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Tag: fraud and financial crimes

  • House GOP keeps up attacks on IRS with bill to abolish the agency | CNN Politics

    House GOP keeps up attacks on IRS with bill to abolish the agency | CNN Politics

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    Washington
    CNN
     — 

    The Republican-controlled House has made the Internal Revenue Service a political target after Democrats bolstered the agency with new funding last year.

    Within the first week of the new Congress, a dozen GOP lawmakers introduced a bill that would abolish the IRS altogether and replace the entire federal tax code with a national sales tax.

    Separately, the House voted to rescind nearly $80 billion in funding for the agency that Democrats approved last year – with many top Republicans repeating the misleading claim that the money will be used to hire 87,000 auditors.

    “Instead of adding 87,000 new agents to weaponize the IRS against small business owners and middle America, this bill will eliminate the need for the department entirely by simplifying the tax code with provisions that work for the American people and encourage growth and innovation,” said Rep. Earl “Buddy” Carter, a Republican from Georgia who introduced the Fair Tax Act earlier this month.

    It’s highly unlikely that either bill will become law, given that Democrats still control the Senate. But the measures highlight how America’s two major political parties have very different strategies when it comes to addressing the embattled tax collection agency – which has seen its budget shrink by more than 15% over the past decade and has struggled to not only process returns on time but also answer taxpayers’ questions. Just 13% of phone calls were answered last year.

    Democrats have taken a different approach, making funding the IRS a priority. The Inflation Reduction Act, which passed along party lines last year, approved $80 billion for the IRS over 10 years. By using the money to crack down on tax cheats, it’s estimated that the agency could boost federal revenue by more than $124 billion over that time period.

    The Republicans’ Fair Tax Act is not a new idea. A version was first introduced in Congress in 1999. It’s never had enough support to become law, but it puts forth an appealing message to those Americans who love to hate the federal tax agency.

    It would get rid of the complicated federal tax system, doing away with the annual task of filing tax returns. Instead, the bill would replace federal taxes on individual and corporate income with a national 23% sales tax in 2025, allowing for adjustments to the rate in later years. Americans would pay Uncle Sam whenever they bought a new good or service for personal consumption.

    The bill calls for abolishing the IRS and directing states to collect the new federal tax.

    While every consumer would pay the same tax at the cash register, the bill provides for a monthly tax rebate payment, based on the poverty rate and family size. It’s meant to help offset the tax levy on low-income Americans who tend to spend a higher share of their paycheck on goods and services.

    A national sales tax appears very simple: one rate all Americans pay on new goods and services they buy.

    But some policy experts say the Fair Tax Act is more complicated than it looks.

    “Moving away from taxing income and toward taxing consumption is a step in the right direction for a pro-growth and simpler tax code,” said Garrett Watson, a senior policy analyst at the Tax Foundation, an independent tax policy nonprofit.

    But there could still be complications. First, the tax rate would likely have to be higher than 23% in order for the federal government to pull in the same amount of tax revenue that it does now. One estimate found that a tax rate of about 30% would more likely be able to generate the same amount of revenue – or 44%, if measured the way state sales taxes are typically presented.

    Second, a nationwide sales tax could leave low- and middle-income people worse off. The current tax system is progressive, meaning it takes a larger percentage of income from high-earners than low-income groups. Even with the monthly tax rebate, a national sales tax would still be less progressive.

    A 2011 independent analysis of a similar national sales tax found that, on average, most income groups would pay more tax than they did under the federal tax system at the time – except the top 5% of earners who would see a tax cut.

    Additionally, it’s hard to imagine that lawmakers would pass a bill that does not exclude some things from the sales tax, like health care costs, for example.

    “The basic income tax is simple too,” said Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center.

    It’s the deductions, credits and exclusions – like for retirement savings and charitable giving – that make it complicated.

    Plus, Americans would likely have to file some paperwork to some tax collection entity in order to receive the rebate, Gleckman said. The administration cost may be less than it is now, but it wouldn’t be zero.

    Tax filing season opens Monday and National Taxpayer Advocate Erin Collins expects IRS services for taxpayers to improve this year – in part due to the funding increase provided by Congress.

    Since the Inflation Reduction Act was passed in August, the IRS has hired 5,000 new customer service agents. The agency has also worked to improve its technology so that taxpayers can ask questions via an automated service online, said Treasury Deputy Secretary Wally Adeyemo on a call with reporters last week.

    The IRS started the year with about 400,000 unprocessed paper individual returns and about 1 million unprocessed business returns. But it’s in much better shape than the prior year, when it had a backlog of 4.7 million unprocessed individual returns and 3.2 million unprocessed business returns, according to the taxpayer advocate’s annual report to Congress.

    Taxpayer service, like answering the phones and processing returns in a timely manner, has suffered as the IRS’ budget has shrunk.

    The Covid-19 pandemic brought even more challenges for the IRS. It was tasked with administering several rounds of stimulus payments to millions of Americans with a lot of its staff working from home. This caused long delays for many taxpayers who filed a paper return. The IRS is starting to implement a scanning system so that returns filed by paper can quickly be made digital. Previously, paper returns had to be entered manually into the agency’s computer system.

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  • George Santos said accused ‘Ponzi scheme’ he worked at was ‘100% legitimate’ when accused of fraud in 2020 | CNN Politics

    George Santos said accused ‘Ponzi scheme’ he worked at was ‘100% legitimate’ when accused of fraud in 2020 | CNN Politics

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    CNN
     — 

    Republican Rep. George Santos, said a company later accused of running a “Ponzi scheme” was “100% legitimate” when it was accused by a potential customer of fraud in 2020, more than a year before it was sued by the US Securities and Exchange Commission. Once the company, where he worked, came under federal scrutiny, Santos claimed publicly that he was unaware of accusations of fraud at the firm, a CNN KFile review of Santos’ social media and statements found.

    Santos, the embattled freshman Republican, faces growing pressure to resign after he lied and misrepresented his educational, work and family history, including falsely claiming he was Jewish and the descendant of Holocaust survivors. Santos admitted to “embellishing” his resume, but has maintained he is “not a criminal.”

    Santos worked at Harbor City Capital Corp. in 2020 and 2021, a company the SEC said was a “classic Ponzi scheme” in an April 2021 complaint against the firm. A Ponzi scheme is a type of fraud where existing investors are paid with funds from new investors, often promising artificially high rates of return with little risk. Santos was not named in the SEC complaint.

    Joseph Murray, an attorney for Rep. Santos, told CNN in an email on Thursday that Santos was unaware of wrongdoing at the company.

    “As to any questions about Harbor City Capital, in light of the ongoing investigation, and for the benefit of the victims, it would be inappropriate to respond other than to say that Congressman Santos was completely unaware of any illegal activity going on at Harbor City Capital,” Murray told CNN.

    Santos told The Daily Beast in 2022 that he was “as distraught and disturbed as everyone else” to learn of allegations against Harbor City. But in a since-removed tweet on his since-deleted personal Twitter account, a potential customer questioned claims the company had a 100% bank guarantee on their investment in the form of a stand by line of credit (SBLC).

    “The market instability is leading to sever (sic) capital erosion. @HarborCityCap offers you a strategy that mitigates loss and risk while creating cash flow, meanwhile your principle is 100% secured by an SBLC held by various major institutions. #fixedincome #alternativeinvestment #win,” Santos tweeted in April 2020 under the name George Devolder, using his mother’s family name.

    In June, a potential customer responded to that tweet from Santos saying he looked into a SBLC from Harbor City and found it to be fraudulent.

    “George, this SBLC I received from Harbor City was looked into, and Deutsche Bank claims is a complete fraud and not signed by the bank officer on the document. How do you explain this?,” the user said.

    “I’m sorry I’m not following you. Could you please send me an email at George.devolder@harborcity.com and we can go over this together. Our SBLC is 100% legitimate and issued by their institution. I look forward to hearing from you,” responded Santos.

    In fact, according to the SEC complaint, “at no point” was Harbor City Capital “ever issued a SBLC,” despite claims from the company.

    Dylan Riddle, a spokesman for Deutsche Bank, told CNN on Monday that they had no affiliation with Harbor City Capital.

    “Harbor City Capital was not a client of Deutsche Bank,” he said.

    Attorney Katherine C. Donlon, the court-appointed receiver for Harbor City Capital told CNN in an email on Friday Santos was affiliated with Harbor City Capital from mid January 2020 through April 2021.

    On Wednesday, the Nassau County GOP and several New York Republican congressmen called on Santos to resign. Santos still has the tacit support of House Speaker Kevin McCarthy, who said it was up to the voters to decide.

    In other media reviewed by CNN’s KFile from 2020, Santos called himself “the head guy” at the Harbor City office in New York and the executive at the company. In one 2020 interview, Santos said he managed a $1.5 billion fund for the company with returns of 12% and 26% on investors’ money.

    “Currently at Harbor City Capital, I manage a 1.5 billion fund, right?,” said Santos. “And I know how to manage it well. I give record returns to anybody who watches this, they’ll understand. I’m giving, a 12% fixed yield income return a year, which nobody in the market’s giving four and we’re giving 12. We’re also giving up to 20 to 26% in IRR return on our investors’ capital. So if there’s something I know how to do, it’s manage dollars and grow them.”

    The SEC filed a complaint in April 2021 against Harbor City Capital and founder Jonathan P. Maroney, alleging that Maroney raised $17.1 million by deceiving more than 100 hundred investors through a series of unregistered fraudulent security offerings and used the money to enrich himself and his family. The SEC claimed that of the investor money collected and deposited into Harbor City Capital bank accounts “at most” only $449,000 were used for business expenses.

    Neither Santos nor other Harbor City Capital employees were named in the complaint.

    In October, Maroney was granted a stay in federal court for the SEC’s civil lawsuit, after Maroney noted that he “is currently the target in a related criminal investigation.” He is representing himself in the case.

    CNN reached out to Maroney for comment but did not receive a response.

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  • 5 reasons why the Republican claim about 87,000 new IRS agents is an exaggeration | CNN Politics

    5 reasons why the Republican claim about 87,000 new IRS agents is an exaggeration | CNN Politics

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    Washington
    CNN
     — 

    In its first vote on legislation, the new Republican-controlled House approved a bill Monday that would rescind nearly $80 billion for the Internal Revenue Service – with key GOP lawmakers making the exaggerated claim that the money would be used to hire 87,000 auditors who will target hardworking Americans.

    “House Republicans just voted unanimously to repeal the Democrats’ army of 87,000 IRS agents,” tweeted speaker Kevin McCarthy after the vote.

    “This was our very first act of the new Congress, because government should work for you, not against you,” he added.

    But Democrats approved the $80 billion in funding last year as part of the sweeping Inflation Reduction Act, intending to support the troubled IRS crack down on tax cheats and provide better service to taxpayers.

    The bill to rescind the funding, which passed along party lines, has little chance of becoming law, given the Democratic majority in the Senate and a pledge from President Joe Biden to veto the bill if it ever reaches his desk.

    But the vote highlights how funding for the IRS has become a political football. The issue is sure to come up when Daniel Werfel, Biden’s nominee for IRS commissioner, gets a confirmation hearing.

    Here’s why the Republicans’ oft-repeated claim about new IRS agents is exaggerated:

    The 87,000 figure comes from a 2021 Treasury report that estimated the IRS could hire 86,852 full-time employees over the course of a decade with a nearly $80 billion investment – not solely enforcement agents.

    And all those new employees can’t be hired overnight. The money will flow to the IRS over a 10-year period.

    “The reality is the $80 billion boost would be spread throughout the agency, with money flowing to enforcement, taxpayer services, operations, and modernization,” wrote Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center.

    The Inflation Reduction Act dictates that about $45.6 billion will go toward strengthening enforcement activities – including collecting taxes owed, providing legal support, conducting criminal investigations and providing digital asset monitoring. But the IRS has not specified how many auditors will be hired.

    More than $25 billion is allocated to support IRS operations, including expenses like rent payments, printing, postage and telecommunications.

    Nearly $4.8 billion can be used for modernizing the agency’s customer service technology, like developing a callback service.

    Roughly $3 billion is allocated for taxpayer assistance, filing and account services.

    Many of the new hires will be replacing staff that the IRS has already lost or is expected to lose through attrition in coming years.

    Last year, then-IRS Commissioner Charles Rettig told lawmakers that staffing has shrunk to 1970s levels and that the IRS would need to hire 52,000 people over the next six years just to maintain current staffing levels to replace those who retire or otherwise leave.

    The IRS is already using the new funds to ramp up hiring for work outside of its audit operations.

    In October, the IRS announced it had hired 4,000 customer service representatives to answer phones and provide other taxpayer assistance. At the time, the agency said it intended to hire another 1,000 staffers by the end of 2022.

    Many of the new staff will be in place at the start of the 2023 tax season, and nearly all are expected to be trained by Presidents’ Day in February, which is traditionally when the agency sees the highest call volumes.

    National Taxpayer Advocate Erin Collins expects IRS services for taxpayers to improve this year – in part due to the funding increase.

    Taxpayer service, like answering the phones and processing returns in a timely manner, has suffered as the IRS’ budget has shrunk by more than 15% over the last decade. Collins, who heads the independent watchdog organization within the IRS, last year called the IRS service “horrendous.”

    Only about one in eight calls from taxpayers got through to an IRS employee last year, according to her annual report released Wednesday.

    The IRS struggled significantly during the Covid-19 pandemic, allowing backlogs of millions of tax returns to pile up in the past two years.

    “The majority of new hires the IRS makes will be those who answer the phones, work on processing individual tax returns or go after high-end taxpayers or corporations who are avoiding their taxes,” wrote Rettig in an op-ed published by Yahoo!Finance in August.

    A Trump appointee, Rettig called the claim that the IRS is hiring 87,000 agents to harass taxpayers “absolutely false.”

    While audit rates are expected to go up for some taxpayers as the new funding flows to the IRS, the rates have also been declining for some time.

    Audit rates of individual income tax returns decreased for all income levels between tax years 2010 to 2019, according to the Government Accountability Office. They decreased the most for taxpayers with incomes of $200,000 and above, which are generally more complex.

    The Inflation Reduction Act says that the new investment in the IRS is not “intended to increase taxes on any taxpayer or small business with a taxable income below $400,000.”

    Still, there is some uncertainty about how exactly the IRS will decide how to ramp up audits.

    In an effort to shed some clarity, Treasury Secretary Janet Yellen affirmed the Biden administration’s commitment to not target low- and middle-income taxpayers.

    “I direct that any additional resources – including any new personnel or auditors that are hired – shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels,” she wrote in a six to Rettig in August.

    Yellen also directed the IRS to produce an operational plan within six months to detail how the new funding will be spent.

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  • Why 2022 was a tough year for Trump and 2023 may not be much better | CNN Politics

    Why 2022 was a tough year for Trump and 2023 may not be much better | CNN Politics

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    CNN
     — 

    This must feel like the year that won’t end for former President Donald Trump, whose actions appear to be catching up with him in public, painful and expensive ways.

    Trump is infamous for escaping accountability, but he’s been put under the microscope in the second half of 2022 in a way that has complicated things for the 2024 contender.

    The FBI searched his Florida resort, where classified documents were seized. His business was found guilty of criminal tax fraud. Documents relating to his tax returns were released by House Democrats, who are expected to release his actual returns before turning over the committee gavel next year to Republicans, who won a smaller-than-expected majority under Trump’s influence. Many candidates Trump backed failed in key Senate races, costing Republicans a majority in that chamber.

    The former president himself hasn’t been charged with any crimes. But a special counsel has been appointed at the Justice Department to oversee two Trump-related investigations – surrounding the hoarding of documents at Mar-a-Lago and the January 6, 2021, attack on the US Capitol.

    Trump has railed against the House committee investigating the January 6 insurrection, and his most ardent supporters tried to stonewall it, but it’s hard to objectively dismiss its damning 800-page detailed report, which spells out his efforts to overturn the 2020 presidential election and his role inspiring rioters to attack the Capitol.

    And though the committee’s criminal referrals of Trump to the Justice Department are largely symbolic, the former president still has to wait and see what comes of the DOJ’s own twin probes.

    In the meantime, there’s no sign that the former president – who launched his third nonconsecutive presidential bid last month – has done much to clear the GOP field, with other hopefuls mulling their options over the holidays.

    The ongoing end-of-year revelations chipping away at Trump’s facade of power include large developments like the January 6 committee report – and smaller details.

    Hidden in court documents is the inconvenient truth that even his loudest acolytes on Fox News knew his 2020 election fantasy was false.

    Sean Hannity, the Fox News opinion host, admitted he didn’t “for one second” believe the fraud claims he helped push.

    It might be nice for Fox viewers to hear that from Hannity, but the admission came off the air and in a deposition as part of Dominion Voting Systems’ $1.6 billion defamation lawsuit against the conservative network, according to the New York Times.

    Hannity, as we know from text messages, was in close contact with Trump’s then-chief of staff, Mark Meadows, in the days leading up to January 6.

    That the conservative elites in Trump’s circle knew the truth adds context to the fears of fraud they pushed to encourage Republican lawmakers to pass new election security laws in key states.

    The release of Trump’s tax information, without his consent, by House Democrats confirmed what anyone could have guessed – that he paid no federal income tax in a year when he was leading the country.

    Even in years like 2018, where he paid about $1 million in federal taxes, the rate he paid, a bit more than 4%, was on par with the bottom half of American taxpayers.

    The special tax rules for real estate barons, which Congress can’t seem to address, help explain why Trump’s tax bill looks so different than that of regular wage-earning Americans. But the end result is that the former president looks like a tax avoider.

    Trump broke with tradition in 2016 by refusing to release any of his personal tax returns. But his team immediately tried to weaponize the release of his information. “If this injustice can happen to President Trump, it can happen to all Americans without cause,” Trump spokesperson Steven Cheung said last week.

    Trump made sure his influence was felt during the 2022 midterms, but after Republicans failed to secure a “red wave,” some members of his party have blamed him for the GOP’s poor showing.

    He must now grapple with polls like CNN’s from earlier this month, which showed that most Republicans and Republican-leaning independents want the party to nominate someone other than Trump in 2024. Their top pick for an alternative? Florida Gov. Ron DeSantis. The GOP governor, who won a resounding reelection last month, enjoyed much stronger favorability ratings than Trump among Republicans, according to the CNN survey.

    That’s bad news for a man who jumped out in front of the 2024 Republican field and launched another presidential bid at the precise moment he began to appear politically weak.

    Even his most ardent supporters are growing tired of some of his antics. The $99 Trump-themed digital trading cards timed the NFT market all wrong and drew ridicule even from his most loyal supporters.

    “I can’t do this any more,” complained Stephen Bannon, the former adviser who was sentenced to four months in jail for contempt of Congress after ignoring a subpoena from the January 6 committee. (He’s appealed that conviction.)

    Many of the issues that dogged Trump in 2022 won’t be over with the start of the new year – and could even escalate.

    His business, convicted of tax fraud in late 2022, also faces civil charges from the New York attorney general in 2023.

    On the election-stealing front, it’s not just Special Counsel Jack Smith that Trump has to worry about. An Atlanta-area special grand jury investigating efforts by Trump and his allies to overturn the 2020 election in the Peach State has already begun writing its final report, CNN reported earlier this month. That will serve as a mechanism for the panel to recommend whether Fulton County District Attorney Fani Willis should pursue indictments.

    While Trump envisions himself returning to the White House, one of the final bipartisan efforts lawmakers agreed on this month was an update to the Electoral Count Act, making clear that attempts like Trump’s after 2020 – to exploit antiquated language in federal election law and undermine the Electoral College – can never occur again.

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  • Brooklyn pastor who was robbed while preaching charged with wire fraud and lying to FBI in unrelated case | CNN

    Brooklyn pastor who was robbed while preaching charged with wire fraud and lying to FBI in unrelated case | CNN

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    CNN
     — 

    The flashy, jewelry-flaunting Brooklyn pastor who reported being robbed while preaching at his church this past summer was arrested on federal charges Monday – unrelated to the July incident – for allegedly defrauding a parishioner, trying to extort a businessman and lying to the FBI, according to a federal indictment.

    Lamor Whitehead, the 45-year-old pastor who goes by “Bishop,” was charged with wire fraud, attempted wire fraud, attempted extortion and making a material false statement, the US Attorney’s Office of the Southern District of New York announced. He faces up to 65 years in prison for his alleged crimes.

    As the pastor of Leaders of Tomorrow International Ministry, Whitehead allegedly defrauded one of his parishioners out of about $90,000 from her retirement savings over the course of at least 14 months beginning around April 2020, according to the indictment. The document said Whitehead told the parishioner he would use her money to help her buy a home and invest the rest of the money, but instead used it “to purchase thousands of dollars of luxury goods and clothing” and “for his own purposes.”

    Whitehead never helped her buy a home, the court document says, and never returned her money despite her request.

    This spring, Whitehead allegedly attempted to convince a businessman to loan him about $500,000 and grant him a stake in real estate transactions in exchange for obtaining “favorable actions by the New York City government” that would make them “millions” – something the pastor knew he could not obtain, the indictment says. Earlier this year, he also allegedly used “threats of force” against that same businessman to extort $5,000 from him.

    Further, Whitehead allegedly told FBI agents who were executing a search warrant that he had only one phone. But the indictment states he had a second phone that he used – including to text a message in which he described it as “my other phone,” the indictment states.

    Whitehead appeared in court Monday and was released on a $500,000 personal recognizance bond, according to Attorney’s Office spokesman Nicholas Biase.

    “As we allege today, Lamor Whitehead abused the trust placed in him by a parishioner, bullied a businessman for $5,000, then tried to defraud him of far more than that, and lied to federal agents,” US Attorney Damian Williams said in a statement. “His campaign of fraud and deceit stops now.”

    Whitehead’s attorney, Dawn Florio, denied the accusations against Whitehead.

    “Bishop Lamor Whitehead is not guilty of these charges,” Florio told CNN. “We are vigorously defending these accusations and we feel he is being targeted and being turned into a villain from a victim.”

    Back in July, Whitehead said he was the victim of a robbery in which at least one masked and armed man entered Whitehead’s church and took jewelry from him and his wife, according to a separate federal indictment. Part of the incident was captured on a livestream video from inside the church that showed Whitehead put his hands up and complied with the gunmen’s demands.

    He reported that the stolen jewelry was worth more than $1 million, raising questions as to how and why the pastor obtained and flaunted such displays of wealth.

    In September, two men were indicted on federal charges for their alleged roles in the armed robbery, while a third defendant remains at large, according to the Department of Justice. Juwan Anderson, 23, and Say-Quan Pollack, 24, pleaded not guilty to the charges, and a trial date is set for July, according to federal court records.

    Whitehead’s verified Instagram account details his extravagant shows of wealth, including Louis Vuitton-emblazoned suits, large jewelry and brightly colored sports cars. In a video posted shortly after the robbery, he pushed back against the media headlines referring to him as “flashy.”

    “It’s not about me being flashy. It’s about me purchasing what I want to purchase,” he said. “It’s my prerogative to purchase what I want to purchase. If I worked hard for it, I can purchase what I want to purchase.”

    According to his bio on the Leaders of Tomorrow website, Whitehead attended the New York Theological Seminary and completed his studies with a certificate in Ministry in Human Services from the Theological Institution of Rising Hope Inc. It touts him as a licensed New York state chaplain and a certified marriage and funeral officiant. In 2013, he founded Leaders of Tomorrow Ministry in Brooklyn, his bio states.

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  • Disgraced former attorney Alex Murdaugh facing new tax evasion charges | CNN

    Disgraced former attorney Alex Murdaugh facing new tax evasion charges | CNN

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    CNN
     — 

    Disgraced former South Carolina attorney Alex Murdaugh, who has been accused of killing his wife and son and being involved in financial crimes and fraud schemes, is now facing a new set of tax evasion charges.

    Murdaugh was indicted by the South Carolina State Grand Jury on nine counts of willful attempt to evade or defeat a tax, state Attorney General Alan Wilson said in a news release on Friday.

    Murdaugh allegedly failed to report more than $6.9 million of income between 2011 and 2019 that he “earned through illegal acts,” according to the release. The former attorney owes more than $486,000 in state taxes, the release added.

    According to the indictments, Murdaugh earned those millions through “an ongoing scheme to defraud” his former law firm, Peters, Murdaugh, Parker, Eltzroth & Detrick (PMPED) and his clients of proceeds from legal settlements.

    “The funds derived through Murdaugh’s ongoing illegal activity were converted to personal use, and as such, are considered earned income,” the indictments say.

    CNN has reached out to Murdaugh’s attorney for comment on the new charges.

    The Murdaugh case first garnered widespread national attention in early September 2021, after the once-prominent attorney was shot in the head on a roadway but survived. Court documents later revealed Murdaugh allegedly admitted to authorities he conspired with a former client to kill him as part of a suicidal fraud scheme so that his only surviving son could collect a $10 million life insurance payout.

    The incident marked the start of what has unraveled to become a complicated, yearslong bloody tragedy.

    That same month, Murdaugh resigned from the law firm after it discovered he misappropriated funds, PMPED said at the time.

    “We were shocked and dismayed to learn that Alex violated our principles and code of ethics. He lied and he stole from us,” PMPED said in a late September 2021 statement.

    That same month, the state’s Supreme Court issued an order suspending his license to practice law in South Carolina.

    Murdaugh’s attorney also said at the time his client had an opioid addiction and was in the early stages of treatment.

    The South Carolina State Grand Jury has indicted Murdaugh for a total of 99 charges for schemes to defraud victims of more than $8.7 million, in addition to the money owed in state taxes, the state attorney general said.

    Disgraced attorney accused of murdering wife and son appears in court

    Murdaugh is also facing murder charges in connection to the deaths of his wife, Margaret “Maggie” Murdaugh, 52, and their youngest son, Paul Murdaugh, 22, who were found shot to death on the family’s property in June 2021. He has pleaded not guilty.

    In a motion filed earlier this month, prosecutors alleged Murdaugh’s motive for killing the two was to distract attention from the schemes he was running to avoid financial ruin.

    “The evidence will show Murdaugh accrued substantial debts over a period of years and to uncover those debts began engaging in illicit financial crimes,” prosecutors wrote in the filing. “The evidence will further show these financial crimes were about to come to light at the time of the killings, more specifically on the date of the killings.”

    The killings, prosecutors alleged, were Murdaugh’s attempt to “shift the focus away from himself and buy himself some additional time to try and prevent his financial crimes from being uncovered.”

    Murdaugh’s murder trial is scheduled to begin in January.

    Murdaugh wants the trial to begin quickly, his attorney has previously said, because he believes his wife and son’s “killer or killers are still at large.”

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  • Trump Org. entities were held in criminal contempt and fined $4K ahead of tax fraud trial | CNN Politics

    Trump Org. entities were held in criminal contempt and fined $4K ahead of tax fraud trial | CNN Politics

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    CNN
     — 

    A Manhattan criminal court judge held entities of the Trump Organization in criminal contempt for not complying with multiple grand jury subpoenas dating as far back as October 2020 and three court orders mandating they produce the requested evidence ahead of their recent tax fraud trial.

    Judge Juan Merchan’s order requiring that the Trump Org. entities pay $4,000 in fines for the violations had been sealed since he issued the ruling last December so as to not prejudice against the defendants at trial, the judge previously said in court.

    It is unclear whether the companies have already paid the fines levied a year ago, separate from the penalties that could tally as much as $1.61 million in connection to the guilty verdict against the two Trump Org. companies.

    CNN has reached out to the parties for comment.

    Merchan ruled at the end of the Trump Org. tax fraud trial that he would unseal the order once a verdict was handed down by the jury because he found the order to be “of significant public concern.”

    A jury ultimately convicted the two entities – the Trump Corporation and Trump Payroll Corp. – last week on all counts related to schemes for Trump Org. executives to cheat their personal taxes.

    The Trump companies did produce thousands of pages of documents in the discovery process, the order said, but still failed to fulfill key requests from prosecutors despite the court orders.

    Lawyers for the Trump companies claimed they were noncompliant in 2021 because the subpoenas were vague and the time frame to respond was “unreasonably short given the scope and breadth of the demands,” according to the court order.

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  • The latest on Donald Trump’s many legal clouds | CNN Politics

    The latest on Donald Trump’s many legal clouds | CNN Politics

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    A version of this story appears in CNN’s What Matters newsletter. To get it in your inbox, sign up for free here.



    CNN
     — 

    Former President Donald Trump has been campaigning in between his many different court appearances for much of the year.

    But his decision to attend the first day of his $250 million civil fraud trial in New York created another opportunity to appear on camera from inside a courtroom when the judge allowed photographers to document the moment before proceedings got underway.

    Keeping track of the dizzying array of civil and criminal cases is a full-time job.

    He is charged with crimes related to conduct:

    • Before his presidency – a hush money scheme that may have helped him win the White House in 2016.
    • During his presidency – his effort to stay in the White House by overturning the 2020 election.
    • After his presidency – his treatment of classified material and alleged attempts to hide it from the National Archives.

    Trump denies any wrongdoing and has pleaded not guilty in all of the criminal cases. He alleges a “witch hunt” against him. But each trial has its own distinct storyline to follow.

    Here’s an updated list of developments in Trump’s very complicated set of court cases, beginning with the one playing out in Manhattan this week.

    The civil fraud trial, unlike Trump’s multiple criminal indictments, does not carry the danger of a felony conviction and jail time, but it could very well cost him some of his most prized possessions, including Trump Tower.

    New York Attorney General Letitia James brought the $250 million lawsuit in September 2022, alleging that Trump and his co-defendants committed repeated fraud in inflating assets on financial statements to get better terms on commercial real estate loans and insurance policies.

    Judge Arthur Engoron has already ruled that Trump and his adult sons are liable for fraud for inflating the value of his golf courses, hotels and homes on financial statements to secure loans.

    The trial portion of the case, playing out in court in Manhattan, will assess what damages will be levied against Trump and how Engoron’s decision to strip Trump of his New York business licenses will play out.

    In May, a federal jury in Manhattan found Trump sexually abused former advice columnist E. Jean Carroll in a luxury department store dressing room in the mid-1990s and awarded her about $5 million.

    A separate civil defamation lawsuit will only need to decide how much money Trump has to pay her. That case for January 15 – the same day Iowa Republicans will hold their caucuses, the first date on the presidential primary calendar.

    In August, Trump was indicted by a federal grand jury in special counsel Jack Smith’s investigation into the aftermath of the 2020 election. The former president was arraigned in a Washington, DC, courtroom, where he pleaded not guilty.

    The case is based in part on a scheme to create slates of fake electors in key states won by President Joe Biden.

    In late September, Judge Tanya Chutkan rejected Trump’s request that she recuse herself from the case. Chutkan, a Barack Obama appointee, has overseen civil and criminal cases related to the January 6, 2021, insurrection and has repeatedly exceeded what prosecutors have requested for convicted rioters’ prison sentences.

    Chutkan set the trial’s start date for March 4, 2024, the day before Super Tuesday, when the largest batch of presidential primaries will occur. The trial marks the first of Trump’s criminal cases expected to proceed.

    Trump has been charged in Manhattan criminal court with 34 felony counts of falsifying business records related to his role in a hush money payment scheme involving adult film actress Stormy Daniels late in the 2016 presidential campaign.

    The former president pleaded not guilty at his April arraignment in Manhattan.

    Prosecutors, led by Manhattan District Attorney Alvin Bragg, accuse Trump of falsifying business records with the intent to conceal $130,000 in payments to Daniels made by former Trump attorney and fixer Michael Cohen to guarantee her silence about an alleged affair.

    Trump has denied having an affair with Daniels.

    The trial was originally scheduled to begin in late March 2024, but Judge Juan Merchan has suggested the date could move. The next court date is scheduled for February.

    Fulton County District Attorney Fani Willis is using racketeering violations to charge a broad criminal conspiracy against Trump and 18 others in their efforts to overturn Biden’s victory in Georgia.

    The probe was launched in 2021 following Trump’s call that January with Georgia Secretary of State Brad Raffensperger, in which the president pushed the Republican official to “find” votes to overturn the election results.

    The August indictment also includes how Trump’s team allegedly misled state officials in Georgia; organized fake electors; harassed an election worker; and breached election equipment in rural Coffee County, Georgia.

    One co-defendant, bail bondsman Scott Hall, has pleaded guilty to five counts in the case.

    Fulton County prosecutors have signaled they could offer plea deals to other co-defendants.

    Willis this week issued a subpoena to former New York City Police Commissioner Bernard Kerik, a Trump ally, who in turn demanded an immunity deal in exchange for testimony.

    Trial for two co-defendants is expected to begin this month and could last three to five months. A trial date has not been set for Trump, who has pleaded not guilty.

    Federal criminal court in Florida: Mishandling classified material

    Trump has pleaded not guilty to 37 federal charges brought by Smith over his alleged mishandling of classified documents. Smith added three additional counts in a superseding indictment.

    The investigation centers on sensitive documents that Trump brought to his Mar-a-Lago residence in Florida after his White House term ended in January 2021.

    The National Archives, charged with collecting and sorting presidential material, has previously said that at least 15 boxes of White House records were recovered from Mar-a-Lago, including some classified records.

    Trump was also caught on tape in a 2021 meeting in Bedminster, New Jersey, where the former president discussed holding secret documents he did not declassify.

    Smith’s additional charges allege that Trump and his employees attempted to delete Mar-a-Lago security footage sought by the grand jury investigating the mishandling of the records.

    Trial is not expected until May, after most presidential primaries have concluded.

    There are other cases to note:

    Trump’s namesake business, the Trump Organization, was convicted in December by a New York jury of tax fraud, grand larceny and falsifying business records in what prosecutors say was a 15-year scheme to defraud tax authorities by failing to report and pay taxes on compensation provided to employees.

    Manhattan prosecutors told a jury the case was about “greed and cheating,” laying out a scheme within the Trump Organization to pay high-level executives in perks such as luxury cars and apartments without paying taxes on them.

    Former Trump Organization Chief Financial Officer Allen Weisselberg pleaded guilty to his role in the tax scheme. He was released after serving four months in jail at Rikers Island.

    Several members of the US Capitol Police and Washington, DC, Metropolitan Police are suing Trump, saying his words and actions incited the 2021 riot.

    The various cases accuse Trump of directing assault and battery; aiding and abetting assault and battery; and violating Washington laws that prohibit the incitement of riots and disorderly conduct.

    In August, Trump requested to put on hold the lawsuit related to the death of Capitol Police Officer Brian Sicknick, citing his various criminal trials. The estate of Sicknick, who died after responding to the attack on the Capitol, is suing two rioters involved in the attack and Trump for his alleged role in egging it on.

    Other lawsuits have been put on hold while a federal appeals court considers whether Trump had absolute immunity as the sitting president.

    Former top FBI counterintelligence official Peter Strzok, who was fired in 2018 after the revelation that he criticized Trump in text messages, sued the Justice Department, alleging he was terminated improperly.

    In summer 2017, former special counsel Robert Mueller removed Strzok from his team investigating Russian interference in the 2016 election after an internal investigation revealed texts with former FBI lawyer Lisa Page that could be read as exhibiting political bias.

    Strzok and Page were constant targets of verbal attacks by Trump and his allies, part of the larger ire the then-president expressed toward the FBI during the Russia investigation. Trump repeatedly and publicly called for Strzok’s ouster until he was fired in August 2018.

    Trump is set to be deposed this month as part of the case, according to Politico.

    A federal judge dismissed Trump’s lawsuit against Hillary Clinton, the Democratic National Committee, several ex-FBI officials and more than two dozen other people and entities that he claims conspired to undermine his 2016 campaign with fabricated information tying him to Russia.

    “What (Trump’s lawsuit) lacks in substance and legal support it seeks to substitute with length, hyperbole, and the settling of scores and grievances,” US District Judge Donald Middlebrooks wrote.

    Trump appealed the decision, but Middlebrooks also ruled that the former president and his attorneys are liable for nearly $1 million in sanctions for bringing the case.

    Trump launched a Hail Mary bid in July to revive the sprawling lawsuit, relying on a recent report from special counsel John Durham that criticized the FBI’s Trump-Russia probe.

    Trump’s former lawyer Cohen sued Trump, former Attorney General William Barr and others, alleging they put him back in jail to prevent him from promoting his upcoming book while under home confinement.

    Cohen was serving the remainder of his sentence for lying to Congress and campaign violations at home, due to Covid-19 concerns, when he started an anti-Trump social media campaign in summer 2020. Cohen said that he was sent back to prison in retaliation and that he spent 16 days in solitary confinement.

    A federal judge threw out the lawsuit in November. District Judge Lewis Liman said he was empathetic to Cohen’s position but that Supreme Court precedent bars him from allowing the case to move forward.

    Trump sued journalist Bob Woodward in January for alleged copyright violations, claiming Woodward released audio from their interviews without Trump’s consent.

    Woodward and publisher Simon & Schuster said Trump’s case is without merit and moved for its dismissal.

    Woodward conducted several interviews with Trump for his book “Rage,” published in September 2020. Woodward later released “The Trump Tapes,” an audiobook featuring eight hours of raw interviews with Trump interspersed with the author’s commentary.

    Trump-filed lawsuits: The New York Times, Mary Trump and CNN

    The former president is suing his niece and The New York Times in New York state court over the disclosure of his tax information.

    A New York judge dismissed The New York Times from Trump’s lawsuit regarding disclosure of his tax returns and ordered Trump to pay the newspaper’s legal fees. Trump is still suing his niece Mary Trump for disclosure of the tax documents. She had tried to sue him for defrauding her out of millions after the death of his father, but the suit was dismissed.

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  • Wealthy Russian businessman arrested in London on suspicion of multiple offenses, including money laundering | CNN

    Wealthy Russian businessman arrested in London on suspicion of multiple offenses, including money laundering | CNN

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    CNN
     — 

    A wealthy Russian businessman has been arrested as part of a “major operation” on suspicion of multiple offenses, the United Kingdom’s National Crime Agency said in a statement Saturday.

    The 58-year-old man was arrested Thursday at his “multi-million-pound residence in London by officers from the NCA’s Combatting Kleptocracy Cell” on suspicion of committing offenses including money laundering, conspiracy to defraud the Home Office – the UK government department for immigration and passports – and conspiracy to commit perjury, the agency said.

    A 35-year-old man, employed at the premises, was also arrested “nearby” on suspicion of money laundering and obstruction of an officer “after he was seen leaving the address with a bag found to contain thousands of pounds in cash,” according to the statement.

    A third man, aged 39, who the agency said is the former boyfriend of the businessman’s current partner, was arrested at his home in Pimlico, London, for offenses including money laundering and conspiracy to defraud, according to the statement.

    A person close to the investigation has given CNN more detail on two of the men arrested, saying the 39-year-old man was a national of Russia, Israel, and the UK and the 35-year-old man was a Polish national. The source told CNN the bank notes the 35-year-old was carrying have not yet been counted but were suspected to be in the tens of thousands and in British currency.

    The three individuals have been interviewed by authorities and have been released on bail, according to the statement.

    The Russian Embassy in London has sent a note to British authorities regarding the detention of a Russian citizen, according to a statement from the embassy made available to Russian state news agency RIA Novosti.

    “The Russian Embassy in London has asked the British authorities for clarification in connection with the information from the National Crime Agency about the alleged detention of a Russian citizen in London,” reads the note, according to RIA Novosti.

    “The NCA’s Combatting Kleptocracy Cell, only established this year, is having significant success investigating potential criminal activity by oligarchs, the professional service providers that support and enable them and those linked to the Russian regime,” said the agency’s director general Graeme Biggar.

    “We will continue to use all the powers and tactics available to us to disrupt this threat,” he added.

    More than 50 officers were involved in the operation at the businessman’s London property, the statement said. “A number of digital devices and a significant quantity of cash was recovered following extensive searches by NCA investigators,” according to the statement.

    So far, the agency says it has secured nearly 100 disruptions “against Putin-linked elites and their enablers” and has taken direct action against “a significant number of elites who impact directly on the UK.”

    The agency is also targeting “less conventional routes used to disguise movements of significant wealth, such as high value asset sales via auction houses,” according to the statement.

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  • Todd and Julie Chrisley sentenced for fraud and tax crimes convictions | CNN

    Todd and Julie Chrisley sentenced for fraud and tax crimes convictions | CNN

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    CNN
     — 

    Reality TV Stars Julie and Todd Chrisley were sentenced to prison in federal court Monday.

    The “Chrisley Knows Best” couple were found guilty in June of conspiracy to defraud banks out of more than $30 million in fraudulent loans, CNN previously reported. In addition, they were found guilty of several tax crimes, including attempting to defraud the Internal Revenue Service.

    Judge Eleanor L. Ross sentenced Todd Chrisley to 12 years in prison with three years of supervised release. His wife Julie Chrisley was sentenced to seven years in prison and three years of supervised release. Their accountant Peter Tarantino was sentenced to three years in prison and three years of supervised released, Ryan Buchanan, US Attorney for the Northern District of Georgia, said during a press conference after the sentencing hearing.

    According to the Department of Justice, evidence in the case showed that the Chrisleys were able to obtain the loans by submitting false bank statements, audit reports and financial statements. The money was used to buy luxury cars, designer clothes, real estate and travel, a DOJ press release stated.

    Then, while earning millions of dollars on their former reality show, the Chrisleys, along with their accountant, conspired to defraud the IRS and evade collection of delinquent taxes.

    “Chrisley Knows Best” debuted in 2014 on the USA Network. New episodes, filmed prior to the trial, will debut sometime next year.

    In a short statement to CNN in June, one of Todd Chrisley’s attorneys, Bruce Morris, said they were, “disappointed in the verdict” and planned to appeal.

    CNN has reached out to representatives of the Chrisleys and Tarantino for comment on Monday’s sentencing.

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  • The rise and fall of Elizabeth Holmes: A timeline | CNN Business

    The rise and fall of Elizabeth Holmes: A timeline | CNN Business

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    CNN
     — 

    More than three years after Elizabeth Holmes was first indicted and nearly four months after her trial kicked off, the founder and former CEO of failed blood testing startup Theranos was found guilty on four out of 11 federal fraud and conspiracy charges.

    The verdict comes after a stunning downfall that saw Holmes, once hailed as the next Steve Jobs, go from being a tech industry icon to being a rare Silicon Valley entrepreneur on trial for fraud.

    A Stanford University dropout, Holmes – inspired by her own fear of needles – started the company at the age of 19, with a mission of creating a cheaper, more efficient alternative to a traditional blood test. Theranos promised patients the ability to test for conditions like cancer and diabetes with just a few drops of blood. She attracted hundreds of millions of dollars in funding, a board of well-known political figures, and key retail partners.

    But a Wall Street Journal investigation poked holes into Theranos’ testing and technology, and the dominoes fell from there. Holmes and her former business partner, Ramesh “Sunny” Balwani, were charged in 2018 by the US government with multiple counts of wire fraud and conspiracy to commit wire fraud. (Both pleaded not guilty.)

    Here are the highlights of the rise and fall of Elizabeth Holmes and Theranos.

    Holmes, a Stanford University sophomore studying chemical engineering, drops out of school to pursue her startup, Theranos, which she founded in 2003 at age 19. The name is a combination of the words “therapy” and “diagnosis.”

    Balwani joins as chief operating officer and president of the startup. Balwani, nearly 20 years her senior, met Holmes in 2002 on a trip to Beijing through Stanford University. The two are later revealed to be romantically involved.

    A decade after first starting the company, Holmes takes the lid off Theranos and courts media attention the same month that Theranos and Walgreens announce they’ve struck up a long-term partnership. The first Theranos Wellness Center location opens in a Walgreens in Palo Alto where consumers can access Theranos’ blood test.

    The original plan had been to make Theranos’ testing available at Walgreens locations nationwide.

    Holmes is named to the magazine’s American billionaire list with the outlet reporting she owns a 50% stake in the startup, pinning her personal wealth at $4.5 billion.

    Theranos has raised more than $400 million, according to a profile of the company and Holmes by The New Yorker. It counts Oracle’s Larry Ellison among its investors.

    The FDA clears Theranos to use of its proprietary tiny blood-collection vials to finger stick blood test for herpes simplex 1 virus – its first and only approval for a diagnostic test.

    The Wall Street Journal reports Theranos is using its proprietary technique on only a small number of the 240 tests it performs, and that the vast majority of its tests are done with traditional vials of blood drawn from the arm, not the “few drops” taken by a finger prick. In response, Theranos defends its testing practices, calling the Journal’s reporting “factually and scientifically erroneous.”

    A day later, Theranos halts the use of its blood-collection vials for all but the herpes test due to pressures from the FDA. (Later that month, the FDA released two heavily redacted reports citing 14 concerns, including calling the company’s proprietary vial an “uncleared medical device.”)

    One week after the Journal report, Holmes is interviewed on-stage at the outlet’s conference in Laguna Beach. “We know what we’re doing and we’re very proud of it,” she says.

    Holmes speaking at a Wall Street Journal technology conference in Laguna Beach, California on October 21, 2015.

    Amid the criticism, Theranos reportedly shakes up its board of directors, eliminating Henry Kissinger and George Shultz as directors while moving them to a new board of counselors; the company also forms a separate medical board.

    Safeway, which invested $350 million into building out clinics in hundreds of its supermarkets to eventually offer Theranos blood tests, reportedly looks to dissolve its relationship with the company before it ever offered its services.

    Centers for Medicare and Medicaid Services (CMS) sends Theranos a letter saying its California lab has failed to comply with federal standards and that patients are in “immediate jeopardy.” It gives the company 10 days to address the issues.

    In response, Walgreens says it will not send any lab tests to Theranos’ California lab for analysis and suspends Theranos services at its Palo Alto Walgreens location.

    CMS threatens to ban Holmes and Balwani from the laboratory business for two years after the company allegedly failed to fix problems at its California lab. Theranos says that’s a “worst case scenario.”

    Balwani departs. The company also adds three new board members as part of the restructuring: Fabrizio Bonanni, a former executive vice president of biotech firm Amgen, former CDC director William Foege, and former Wells Fargo CEO Richard Kovacevich.

    Theranos voids two years of blood test results from its proprietary testing devices, correcting tens of thousands of blood-test reports, the Journal reports.

    Forbes revises its estimate of Holmes’ net worth from $4.5 billion to $0. The magazine also lowers its valuation for the company from $9 billion to $800 million.

    Walgreens, once Theranos’ largest retail partner, ends its partnership with the company and says it will close all 40 Theranos Wellness Centers.

    CMS revokes Theranos’ license to operate its California lab and bans Holmes from running a blood-testing lab for two years.

    Holmes tries to move past recent setbacks by unveiling a mini testing laboratory, called miniLab, at a conference for the American Association for Clinical Chemistry. In selling the device, versus operating its own clinics, Theranos seeks to effectively side-step CMS sanctions, which don’t prohibit research and development.

    Theranos investor Partner Fund Management sues the company for $96.1 million, the amount it sunk into the company in February 2014, plus damages. It accuses the company of securities fraud. Theranos and Partner Fund Management settled in May, 2017, for an undisclosed amount.

    The company also lays off 340 employees as it closes clinical labs and wellness centers as it attempts to pivot and focus on the miniLab.

    Walgreens sues the blood testing startup for breach of contract. Walgreens sought to recover the $140 million it poured into the company. The lawsuit was settled August, 2017.

    Theranos downsizes its workforce yet again following the increased scrutiny into its operations, laying off approximately 155 employees or about 41% of staffers.

    The Wall Street Journal reports that Theranos failed a second regulatory lab inspection in September, and that the company was closing its last blood testing location as a result.

    Theranos settles with the CMS, agreeing to pay $30,000 and to not to own or operate any clinical labs for two years.

    Theranos also settles with the Arizona Attorney General Mark Brnovich over allegations that its advertisements misrepresented the method, accuracy, and reliability of its blood testing and that the company was out of compliance with federal regulations governing clinical lab testing. Theranos agrees to pay $4.65 million back to its Arizona customers as part of a settlement deal.

    The SEC charges Holmes and Balwani with a “massive fraud” involving more than $700 million from investors through an “elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance.”

    The SEC alleges Holmes and Balwani knew that Theranos’ proprietary analyzer could perform only 12 of the 200 tests it published on its patient testing menu.

    Theranos and Holmes agree to resolve the claims against them, and Holmes gives up control of the company and much of her stake in it. Balwani, however, is fighting the charges, with his attorney saying he “accurately represented Theranos to investors to the best of his ability.”

    Reporter John Carreyrou, who first broke open the story of Theranos for the Wall Street Journal, publishes “Bad Blood,” a definitive look at what happened inside the disgraced company. Director Adam McKay (who directed “The Big Short”) secures the rights to make the film, starring Jennifer Lawrence as Holmes, by the same name.

    Holmes and Balwani are indicted on federal wire fraud charges over allegedly engaging in a multi-million dollar scheme to defraud investors, as well as a scheme to defraud doctors and patients. Both have pleaded not guilty.

    Minutes before the charges were made public, Theranos announced that Holmes has stepped down as CEO. The company’s general counsel, David Taylor, takes over as CEO. Holmes remains chair of the company’s board.

    Former Theranos COO Ramesh

    Taylor emails shareholders that Theranos will dissolve, according to a report from The Wall Street Journal. Taylor said more than 80 potential buyers were not interested in a sale. “We are now out of time,” Taylor wrote.

    Alex Gibney, the prolific documentary filmmaker behind “Dirty Money,” “Enron: The Smartest Guys in the Room,” and “The Armstrong Lie,” debuts “The Inventor” on HBO, following the rise and fall of Theranos.

    A new court document reveals Holmes may seek a “mental disease” defense in her criminal fraud trial. Later, in August 2021, unsealed court documents reveal Holmes is likely to claim she was the victim of a decade-long abusive relationship with Balwani. The allegations led to the severing of their trials. His trial is slated to begin in 2022.

    Initially set to begin in July 2020, Holmes’ criminal trial is further delayed til July 2021 due to the coronavirus pandemic.

    News surfaces that Holmes’ is expecting her first child, once more further delaying her criminal trial. Holmes’ counsel advised the US government that Holmes is due in July 2021, a court document revealed. She gave birth in July.

    Holmes collects her belongings after going through security at the Robert F. Peckham Federal Building with her defense team on August 31, 2021 in San Jose, California.

    More than 80 potential jurors are brought into a San Jose courtroom for questioning over the course of two days to determine if they are fit to serve as impartial, fair jurors for the criminal trial of Holmes. A jury of seven men and five women is selected, with five alternatives.

    After three months of testimony from 32 witnesses, the criminal fraud case of Theranos founder Elizabeth Holmes makes its way to the jury of eight men and four women who will decide her fate. The jury would go on to deliberate for more than 50 hours before returning a verdict.

    Holmes is found guilty of one count of conspiracy to defraud investors as well as three wire fraud counts tied to specific investors. She is found not guilty on three additional charges concerning defrauding patients and one charge of conspiracy to defraud patients. The jury returns no verdict on three of the charges concerning defrauding investors. Holmes faces up to 20 years in prison as well as a fine of $250,000 plus restitution for each count.

    “The Dropout,” a scripted miniseries about Theranos produced by ABC, debuts on Hulu. Amanda Seyfried stars as Holmes and Naveen Andrews plays Balwani. Their romantic and professional relationship features prominently in the show.

    Following delays due to Holmes’ prolonged trial then a surge of Covid-19, jury selection for Balwani’s trial gets underway. On March 22, opening arguments are held and the government’s first witness, a former Theranos employee turned whistleblower, is called to the stand.

    After four full days of deliberations, a jury finds Balwani guilty of ten counts of federal wire fraud and two counts of conspiracy to commit wire fraud. Like Holmes, Balwani faces up to 20 years in prison as well as a fine of $250,000 plus restitution for each count of wire fraud and each conspiracy count.

    Holmes asks for a new trial after claiming that a key witness visited her house unannounced and allegedly said he “feels guilty” about his testimony.

    In a court filing with the United States District Court for the Northern District of California, Holmes’ attorneys said Adam Rosendorff, a former Theranos lab director who was one of the government’s main witnesses, arrived at her home on August 8 asking to speak with her. According to the filing, Rosendorff did not interact with Holmes but did speak to her partner Billy Evans, who recounted the exchange in an email to Holmes’ lawyers shortly after.

    “His shirt was untucked, his hair was messy, his voice slightly trembled,” Evans wrote about Rosendorff. According to Evans’ email, Rosendorff “said when he was called as a witness he tried to answer the questions honestly but that the prosecutors tried to make everybody look bad.”

    The former Theranos lab director also “said he felt like he had done something wrong,” Evans wrote.

    Rosendorff takes the stand again to address concerns from Holmes’ defense team and their claims he had shown up at her home after the trial concluded asking to speak with her and expressed regrets about his testimony.

    At the hearing, Rosendorff reaffirmed the truthfulness of his testimony at Holmes’ trial and said that the government did not influence what he said.

    A federal judge denies Elizabeth Holmes’ request for a new trial, according to court filings, paving the way for the founder of failed blood testing startup Theranos to be sentenced later in the month.

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  • Former Trump Org. CFO testifies he didn’t pay taxes on $1.76 million in personal expenses | CNN Politics

    Former Trump Org. CFO testifies he didn’t pay taxes on $1.76 million in personal expenses | CNN Politics

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    CNN
     — 

    Former Trump Organization CFO Allen Weisselberg testified Tuesday that he knew he should have paid taxes on hundreds of thousands of dollars in benefits he received annually, including a company-paid Manhattan apartment that he said former President Donald Trump suggested he move into.

    Weisselberg testified for about 90 minutes during the criminal trial of the Trump Organization in Manhattan, calmly walking the jury through the growth of the company from 50 employees when he started there in 1986 into an umbrella organization that includes 500 entities.

    Under questioning by prosecutor Susan Hoffinger, Weisselberg answered “yes” as the prosecutor went through each of personal expenses he received from the Trump Org. – and that the company didn’t pay taxes on them from 2005 through 2017.

    One of those untaxed benefits Weisselberg received was a more than $7,000 per month 1200 square foot luxury apartment overlooking the Hudson River in Manhattan.

    The former CFO said Trump offered him the apartment in 2005 to cut his daily commute to Long Island where he lived at the time. Weisselberg sat down with Trump, who Weisselberg said asked him if he would consider moving into the city. Trump said, according to Weisselberg, it would “help you, help the company” and Weisselberg could work longer hours.

    Weisselberg said after speaking with his wife, they agreed to move in and Trump authorized the expense.

    He also said he expensed his utilities, phone, car leases and garage saying it was “part and parcel” with the apartment.

    Either Weisselberg or Trump would sign the rent checks for his apartment. In total, he received as much as $200,000 in untaxed compensation in a year from all those benefits, according to his testimony.

    Weisselberg testified had he asked for a raise the company would have had to pay him double – as much as $400,000, to cover the taxes.

    In all, Weisselberg said he didn’t pay taxes on approximately $1.76 million in personal expenses from 2005 through 2017.

    He acknowledged that he knowingly unreported his income on his tax forms to get the fringe benefits tax free, and he hid that information from the accountants at Mazars, he said, because he thought they would refuse to sign his tax returns had they known about it.

    Trump Organization Controller Jeff McConney knew the practice was illegal when he generated the false W-2 and 1099 tax forms on Weisselberg’s behalf, according to Weisselberg.

    McConney previously claimed on the stand that he didn’t think all of the expenses were handled improperly until an internal review years later.

    Weisselberg on Tuesday also acknowledged that he was stripped of the chief financial officer title after he was arrested and charged with 15 counts of tax fraud and grand larceny. Weisselberg, whose voice dropped to a whisper when discussing his crimes, said he continued to do most of the same work after he was indicted. That changed in October, several months after he pleaded guilty and agreed to testify, when Weisselberg said he began working from home and his contact with Eric Trump, who runs the company on a day-to-day basis, “stopped.”

    Weisselberg said he is on paid leave and still expects to receive a $500,000 bonus in January in addition to his $640,000 salary.

    The day Weisselberg finalized a plea deal with prosecutors in August, his son threw a birthday party for him at Trump Tower. Weisselberg attempted to downplay it, saying he regretted it, and that “it was a small cake.”

    Weisselberg is expected to continue on the stand Thursday morning.

    Two Trump Organization entities are charged with nine counts of tax fraud, grand larceny and falsifying business records in what prosecutors allege was a 15-year scheme to defraud tax authorities by failing to report and pay taxes on compensation provided to employees. The former president is not a defendant in the case and is not expected to be implicated in any wrongdoing.

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  • Whistleblowers say IRS recommended far more charges, including felonies, against Hunter Biden | CNN Politics

    Whistleblowers say IRS recommended far more charges, including felonies, against Hunter Biden | CNN Politics

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    CNN
     — 

    Two whistleblowers told Congress that IRS investigators recommended charging Hunter Biden with attempted tax evasion and other felonies, which are far more serious crimes than what the president’s son has agreed to plead guilty to, according to transcripts of their private interviews with lawmakers.

    The IRS whistleblowers said the recommendation called for Hunter Biden to be charged with tax evasion and filing a false tax return – both felonies – for 2014, 2018 and 2019. The IRS also recommended that prosecutors charge him with failing to pay taxes on time, a misdemeanor, for 2015, 2016, 2017, 2018 and 2019, according to the transcripts, which were released Thursday by House Republicans.

    It appears that this 11-count charging recommendation also had the backing of some Justice Department prosecutors, but not from more senior attorneys, according to documents that the whistleblowers provided to House investigators.

    In a deal with prosecutors announced earlier this week, Hunter Biden is pleading guilty to just two tax misdemeanors.

    The allegations come from Gary Shapley, a 14-year IRS veteran, who oversaw parts of the Hunter Biden criminal probe, and an unnamed IRS agent who was on the case nearly from its inception. Shapley approached Congress this year with information that he claimed showed political interference in the investigation. He and the entire IRS team were later removed from the probe.

    “I am alleging, with evidence, that DOJ provided preferential treatment, slow-walked the investigation, did nothing to avoid obvious conflicts of interest in this investigation,” Shapley told lawmakers.

    David Weiss, the Trump-appointed US attorney in Delaware who oversaw the Hunter Biden criminal probe, eventually reached a plea deal where the president’s son will plead guilty to two misdemeanors for failing to pay taxes on time. The plea agreement will also resolve a separate felony gun charge, if Hunter Biden abides by certain court-imposed conditions for a period of time.

    Hunter Biden isn’t pleading guilty to any felonies, and he wasn’t charged with any tax felonies. CNN reported that prosecutors are expected to recommend no jail time. He is scheduled to appear in federal court in Delaware on July 26.

    It isn’t uncommon for there to be internal disagreements among investigators over which charges to file against the target of an investigation, much like the disagreements that the IRS whistleblowers described. CNN reported last year that some FBI and IRS investigators were at odds with other Justice Department officials over the strength of the case, and that there were discussions over which types of charges were appropriate and whether further investigation was needed.

    Sources familiar with the criminal probe told CNN in April that prosecutors were still actively weighing a felony tax charge against Hunter Biden. And it is common for prosecutors to strike deals with defendants where they plead guilty to a small subset of the possible charges they could’ve faced.

    The Justice Department probe into Hunter Biden was opened in November 2018, and was codenamed “Sportsman.” According to Shapley’s testimony, federal investigators knew as early as June 2021 that there were potential venue-related issues with charging Hunter Biden in Delaware. Under federal law, charges must be brought in the jurisdiction where the alleged crimes occurred.

    If the potential charges couldn’t be brought in Delaware, then Weiss would need help from his fellow US attorneys. He looked to Washington, DC, where some of Hunter Biden’s tax returns were prepared, and the Central District of California, which includes the Los Angeles area where Hunter Biden lives.

    But Shapley told the committee that the US attorneys in both districts wouldn’t seek an indictment.

    A second whistleblower, an IRS case agent who also testified to the committee but hasn’t been publicly identified, also told lawmakers that this is what happened. He agreed that Weiss was “was told no” when he tried to get the cooperation of the US attorneys in in DC and Los Angeles, who are Biden appointees.

    Hunter Biden’s eventual plea agreement was filed in Weiss’ jurisdiction, in Delaware.

    Shapley contends in his interview that Attorney General Merrick Garland was not truthful when he told Congress that Weiss had full authority on the investigation.

    Shapley recounted a meeting on October 7, 2022, where, according to Shapley’s notes memorializing the meeting, Weiss said, “He is not the deciding person on whether charges are filed” against Hunter Biden. This undermines what Weiss and Garland have publicly said about Weiss’ independence on the matter.

    Shapley also testified to committee investigators that it was during this October 2022 meeting that he learned for the first time that Weiss had requested to be named as a special counsel, but was denied.

    In testimony to Congress in March, Garland said Weiss was advised “he is not to be denied anything he needs.”

    Regarding the claims of political interference with the Hunter Biden criminal probe, Weiss told House Republicans in a recent letter that Garland granted him “ultimate authority over this matter, including responsibility for deciding where, when, and whether to file charges.”

    After the transcripts were released Thursday, spokespeople for the US attorney’s offices in DC and Los Angeles issued near-identical statements reiterating that Weiss “was given full authority to bring charges in any jurisdiction he deemed appropriate.” The Justice Department echoed those comments in a statement saying Weiss “needs no further approval” to bring charges wherever he wants.

    The whistleblowers also allege that at multiple key junctures, investigators were thwarted in their efforts because prosecutors were concerned about interfering in the 2020 presidential election.

    In 2020, IRS investigators sought to conduct search warrants and take other overt steps. But according to Shapley, several weeks before the election, in September 2020, a Justice Department prosecutor questioned the optics of searching Hunter Biden’s residence and Joe Biden’s guest home.

    Later that year, other planned searches were delayed because then-President Donald Trump was refusing to concede and was continuing to contest the results.

    Republicans have slammed the plea agreement Hunter Biden struck as a “sweetheart deal,” and said it amounted to “a slap on the wrist.”

    House Ways and Means Committee Chairman Jason Smith said earlier Thursday that the transcripts reveal “credible whistleblower testimony alleging misconduct and abuse” at the Justice Department that “resulted in preferential treatment for the president’s son.”

    The Missouri Republican highlighted the whistleblowers’ allegations that the Justice Department “overstepped” in their efforts to intervene in the Hunter Biden criminal probe.

    “The testimony … details a lack of US attorney independence, recurring unjustified delays, unusual actions outside the normal course of any investigation, a lack of transparency across the investigation and prosecution teams, and bullying and threats from the defense counsel,” Smith said.

    Democrats on the committee said the transcripts were “a premature and incomplete record” of what happened with the Hunter Biden probe and accused the GOP of a “stunning abuse of power.”

    Hunter Biden’s lawyer pushed back in a statement Friday against the whistleblowers claims, saying it was “preposterous and deeply irresponsible” to suggest that federal investigators “cut my client any slack” during their “extensive” five-year probe.

    “A close examination of the document released publicly yesterday by a very biased individual raises serious questions over whether it is what he claims it to be,” attorney Chris Clark said. “It is dangerously misleading to make any conclusions or inferences based on this document.”

    Shapley, the IRS supervisor-turned-whistleblower, told House lawmakers that Justice Department prosecutors denied requests to look into messages allegedly from Hunter Biden where he used his father as leverage to pressure a Chinese company into paying him.

    “I am sitting here with my father and we would like to understand why the commitment made has not been fulfilled,” according to a document Shapley gave to Congress, which quotes from texts that are allegedly from Hunter Biden to the CEO of a Chinese fund management company.

    The message continues: “Tell the director that I would like to resolve this now before it gets out of hand. And now means tonight.” The message goes onto say, “I will make certain that between the man sitting next to me and every person he knows and my ability to forever hold a grudge that you will regret not following my direction. I am sitting here waiting for the call with my father.”

    The second, unnamed IRS whistleblower also testified to lawmakers about this alleged WhatsApp message, saying prosecutors questioned whether they could be sure Hunter Biden was telling the truth that his father was actually in the room in the messages. The unnamed whistleblower testified that they did not know whether the FBI investigated the message.

    Shapley told House investigators that a Justice Department attorney insisted that the FBI not ask directly about Joe Biden when doing interviews. But the FBI did manage to ask one key witness about Joe Biden, and Shapley said the witness told investigators that some suggestions of the president’s involvement were overstated.

    An email sent among business partners of Hunter Biden said an equity stake should be held “for the big guy,” an apparent reference to Joe Biden, who was vice president at the time. But one of the associates told the FBI that it was probably just “wishful thinking or maybe he was just projecting” that Joe Biden would get involved if he did not run for president in 2016.

    Joe Biden has repeatedly denied having any involvement in his son’s overseas business dealings, where he made millions of dollars from China, Ukraine and other countries. House Republicans have used their oversight probes to look for evidence that Joe Biden was actually involved.

    This story has been updated with additional developments.

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