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Tag: Corporate crime

  • The AP Interview: Olympics boss vows Paris Games will be safe, says no resignations planned in probe

    The AP Interview: Olympics boss vows Paris Games will be safe, says no resignations planned in probe

    SAINT-DENIS, France — What was shaping up as a regular workday turned out to be anything but for the organizers of France’s first summer Olympic Games in a century.

    French anti-corruption police raided their bustling Olympic headquarters on the outskirts of Paris, arriving unannounced and accompanied by a magistrate from a French financial crimes prosecution unit that has made a habit of going after sports’ rogues.

    This time, they were zeroing in on twenty or so of the many hundreds of business contracts that Olympic organizers have signed as they race to prepare the French capital for 10,500 athletes and millions of spectators next year. The investigators were hunting for documents and information as they dig into suspicions of favoritism, conflicts of interest, and misuse of some of the billions of euros (dollars) being sunk into the Paris Games that open July 26, 2024.

    Tony Estanguet, a former Olympic canoeing star with gold medals from the 2000, 2004 and 2012 Games, was at work in the Olympic HQ when police came knocking last week. The trim 45-year-old is the face and chief organizer of the Paris Games, presiding over a rapidly growing workforce whose preparations were progressing largely smoothly before investigators arrived with a judge’s warrant.

    “It’s the first time this has happened to us, so we were surprised,” Estanguet says. “We said, ‘Yes, of course, take all the information you need.’”

    “I am cooperating. There will surely be other stages. We’ll surely have to reply to more questions. There will be more checks right up to the end, perhaps even after the Games,” he acknowledges. “So I am ready for that and I know that it is part of this kind of adventure. We’ll be inspected intensely, criticized hugely.”

    In a wide-ranging interview with The Associated Press, the Paris 2024 president vigorously defended colleagues whose homes also were searched. The two senior organizing committee executives for now face no allegations and are being looked at because they were involved in business decisions, Estanguet says. “There’s no question of envisaging” their resignation “for the moment,” he adds.

    Estanguet insists that the two financial probes of Paris Games contract awards bear no comparison with corruption and ethics scandals that have for decades dogged the Olympic movement and its flagship money-spinning event, including the 2021 Tokyo Olympics and Rio de Janeiro’s bribery-plagued Games of 2016.

    “It’s unfair to say that we’re like the others,” he says. “Unfortunately, things went off course in the past and I think we’re all being lumped together a bit, although I can tell you that we’re being very careful and everyone here has to be very careful because there is no room for error.”

    In the hour-long AP interview, Estanguet also addressed other issues crucial to the success of the first Olympics to host spectators again after the COVID-19 pandemic:

    — Security preparations for the groundbreaking opening ceremony on July 26 will turn Paris into “the safest place in the world,” he boldly predicts. Instead of a traditional stadium ceremony, Paris intends to showcase its iconic monuments with a waterborne extravaganza on a 6-kilometer (3 1/2-mile) stretch of the cleaned-up River Seine. Hundreds of thousands of spectators will mostly watch for free in the heart of the French capital, where Islamic extremists attacked twice in 2015, killing 147 people, including outside the national stadium.

    “If you want to be safe, come to Paris for the opening ceremony,” Estanguet says.

    — With just a year to go, Paris still has a lot of unfinished work, and that’s fine, he says. “There are lots of things that aren’t ready. But that’s normal. I used to be a top-level athlete. It’s never good to be ready a year beforehand … You have to be ready on gameday and arrive with the feeling that you’re not quite ready. That way you fight, cling on, give everything to really be at your best,” he says.

    The probes led by France’s financial prosecution service — the first opened in 2017, the second in 2022 — threaten to hang over organizers for the duration of the July-August Olympics and the Paralympic Games that follow into September. Investigators expect to spend months sifting through documents recovered in their searches of the Paris 2024 offices, the homes of Etienne Thobois, its director general, and Edouard Donnelly, executive director of operations. They also searched the HQ of the company delivering Olympic infrastructure, Solideo, and homes of some of its staff, according to a judicial official with knowledge of the investigations who wasn’t authorized to discuss them publicly.

    The official said the Paris court that would hear any case, if the prosecutors’ probes get that far, also has no room on its calendar to hold a trial before September 2024.

    Investigators do not suspect that bribes were paid or received, drawing a sharp distinction with the corruption probes that ensnared Tokyo and Rio, the official said. Instead, two police units that fight financial criminality are investigating about 20 Olympic-related contracts — some worth less than 1 million euros — for suspected violations of French laws governing conflicts of interest, contract dealings and use of public funds, the official said.

    Estanguet acknowledges that with an event so big and costly, it’s a constant battle to keep tabs on everyone working to make it happen.

    He detailed multiple layers of internal and external checks, including continuous scrutiny by state auditors, that he and other Olympic organizers work under in dealing with service providers and in handling their budget of 4.38 billion euros (US$4.8 billion) — one of the largest chunks of the overall Paris Games spending approaching 9 billion euros. Paris 2024 says it has signed contracts with more than 1,500 companies so far.

    No Paris 2024 employee awards contracts alone, “the decision is always collective,” Estanguet says.

    “From the outset, we’ve been very careful because we know we’re watched and we know we’re accountable. And vis-à-vis the French, we have this duty to be exemplary. Me, I have my image,” says the former athlete who at the opening ceremony of the 2008 Beijing Olympics was chosen to carry France’s tricolor flag.

    “I believe in sport. It changed my life. I want to show that sport will change this country and that sport will be a success. And I don’t want this adventure to be remembered as having been badly managed.”

    ___

    Paris chief correspondent John Leicester has covered eight summer and winter Olympics for AP. More AP coverage of the Paris Olympics: https://apnews.com/hub/2024-paris-olympic-games and https://twitter.com/AP_Sports

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  • Nvidia, AMD stocks fall on report of new U.S. ban on AI chip exports to China

    Nvidia, AMD stocks fall on report of new U.S. ban on AI chip exports to China

    Shares of Nvidia Corp. and Advanced Micro Devices Inc. slumped in the extended session Tuesday following a report that the Biden administration is considering a new ban on sales of AI chips to China.

    Nvidia shares
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    +3.06%

    A fell 3% after hours, following a 3.1% gain to close at $418.76, while AMD shares
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    also fell 3%, after a 2.7% gain in the regular session to close at $110.39.

    Late Tuesday, the Wall Street Journal reported the Commerce Department could further block sales of AI chips to China unless U.S. companies first obtain a special license.

    The ban would follow upon similar actions last year that threatened $400 million in Nvidia sales, but the company found a workaround in supplying a version of products that avoided the ban.

    Read: AMD launches new data-center AI chips, software to go up against Nvidia and Intel

    Both Nvidia and AMD have launched new AI chips this year: Nvidia in March and AMD earlier in the month. Last year’s release of Open AI’s ChatGPT generative AI — with billions of dollars invested by Microsoft Corp.
    MSFT,
    +1.82%

    — resulted in an explosion of interest in artificial-intelligence technology, prompting luminaries to herald the technology as the biggest thing in tech since … you name it.

    Read: Bill Gates says AI is only the second revolutionary tech advancement in his lifetime

    News of the possible ban happened to follow a claim earlier in the day from Baidu Inc.
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    +3.09%

    on the Chinese search company’s blog, which said its Ernie 3.5 version AI outperformed ChatGPT’s earlier version “in comprehensive ability scores,” and its latest iteration, GPT-4, which was released in mid-March, “in several Chinese-language capabilities.”

    Baidu’s claim appeared to be based upon performance metrics published in China Science Daily. On Wall Street, ADRs of Baidu were down 0.7% after hours, following a 3.1% gain to close at $143.90.

    As of Tuesday’s close, Nvidia shares were up 187% in 2023, and AMD shares were up 70% for the year.

    Read: Snowflake adds partnerships with Nvidia and Microsoft for AI double play

    Shares of Super Micro Computer Inc.
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    ,
    which have benefited from AI, also declined 3% after hours, while shares of Intel Corp.
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    +2.28%
    ,
    which supplies chips to data centers, saw shares decline 1% after hours.

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  • ‘This is a game changer’: Ahead of Amazon Prime Day, a new law makes it harder for online sellers to hawk fake or stolen products

    ‘This is a game changer’: Ahead of Amazon Prime Day, a new law makes it harder for online sellers to hawk fake or stolen products

    Shopping online has just gotten safer.

    The INFORM Consumers Act, which went into effect Tuesday, aims to limit the sales of stolen and counterfeit products on e-commerce platforms. 

    The measure, which requires e-commerce sites to verify and disclose information about their high-volume third-party sellers, was passed into law following a lobbying campaign to address counterfeit products after being left out of the bipartisan Chips and Science Act last year.

    All online marketplaces, including eBay, Etsy, Poshmark and Amazon’s third-party sales platform, will now be required to collect information from high-volume sellers, defined as those selling 200 items or more totaling at least $5,000 over the previous 12 months. These third-party sellers must submit information such as a government-issued ID, a bank-account number, a working email address and phone number, and a taxpayer identification number. 

    Customers will also be able to find the verified contact information for bigger third-party sellers — those with sales of over $20,000 a year — and to get in touch with them outside of the e-commerce platform. In the past, consumers often had to engage within the platform operator in order to communicate with a seller. 

    Those bigger sellers will also have their full names and physical addresses listed on their product pages in addition to their contact information, according to the Federal Trade Commission’s business guide

    “This is a game changer,” said Teresa Murray, director of the consumer watchdog office at U.S. PIRG, a nonprofit that lobbies on behalf of the public interest. “For bad guys, stealing items has generally been the difficult part. Selling things online once you’ve stolen them is easy. We hope that with the INFORM Act, it’s not nearly as easy in the future.”

    ‘The only people opposing this may be thieves.’


    — Teresa Murray, U.S. PIRG

    The act goes into effect just weeks before Amazon Prime Day, when the world’s biggest e-commerce site rolls out discounts for Prime members. This year, Prime Day will be held over two days, on July 11 and 12.

    Picks: Amazon Prime Day is July 11-12. You’ll need the $139-a-year Prime membership to access the deals, but is it actually worth it?

    Also see: Amazon sued by FTC, which alleges people were ‘tricked and trapped’ into Prime subscriptions

    Several e-commerce platforms, including Amazon and eBay, supported the INFORM Consumers Act. TechNet, a national network of technology CEOs and senior executives representing what it calls the innovation economy, wrote to leaders in Congress last December, saying the law would improve consumer safety and increase transparency. 

    In a statement provided to MarketWatch, eBay
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    +2.32%

    said it “fully supports transparency and is committed to a safe selling and buying experience for our customers. We were proud to support” the law “to protect consumers from bad actors who seek to misuse online marketplaces, while also ensuring important protections for sellers. We are fully prepared to comply with the new law.”

    Etsy
    ETSY,
    +3.45%

    said it “has long been supportive of the INFORM Act passing into law, as a balanced and thoughtful approach to make the ecommerce landscape safer for both consumers and sellers.” In a statement provided to MarketWatch, the company said, “We are taking appropriate steps to comply with the INFORM Act requirements.”

    Amazon
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    +1.45%

    and Poshmark, owned by South Korea–based Naver Corp.
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    did not immediately respond to MarketWatch requests for comment.

    Some analysts, however, said the new law lacks stronger protections that were included the SHOP SAFE Act, an earlier bill that did not get passed by Congress. The INFORM Act, they noted, does not hold online platforms liable when a third party sells harmful counterfeit products or when the platform has not followed certain best practices. 

    “Notably, the legislation is supported by Amazon and other marketplaces as it’s seen as a watered-down bill that would head off more stringent legislation like the SHOP SAFE Act,” Ben Koltun, director of research at Beacon Policy Advisors, wrote in a note last year.

    So how can consumers spot counterfeit or stolen items? A guide from PIRG has tips, such as keeping an eye out for products with suspiciously low prices or featuring misspellings or mislabeling or low-quality, photoshopped photos in their listings.

    PIRG also cautions consumers about purchasing medications online. Always check the legitimacy of online pharmacies, it says. 

    “Many online marketplaces haven’t been doing enough to protect consumers from sellers who appear to be peddling stolen or counterfeit goods,” Murray said. “The only people opposing this [new law] may be thieves.”

    Victor Reklaitis contributed.

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  • Ex-Goldman Sachs investment banker convicted of insider trading charges

    Ex-Goldman Sachs investment banker convicted of insider trading charges

    A former Goldman Sachs investment banker has been convicted of insider trading and obstruction of justice charges

    NEW YORK — A former Goldman Sachs investment banker was convicted of insider trading charges Wednesday after a weeklong trial.

    Brijesh Goel, 38, of Manhattan, was convicted in Manhattan federal court of securities fraud, conspiracy and obstruction of justice by a jury that deliberated less than a day before concluding he had shared secrets about likely merger-and-acquisition transactions that Goldman Sachs was considering financing.

    Sentencing was set for Oct. 19.

    Prosecutors said Goel worked in Manhattan at the investment bank when he shared information about potential merger and acquisition deals with a friend who worked at another investment bank in Manhattan.

    Goel and the friend agreed to split profits from their illegal trading, which amounted to about $280,000, prosecutors said.

    Prosecutors said Goel obstructed justice by deleting electronic communications regarding the insider trading scheme as a grand jury and the U.S. Securities and Exchange Commission investigated.

    Adam Ford, an attorney for Goel, declined comment.

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  • US appeals court rejects bail for Chinese businessman awaiting fraud trial

    US appeals court rejects bail for Chinese businessman awaiting fraud trial

    A U.S. federal appeals court has rejected a bid for bail by a self-exiled Chinese businessman awaiting trial in a $1 billion fraud case

    ByLARRY NEUMEISTER Associated Press

    NEW YORK — A self-exiled Chinese businessman awaiting trial in a $1 billion fraud case will remain behind bars after an appeals court on Wednesday rejected his request to override a lower court’s finding that he might flee or harm the community if he were to be freed.

    The 2nd U.S. Circuit Court of Appeals in Manhattan said in a two-page order that Guo Wengui’s lawyers had failed to convince a three-judge panel that Judge Analisa Torres made a clear error in refusing to accept a $25 million bail package proposal in April.

    Torres said she didn’t trust that Guo, listed in court papers under the name Ho Wan Kwok, would obey court orders if he was released on strict conditions including GPS monitoring and a 24-hour armed guard. She also wrote that he posed a threat to the community.

    Guo, who was arrested in March, has pleaded not guilty to charges including wire and securities fraud. Prosecutors said he fleeced thousands of investors in too-good-to-be-true offerings that promised outsize profits for investors in his media company, GTV Media Group Inc., his so-called Himalaya Farm Alliance, G’CLUBS, and the Himalaya Exchange.

    He allegedly used proceeds from the five-year fraud scheme starting in 2018 to buy extravagant goods and assets for himself and his family. Prosecutors say he has a 50,000-square-foot mansion, a $3.5 million Ferrari, two $36,000 mattresses and a $37 million luxury yacht.

    His lawyers, though, say he is broke.

    Guo was once thought to be among the richest people in China before he left in 2014 during a crackdown on corruption that ensnared individuals close to him, including a top intelligence official. Chinese authorities have accused Guo of rape, kidnapping, bribery and other offenses.

    Guo has said those allegations are false and were meant to punish him for publicly outing corruption and criticizing leading figures in the Communist Party.

    While living in New York, he became a fierce critic of the ruling Communist Party in China and developed a close relationship with former President Donald Trump’s onetime political strategist Steve Bannon. In 2020, Guo and Bannon announced a joint initiative to overthrow the Chinese government.

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  • Guatemala sentences renowned journalist José Rubén Zamora to six years in money laundering case

    Guatemala sentences renowned journalist José Rubén Zamora to six years in money laundering case

    GUATEMALA CITY — A Guatemalan tribunal sentenced newspaper founder José Rubén Zamora to six years in prison Wednesday in a money laundering case, concluding a trial that press freedom groups decried as a political persecution aimed at silencing a critical voice.

    The three-judge panel convicted and sentenced the well-known journalist on a charge of money laundering that affected the national economy and stability of the financial system. The tribunal cleared Zamora of additional charges of blackmail and influence peddling.

    Guatemala President Alejandro Giammattei, and specifically his justice system, have been criticized internationally for backsliding on democratic principles and weaponizing the country’s prosecutors and courts to pursue perceived enemies.

    “I am innocent of the crimes,” Zamora said after his sentencing. “I continue being innocent and he (Giammattei) continues being a thief.”

    Giammattei has denied there was any political motivation.

    Zamora’s El Periodico newspaper was known as fiercely independent and published investigations about corruption in the administrations of Giammattei and his predecessors. Zamora’s work has been internationally recognized.

    In his final comments to the court Wednesday before the verdict was announced, Zamora said, “all of my rights were violated,” including the right to a defense. “They treated us like criminals, they destroyed evidence,” he said.

    Several of his defense lawyers were arrested in the run-up to the trial.

    After the hearing, Rafael Curruchiche, the Attorney General’s special prosecutor against impunity who brought the charges against Zamora, was visibly upset and raised his voice, insisting that prosecutors would likely appeal the sentence and ask for the 40-year sentence they had originally requested.

    He said the prison time Zamora would get is compensation for those whose “name and reputation” he and his newspaper destroyed.

    The charges stemmed from Zamora, 66, asking a friend to deposit a $38,000 donation to keep the newspaper going rather than depositing it himself. Zamora has said he did so because the donor did not want to be identified supporting an outlet in the sights of Giammattei.

    The tribunal fined Zamora an equal amount Wednesday.

    With Zamora in jail, El Periodico was forced to stop publishing a print edition Nov. 30 due to its financial difficulties. The outlet halted operations altogether May 15.

    Last month, the Guatemalan Association of Journalists said that at least 20 journalists have been forced to flee the country in recent years.

    Following the sentence Wednesday, the New York-based Committee to Protect Journalists condemned the proceeding.

    Carlos Martinez de la Serna, CPJ’s program director, said the “shameful” sentence was part of attempts by Giammattei’s government to “criminalize journalism,” and that it signaled an erosion of free speech in Guatemala.

    “Guatemalan officials must end the absurd charade of criminal proceedings against him. It is time for José Ruben Zamora to be released, for his only ‘crime’ has been the fearless exercise of his profession.”

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  • EU charges Google with anti-competitive practices in ad tech business

    EU charges Google with anti-competitive practices in ad tech business

    EU Commissioner for A Europe Fit for the Digital Age – Executive Vice President Margrethe Vestager is talking to media during a virtual press briefing in the Berlaymont, the EU Commission headquarter on November 26, 2020, in Brussels, Belgium.

    Thierry Monasse | Getty Images

    The European Union on Wednesday charged Google with breaching antitrust rules in advertising technology, known as adtech, and may seek the break-up of parts of the tech giant’s business to allay the bloc’s concerns.

    The European Commission, the executive arm of the EU, reached a preliminary conclusion that Google is dominant in the European market for publisher ad servers and for programmatic ad buying tool for the open up. The commission also said that Google has abused this dominant position since at least 2014.

    Alphabet, Google’s parent company, will now have the chance to read the concerns raised by the commission and defend its position in writing, as well as request an oral hearing to present their comments.

    The commission suggested that Google might have to break up the business in order to address the concerns raised and thus comply with competition rules in the bloc.

    “The Commission’s preliminary view is therefore that only the mandatory divestment by Google of part of its services would address its competition concerns,” EU Competition Chief Margrethe Vestager said in a statement.

    “[Google] collects users’ data, it sells advertising space, and it acts as an online advertising intermediary. So Google is present at almost all levels of the so-called adtech supply chain,” she added. “Our preliminary concern is that Google may have used its market position to favour its own intermediation services. Not only did this possibly harm Google’s competitors but also publishers’ interests, while also increasing advertisers’ costs. If confirmed, Google’s practices would be illegal under our competition rules,”

    Google was not immediately available for comment when contacted by CNBC Wednesday.

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  • Judge temporarily blocks Microsoft’s $69 billion purchase of Activision

    Judge temporarily blocks Microsoft’s $69 billion purchase of Activision

    A federal judge late Tuesday approved a request by the Federal Trade Commission to temporarily block Microsoft Corp.’s $69 billion acquisition of Activision Blizzard Inc.

    U.S. District Judge Edward Davila in San Francisco issued a temporary restraining order in order to “maintain the status quo,” and set a evidentiary hearing to be held June 22-23 on whether a preliminary injunction should be issued.

    The deal was set to be finalized as soon as this Friday. Tuesday’s order said the deal may not close until at least five days after the court’s preliminary injunction ruling.

    The acquisition has raised antitrust concerns that Microsoft
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    +0.74%
    ,
    with its Xbox gaming console, could withhold hit Activision Blizzard
    ATVI,
    +1.17%

    videogame franchises such as “Call of Duty” and “Overwatch” from competing console platforms.

    On Monday, the FTC filed for a restraining order and injunction to block the deal, arguing “a preliminary injunction is necessary to maintain the status quo and prevent interim harm to competition.”

    “This loss of competition would likely result in significant harm to consumers in multiple markets at a pivotal time for the industry,” the FTC said in its filing Monday.

    In a statement Tuesday evening, a Microsoft spokesperson said: “Accelerating the legal process in the U.S will ultimately bring more choice and competition to the gaming market. A temporary restraining order makes sense until we can receive a decision from the court, which is moving swiftly.” 

    While EU regulators approved the deal in May, British regulators have tentatively scheduled appeal hearings after saying in April they would prohibit the purchase.

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  • Trump charged with 37 counts in classified documents case, indictment says

    Trump charged with 37 counts in classified documents case, indictment says

    A 37-count criminal indictment against Donald Trump for retaining classified government records and conspiring to prevent their return to U.S. officials was unsealed Friday.

    The charging document was made public a day after the former president was indicted by a grand jury in U.S. District Court in Miami.

    Among other allegations, the indictment says that Trump showed classified documents to other people in the summer of 2021, after leaving office.

    Follow our live coverage of Donald Trump’s indictment in the classified documents case.

    One of those documents was a “plan of attack” that he said was prepared by the Pentagon, while the other was a classified map related to a military operation, the indictment alleges.

    Also charged in the indictment was Trump’s valet, Walter Nauta, who faces several of the same charges as his boss, with whom he allegedly conspired to keep classified records and hide them from a federal grand jury.

    The FBI raid of Trump’s Florida home last August discovered hundreds of classified documents, which he had failed to turn over to U.S. officials despite months of efforts to recover them.

    Former U.S. President Donald Trump is seen in Midtown on April 03, 2023 in New York City. Trump is scheduled to be arraigned tomorrow at a Manhattan courthouse following his indictment by a grand jury.

    Gotham | Gc Images | Getty Images

    The indictment says Trump was aware of the highly sensitive nature of the documents, quoting him at one point as saying: “As president, I could have declassified it … but this is still secret.”

    Trump and Nauta are due to be arraigned in Miami on Tuesday, the day before the ex-president’s 77th birthday.

    He and Nauta each face a maximum possible sentence of 20 years in prison if convicted of the most serious charges, which are conspiracy to obstruct justice and counts related to withholding and concealing the government records.

    Thirty-one of the counts accuse Trump of willful retention of national defense information. He is also charged with conspiracy to obstruct justice; withholding a document or record; corruptly concealing a document or record; concealing a document in a federal investigation; scheme to conceal; and false statements and representations.

    Trump was put under criminal investigation in the spring of 2022, after the FBI was notified that classified documents were found in the 15 boxes of government records he gave to the National Records and Archives Administration after months of effort by NARA to recover documents the agency believed were missing.

    By law, presidents must give NARA all government records when they leave office.

    The indictment notes, “As he departed the White House, TRUMP caused scores of boxes, many of which contained classified documents, to be transported to The Mar-a-Lago Club in Palm Beach, Florida, where he maintained his residence.”

    “TRUMP was not authorized to possess or retain those classified documents,” the indictment says.

    Trump later suggested to any attorney that he lie to the FBI and a grand jury by saying that he did not have the documents they were seeking, and directed Nauto to move boxes of documents to conceal them from Trump’s own lawyer, the FBI and the grand jury, the indictment alleges.

    Trump also is accused in the indictment of suggesting to his lawyer that the attorney hide or destroy documents, that he gave the FBI and the grand jury only some of the documents he had kept while claiming he was fully cooperating.

    And Trump caused a certification to be submitted to the FBI and grand jury, falsely representing that all documents had been produced when he knew that was not true, according to the indicment.

    The indictment estimates that Trump’s trial would take between 21 and 60 days.

    Earlier Friday, two of his lawyers resigned from representing him in the classified documents case, and in another pending federal criminal investigation for his efforts to overturn his loss in the 2020 presidential election.

    Read the indictment against Donald Trump

    This is breaking news. Check back for updates.

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  • Businessman linked to Texas AG Ken Paxton’s impeachment charged with lying to get $172M in loans

    Businessman linked to Texas AG Ken Paxton’s impeachment charged with lying to get $172M in loans

    AUSTIN, Texas — A Texas businessman at the center of the scandal that led to the historic impeachment of state Attorney General Ken Paxton was charged Friday with making false statements to mortgage lenders to obtain $172 million in loans.

    The federal indictment of real estate developer Nate Paul is the result of a yearslong FBI investigation — a probe Paxton involved his office in, setting off a chain of events that ultimately led to his impeachment and suspension from office last month.

    Paul was charged with eight counts of making false statements while seeking loans from mortgage lenders in the U.S. and Ireland. There was no mention of Paxton or the attorney general’s office during the hearing.

    Paul, 36, who entered the federal courtroom shackled and wearing jeans, a blue shirt and Nikes, did not enter a plea during his initial appearance in an Austin court nor visibly react as the charges were read. He was released ahead of trial but ordered to surrender his passport and inform the court of any travel outside Texas.

    Paul is “adamant that he is not guilty,” defense attorney Gerry Morris said after hearing, adding that he did not know when his client last spoke with Paxton. An attorney for Paxton did not immediately respond to a request for comment Friday.

    Paul is accused of overstating his assets and understating his liabilities while seeking loans in 2017 and 2018, including by giving financial institution false and counterfeit records. In one case, prosecutors said, Paul told banks he had $18 million in an account when he had less than $13,000. In another case laid out in the 23-page indictment, Paul is accused of having $28 million in liabilities but giving a credit union in 2018 a far lower number.

    FBI agents examining Paul’s troubled real estate empire searched his Austin offices and palatial home in 2019. The next year, eight of Paxton ’s top deputies reported the attorney general to the FBI on allegations of bribery and abuse of office, including for hiring an outside lawyer to examine the developer’s claims of wrongdoing by federal agents.

    The allegations by Paxton’s staff prompted an FBI investigation, which remains ongoing, and are central to 20 articles of impeachment overwhelmingly approved by the GOP-led state House of Representatives. They include abuse of public trust, unfitness for office and bribery.

    The impeachment accuses Paxton of using his office to help Paul over his unproven claims of an elaborate conspiracy to steal $200 million of the developer’s properties. The bribery counts say that in return the developer employed a woman with whom Paxton had an extramarital affair and paid for expensive renovations to the attorney general’s million-dollar Austin home.

    Paxton’s lawyers sought to rebut the latter claim this week by releasing a bank statement that included a 2020 wire transfer purportedly showing Paxton, and not a donor, paying more than $120,000 for a home renovation. But the document raised new questions about the men’s dealings.

    The wire transfer was dated Oct. 1, 2020 — the same day Paxton’s deputies signed a letter informing the head of human resources at the Texas attorney general’s office that they had reported their boss to the FBI. The $121,000 payment was to Cupertino Builders, whose manager had done work for Paul and had an email address with his company, state corporation and court records show.

    Paul has faced numerous lawsuits from creditors and business partners over the years, with several of his companies filing for bankruptcy or being placed under the supervision of court-appointed overseers. Last year, one of those receivers wrote in a report that Cupertino Builders was used for “fraudulent transfers” from Paul’s business.

    Paul has denied bribing Paxton. The attorney general has also broadly denied wrongdoing and said he expects to be acquitted during an impeachment trial in the state Senate, where his wife is a member.

    The Senate will set its own rules for a trial that has little precedent, given that Paxton is just the third sitting official in Texas history to be impeached. The proceeding is set begin no later than Aug. 28.

    Paxton was separately indicted on securities fraud charges in 2015, though he has yet to stand trial.

    ___

    Bleiberg reported from Dallas.

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  • FBI arrests Texas businessman linked to impeachment of state Attorney General Ken Paxton

    FBI arrests Texas businessman linked to impeachment of state Attorney General Ken Paxton

    AUSTIN, Texas — The FBI on Thursday arrested a businessman at the center of the scandal that led to Texas Attorney General Ken Paxton’s historic impeachment, a move that came amid new questions about the men’s dealings raised by financial records the Republican’s lawyers made public to try to clear him of bribery allegations.

    Nate Paul, 36, was taken into custody by federal agents and booked into an Austin jail in the afternoon, according Travis County Sheriff’s Office records. It was not immediately clear what charges led to his arrest, but the records showed he was being held on a federal detainer for a felony.

    Paul’s arrest followed a yearslong federal investigation into the Austin real estate developer — a probe that Paxton involved his office in, setting off a chain of events that ultimately led to his impeachment last month.

    Lawyers for Paul did not immediately respond to requests for comment.One of Paxton’s defense attorneys, Dan Cogdell, said he had no additional information on the arrest. The FBI declined to comment, and a spokesman for federal prosecutors in West Texas did not respond to inquires.

    FBI agents examining Paul’s troubled real estate empire searched his Austin offices and palatial home in 2019. The next year, seven of Paxton ’s top deputies reported the attorney general to the FBI on allegations of bribery and abusing his office to help Paul, including by hiiring an outside lawyer to examine the developer’s claims of wrongdoing by federal agents.

    The allegations by Paxton’s staff prompted separate FBI investigation of the attorney general, which remains ongoing, and are central to articles of impeachment overwhelmingly approved by the GOP-led state House of Representatives.

    On Wednesday, Paxton’s defense team showed a packed room of journalists a bank statement that included a 2020 wire transfer purportedly showing him, and not a donor, paying more than $120,000 for a home renovation.

    The wire transfer was dated Oct. 1, 2020 — the same day Paxton’s deputies signed a letter informing the head of human resources at the Texas attorney general’s office that they had reported Paxton to the FBI.

    The $121,000 payment was to Cupertino Builders, whose manager was an associate of Paul, state corporation and court records show.

    The company did not incorporate as a business in Texas until more than three weeks after the transaction took place. A company of the same name was formed in Delaware in April of that year, although public filings there do not make clear who is behind it.

    Last year a court-appointed overseer for some of Paul’s companies wrote in a report that Cupertino Builders was used for “fraudulent transfers” from his business to Narsimha Raju Sagiraju, who was convicted of fraud in California in 2016. The report described Sagiraju as Paul’s “friend.”

    Paul, who also employed a woman with whom Paxton acknowledged having an extramarital affair, has denied bribing Paxton. In a deposition, Paul described Sagiraju as an “independent contractor” and said he didn’t remember how they first met.

    The timing of the payment — and the identity of who was paid for renovations at Paxton’s home in Austin — was not publicly known before his new legal team held a news conference Wednesday in which they put financial documents on a projector screen while criticizing the impeachment. They were first reported by The Wall Street Journal.

    Tony Buzbee, a prominent Houston attorney who was hired by Paxton over the weekend and led the news conference, said by email Thursday that receipts “clearly demonstrate” Paxton paid for the repairs. He did not address questions about the timing of the payments or Cupertino Builders.

    “Without any evidence the politicians leading this sham impeachment falsely accused General Paxton of not paying for the repairs to his home. That is a lie,” Buzbee said.

    Since becoming just the third sitting official in Texas history to be impeached, Paxton has attacked the proceedings as politically motivated and rushed, saying he was never given the chance to rebut the accusations in the state House.

    “We have the receipts,” Buzbee told reporters Wednesday as the documents flashed onscreen. “This is the type of evidence we tried to offer them once we found out this foolishness was going on.”

    Paxton is temporarily suspended from office pending the outcome of a trial in the Texas Senate that is set to begin no later than Aug. 28. The “jury” will be the members of the 31-seat Senate; one of them, Paxton’s wife, Sen. Angela Paxton, has not said whether she will recuse herself.

    The Paxtons purchased the Austin house in 2018. When it was remodeled two years later, Paxton’s former staff alleged in court documents, Paul “was involved in” the work.

    Among the 20 articles of impeachment are accusations that Paxton used the power of his office to help Paul over unproven claims of an elaborate conspiracy to steal $200 million of the developer’s properties. The FBI searched Paul’s home in 2019, but he has not been charged and his attorneys have denied wrongdoing.

    The city has no record of building permits from the time of the renovations. A different Austin contractor — not Cupertino Builders — received a federal grand jury subpoena in 2021 for records related to work on Paxton’s home that started in January 2020.

    Cupertino Builders was formed in October 2020 and dissolved less than two years later, according to Texas corporation records. Its manager was Sagiraju, who said in a deposition for an unrelated case that he did “consulting” work for Paul’s business and had an email address with Paul’s company.

    Sagiraju acknowledged that he served prison time for securities fraud and grand theft in California before moving to Austin, according to a transcript of the deposition. He said he was first introduced to Paul by a mutual friend before his prison term and they later did “a few projects” together.

    A lawyer for Sagiraju did not immediately respond to requests for comment.

    Paxton was separately indicted on securities fraud charges in 2015, though he has yet to stand trial. ___ Bleiberg reported from Dallas. Associated Press journalists Adam Kealoha Causey in Dallas and Derek Karikari in New York contributed.

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  • Trump told he is target of Mar-a-Lago documents criminal probe by special counsel

    Trump told he is target of Mar-a-Lago documents criminal probe by special counsel

    Former President Donald Trump greets supporters at a Team Trump volunteer leadership training event held at the Grimes Community Complex on June 01, 2023 in Grimes, Iowa. 

    Scott Olson | Getty Images

    Former President Donald Trump has been informed he is a target of the federal criminal probe into his retention of hundreds of classified government records after leaving the White House, NBC News reported Wednesday evening.

    Such notification typically occurs before prosecutors decide whether to lodge criminal charges against a target.

    Trump’s attorneys were told at a meeting Monday at the Department of Justice with special counsel Jack Smith and other DOJ officials that he is a target of the classified documents investigation, according to two sources briefed on the meeting, NBC reported. It was not clear if they previously had been notified of that status for him.

    Targets are people who prosecutors believe committed a crime. Targets often end up being indicted.

    DOJ regulations say that a prosecutor, “in appropriate cases, is encouraged to notify such person a reasonable time before seeking an indictment in order to afford him or her an opportunity to testify before the grand jury.”

    A DOJ spokesperson declined to comment.

    Disclosure of Trump’s status in the investigation came as Taylor Budowich, a top aide of his, testified to a grand jury in U.S. District Court in Miami, which has been gathering evidence for the case.

    Smith is probing Trump both for keeping classified records at his residence in his Mar-a-Lago club in Palm Beach, Florida, and his suspected efforts to hide those documents and keep them from government officials seeking their return. By law, presidents must surrender government records when they leave office.

    A raid on Mar-a-Lago last August by the FBI uncovered hundreds of classified documents and other government records.

    CNBC Politics

    Read more of CNBC’s politics coverage:

    Trump in a social media post on Wednesday said, “no one has told me I’m being indicted.”

    He added that he should not be criminally charged in the case “because I’ve done nothing wrong.”

    Trump did not directly answer a New York Times reporter, Maggie Haberman, when she asked him if he had been told he was a target, she reported.

    Trump, who is seeking the 2024 Republican presidential nomination, was indicted by a New York state grand jury in March on charges of falsifying business records in connection with a 2016 hush money payment to porn star Stormy Daniels by his then-personal lawyer.

    He has pleaded not guilty in that case, which is due to go to trial next year in Manhattan Supreme Court.

    Smith separately is overseeing a criminal probe of Trump’s efforts to reverse his loss in the 2020 national presidential election. A state prosecutor in Georgia likewise is investigating him and his allies for such efforts in that state’s presidential election that year.

    Trump on Wednesday called the prosecutors in all of those cases “fascists” who were trying to harm him politically.

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  • Money laundering trial ends for former Panamanian President Ricardo Martinelli

    Money laundering trial ends for former Panamanian President Ricardo Martinelli

    The trial of former Panamanian President Ricardo Martinelli and 14 others for alleged money laundering related to their purchase of a publishing company concluded Friday, starting the clock on the 30 days the judge has to issue a verdict

    FILE – Panama’s former President Ricardo Martinelli talks to reporters near his home, in Panama City, Aug. 9, 2019. Martinelli’s trial and 14 others for alleged money laundering related to their purchase of a publishing company concluded on Friday, June 2, 2023, starting the clock on the 30 days the judge has to issue a verdict. (AP Photo/Eric Batista, File)

    The Associated Press

    PANAMA CITY — The trial of former Panamanian President Ricardo Martinelli and 14 others for alleged money laundering related to their purchase of a publishing company concluded on Friday, starting the clock on the 30 days the judge has to issue a verdict.

    Martinelli, a 71-year-old supermarket magnate who hopes to seek re-election next year, had back surgery the week before the trial started and was not present.

    The case, known locally as “New Business,” dates back to 2017 and concerns the 2010 purchase of a publishing company that owns national newspapers.

    Prosecutors maintain that through a complex series of foreign money transfers totaling $43 million, companies that had won lucrative government contracts during Martinelli’s presidency, funneled money to a front company that was then used to purchase the publisher. The front company collecting the money was called “New Business.”

    In closing statements, prosecutor Emeldo Márquez requested the maximum sentence for Martinelli, which would be 12 years, but could be extended to 18 years with aggravating factors.

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  • Theranos founder Elizabeth Holmes set to report to prison on Tuesday

    Theranos founder Elizabeth Holmes set to report to prison on Tuesday

    Theranos founder and former CEO Elizabeth Holmes pauses while going through a security checkpoint as she arrives for trial at the Robert F. Peckham Federal Building on December 07, 2021 in San Jose, California.

    Justin Sullivan | Getty Images

    Disgraced Theranos CEO Elizabeth Holmes is expected to report to prison Tuesday to begin her more than 11-year sentence for defrauding investors about the capabilities of her company’s blood-testing technology.

    U.S. District Judge Edward Davila ordered Holmes to surrender no later than 2 p.m. local time Tuesday at a minimum-security facility in Bryan, Texas in a ruling earlier this month. The ruling followed a day after an appeals court rejected Holmes’ bid to stay out of prison while she appeals her conviction.

    Holmes, 39, has two young children with her current partner, William “Billy” Evans. Her second child was born earlier this year after her sentencing in Nov. 2022.

    A federal jury in San Jose, California, convicted Holmes on four counts of defrauding investors in Theranos, the company she dropped out of Stanford University to found in 2003. In another ruling this month, Davila ordered that Holmes and former Theranos executive Ramesh “Sunny” Balwani pay $452 million in restitution to victims.

    Balwani and Holmes, former romantic partners, helmed Theranos during its meteoric rise. At its peak, Theranos was valued at more than $9 billion and attracted backers ranging from the DeVos family to news magnate Rupert Murdoch. It was one of Murdoch’s publications, The Wall Street Journal, that first reported on irregularities with Theranos’ supposedly revolutionary blood-testing machines.

    Balwani was convicted on 12 counts of wire fraud and conspiracy to commit wire fraud. He is serving his nearly 13-year sentence in a prison in Southern California.

    Holmes’ saga began when she dreamed of running hundreds of laboratory tests with just a finger prick of blood. The idea was to make blood tests cheaper, more convenient and accessible to consumers, but Theranos’ technology ultimately proved to be faulty and unreliable.

    Patients were given inaccurate test results relating to conditions such as HIV, cancer and miscarriages. In closing arguments during Holmes’ trial, prosecutors argued that she “chose fraud” over “failure.”

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  • US inks modest trade deal with Taiwan in show of support in the face of pressure from China

    US inks modest trade deal with Taiwan in show of support in the face of pressure from China

    The United States has reached a modest trade agreement with Taiwan

    ByPAUL WISEMAN AP Economics Writer

    FILE – U.S. Trade Representative Katherine Tai listens to a reporter’s question at a press conference at the Foreign Correspondents’ Club of Japan Thursday, April 20, 2023, in Tokyo. The U.S. has reached a modest trade agreement with Taiwan, signaling Washington’s support for the island democracy as it comes under increasing pressure from China. The first agreement under the U.S.-Taiwan Initiative on 21st Century Trade announced Thursday, May 18, 2023, is expected to set the stage for a bigger deal later — “a robust and high-standard trade agreement,’’ U.S. Trade Representative Tai said. (AP Photo/Shuji Kajiyama, File)

    The Associated Press

    WASHINGTON — The United States has reached a modest trade agreement with Taiwan, signaling Washington’s support for the island democracy as it comes under increasing pressure from China.

    The first agreement under the U.S.-Taiwan Initiative on 21st Century Trade is expected to set the stage for a bigger deal later — “a robust and high-standard trade agreement,’’ U.S. Trade Representative Katherine Tai said.

    The initiative announced Thursday will, among other things, cut red tape at customs and reduce waiting times for U.S. businesses bringing products to Taiwan. It also commits the U.S. and Taiwan to adopting measures to combat bribery and other forms of corruption and to encouraging more trade involving small- and medium-sized businesses.

    The agreement does not require approval from the U.S. Congress. But there is broad bipartisan support in Washington for Taiwan, an island of 23 million that split from China when the communists took over the mainland in 1949 and has since developed into a prosperous democracy. Beijing considers Taiwan a renegade Chinese province and has long demanded that it reunify.

    Relations between the United States and China – the world’s two biggest economies – have deteriorated in recent years. The United States accuses China of predatory economic practices and has criticized Beijing’s crackdown on dissent in Hong Kong and Muslim region of Xinjiang and its bullying of neighbors, including Taiwan, over territorial claims.

    “Beijing is likely to complain about this announcement, but its words will fall on deaf ears in Washington as negotiations continue” with Taiwan, said Wendy Cutler, vice president at the Asia Society Policy Institute and a former U.S. trade negotiator.

    Taiwan is the world’s leading producer of computer chips. The United States last year bought $105 billion worth of goods and services from Taiwan, making it the 10th-biggest source of U.S. imports. American exports to Taiwan came to nearly $55 billion, making it America’s 15th-biggest foreign market.

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  • Deutsche Bank to settle Jeffrey Epstein suit for $75 million: report

    Deutsche Bank to settle Jeffrey Epstein suit for $75 million: report

    Deutsche Bank AG will pay $75 million to settle a proposed class-action lawsuit claiming it aided Jeffrey Epstein’s sex-trafficking ring, the Wall Street Journal reported Wednesday night.

    The suit was filed by lawyers on behalf of an anonymous victim and others who accused the financier, who died by suicide in federal lockup in 2019, of sexual abuse and trafficking. The suit claimed Deutsche Bank
    DB,
    +1.92%

    ignored red flags and did business with Epstein for five years despite knowing he was using the money from his accounts to further his sex trafficking.

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  • Wells Fargo settles shareholder lawsuit for $1 billion: report

    Wells Fargo settles shareholder lawsuit for $1 billion: report

    Wells Fargo & Co. has agreed to pay $1 billion to settle a shareholders lawsuit related to its 2016 fake-accounts scandal, according to the Wall Street Journal.

    Citing court documents, the Journal reported Monday night that Wells Fargo
    WFC,
    +3.41%

    settled a class-action suit brought by shareholders who claimed bank executives overstated the bank’s progress at cleaning up its risk-management systems and governance in the wake of the scandal.

    In a statement to the Journal, Wells Fargo said: “While we disagree with the allegations in this case, we are pleased to have resolved this matter.”

    The settlement, which still needs to be approved by a judge, likely would be the 17th-largest ever for a shareholders’ class action, the Journal reported.

    Wells Fargo has paid billions in fines and settlements related to the scandal. In December, the  Consumer Financial Protection Bureau ordered Wells Fargo to pay $3.7 billion as a result of alleged widespread mismanagement, and in March, a former Wells Fargo executive accused of overseeing the fake-account scheme pleaded guilty to criminal charges, agreeing to a 16-month prison term and a $17 million fine.

    Wells Fargo shares are down 6% year to date and are off 8% over the past 12 months, compared to the S&P 500’s
    SPX,
    +0.30%

    8% gain in 2023 and 3% rise over the past year.

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  • TripAdvisor lawsuit highlights companies moving to Nevada from Delaware

    TripAdvisor lawsuit highlights companies moving to Nevada from Delaware

    A lawsuit filed in Delaware in April against the travel site Tripadvisor and its majority shareholder is highlighting what may be a growing trend: companies seeking to shift their incorporations to Nevada to avoid Delaware’s more stringent and entrenched legal standards.

    The suit was filed on behalf of a group of Tripadvisor Inc. TRIP shareholders, who are hoping to persuade the Delaware Chancery Court to stop the company from pushing ahead with board-approved plans to reincorporate in Nevada, arguing their motive is to take…

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  • US agency raises ‘serious concerns’ about tech visa lottery

    US agency raises ‘serious concerns’ about tech visa lottery

    BERKELEY, Calif. — The number of applications for visas used in the technology industry soared for a second straight year, raising “serious concerns” that some are manipulating the system to gain an unfair advantage, authorities said Friday.

    There were 780,884 applications for H-1B visas in this year’s computer-generated lottery, up 61% from 483,927 last year, U.S. Citizenship and Immigration Services said in a message to “stakeholders.” Last year’s haul was up 57% from 308,613 applications the year before.

    Each year, up to 85,000 people are selected for H-1B visas, a mainstay for technology giants such as Amazon.com Inc., Google parent Alphabet Inc., Facebook parent Meta Platforms Inc. and International Business Machines Corp.

    Last year, the government began requiring workers who won the lottery to sign affidavits stating they didn’t try to game the system by working with others to file multiple bids under different company names, even if there was no underlying employment offer. By winning at least once, these companies could market their services to technology companies that wanted to fill positions but didn’t have visas, effectively becoming labor contractors.

    “The large number of eligible registrations for beneficiaries with multiple eligible registrations — much larger than in previous years — has raised serious concerns that some may have tried to gain an unfair advantage by working together to submit multiple registrations on behalf of the same beneficiary. This may have unfairly increased their chances of selection,” the agency wrote.

    The agency said it has “undertaken extensive fraud investigations” based on lottery submissions from the last two years, denied some petitions and is “in the process” of referring some cases to federal prosecutors for possible crimes.

    The number of registrations tied to people who applied more than once rose to 408,891 this year from 165,180 last year and 90,143 the year before.

    “We remain committed to deterring and preventing abuse of the registration process, and to ensuring only those who follow the law are eligible to file an H-1B cap petition,” the agency said.

    H-1B visas, which are used by software engineers and others in the tech industry, have been a lightning rod in the immigration debate, with critics saying they are used to undercut U.S. citizens and legal permanent residents. They are issued for three years and can be extended another three years.

    Technology companies say H-1Bs are critical for hard-to-fill positions even as they have had to lay off workers in other areas. As the number of applications have soared in the last two years, major companies have seen winning lottery submissions dwindle.

    Andrew Greenfield, a partner at the law firm Fragomen, which represents major technology companies, said the increase in applications is “bizarre” given widespread layoffs in the industry. His clients had a roughly 15% success rate on lottery entries this year, down from about 30% last year.

    “It’s devastating,” Greenfield said. “Our clients are legitimate employers that are just unable to source enough talent in the United States to fill all their hiring needs.”

    Fraud, as outlined by U.S. authorities, may be driving up applications, with companies under different names but the same ownership submitting entries on behalf of the same person, Greenfield said, but there may be other reasons. Some applicants may convince different, independently-owned companies to sponsor them in the lottery, which is perfectly legal. Some companies may overestimate their labor demands when they enter the lottery in March.

    The computer-generated lottery in March selected 110,791 winners for the 85,000 slots. Companies have until June 30 to confirm they plan to go ahead with hiring. If confirmations fall short of 85,000, the government may hold another lottery to fill remaining slots.

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  • US agency raises ‘serious concerns’ about tech visa lottery

    US agency raises ‘serious concerns’ about tech visa lottery

    BERKELEY, Calif. — The number of applications for visas used in the technology industry soared for a second straight year, raising “serious concerns” that some are manipulating the system to gain an unfair advantage, authorities said Friday.

    There were 780,884 applications for H-1B visas in this year’s computer-generated lottery, up 61% from 483,927 last year, U.S. Citizenship and Immigration Services said in a message to “stakeholders.” Last year’s haul was up 57% from 308,613 applications the year before.

    Each year, up to 85,000 people are selected for H-1B visas, a mainstay for technology giants such as Amazon.com Inc., Google parent Alphabet Inc., Facebook parent Meta Platforms Inc. and International Business Machines Corp.

    Last year, the government began requiring workers who won the lottery to sign affidavits stating they didn’t try to game the system by working with others to file multiple bids under different company names, even if there was no underlying employment offer. By winning at least once, these companies could market their services to technology companies that wanted to fill positions but didn’t have visas, effectively becoming labor contractors.

    “The large number of eligible registrations for beneficiaries with multiple eligible registrations — much larger than in previous years — has raised serious concerns that some may have tried to gain an unfair advantage by working together to submit multiple registrations on behalf of the same beneficiary. This may have unfairly increased their chances of selection,” the agency wrote.

    The agency said it has “undertaken extensive fraud investigations” based on lottery submissions from the last two years, denied some petitions and is “in the process” of referring some cases to federal prosecutors for possible crimes.

    The number of registrations tied to people who applied more than once rose to 408,891 this year from 165,180 last year and 90,143 the year before.

    “We remain committed to deterring and preventing abuse of the registration process, and to ensuring only those who follow the law are eligible to file an H-1B cap petition,” the agency said.

    H-1B visas, which are used by software engineers and others in the tech industry, have been a lightning rod in the immigration debate, with critics saying they are used to undercut U.S. citizens and legal permanent residents. They are issued for three years and can be extended another three years.

    Technology companies say H-1Bs are critical for hard-to-fill positions even as they have had to lay off workers in other areas. As the number of applications have soared in the last two years, major companies have seen winning lottery submissions dwindle.

    Andrew Greenfield, a partner at the law firm Fragomen, which represents major technology companies, said the increase in applications is “bizarre” given widespread layoffs in the industry. His clients had a roughly 15% success rate on lottery entries this year, down from about 30% last year.

    “It’s devastating,” Greenfield said. “Our clients are legitimate employers that are just unable to source enough talent in the United States to fill all their hiring needs.”

    Fraud, as outlined by U.S. authorities, may be driving up applications, with companies under different names but the same ownership submitting entries on behalf of the same person, Greenfield said, but there may be other reasons. Some applicants may convince different, independently-owned companies to sponsor them in the lottery, which is perfectly legal. Some companies may overestimate their labor demands when they enter the lottery in March.

    The computer-generated lottery in March selected 110,791 winners for the 85,000 slots. Companies have until June 30 to confirm they plan to go ahead with hiring. If confirmations fall short of 85,000, the government may hold another lottery to fill remaining slots.

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