DOJ.

Van Eck Associates Charged for Failing to Disclose Influencer’s Role in Connection with ETF Launch

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Administrator
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"Stock Exchange" by Travel Aficionado is marked with CC BY-NC 2.0.

Washington D.C. — The Securities and Exchange Commission today announced that registered investment adviser Van Eck Associates Corporation has agreed to pay a $1.75 million civil penalty to settle charges that it failed to disclose a social media influencer’s role in the launch of its new exchange-traded fund (ETF).

According to the SEC’s order, in March 2021, Van Eck Associates launched the VanEck Social Sentiment ETF (NYSE:BUZZ) to track an index based on “positive insights” from social media and other data. The provider of that index informed Van Eck Associates that it planned to retain a well-known and controversial social media influencer to promote the index in connection with the launch of the ETF. To incentivize the influencer’s marketing and promotion efforts, the proposed licensing fee structure included a sliding scale linked to the size of the fund so, as the fund grew, the index provider would receive a greater percentage of the management fee the fund paid to Van Eck Associates. However, as the SEC’s order finds, Van Eck Associates failed to disclose the influencer’s planned involvement and the sliding scale fee structure to the ETF’s board in connection with its approval of the fund launch and of the management fee.

“Fund boards rely on advisers to provide accurate disclosures, especially when involving issues that can impact the advisory contract, known as the 15(c) process,” said Andrew Dean, Co-Chief of the Enforcement Division’s Asset Management Unit. “Van Eck Associates’ disclosure failures concerning this high-profile fund launch limited the board’s ability to consider the economic impact of the licensing arrangement and the involvement of a prominent social media influencer as it evaluated Van Eck Associates’ advisory contract for the fund.”

Van Eck Associates consented to the entry of the SEC’s order finding that it violated the Investment Company Act and Investment Advisers Act. Without admitting or denying the SEC’s findings, Van Eck Associates agreed to a cease-and-desist order and a censure in addition to the monetary penalty.

The SEC’s investigation was conducted by Salvatore Massa, Gregory Padgett, and John Farinacci under the supervision of Virginia Rosado Desilets, Mr. Dean, and Corey Schuster, all with the Enforcement Division’s Asset Management Unit.

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Press release by the SEC.

Featured image: Exchange” by Travel Aficionado.

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