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Flash: Railroad Workers Charged in $1 Billion Fraud

U.S. prosecutors on Thursday charged 11 people in connection with an alleged $1 billion fraud involving hundreds of railroad workers filing false disability claims.

In some cases workers claimed they were unable to work even while they played golf, shoveled snow or rode bikes, the complaint says.

Former Long Island Railroad workers, doctors and a federal railroad agency employee are accused of participating in the scheme in which employees filed disability claims shortly before they retired. The move allowed them to get disability pay on top of their retirement pension, prosecutors said.

In filing the claims, the railway workers allegedly paid between $800 and $1,200 to hire one of several disability doctors.

Those doctors would then conduct unnecessary tests and concoct a medical issue that would allow the workers to go on disability, prosecutors said.

Two have been charged and a third doctor has died.

The U.S. attorney’s office in Manhattan said the scheme cost the Railroad Retirement Board more than $1 billion. The investigation developed after a series of reports by The New York Times starting in 2008.

The Times said that almost every longtime LIRR employee was receiving disability payments, resulting in a disability rate sharply higher than other railroads.

In many cases, workers were far healthier than those claims would indicate, according to prosecutors.

One defendant, a former engineering manager, receives about $105,000 a year in pension and disability pay, based on “severe pain when gripping and using simple hand tools and pain in his knees, shoulder and back from bending or crouching,” the complaint says.

An investigation found, however, that he plays tennis several times a week and golfs regularly in his retirement.

Another defendant was seen shoveling heavy snow and walking with a baby stroller for 40 minutes, despite a disability claim in which she claimed to be unable to stand for more than five minutes without leg pain. She is paid at least $108,000 a year by the railroad authority, prosecutors said.

U.S. Attorney for the Southern District of New York Preet Bharara was expected to announce the mail fraud and conspiracy to commit health care fraud charges later on Thursday.


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1.4 trillion euros.

Cash on hand will be leveraged 4 to 5 times.

Banks to get 30 bill euros in funding.

Italy pledges to cut debt gdp ratio to 113% by 2013.

50% haircut on Greek debt, EXCLUDING ECB holdings- LOL


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MF Global is down 30% on news they are looking for strategic alternatives.

I smell bankruptcy.

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Former Goldman Sachs Director Expected to Face Criminal Charges

Federal prosecutors are expected to file criminal charges on Wednesday against Rajat K. Gupta, the most prominent business executive ensnared in an aggressive insider trading investigation, according to people briefed on the case.

The case against Mr. Gupta, 62, who is expected to surrender to the authorities on Wednesday, would extend the reach of the government’s inquiry into America’s most prestigious corporate boardrooms. Most of the defendants charged with insider trading over the last two years have plied their trade exclusively on Wall Street.

The charges would also mean a stunning fall from grace of a trusted adviser to political leaders and chief executives of the world’s most celebrated companies.

A former director of Goldman Sachs and Procter & Gamble and the longtime head of McKinsey & Company, the elite consulting firm, Mr. Gupta has been under investigation over whether he leaked corporate secrets to Raj Rajaratnam, the hedge fund manager who was sentenced this month to 11 years in prison for trading on illegal stock tips.


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{Video} Herman Cain’s Chain-Smoking Political Ad Guy Says No Subliminal Message

Fox News’s Megyn Kelly scored an exclusive interview with the star of Herman Cain‘s hot new viral web adMark Block, who is featured in the clip defiantly blowing cigarette smoke at the camera. Kelly introduced Cain’s chief of staff by noting that people have been “dizzified” by the political ad. “The message behind the ad was to our supporters that we’re on a roll,” Block explained. “We’re excited about what’s happening. There was no subliminal message. In fact, I personally would encourage people not to smoke. It’s just that I’m a smoker and as a lot of people on the staff said, ‘Just let Block be Block.’ That’s what it was all about.”

Kelly asked if the quirky web ad was trying to reach out to regular joes. “Were you trying to appeal to folks who are out there living real lives, working the farm, working in Detroit, that kind of thing as opposed to the East and West coast elite, people in media circles, who shun smoking, and, you know, sort of real American things?”

“I tell you, you walk into a veteran’s bar in Iowa, and they are sitting around smoking, and, you know, yeah, we are resonating with them,” Block exclaimed. “I’m not the only one that smokes in America, for God’s sake! It’s a choice that I made and it was at the end of the ad, but the real message that we were trying to get through is that the Cain train is on a roll!”


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FSLR Down on Heavy Volume

CEO stepping down.

Update: First Solar, Inc. (NASDAQ: FSLR) today asked its Chairman and company founder, Mike Ahearn, to serve as interim Chief Executive Officer. Ahearn has accepted. Effective immediately, Rob Gillette is no longer serving as Chief Executive Officer, and the Board of Directors thanks him for his service to the company.

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200 Prisoners Escape from Prison in Turkey as All Hell Breaks Loose

Gunshots were heard as prisoners set fire to a jail and fought with guards in Turkey’s quake-hit city of Van on Tuesday, two days after a jailbreak when 200 were reported to have escaped in the chaos after a major earthquake.

A soldier said prisoners had attacked guards with scissors and knives. A municipal official, who declined to be named, said inmates had set fire to the jail.

Reuters journalists saw flames lap the building, while white smoke billowed into the night sky, before half a dozen shots were heard.


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JUICY DETAILS: Swiss Banks to Reveal U.S. Holders

Swiss banks will probably settle a sweeping U.S. probe of offshore tax evasion by paying billions of dollars and handing over names of thousands of Americans who have secret accounts, according to two people familiar with the matter.

U.S. and Swiss officials are concluding negotiations on a civil settlement amid U.S. criminal probes of 11 financial institutions, including Credit Suisse Group AG (CSGN), suspected of helping American clients hide money from the Internal Revenue Service, according to five people with knowledge of the talks who declined to speak publicly because they are confidential.

Switzerland, the biggest haven for offshore wealth, wants an end to new U.S. probes while preserving its decades-old tradition of bank secrecy, the people said. The U.S. seeks data on Americans who have dodged U.S. taxes and a pledge by Swiss banks to stop helping such clients, according to the people. The Swiss reached accords this year with Germany and the U.K. on untaxed assets.

“The Swiss would like to get out of this by paying money, and they’ve done that with other countries,” said tax attorney H. David Rosenbloom of Caplin & Drysdale Chartered in Washington, who isn’t involved in the talks. “For the U.S., it’s not primarily a money question. It’s a matter of making sure the laws apply fairly among taxpayers.”

Final Accord

The Swiss government seeks to outline a final accord for the Foreign Affairs Committee of its Parliament’s upper house on Nov. 10, according to a person familiar with the matter. The number of banks that will pay to resolve the U.S. negotiations may extend beyond the 11 under criminal investigation, the people said.

“We are aiming for an all-encompassing solution that will apply to all the banks,” Finance Minister Eveline Widmer- Schlumpf said in an Oct. 4 interview in the Swiss capital Bern. “We don’t want to be confronted with the same issues time and again.”

Under accords this year with Germany and the U.K. on untaxed assets, the identity of clients remained secret. The U.S. insists that the Swiss disclose client account data, and the banks may end up handing over data on 5,000 to 10,000 accounts, the people said. A final determination hasn’t been made, they said.

Criminal Charges

The U.S. Justice Department also may bring criminal charges or civil enforcement actions against any of the 11 financial institutions. They could avoid prosecution by separately paying fines, admitting wrongdoing and disclosing data, the people said. On Aug. 30, the Justice Department requested statistical data from the 11 about their U.S. accounts, which the U.S. has received and is analyzing, the people said.

Credit Suisse, the second-biggest Swiss bank, said July 15 that it was a target of U.S. prosecutors. On July 21, seven Credit Suisse bankers were indicted on a charge of conspiring to help U.S. clients evade taxes through secret accounts.

The group of 11 also includes HSBC Holdings Plc (HSBA), the biggest European bank, Basler Kantonalbank, Wegelin & Co., Zuercher Kantonalbank, and Julius Baer Group Ltd. (BAER), the people said. Three Israeli banks — Bank Leumi Le-Israel BM (LUMI)Bank Hapoalim BM (POLI), and Mizrahi-Tefahot Bank Ltd. (MZTF) — are on the list, as well as Liechtensteinische Landesbank AG and an asset manager, NZB AG, according to the people.

U.S. Crackdown

The U.S. crackdown against offshore tax evasion has led to charges against UBS AG (UBSN), the largest Swiss bank; at least 21 foreign bankers, advisers and attorneys; and at least 36 U.S. taxpayers.

UBS, which isn’t one of the 11 banks now under scrutiny, avoided prosecution in 2009 by paying $780 million, admitting it fostered tax evasion and handing over details on 250 secret accounts. It later disclosed another 4,450 accounts.

UBS made 10.75 billion francs ($12.1 billion) in revenue in the U.S. in 2010, or 34 percent of the group’s total. Credit Suisse made 12.84 billion francs in revenue in the Americas in 2010, or 41 percent of the total. HSBC’s Swiss private bank and Julius Baer declined to disclose information on revenue from U.S. clients. A spokesman for HSBC in Geneva declined to comment on the settlement talks.

Credit Suisse gained 2.4 percent to 24.42 Swiss francs, at 3:09 p.m. in Zurich. Baer was unchanged at 34.70 francs. Basler Kantonalbank and Liechtensteinische Landesbank dropped 0.4 percent and 2.8 percent, respectively.

Statistical Data

Urs Rohner, chairman of Credit Suisse, last month told newspaper NZZ am Sonntag that the bank has transferred statistical data sought by the U.S. Marc Dosch, a spokesman for the Zurich-based bank, declined to comment further.

Basler Kantonalbank (BSKP) spokesman Michael Buess said it also gave such data to the U.S.

Wegelin & Co. spokeswoman Albena Bjoerck said it will show “Swiss and U.S. authorities that the bank has not breached either Swiss or U.S. law.” The bank is cooperating with authorities “within the scope of Swiss law.”

After a U.S. indictment of two Julius Baer bankers this month, the bank said it “is one of a number of Swiss financial institutions supporting the ongoing tax negotiations between the U.S. and Switzerland” and is cooperating with the U.S. probe. Spokesman Martin Somogyi declined to comment further.

Youval Dichovski, Zurich-based head of internal audit at Bank Leumi Switzerland Ltd., said the bank is cooperating.

Bank Hapoalim Switzerland is complying with its legal and regulatory duties in cooperating with Swiss authorities, said Chief Executive Officer Michael Warszawski. He said the bank “has only a limited number of American clients whose holdings with the bank are very small.” The bank, he said, “is not aware of any violations of U.S. law by the bank or its employees.”

Few Employees

Cyrill Sele, a Vaduz, Liechtenstein-based spokesman for Liechtensteinische Landesbank AG (LLB), said it sent statistical data to the U.S. A man who answered the phone Oct. 20 at NZB said it is closing and has only a few employees.

Zuercher Kantonalbank spokesman Urs Ackermann said the bank was informed in September of the U.S. investigation. A spokesman for Mizrahi Bank had no immediate comment.

The UBS turnover of 4,450 names, in the face of Swiss laws barring most disclosures of client data, set a precedent for the current talks. The U.S. agreed to submit a request for specific accounts under a 1996 tax treaty and a follow-up agreement in 2003. Under that accord, Swiss bank secrecy doesn’t protect accounts if the owner engaged in “tax fraud or the like,” which is a narrower definition of tax evasion than U.S. law provides.

Turned Over Accounts

The Swiss directed UBS to turn over accounts to the Swiss Federal Tax Administration for review before handing them to the IRS. Negotiators are determining how to apply the 1996 tax treaty and one adopted in 2009 that still needs ratification by the U.S. Senate, the people said.

Switzerland is continuing talks with the U.S. authorities on administrative assistance in cases of tax fraud and tax evasion,” said Norbert Baerlocher, spokesman for the Swiss embassy in Washington, in a statement. “Any exchange of client data can occur only within the scope of the current legal system, in accordance with the procedures provided for in the existing or the new double-taxation agreement with the USA.”

The Swiss agreed in March 2009 to meet international standards to avoid being blacklisted as a tax haven by the Organization for Economic Cooperation and Development. The London-based Tax Justice Network this month ranked Switzerland at the top of its financial secrecy index.

‘A Big Issue’

“This is a big issue for these banks,” said C. Evan Stewart, an attorney at Zuckerman Spaeder LLP in New York, who isn’t involved in the settlement talks.

“These are no longer small institutions catering to wealthy people in a small part of centralEurope,” he said. “These are multinational institutions now that have a reach that’s all over the world. This has a huge impact on the banking system in Switzerland. Another issue is the sovereignty in Switzerland and whether that will be given deference by other governments.”

The IRS has said 30,000 U.S. taxpayers with offshore accounts avoided prosecution since 2009 by entering a limited amnesty program, paying back taxes and saying who helped them hide their accounts from authorities. Hundreds of taxpayers in the program have given information to prosecutors that have helped them build criminal cases against bankers and advisers.

‘Wide Net’

“The DOJ and IRS are casting a wide net as they try to identify Americans guilty of offshore tax evasion,” said Aaron D. Schumacher, a Geneva-based wealth planning attorney, with Withers LLP.

“They obtained a lot of information about various Swiss banks from the participants in the voluntary disclosure programs and that has likely enabled the recent indictments we’ve seen,” he said. “More people than we saw previously have come to us looking to renounce their citizenship.”

Attorney Robert Katzberg, who represents clients in criminal tax cases, said U.S. taxpayers with Swiss accounts don’t understand that the IRS and Justice Department will get a trove of new data on secret accounts.

“There are thousands of Americans, who are the functional equivalent of residents of New Orleans on the eve of Hurricane Katrina, who have no idea that Katrina is about to happen,” said Katzberg, of Kaplan & Katzberg in New York.


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Hollywood News: Matt Damon & Ben Affleck to Make Film About Boston Mobster Whitey Bulger

Just days after Matt Damon confirmed that he’s settled on his first directing project, the actor tells GQ that he and Ben Affleck have also chosen their next collaboration: a movie about the former godfather of the Irish Mob, one of the coldest, most ruthless figures in the history of organized crime.

“We’re doing a Whitey Bulger movie,” Damon says of the leader of South Boston’s Winter Hill Gang, who had been on the lam for 16 years and was wanted for 19 murders, among other things, when he was apprehended in Santa Monica in June. “Warner’s got it for us.”

Damon will star as Bulger, Affleck will direct, and Terence Winter, of The Sopranos and Boardwalk Empire fame, is writing the script. Last year, Damon and Affleck cemented a first-look deal with Warner Bros., where their production company is now based. Damon has made nine movies at the studio in the last decade, while Affleck has become one of Warner’s go-to directors, making Gone Baby GoneThe Town and the soon-to-be-completed Argo, a comedy about the Iran hostage crisis. Warner’s also recently tapped Affleck to adapt and direct Stephen King’s mammoth apocalyptic novel The Stand.

There’d been talk that Damon and Affleck, who won Oscars in 1998 for their best original screenplay Good Will Hunting, would next reteam on The Trade, about two Yankees pitchers who swapped wives in the ’70s. But legal challenges have slowed that project, Damon says.

“That might happen at some point,” he says. But the Bulger picture will come first.

“There are a couple of competing movies and I don’t think it’s been announced yet that we’re doing it,” Damon says. “But the sooner it’s announced the better, just because everyone else will back off, hopefully. I’m really excited about it.”

Previously announced Bulger projects include one from producer Graham King, who won the Best Picture Oscar for another Damon film, Martin Scorsese’s The Departed, which depicted a character based on Bulger (played by Jack Nicholson). King has reportedly acquired the rights of the Winter Hill Gang’s chief enforcer, John Martorano. And actor Peter Facinelli, perhaps best known for the Twilight Saga, is said to be producing an adaptation of Edward MacKenzie and Phyllis Karas’s book Street Soldier: My Life as an Enforcer for Whitey Bulger and the Boston Irish Mob.

Bulger fled Boston, Affleck and Damon’s hometown, just before his federal racketeering indictment in January 1995. It was later revealed in federal court that he was a longtime FBI informant who had been warned by his corrupt handler, former FBI agent John J. Connolly Jr.—the basis for Damon’s character in The Departed—that he was about to be arrested. Bulger was eighty-one by the time the Feds finally caught up to him last summer, living by the beach with his girlfriend.

So will Damon play the young, vital Bulger or the aging fugitive? The actor says he doesn’t yet know. “If it’s a straight biopic, we’ll do it over a period of time. But it’s always a question of what part of the story do you tell, and biopics are always a little cumbersome,” Damon says. “So do we find another way in? We’re still figuring it out.”

Last week, meanwhile, Damon confirmed that he will be directing his first film for Warner Bros.: a script he co-wrote with John Krasinski of The Office fame. He’s keeping mum about the idea, which Krasinski originally developed with Dave Eggers, but to say, “It’s about a salesman who goes to this small town and how the salesman is changed by his experience there.” Reports last week that the movie resembles Erin Brockovich and involves a mass poisoning in the town are wrong, he says, shaking his head.

“Nobody gets poisoned,” says Damon, who plans to direct the untitled film early next year. “I don’t know where that came from.”
Read More http://www.gq.com/entertainment/movies-and-tv/201110/whitey-bulger-matt-damon-ben-affleck-irish-mob#ixzz1biLXOmrW

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Emerging Creditor Markets: Euro Zone Fund May Draw on China, Brazil

The mostly likely method for leveraging the euro zone’s bailout fund involves using it to provide bond insurance while combining its firepower with a special purpose vehicle drawing in funds from China or Brazil, European Union officials said.

After a summit of EU leaders on Sunday to try to come up with a comprehensive solution to the crisis, officials indicated that twinning two of the options for scaling up the 440 billion euro European Financial Stability Facility might end up securing broad backing, and the summit’s conclusions reflected that.

One official indicated that the special purpose vehicle could be attached to the EFSF itself, while others said it would involve the IMF. The options will have to be narrowed down by another summit on Wednesday. But Sunday’s summit conclusions referred to the IMF as a possible partner.

“The G20 should ensure that the IMF has adequate resources to fulfill its systemic responsibilities and should explore possible contributions to the IMF from countries with large external surpluses,” the conclusions said.

Export-giant China, which has the world’s biggest foreign currency reserves, is often referred to in G20 statements as an external surplus country. It has a sovereign wealth fund managing assets of over $230 billion.


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Google is exploring the possibility of helping to finance a possible deal by others to acquire Internet search company Yahoo, according to a report published by the Wall Street Journalon Saturday.

Google Inc. has talked to at least two-private equity firms about potentially assisting them to finance a deal to buy Yahoo Inc.’s core business, according to the story, which cited a person familiar with the matter, and did not identify the source.

The Journal said Google and prospective partners have held early-stage discussions, but haven’t assembled a formal proposal. The source said Google may not end up pursuing a bid.

A spokeswoman for Mountain View, California-based Google declined to comment to The Associated Press. A spokeswoman for Sunnyvale, California-based Yahoo said the company doesn’t comment “on rumor or speculation.”

Messages that The AP left on Saturday with representatives of Google, based in Mountain View, California, were not returned.

Any involvement by Google in a Yahoo acquisition would likely draw antitrust scrutiny from regulators, because of both companies’ shares in the Internet search business.

The report came as investors have recently driven up Yahoo’s stock price, betting that the company will sell itself, either in whole or in part. Closing Friday at $16.12 apiece, the shares have gained nearly 25 percent since Sept. 6, when CEO Carol Bartz was fired. They are up 45 percent from the stock’s 52-week low reached in early August.

There has been repeated speculation that the company might be sold to an assortment of buyout firms that prey upon troubled companies. Alibaba Group, a Chinese Internet company of which Yahoo owns a 43 percent stake, has expressed interest if it can line up the financing for a deal that would likely require a bid of more than $20 billion, the current market value of Yahoo’s shares. Microsoft Corp., which offered to buy Yahoo for $47.5 billion in 2008 before withdrawing the bid, also has been mentioned as a possible suitor.

Since Bartz’ firing, Tim Morse has been filling in as Yahoo’s interim CEO while also working as chief financial officer. After the company’s third-quarter earnings announcement on Tuesday, Morse told analysts that he couldn’t discuss what the company’s next step might be or when it might take it.

Yahoo is under pressure because its revenue has been falling at a time when the Internet advertising market has been growing as rivals such as Google and Facebook gain market share.

Although it’s still recognized around the world, Yahoo’s brand has been losing its luster as people increasingly embrace social networks such as Facebook and short-messaging service Twitter to keep track of what’s going on instead of relying on a media hub like Yahoo’s website.


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