ISRI gauging impact of coin buyback suspension

The American Metal Market Daily is the online resource for metals industry news and proprietary pricing information covering the steel, non-ferrous and scrap markets. Since its first print issue published in 1882, AMM has been the trusted name in metals industry information.  This is what AMM has learned about growing concerns reporrted by members of and recent actions taken by the Institute of Scrap Recycling Industries, Inc. (ISRI)  on their behalf (click below to access the article):

“Collecting coins out of scrap metal is a decades-old practice—particularly since the shredder came into being, and more so since the advent of advanced metal processing technology,” he said. “If it is hurting our members as a result of pricing of zorba or through the inability to sell direct back to U.S. Mint, then obviously we need to step in.”

Virginia Security Contractor to Pay $44,000 Over Allegations of Illegally Exporting Firearms Accessories

Alexandria, VA — Pax Mondial LLC, doing business as Mondial Risk Management Company (MRMC), agreed to pay the United States $44,000 to settle civil fraud claims that it illegally exported firearms accessories from the United States to Afghanistan in 2012. At the time, MRMC was providing security services to support work on the Kandahar Helmand Power Project, a United States Government reconstruction project funded by the U.S. Agency for International Development (USAID).
The settlement, reached between MRMC and the U.S. Department of Justice in January 2016, resolves claims that MRMC violated the Arms Export Control Act (AECA) by shipping weapons accessories from the continental United States to a U.S. Army/Air Post Office (APO) in Afghanistan between April 2012 and June 2012.  Working under a subcontract for security services with USAID implementer Black and Veatch, MRMC obtained these accessories, which included rifle stocks, replacement pistol magazines, and other weapons parts, to supply its security teams in Kandahar, Afghanistan.  The government alleged that MRMC knowingly failed to adhere to its subcontract provisions and U.S. laws and regulations regarding the export of such materials in violation of the False Claims Act (31 U.S.C. § 3729 et seq.).
“I commend the work of our special agents and their federal partners,” said Ann Calvaresi Barr, USAID’s Inspector General. “It is vital that U.S. Government contractors comply with rules governing their work and conduct overseas, especially those concerning international shipments of weapons and related accessories.  Failure to adhere to those rules is not acceptable.”
During the investigation, federal authorities identified a number of export violations, including MRMC’s failure to consult with the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC), a step that is required under both U.S. export laws and MRMC’s subcontract provisions.  Authorities also found that MRMC had failed to acquire the requisite permits, licenses, and registrations in order to ship these controlled items and had not registered as an exporter with DDTC.  MRMC did not disclose these violations to U.S. authorities until early 2013, long after the shipments had been made.
Under the settlement, Pax Mondial made no admission of liability.  The company registered with the Department of State’s DDTC while the investigation was underway.
The settlement is a result of joint investigative efforts by the USAID Office of Inspector General; U.S. Immigration and Customs Enforcement’s (ICE’s) Homeland Security Investigations (HSI); and the U.S. Attorney’s Office for the Eastern District of Virginia.

Liberty Reserve Exec Gets 20 Years For Laundering

 

Arthur Budovsky, 42, was sentenced today in the Southern District of New York to 20 years imprisonment for running a massive money laundering enterprise through his company Liberty Reserve S.A. (“Liberty Reserve”), a virtual currency once used by cybercriminals around the world to launder the proceeds of their illegal activity.

Assistant Attorney General Leslie R. Caldwell for the Justice Department’s Criminal Division and U.S. Attorney Preet Bharara for the Southern District of New York made the announcement.

In January, Budovsky pleaded guilty to one count of conspiring to commit money laundering.  In imposing sentence, the court noted that Budovsky ran an “extraordinarily successful” and “large-scale international money laundering operation.”  U.S. District Judge Denise L. Cote also ordered Budovsky to pay a $500,000 fine.

“The significant sentence handed down today shows that money laundering through the use of virtual currencies is still money laundering, and that online crime is still crime,” said Assistant Attorney General Caldwell.  “Together with our American and international law enforcement partners, we will protect the public even when criminals use modern technology to break the law.”

“Liberty Reserve founder Arthur Budovsky ran a digital currency empire built expressly to facilitate money laundering on a massive scale for criminals around the globe,” said Manhattan U.S. Attorney Bharara.  “Despite all his efforts to evade prosecution, including taking his operations offshore and renouncing his citizenship, Budovsky has now been held to account for his brazen violations of U.S. criminal laws.”

According to the indictment, Liberty Reserve billed itself as the Internet’s “largest payment processor and money transfer system” and allowed people all over the world to send and receive payments using virtual currency.  At all relevant times, Budovsky directed and supervised Liberty Reserve’s operations, finances, and business strategy and was aware that digital currencies were used by other online criminals, such as credit card traffickers and identity thieves.

Liberty Reserve grew into a financial hub for cybercriminals around the world, trafficking the criminal proceeds of Ponzi schemes, credit card trafficking, stolen identity information and computer hacking.  By May 2013, when the government shut it down, Liberty Reserve had more than 5.5 million user accounts worldwide and had processed more than 78 million financial transactions with a combined value of more than $8 billion.  United States users accounted for the largest segment of Liberty Reserve’s total transactional volume – between $1 billion and $1.8 billion – and the largest number of user accounts – over 600,000.

Four co-defendants, Vladimir Kats, Azzeddine El Amine, Mark Marmilev and Maxim Chukharev, have already pleaded guilty.  Marmilev and Chukharev were sentenced to five years and three years in prison, respectively.  Judge Cote is expected to sentence Kats and El Amine May 13. Charges remain pending against Liberty Reserve and two individual defendants who are fugitives.

The U.S. Secret Service, the Internal Revenue Service-Criminal Investigation and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations investigated this case as part of the Global Illicit Financial Team.  The U.S. Secret Service’s New York Electronic Crimes Task Force assisted with the investigation.  The Judicial Investigation Organization in Costa Rica, Interpol, the National High Tech Crime Unit in the Netherlands, the Spanish National Police’s Financial and Economic Crime Unit, the Cyber Crime Unit at the Swedish National Bureau of Investigation and the Swiss Federal Prosecutor’s Office also provided assistance.

Trial Attorney Kevin Mosley of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorneys Christian Everdell, Christine Magdo and Andrew Goldstein of the Southern District of New York are prosecuting the case.  The Criminal Division’s Office of International Affairs and Computer Crime and Intellectual Property Section provided substantial assistance.

FormerFedsGroup issues White Paper Working Draft on US Mint mutilated coin program

WASHINGTON, April 26, 2016 /PRNewswire/ — The FormerFeds Group LLC, today announced the release of its White Paper on the U.S. Mint’s Mutilated Coin Redemption Program including recommendations to improve coin redemption procedures.  This program was suspended by the Department of the Treasury in November 2015 for a review of its security processes.  The FormerFeds Group White Paper was commissioned by GeyerGorey LLP, the law firm representing Wealthy Max Limited (Wealthy Max), a claimant in a federal civil forfeiture case involving redemption of supposedly counterfeit coins.

The White Paper was produced by a team of professional researchers, analysts and retired FBI agents all working in the FormerFeds Group organization.  The document reviews the history and development of the U.S. Mint’s Mutilated Coin Redemption Program since its founding in 1911, and recent concerns about the possibility of criminal exploitation of the program.  It concludes with several policy recommendations for the Mint and Treasury Department to consider when determining how best to restructure and relaunch the program.  A copy of the White Paper can be downloaded here.

“Over the last six months the FormerFeds Group has worked closely with the Wealthy Max legal defense team to provide investigation support, internal compliance review and auditing and most recently policy research and recommendations,” saidRoy Johnson, Special Agent in Charge, FormerFeds Group LLC.  “Our investigation into this program has found no evidence counterfeit mutilated coins have ever been redeemed, yet concerns have lingered about this possibility.  This White Paper uses our research and analysis capabilities to present a neutral review of the current program, and generate practical recommendations for improvements in security that will not significantly increase costs.  We believe there is consensus among all stakeholders that the Mutilated Coin Redemption Program is worthwhile and should be maintained in a manner that addresses security concerns.  Our White Paper reflects the FormerFeds Group contribution to this discussion.”

On April 25th the White Paper was delivered to multiple officials at the U.S. Mint and is also being sent to members of the House Financial Services Subcommittee on Domestic Monetary Policy and Technology as well as senior officials from the Departments of Treasury, Justice and Homeland Security.

The primary recommendation of the FormerFeds Group White Paper is that the U.S. Mint require all large scale coin redeemers to implement a rigorous compliance program with third party validation, to demonstrate coins being redeemed are genuine U.S. currency.  Each shipment of coins would need to be inspected and validated prior to being submitted to the U.S. Mint for redemption.  The costs of the compliance program would be borne by the organizations redeeming coins and thus would not add to the government’s expenses associated with this program.

“The FormerFeds Group thinks the institution of a well-structured and documented compliance program for coin redeemers is an effective and viable approach to addressing concerns regarding the potential redemption of coins that are not genuine U.S. currency. We would welcome the opportunity to sit down with Mint officials to discuss our recommendations in greater detail,” concluded Raymond J. Carr, Special Agent in Charge, FormerFeds Group.

The FormerFedsGroup is an international provider of compliance, investigative, crisis management and business development services for private and non-government organizations.  The organization is staffed with experienced professionals, all of whom have over 20-years of experience in United States federal law enforcement.

SOURCE The FormerFeds Group LLC

Related Links

http://www.formerfedsgroup.com2015-05-29 11.34.57

Chasing the Jackpot in America’s Cash Stream-AMM

The American Metal Market Daily attended the FormerFedsGroup.Com unsealing of 13 metric tons of Wealthy Max US clad coins in Hong Kong. American Metal Market is the online resource for metals industry news and proprietary pricing information covering the steel, non-ferrous and scrap markets. Since its first print issue published in 1882, AMM has been the trusted name in metals industry information.  This is what AMM has learned about the scrap industry and the coin redemption industry in what is a fascinating read.

Cash and Carry: The US Mint vs. Wealthy Max
Chasing the Elusive Jackpot in America’s Cash Stream 

American Metals Market Report on Hong Kong Unsealing by FormerFedsGroup of 13 Metric Tons of Mutilated Clad Coins Processed by Wealthy Max

2015-05-29 11.34.57

The country’s oldest and most respected metals market trade publication, AMM, attended the Hong Kong unsealing of 13 metric tons of US clad coins on February 23rd that were processed in Foshan, China by the Wealthy Max quality assurance line in September, 2014, immediately following its processing of four shipments of mutilated clad coins that were seized by the government as being counterfeit.  Now, the US Attorney’s Office of the Eastern District of Pennsylvania, which played no role in creating this mess, has, sensibly, reasonably and in good faith, has started referring to the coins as not meeting Mint specifications rather than in the preposterous terms used by the US Attorney’s Office of New Jersey and the Department of Homeland Security who, preposterously, continue to allege counterfeiting in one of the most slipshod, ramshackle and careless investigations in recent memory.  Linked here is the carefully researched article.

Wealthy Max Arranges Events in Hong Kong to Fight Civil Forfeiture Case Challenges Members of Congress and Other Government Officials to See for Themselves if the Company is Guilty

Feb. 9, 2016PRLog — Washington, DC – Wealthy Max Limited (Wealthy Max), a claimant in a federal civil forfeiture case involving supposedly counterfeit coins, today announced that it had invited the members of the House Financial Services Subcommittee on Domestic Monetary Policy and Technology as well as senior officials from the Departments of Treasury, Justice and Homeland Security, to attend a briefing and product audit in Hong Kong.  The event is being held as part of the Company’s fight against the civil forfeiture of $2.388 million owed to it by the U.S. Mint.  It will also demonstrate once and for all that Wealthy Max does not traffic in counterfeit U.S. coins.

On February 23rd there will be a briefing by Wealthy Max executives and a public unsealing of 13 metric tons of damaged U.S. coins that were destined to be shipped to the U.S. Mint until the civil fortitude caused a halt to operations.  The unsealing will be overseen by former U.S. FBI agents who are members of the FormerFedsGroup.com.

On February 24th Wealthy Max will organize a trip to Foshan, China, to visit metal recycling companies where the Company sources its coins.  Participants will see the hand-sorting process that yields damaged U.S. coins, as well as the growing stockpiles of coins that would have been returned to the U.S. Mint, but for this unjust civil forfeiture action.

“The members of the House Financial Services Subcommittee on Domestic Monetary Policy and Technology have oversight responsibility for the U.S. Mint, and should have a keen interest in this case, as it reflects unprecedented executive branch over reach, which could impact perceptions of the government’s commitment to full faith and credit in our currency,” said Bradford L. Geyer, counsel for Wealthy Max.  “Going back to the founding documents of our country, the Secretary of the Mint, with Congressional oversight, has the sole responsibility for the minting of coins and sourcing materials to be used in those coins.  The actions of the U.S. Attorney’s Office and the Department of Homeland Security have effectively usurped this responsibility.”

“Wealthy Max has been a reliable supplier to the U.S. Mint for over a decade and we have successfully redeemed more than 160 shipments of coins in that time,” said Matthew Wong, director, Wealthy Max Limited. “We were shocked by the accusations against us, and the unjust seizure of our property by the U.S. government.  We have been treated like criminals who have no rights.  This is why we are demanding our property back, and more, we are demanding justice for ourselves and others who have been wronged by the U.S. authorities.  Before these officials accuse us of being criminals, they should come to Hong Kong to see for themselves our product and our supply chain.”

In addition to the members of congress and their staffs, and the other U.S. government officials who have been invited to this event, Wealthy Max has extended invitations to local and international media, and members of the American Chamber of Commerce in Hong Kong.

North Florida Shipyards to Pay $1 Million to Resolve False Claims Allegations

North Florida Shipyards and its president, Matt Self, will pay the United States $1 million to resolve allegations that they violated the False Claims Act by creating a front company, Ind-Mar Services Inc., in order to be awarded Coast Guard contracts that were designated for Service Disabled Veteran Owned Small Businesses (SDVOSBs), the Justice Department announced today.  North Florida Shipyards has facilities in Jacksonville, Florida.

“Those who expect to do business with the government must do so fairly and honestly,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “We will not tolerate contractors who seek to profit at the expense of our veterans and taxpayers.”

To qualify as a SDVOSB on Coast Guard ship repair contracts, a company must be operated and managed by service disabled veterans and must perform at least 51 percent of the labor.  The government alleged that North Florida created Ind-Mar merely as a contracting vehicle and that North Florida performed all the work and received all the profits.  The government further alleged that if the Coast Guard and the Small Business Administration (SBA) had known that Ind-Mar was nothing but a front company, the Coast Guard would not have awarded it contracts to repair five ships.

In December 2013, the SBA suspended North Florida, Matt Self, Ind-Mar and three others from all government contracting.  In April 2014, North Florida and Matt Self entered into an administrative agreement with the SBA in which they admitted to having created and operated Ind-Mar in violation of its Coast Guard contracts and SBA statutes and regulations.

“Special programs to assist service disabled veterans are an important part of the SBA’s business development initiative,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida.  “False claims such as this undermine the integrity of this vital program and, where found, will be vigorously pursued by our Office.”

“This settlement sends a strong message to those driven by greed to fraudulently obtain access to contracting opportunities set-aside for deserving small businesses owned and operated by service disabled veterans,” said Inspector General Peggy E. Gustafson for the SBA.  “We are committed to helping ensure that only eligible service disabled veteran owned small businesses benefit from that SBA program.”

The settlement resolves allegations originally filed in a lawsuit by Robert Hallstein and Earle Yerger under the qui tam, or whistleblower provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  The act also allows the government to intervene and take over the action, as it did in this case.  Hallstein and Yerger will receive $180,000.

The investigation was a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the Middle District of Florida, the Department of Homeland Security’s-Office of Inspector General and the SBA Office of Inspector General.

The claims resolved by the settlement are allegations only, except to the extent that North Florida and Matt Self have admitted to the conduct in their agreement with the SBA.

The case is captioned United States ex rel. Yerger, et al, v. North Florida Shipyards, et al., Case No. 3:11-cv-464J-32 MCR (M.D. Fla.).

Virginia-Based Move Management Company Pays More Than $500,000 to Settle Overbilling Claims in Connection with Transportation of Personal Property in Relocating Federal Employees

Virginia-Based Move Management Company Pays More Than $500,000 to Settle Overbilling Claims in Connection with Transportation of Personal Property in Relocating Federal Employees

RE/MAX Allegiance Relocation Services, a Virginia-based move management company, has agreed to pay the government $509,807 to resolve allegations that it violated the False Claims Act by overbilling for transportation services, the Department of Justice announced today.

“Today’s settlement demonstrates our continuing vigilance to ensure that those doing business with the government do so legally and honestly and that taxpayer funds are not misused,” said Assistant Attorney General for the Civil Division Stuart F. Delery.  “Government contractors who seek to profit at the expense of taxpayers will be held accountable.”

 

The settlement relates to allegations involving contracts to transport personal property of federal employees relocating duty stations within the United States and between the United States and Canada.  The government alleged that the defendant charged for move management services that were not provided and overbilled agencies on other moves by charging inapplicable tariff rates.

 

“We encourage whistleblowers to provide us with useful information to help us combat all manners of fraud on the U.S. Government,” said U.S. Attorney for the Eastern District of Virginia Dana J. Boente.

“We will continue to investigate allegations of federal contractors fraudulently maximizing their profits at the expense of American taxpayers,” said U.S. General Services Administration Acting Inspector General Robert C. Erickson.

The settlement resolves allegations filed in a lawsuit by Michael Angel, a former employee of RE/MAX Allegiance Relocation Services, in federal court in Alexandria, Virginia.  The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  The act also allows the government to intervene and take over the action, as it did in this case.  Angel will receive $86,667.

The settlement was the result of a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Eastern District of Virginia, the General Services Administration Office of Inspector General, U.S. Department of Homeland Security Office of Inspector General, Department of Agriculture Office of Inspector General and NASA Office of Inspector General.

The case is captioned United States ex rel. Michael Angel v. Franconia Real Estate Services, Inc., d/b/a RE/MAX Allegiance Relocation Services; No. 1:12cv764 (E.D.Va.).  The claims resolved by the settlement are allegations only; there has been no determination of liability.

19 Arrested in International Round Up on Federal Fraud Charges

Fifteen individuals were arrested today in South Africa, Canada, California, Wisconsin and Indiana, pursuant to an eight-count federal indictment on fraud charges filed in the Southern District of Mississippi.  A total of 19 individuals were arrested across the United States and internationally on charges brought by federal prosecutors in Mississippi, South Carolina and Georgia.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Gregory K. Davis for the Southern District of Mississippi, Raymond Parmer Jr., Special Agent in Charge of Immigration Customs Enforcement (ICE), Homeland Security Investigations (HSI) in New Orleans and Robert Wemyss, U.S. Postal Inspection Service Inspector in Charge made the announcement.
Another individual was arrested today in New York on a related Southern District of Mississippi complaint.    Three defendants in South Carolina were arrested in Charleston, pursuant to a nine-count indictment, and the U.S. Attorney’s Office for the Northern District of Georgia has filed related criminal complaints in Atlanta against two additional defendants.    All of the indictments and complaints were unsealed yesterday.
The indictments allege the involvement of a West African transnational organized crime enterprise engaged in numerous complex financial fraud schemes over the internet.    This mass marketing fraud includes romance scams, re-shipping scams, fraudulent check scams and work-at-home scams, along with bank, financial and credit card account take-overs.
The investigation was initiated in October 2011, by HSI agents in Gulfport, Mississippi, after U.S. law enforcement officers were contacted by a female victim who was the victim of a sweetheart scam.    The victim received a package in the mail requesting that she reship the merchandise to an address in Pretoria, South Africa.  The investigation later revealed that the merchandise was purchased using stolen personal identity information and fraudulent credit card information of persons in the United States.  Investigators have identified hundreds of victims of this scam in the United States, resulting in the loss of millions of U.S. dollars.
Today’s arrests were the result of an investigation led by the HSI Gulfport office in partnership with the U.S. Postal Inspection Service, South African Police Service, Toronto Police, HSI Cyber Crimes Center, Treasury Executive Office of Asset Forfeiture, HSI Ontario, HSI Charleston, Interpol South Africa, HSI Pretoria and HSI Atlanta.
The Department of Justice Office of International Affairs assisted in the provisional arrests of ten defendants in Pretoria, South Africa.    Another defendant was arrested in Toronto, Canada, and the remaining defendants were arrested in the United States.
The case in Mississippi will be prosecuted by Assistant U.S. Attorneys Annette Williams and Scott Gilbert, and will be scheduled for trial after extradition of the defendants to Mississippi.    The South Carolina prosecution will be handled by Department of Justice Organized Crime and Gang Section trial attorneys Leshia Lee-Dixon and Robert Tully.    The Georgia cases will be prosecuted by Assistant U.S. Attorney Shanya J. Dingle of the Northern District of Georgia.
An indictment is a formal charge against a defendant.    Under the law, an indictment is merely an accusation and a defendant is presumed innocent until proven guilty.