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Tag: Fraud

  • Man convicted of running unlicensed bitcoin exchange biz

    Man convicted of running unlicensed bitcoin exchange biz

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    CONCORD, N.H. — A New Hampshire man was convicted Thursday of running an unlicensed bitcoin exchange business and laundering over $10 million in proceeds of romance scams and other internet frauds following a two-week federal trial.

    Prosecutors said Ian Freeman “created a business that catered to fraudsters” by failing to register his business with the Financial Crimes Enforcement Network as required by law, disabling ‘know your customer’ features on bitcoin kiosks, and ensuring bitcoin customers didn’t tell him what they did with their bitcoin.

    Freeman’s lawyer, Mark Sisti, said Freeman actually warned people of scams and he helped businesses in the community.

    “We are definitely going to appeal,” Sisti said. “We appreciate the jury’s effort and time they spent on the case.”

    Freeman, 42, a libertarian activist and radio show host, was released pending his April 14 sentence and appeal.

    Five others were arrested with him last year. Three pleaded guilty to wire fraud in opening accounts at financial institutions in their names or in the names of churches to allow someone to use the accounts to sell virtual currency. They received light sentences. A fourth pleaded guilty to operation of an unlicensed money transmitting business and awaits sentencing. Charges were dismissed against the fifth person.

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  • Judge says cryptocurrency mogul Sam Bankman-Fried can post $250M bond, live in parents’ home while he awaits fraud trial

    Judge says cryptocurrency mogul Sam Bankman-Fried can post $250M bond, live in parents’ home while he awaits fraud trial

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    Judge says cryptocurrency mogul Sam Bankman-Fried can post $250M bond, live in parents’ home while he awaits fraud trial

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  • 2 suspects in murder for hire case charged with wire fraud

    2 suspects in murder for hire case charged with wire fraud

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    Two of the men charged in the murder for hire case that led to the 2018 killing of a Vermont man are now facing federal wire fraud charges, court records show.

    Serhat Gumrukcu and Berk Eratay are due in appear in U.S. District Court by video next week to answer the charges contained in an updated indictment filed earlier this month by federal prosecutors.

    The two men are also charged with arranging for the kidnapping and murder of Gregory Davis, who was taken from his Danville home on Jan. 6, 2018. His body was found the next day in a snowbank about 15 miles (24 kilometers) away. He had been shot to death.

    Both Gumrukcu and Eratay have pleaded not guilty to the earlier charges. They are both being held without bail.

    Prosecutors have alleged that Davis was killed because he was ready to go to the FBI to complain that Gumrukcu was failing to live up to his obligations in an oil trading deal.

    Gumrukcu, 40, is a native of Turkey who immigrated to the United States in 2013 and became a permanent resident a year later. He was living in Los Angeles when he was arrested in May. Eratay, 36, who prosecutors say was working for Gumrukcu, is also Turkish, was living in Las Vegas when he was arrested.

    Gumrukcu’s lawyer declined comment. Eratay’s lawyer did not return an email seeking comment.

    A third suspect, Jerry Banks, 35, of Fort Garland, Colorado, is charged with kidnapping and killing Davis, but he was not charged with wire fraud.

    The latest indictment outlines how prosecutors say that over several years Gumrucku and Davis, working through a middleman, were trying to arrange an oil trading deal that began in 2015. Later after Gumrukcu failed to live up to his financial obligations, Davis’ company Mode Commodities and a company controlled by Gumrukcu called Lauran Trading, agreed to pay Davis $5 million over time, the indictment says.

    Among the fraudulent messages allegedly sent to Davis by Gumrukcu and Eratay, were messages that falsely represented that Lauran Trading had $30 million available for oil trading from a bank in the Persian Gulf.

    In 2017, Gumrukcu was also putting together a different deal through which he obtained a significant ownership stake in Enochian Biosciences, a Los Angeles based biotechnology company. Prosecutors have said that if Davis would have complained to the FBI about Gumrukcu it could have jeopardized the biotechnology deal.

    After Davis’ death investigators worked for more than four years to build a chain connecting the four suspects: Banks, who was friends with Aron Lee Ethridge, of Las Vegas, who was friends with Eratay, who worked for Gumrukcu.

    Ethridge has since pleaded guilty.

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  • FTX founder Bankman-Fried to make 1st US court appearance

    FTX founder Bankman-Fried to make 1st US court appearance

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    NEW YORK — The cryptocurrency entrepreneur Sam Bankman-Fried was expected to make his initial U.S. court appearance Thursday on charges that he swindled investors and looted customer deposits on his FTX trading platform.

    Bankman-Fried, arrested in the Bahamas last week, was flown to New York late Wednesday after deciding not to challenge his extradition.

    While he was in the air, the U.S. attorney in Manhattan announced that two of Bankman-Fried’s closest business associates had also been charged and had secretly pleaded guilty.

    Carolyn Ellison, 28, the former chief executive of Bankman-Fried’s trading firm, Alameda Research, and Gary Wang, 29, who co-founded FTX, pleaded guilty to charges including wire fraud, securities fraud and commodities fraud.

    U.S. Attorney Damian Williams said in a video statement that both were cooperating with investigators and had agreed to assist in any prosecution. He warned others who enabled the alleged fraud to come forward.

    “If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” he said. “We are moving quickly, and our patience is not eternal.”

    Prosecutors and regulators contend that Bankman-Fried, 30, was at the center of several illegal schemes to use customer and investor money for personal gain. He faces the possibility of decades in prison if convicted on all counts.

    In a series of interviews before his arrest, Bankman-Fried said he never intended to defraud anyone.

    Bankman-Fried is charged with using money, illicitly taken from FTX customers, to enable trades at Alameda, spend lavishly on real estate, and make millions of dollars in campaign contributions to U.S. politicians.

    FTX, founded in 2019, rode the crypto investing phenomenon to great heights quickly, becoming one of the world’s largest exchanges for digital currency. Seeking customers beyond the tech world, it hired the comic actor and writer Larry David to appear in a TV ad that ran during the Super Bowl, hyping crypto as the next big thing.

    Bankman-Fried’s crypto empire, however, abruptly collapsed in early November when customers pulled deposits en masse amid reports questioning some of its financial arrangements.

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  • FTX co-founder Gary Wang, ex-Alameda CEO Caroline Ellison plead guilty to federal charges

    FTX co-founder Gary Wang, ex-Alameda CEO Caroline Ellison plead guilty to federal charges

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    On the same day that that the Bahamas extradited FTX co-founder and former CEO Sam Bankman-Fried to the U.S. to face criminal charges, two former executives at FTX and Alameda Research pleaded guilty Wednesday to federal fraud charges.

    Caroline Ellison, 28, the former chief executive of Alameda Research — the crypto trading company founded by Bankman-Fried — and Zixiao (Gary) Wang, 29, co-founder of crypto platform FTX and its former chief technology officer, were charged for their roles in contributing to the crypto platform’s collapse.

    The pair each faced decades-long prison sentences if convicted, and pleaded guilty to charges that included wire fraud, securities fraud and commodities fraud in exchange for leniency. In a video Wednesday night, U.S. Attorney Damian Williams of the Southern District of New York said both were cooperating in the continuing investigation into FTX and Bankman-Fried.

    Williams added that Bankman-Fried, 30, was in FBI custody and will appear in court in “as soon as possible,” and suggested more charges in the FTX case could be forthcoming.

    “If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” Williams said. “We are moving quickly and our patience is not eternal. … and we are far from done.”

    In a parallel action, the Securities and Exchange Commission on Wednesday also charged Ellison and Wang “for their roles in a multiyear scheme to defraud equity investors in FTX.”

    According to the SEC complaint, Ellison helped manipulate the price of FTX-issued crypto token FTT, which served as collateral for undisclosed loans from FTX customers’ assets to Alameda. In addition, the SEC alleges Bankman-Fried misled customers by falsely claiming FTX was a safe trading platform with strict risk-mitigation measures.

    The SEC claims Wang created software code to allow Alameda to divert FTX customers’ funds, and that Ellison used those funds for Alameda’s trading activity.

    “As part of their deception, we allege that Caroline Ellison and Sam Bankman-Fried schemed to manipulate the price of FTT, an exchange crypto security token that was integral to FTX, to prop up the value of their house of cards,” SEC Chair Gary Gensler said in a statement. “We further allege that Ms. Ellison and Mr. Wang played an active role in a scheme to misuse FTX customer assets to prop up Alameda and to post collateral for margin trading. When FTT and the rest of the house of cards collapsed, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left investors holding the bag. Until crypto platforms comply with time-tested securities laws, risks to investors will persist. It remains a priority of the SEC to use all of our available tools to bring the industry into compliance.”

    Bankman-Fried was arrested in the Bahamas last week after he was indicted by U.S. federal prosecutors, who allege he played a key role in the collapse of FTX, diverting billions of dollars of customer assets and defrauding investors, customers and lenders.

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  • FTX founder Sam Bankman-Fried to be extradited to New York

    FTX founder Sam Bankman-Fried to be extradited to New York

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    FTX founder Sam Bankman-Fried to be extradited to New York – CBS News


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    Disgraced FTX founder Sam Bankman-Fried left a Bahamian courthouse late Wednesday after agreeing to be extradited to the U.S. to face criminal charges. He has spent more than a week in jail after being arrested at the request of U.S. federal prosecutors. Lilia Luciano has the details.

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  • FTX founder expected to drop fight against extradition to US

    FTX founder expected to drop fight against extradition to US

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    Sam Bankman-Fried is in a courthouse in the Bahamas where he is expected to tell a judge he will not fight extradition to the U.S., where he faces multiple criminal and civil charges related to the collapse of cryptocurrency exchange FTX

    Sam Bankman-Fried arrived a courthouse in the Bahamas early Monday and is expected to tell a judge he will not fight extradition to the U.S., where he faces multiple criminal and civil charges related to the collapse of cryptocurrency exchange FTX.

    The decision comes just a week after Bankman-Fried’s lawyers had initially said that they planned to fight extradition. An extradition hearing had been scheduled for Feb. 8. His turnabout could speed up the timetable for him to be sent to the U.S.

    Bahamian authorities arrested Bankman-Fried last Monday at the request of the U.S. government. The former FTX CEO faces criminal charges in the U.S., including wire fraud and money laundering, as well as civil charges. The 30-year-old could potentially spend the rest of his life in jail.

    Bankman-Fried’s downfall, from crypto evangelist to pariah, occurred with stunning speed. FTX filed for bankruptcy protection on Nov. 11 when it ran out of money after the cryptocurrency equivalent of a bank run.

    Before the bankruptcy, Bankman-Fried was considered by many in Washington and on Wall Street as a wunderkind of digital currencies, someone who could help take them mainstream, in part by working with policymakers to bring more oversight and trust to the industry.

    Bankman-Fried had been worth tens of billions of dollars — at least on paper — and was able to attract celebrities like Tom Brady or former politicians like Tony Blair and Bill Clinton to his conferences at luxury resorts in the Bahamas. One prominent Silicon Valley firm, Sequoia Capital, invested hundreds of millions of dollars in FTX.

    U.S. prosecutors and financial regulators painted a very different picture of Bankman-Fried and FTX last week. An indictment unsealed Tuesday alleging he played a central role in the rapid collapse of FTX and hid its problems from the public and investors. The Securities and Exchange Commission said Bankman-Fried illegally used investors’ money to buy real estate on behalf of himself and his family.

    The new CEO of FTX, John Ray III, told a congressional committee on Tuesday that there was nothing sophisticated about what Bankman-Fried was up to.

    “This is just old fashion embezzlement, taking money from others and using it for your own purposes,” he said.

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  • Sam Bankman-Fried will now reverse his decision to fight extradition to the U.S.: Report

    Sam Bankman-Fried will now reverse his decision to fight extradition to the U.S.: Report

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    Sam Bankman-Fried could soon be headed for a U.S. prison to face fraud charges. The former CEO of FTX—the cryptocurrency exchange that went abruptly bankrupt last month—is currently being held in a jail in the Bahamas.

    Bahamian authorities arrested him on Monday following a formal notification by the U.S. government that it had filed criminal charges against him and would likely request his extradition. The U.S. and the Bahamas have had an extradition process in place since 1994, when a treaty signed by both countries came into force.

    On Tuesday, a Bahamian judge denied him bail, deeming him a flight risk. During the arraignment proceedings, Bankman-Fried’s lawyer said he would fight plans to send him to the U.S., and an extradition hearing was set for Feb. 8.

    But now Bankman-Fried is expected to appear in a Bahamian court on Monday to reverse his decision to contest extradition, Reuters reported.

    Federal prosecutors in New York have charged Bankman-Fried with eight criminal counts, including conspiracy and wire fraud, for allegedly misusing billions of dollars in customers’ funds. He faces up to 115 years in prison if convicted on all eight counts.

    ‘Open and shut case for fraud’

    Last month, billionaire Mark Cuban said he’d “be afraid of going to jail for a long time” if he were Bankman-Fried.

    And earlier this month, Brain Armstrong, CEO of the U.S.-based crypto exchange Coinbase, said it was “baffling” why Bankman-Fried wasn’t already in prison.

    “The DOJ or somebody should be able to make—just based on his public statements, I think there’s a very open and shut case for fraud,” Armstrong said at the a16z crypto Founder Summit.

    FTX’s implosion last month surprised many inside and outside of the crypto sector. The $32 billion exchange had established itself as a leader in the field, having enlisted star athletes like Tom Brady and other celebrities to bolster its image. 

    Bankman-Fried resigned as CEO on Nov. 11, the same day that FTX filed for bankruptcy. A key accusation leveled against him is that he used customer funds from his crypto exchange to fund risky bets at Alameda Research, his misleadingly named crypto hedge fund.

    FTX is based in the Bahamas, where Bankman-Fried reportedly enjoyed a luxurious penthouse lifestyle

    He’s now being held at Fox Hill prison in the Bahamas, according to Reuters, a jail described as “harsh” by the U.S. State Department last year, with overcrowding and a rodent infestation at the time.

    Our new weekly Impact Report newsletter examines how ESG news and trends are shaping the roles and responsibilities of today’s executives. Subscribe here.

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    Steve Mollman

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  • NYAG sues LI nursing home for alleged massive fraud | Long Island Business News

    NYAG sues LI nursing home for alleged massive fraud | Long Island Business News

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    New York Attorney General Letitia James has filed a lawsuit against Cold Spring Hills Center for Nursing and Rehabilitation for alleged financial fraud and abuse of its residents. 

    The lawsuit claims the owners of the Cold Spring Hills facility in Woodbury diverted over $22.6 million in Medicaid and Medicare funds from resident care through a fraudulent network of companies that were used to conceal up-front profit taking. The alleged self-dealing led to “severe understaffing and resident neglect and harm,” according to a statement from the AG’s office. 

    The lawsuit alleges that long before the COVID-19 pandemic, the owners repeatedly cut staffing at the 588-bed facility, which created poor working conditions and endangered residents. Through the lawsuit, the attorney general seeks to prevent new residents from entering the facility, install monitors to oversee the facility’s operations and finances, and ban existing and hidden owners from their roles. 

    The operators of Cold Spring Hills used 13 companies to create the appearance that they were paying for services for the nursing home but were in fact diverting Medicaid and Medicare funds to themselves as up-front profit instead of using the funds for resident care, according to the statement. The network of companies was also used to hide the real owners of the nursing home and to orchestrate multiple deceptive schemes to extract funds for their personal financial benefit, while disregarding the nursing home’s duty to provide required care, the lawsuit alleges. 

    From 2017 through 2021, Cold Spring Hills received over $157 million from New York’s Medicaid program and over $88 million from Medicare to provide critical care to its elderly and disabled residents. The AG’s lawsuit alleges that the facility’s operators used three primary fraudulent schemes to siphon over $22.6 million in Medicaid and Medicare funds from Cold Spring Hills, including paying more than $15.3 million in fraudulent “rent” to Cold Spring Realty, which is owned by the same individuals who operate the nursing home. 

    The lawsuit alleges that the respondents paid more than $5.2 million to several deceptive entities for supposed “consulting” and that the respondents engaged in a $2 million fraudulent promissory note scheme when they purchased the facility. The lawsuit claims the Cold Spring Hill facility’s owners also funneled another $10.6 million in concealed self-dealing transactions through what were ostensibly insurance companies, and another $8.1 million through an entity that purportedly provided services and supplies to Cold Spring Hills. In total, the respondents transferred over $42.4 million to its owners and related parties from 2016 to 2021, according to the AG’s statement. 

    “Cold Spring Hills’ owners put profits over patient care and left vulnerable New Yorkers to live in heartbreaking and inhumane conditions,” James said in the statement. “From Buffalo to Long Island, every nursing home in New York must abide by laws that require the best care for New Yorkers. As attorney general, I am determined to use the full force of my office to hold nursing homes to that standard, and ensure New Yorkers are protected. I encourage anyone who has witnessed alarming conditions, resident neglect, or abuse at a nursing home to contact my office.” 

    In addition to the alleged financial fraud, the lawsuit maintains that residents of the Cold Spring Hills facility were abused and neglected. Testimony from staff and family members of residents describe bleak conditions at the facility. Family members of residents often observed that the facility was unclean and that critical care equipment, such as wheelchairs, beds, shower chairs, and air conditioners, were broken, according to the statement.  

    The AG said that residents were routinely left sitting in soiled briefs and were not bathed for long periods of time and that Cold Spring Hills repeatedly failed to provide proper wound care and prevention for residents, causing wounds to develop and existing wounds to deteriorate, leading to infections. 

    In addition, Cold Spring Hills’ staff confirmed that insufficient staffing was a problem at the facility before the pandemic, and that it continued into 2022, according to the AG’s office. From March 1, 2020 to June 4, 2020, 166 residents of Cold Spring Hills died, 98 from COVID-19 and 68 from other causes. Cold Spring Hills fraudulently failed to report 51 of those 98 COVID-19 deaths to DOH, underreporting by 52 percent, according to the statement. 

    The companies named in the lawsuit are Cold Spring Hills, the actual facility; Cold Spring Realty Acquisition, LLC (Cold Spring Realty), which owns the property where the nursing home is located; Ventura Services, LLC, Highview Management Inc., B&L Consulting, LLC, all of which claim to provide consulting services to nursing homes; Graph MGA, LLC, Graph Management, LLC, Graph Insurance Company A Risk Retention Group, which purportedly act as insurance brokerages; Philipson Family, LLC, which is a partial owner of Cold Spring Realty; Lifestar Family Holdings, which is a partial owner of Cold Spring Realty; Comprehensive Care Solutions, LLC, which purported to provide services and supplies; and Ross CSH Holdings, LLC, Rosewell Associates, LLC, and ZBL Management, LLC, all pass-through companies.  

    Also named in the suit is the principal owner, Bent Philipson, whose role was allegedly concealed, Benjamin Landa, whose ownership is also alleged to have been concealed; Joel Leifer; David Zahler, his wife Chaya Zahler, their adult children Rochel David, Leah Friedman, Chaim Zahler, and Jacob Zahler, Avi Philipson (Bent Philipson’s adult son), Esther Farkovits (Benjamin Landa’s adult daughter), Rochel David and Leah Friedman (the Zahlers’ daughters) who were straw owners of the nursing home, allegedly put in place to conceal their fathers’ control. Also named in the suit is Cheskel Berkowitz, Joel Zupnick, and the Estate of Deborah Philipson. 

    The lawsuit respondents were unable to be reached for comment. 

    In the lawsuit filed today, Attorney General James seeks to prohibit Cold Spring Hills from admitting any new residents unless and until staffing levels meet appropriate standards; require Cold Spring Hills to engage and pay for a financial monitor to oversee the facility’s financial operations; and require Cold Spring Hills to engage and pay for an independent healthcare monitor to oversee the facility’s healthcare operations and ensure residents’ outcomes improve. 

    The AG also seeks to remove Bent Philipson, Avi Philipson, Joel Leifer, Esther Farkovits, Rochel David, and Leah Friedman, and any of their related entities, from further serving or having any role at Cold Spring Hills; direct all respondents to fully disgorge any and all funds wrongfully received as part of the scheme; and direct all respondents corporate and individual to pay restitution and penalties. 

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    David Winzelberg

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  • Russians find asylum lifeline to US, but at a high price

    Russians find asylum lifeline to US, but at a high price

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    CHULA VISTA, Calif. — Phil Metzger promises to arrange entry to the United States for Russian-speaking asylum-seekers through unmatched connections with U.S. border officials and people in Mexico who can guarantee safety while traveling. Though seeking asylum is free, the pastor of Calvary San Diego said his services are “not cheap.”

    In an interview with a Russian-language YouTube channel, he touted director computer access to U.S. Customs and Border Protection to enroll migrants and was vague about “opportunists” in Mexico who ensure customers’ safety after they fly there on tourist visas and while they wait in Tijuana to cross.

    “I just know there’s a lot of power on that side that I just don’t control,” the evangelical Christian pastor said. “But I do have one control. I control who goes across. So I have to negotiate. To keep those people safe, I have to negotiate with those in power (in Mexico).”

    Asylum is supposed to be free and for those most in need; many have been unable to even ask for protection under COVID-19 restrictions that are set to expire Wednesday.

    Yet Metzger’s service, as described in the 25-minute interview last month at his church in the San Diego suburb of Chula Vista, is a private money-generating enterprise that uses its government connections to bypass those restrictions. It’s part of an opaque, bewildering patchwork of exemptions CBP has developed. Immigration advocates select who gets in, though CBP has final say.

    Asked about an outside group charging money, the Department of Homeland Security said there is no fee related to exemptions from asylum restrictions and that it will “look into any allegation of abuse.”

    “DHS takes any allegations of fraud or abuse of our immigration systems very seriously,” it said in a written response to questions about the service.

    The pastor did not respond to text, email and phone messages left over a week and his office was closed when a reporter went there on a recent weekday afternoon.

    ———

    This story is part of an ongoing Associated Press series, “Migration Inc,” which investigates individuals and companies that profit from the movement of people who flee violence and civil strife in their homelands.

    ———

    Migrants have been denied rights to seek asylum more than 2.5 million times since March 2020 on grounds of preventing the spread of COVID-19 under Trump-era restrictions known as Title 42.

    Exemptions are supposed to be for migrants deemed most vulnerable in Mexico — perhaps for gender identity or sexual orientation, or for being specifically threatened with violence — but some partners say CBP doesn’t question choices and that migrants selected often face no unusual danger. The agency doesn’t publicly identify its partners or how many slots are made available to each, leaving migrants guessing who they are and which ones are best connected to U.S. authorities.

    In El Paso, Texas, CBP gives out 70 slots daily, half for the government of Mexico’s Chihuahua state and the rest for attorneys and advocacy groups, said Nicolas Palazzo, an attorney for Las Americas Immigrant Advocacy Center, which participates in the arrangement. He said some attorneys unaffiliated with his organization charge migrants for the service.

    In Piedras Negras, Mexico, across from Eagle Pass, Texas, the city government chooses who escapes the reach of Title 42, according to a report last month from the University of Texas at Austin Strauss Center for International Security and Law. In Reynosa, across from McAllen, Texas, a migrant shelter picks who crosses, while in Laredo, Texas, there are no exemptions, the report says.

    In San Diego, CBP exempts about 200 people daily, including 40 slots that are set aside for Russian speakers working through Calvary San Diego, said Enrique Lucero, the city of Tijuana’s director of migrant affairs, who regularly communicates with U.S. officials.

    Other slots in San Diego are for advocacy groups Al Otro Lado, which operates an online registration list, and Border Angels, which leans on migrant shelter directors to select who gets to cross, and the U.S. Committee for Refugees and Immigrants, a refugee resettlement organization.

    CBP is allowing more Russians to enter the United States with Title 42 exemptions, with about 3 in 4 coming through California border crossings with Mexico. In October, it exempted 3,879 Russians, more than triple the same period a year earlier. It exempted 21,626 Russians in the fiscal year that ended Sept. 30, more than five times the previous year.

    In the YouTube interview last month with Alex Moore, Metzger said his call center fields more than 1,000 inquiries a day. CBP tells him how many people can cross and “I control who crosses.”

    “Honestly, we think it was God opening a door for us,” said Metzger, who grew up in Southern California but spent much of his adult life in Eastern Europe.

    Metzger is unclear on who he pays to greet customers in Mexico and bring them to the border, saying he doesn’t know them.

    Through a Telegram account called Most V USA, the cost for single adults paying cash was 1,800 (presumably U.S. dollars) Monday — a “price reduction.” For married couples paying cash, the cost was $3,500. Online payments were $300 less for individuals and $500 less for couples. Children were free.

    “You pay not for the crossing, but for the consultation on the crossing,” Most V USA says on its website. “We use the only legal way available to our organization — making an appointment with a CBP officer at the border.”

    The price includes crossing to the United States safely in groups from Tijuana to San Diego, with a bag containing water and protein bars.

    Metzger opened his large church to Ukrainian refugees after Russia’s invasion this year, working with volunteers on a smooth-running operation that deployed a mobile app used to track church attendance. Ukrainians who flew to Tijuana were told to report to a San Diego border crossing as their numbers approached, a system organizers likened to waiting for a restaurant table.

    Metzger touts connections with CBP developed during that time and warns about falling for scammers who use his Most V USA brand.

    “No, it’s not cheap. No, it’s not easy but we will make sure that it is safe and that you will get into the States,” he said.

    ———

    Associated Press writer Jim Heintz in Moscow contributed.

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  • Biden administration proposes crackdown on scam Medicare ads

    Biden administration proposes crackdown on scam Medicare ads

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    The Biden administration has proposed a ban on misleading ads for Medicare Advantage plans that have targeted older Americans and, in some cases, convinced them to sign up for plans that don’t cover their doctors or prescriptions

    WASHINGTON — The Biden administration on Wednesday proposed a ban on misleading ads for Medicare Advantage plans that have targeted older Americans and, in some cases, convinced them to sign up for plans that don’t cover their doctors or prescriptions.

    The rule, proposed by the Centers for Medicare and Medicaid Services, would ban ads that market Medicare Advantage plans with confusing words, imagery or logos. The new regulation would also prohibit ads that don’t specifically mention a health insurance plan by name.

    It’s an aggressive step to tackle a growing problem in the Medicare Advantage marketplace, a booming business that offers privately run versions of the government’s Medicare program for people who are 65 and older or have disabilities. Nearly half of all Medicare enrollees — about 28 million — are now turning to Medicare Advantage plans.

    And some have been deceived by television commercials, online ads and mailers put out by the marketing agencies and brokers that some insurers have hired to win over customers.

    The proposed rule “takes important steps to hold Medicare Advantage plans accountable for providing high quality coverage and care to enrollees,” said agency Administrator Chiquita Brooks-LaSure in a statement.

    The problem has become so pervasive that CMS agents have been secretly shopping for plans by calling the phone numbers in advertisements, finding in some cases that brokers have overstated the benefits that enrollees would get and the money they would save in the new plans. Democrats on the Senate Finance Committee released an investigative report last month showing that several states also reported an increase in complaints about deceptive marketing schemes in 2021.

    The committee’s investigation found that older adults in Ohio, for example, were sent mailers resembling federal government tax forms promising bigger Social Security checks if they enrolled in a new Medicare Advantage plan. Nationwide TV commercials featuring celebrities have also misled some customers by telling viewers they’ll get “money back to your Social Security check” but fail to mention that the plans they’re selling vary by ZIP code or don’t cover all providers.

    “These proposals are an important step towards protecting seniors in Medicare from scammers and unscrupulous insurance companies and brokers,” the committee chairman, Sen. Ron Wyden, D-Ore., said in a statement on Wednesday.

    The federal agency on Wednesday also proposed regulations that would establish new wait-time standards for mental health providers that are in-network for Medicare Advantage plans. The standards would recommend that enrollees be able to access mental health care appointments within 10 days.

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  • FTX founder Sam Bankman-Fried charged with fraud

    FTX founder Sam Bankman-Fried charged with fraud

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    FTX founder Sam Bankman-Fried charged with fraud – CBS News


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    Federal prosecutors charged FTX Trading founder Sam Bankman-Fried with eight counts including fraud, money laundering and other financial crimes. Scott MacFarlane reports.

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  • 12/13: CBS News Prime Time

    12/13: CBS News Prime Time

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    12/13: CBS News Prime Time – CBS News


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    John Dickerson reports on the charges against FTX founder Sam Bankman-Fried, an alleged Russian smuggling ring in New Hampshire, and reasons why inflation slowed in November.

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  • FTX founder Sam Bankman-Fried charged in

    FTX founder Sam Bankman-Fried charged in

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    FTX founder Sam Bankman-Fried charged in “years-long” fraud scheme – CBS News


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    FTX founder Sam Bankman-Fried was arrested in the Bahamas and is facing U.S. charges in what a federal prosecutor calls “one of the biggest financial frauds in American history.” He was scheduled to testify on Capitol Hill. Scott MacFarlane reports.

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  • New FTX CEO says lax oversight, bad decisions caused failure

    New FTX CEO says lax oversight, bad decisions caused failure

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    WASHINGTON — Sam Bankman-Fried, founder and former CEO of the failed cryptocurrency exchange FTX, helped 1,500 Bahamian investors remove $100 million from their accounts while other customers around the world were locked out of the exchange, according to the company’s new CEO, who testified before a House committee Tuesday

    FTX CEO John Ray III, who has guided dozens of companies, including Enron, through bankruptcy restructuring, called FTX’s collapse one of the worst business failures he has seen — a “paperless bankruptcy,” fueled by an “unprecedented lack of documentation.”

    For nearly four hours, without a break, Ray told lawmakers about the lack of oversight and financial controls that he discovered since taking over FTX a month ago. He found a loan where Bankman-Fried was both the issuer and the recipient. There were expenses approved by emoji. FTX didn’t have accountants. For record-keeping, employees used QuickBooks, pre-packaged software typically used by small and medium-sized businesses, to manage FTX’s finances.

    “Nothing against QuickBooks,” Ray said. “It’s a very nice tool, just not for a multibillion-dollar company.”

    At its peak, FTX’s market value topped $30 billion.

    Notably absent from the hearing before the House Financial Services Committee was Bankman-Fried, who was arrested in the Bahamas just hours before he was scheduled to testify. The arrest was made at the request of the U.S. government, which on Tuesday announced criminal charges against Bankman-Fried including wire fraud and money laundering.

    The timing of Bankman-Fried’s arrest frustrated many committee members. Republican Rep. William Timmons, of South Carolina, called the timing “bizarre” and added that, as a former prosecutor, he couldn’t imagine why any prosecutor wouldn’t want “hours of congressional grilling for the target of an investigation” to help make a case.

    FTX filed for bankruptcy protection on Nov. 11, when the firm ran out of money after the cryptocurrency equivalent of a bank run. The collapse of crypto’s second-largest exchange has garnered worldwide attention, and prompted worries in the crypto industry that the pain could become widespread. Ray estimated that about $8 billion of customer funds are missing.

    Some customers in the Bahamas, where FTX was based, were able to recover some money, Ray said. That’s because the Bahamian government and Bankman-Fried agreed to let them get their money out of FTX while customers in other countries were blocked from doing so, Ray said.

    Ray, who took over FTX on Nov. 11, told the committee that the problems at FTX were a cumulation of months or even years of bad decisions and poor financial controls.

    “This is not something that happened overnight or in a context of a week,” he said.

    However, Ray didn’t answer numerous questions about what regulations could have stopped the collapse of FTX. Instead, he focused on how unusual FTX was — having no board of directors, having no real structure that prohibited money invested by consumers in FTX to be shifted to Bankman-Fried’s hedge fund Alameda Research for other investments or lavish purchases, without the original investors’ knowledge.

    In his prepared remarks, Ray painted a picture of a company acting with little to no oversight.

    “FTX Group’s collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets,” Ray said.

    In interviews since FTX filed for bankruptcy protection, Bankman-Fried acknowledged that the company lacked proper financial controls and corporate governance, but denied any fraud had been committed.

    U.S. prosecutors and financial regulators disagreed with that assessment. An indictment unsealed Tuesday charged Bankman-Fried with a host of financial crimes and campaign finance violations, alleging he played a central role in the rapid collapse of FTX and hid its problems from the public and investors. The Securities and Exchange Commission said Bankman-Fried illegally used investors’ money to buy real estate on behalf of himself and family.

    Ray’s comments supported those allegations.

    “This is just old fashion embezzlement, taking money from others and using it for your own purposes,” he said. “This is not sophisticated at all.”

    A lawyer for Bankman-Fried, Mark S. Cohen, said Tuesday he is “reviewing the charges with his legal team and considering all of his legal options.”

    ————

    Reporter Ken Sweet contributed.

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  • A decade after Sandy Hook, grief remains but hope grows

    A decade after Sandy Hook, grief remains but hope grows

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    NEWTOWN, Conn. — They would have been 16 or 17 this year. High school juniors.

    The children killed at the Sandy Hook Elementary School on Dec. 14, 2012 should have spent this year thinking about college, taking their SATs and getting their driver’s licenses. Maybe attending their first prom.

    Instead, the families of the 20 students and six educators slain in the mass shooting will mark a decade without them Wednesday.

    December is a difficult month for many in Newtown, the Connecticut suburb where holiday season joy is tempered by heartbreak around the anniversary of the nation’s worst grade school shooting.

    For former Sandy Hook students who survived the massacre, guilt and anxiety can intensify. For the parents, it can mean renewed grief, even as they continue to fight on their lost children’s behalf.

    In February, Sandy Hook families reached a $73 million settlement with the gunmaker Remington, which made the shooter’s rifle. Juries in Connecticut and Texas ordered the conspiracy theorist Alex Jones to pay $1.4 billion for promoting lies that the massacre was a hoax.

    In mid-November, a memorial to the 26 victims opened near the new elementary school built to replace the one torn down after the shooting.

    Ten years on, some victims’ relatives and survivors aren’t without hope for a brighter future.

    ACTIVISM IN TRAGEDY’S AFTERMATH

    After the massacre, Nicole Hockley and Mark Barden were among many victims’ relatives who turned to activism. They helped form Sandy Hook Promise, a nonprofit group that works to prevent suicides and mass shootings.

    Hockley, who lost her 6-year-old son, Dylan, and Barden, who lost his 7-year-old son, Daniel, both find it difficult to believe their children have been gone for a decade.

    “For me, Dylan is still this 6-year-old boy, forever frozen in time,” Hockley said. “This journey that we’ve been on the last 10 years, it doesn’t feel like a decade and it doesn’t feel like 10 years since I last held my son, either.”

    A decade hasn’t diminished the disbelief Barden and his wife feel over Daniel’s death.

    “Jackie and I still have moments where we just kind of look at each other, still wrapping our heads around the fact that our little 7-year-old boy was shot to death in his first grade classroom,” he said.

    “I can’t help but wonder what he’d be like now at 17,” he said, repeating the number 17. “I just think he would be still a more mature version of the beautiful, sweet, compassionate, thoughtful, intelligent little boy that he was at 7. And it breaks my heart to think of the wonderful impact he would have had in these last 10 years and what he would have still yet to come, and it’s all been taken away from him.”

    Sandy Hook Promise’s programs have been taught in more than 23,000 schools to over 18 million children and adults. Key components include education about the warning signs of potential school violence or self-harm and an anonymous tip system to report a classmate at risk for hurting others or themselves.

    Hockley and Barden say they believe the educational programs and reporting system have prevented many suicides and stopped some school shootings.

    “It’s a tremendous satisfaction and it’s a serious responsibility,” Barden said of the group’s work. “And it’s a gift in a way that we have built something that allows us this mechanism with which to honor our children by saving other children and by protecting other families from having to endure this pain.”

    GROWING UP A SURVIVOR

    Ashley Hubner was in her second grade classroom at Sandy Hook Elementary when the shooting happened. She and her classmates ran to the cubby area to hide. The school intercom system clicked on. Everyone could hear gunshots, screaming and crying.

    When police arrived, she and her classmates didn’t want to open the door. They thought bad guys could be impersonating officers. They screamed “No!” The officers had to convince them they were actually police.

    Ashley, now a 17-year-old senior at Newtown High School, developed post-traumatic stress disorder and has struggled with anxiety and depression, like other students who were there that day. Ashley said she always gets more emotional and irritable around the shooting anniversary.

    “Even though it’s been 10 years, like this is still a problem that a lot of us still have to handle in our everyday lives and it still affects us greatly,” she said.

    Adding to the grief is the fact that mass shootings keep happening, she said.

    “We’ve had 10 years to change things and we’ve changed so little, and that’s just disgusting to me,” she said.

    Ashley said there wasn’t much talk among her classmates yet about the anniversary.

    “I feel like everyone just tries to pretend like everything is normal and then when it gets to that day, I’m sure people will reach out and I’ll reach out to people.”

    Ashley wasn’t sure how she might mark the day. All town schools will be closed for staff development. She said she may make her first trip to the new memorial.

    She said she has been happy with her senior year at Newtown High, calling it one of the best school years she’s had. She is looking forward to going to college.

    “I’m really, really excited to leave,” she said. “Just like to get new experiences, grow up and move on with this chapter of my life, you know?”

    LIGHT CONQUERING DARKNESS

    St. Rose of Lima Church has been a gathering point for the Newtown community since the day of the shooting, when hundreds of people packed the Roman Catholic church and stood outside for a vigil. It has held a special Mass every Dec. 14 since.

    Monsignor Robert Weiss still struggles with his own trauma. The church led the funerals for eight slain children. He hasn’t slept well ever since and becomes emotional easily. During Mass, he always keeps watch on the entrances, worried about a violent intruder.

    “It’s a very difficult time for me having buried eight of those children,” he said of the anniversary. “It just brings back so many memories of true sadness.”

    The anniversary Masses are hopeful, Weiss said, with a theme that light conquers darkness.

    “The darkness of evil is not going to conquer good and we as a community have to work together to be sure that happens,” Weiss said. “We want to celebrate and remember the children and the families, and how it’s turned this tragedy into so many positive things to assist other people.”

    2022 ‘TIPPING POINT’ IN GUN SAFETY

    After Sandy Hook, there was frustration among many gun violence prevention advocates that nothing was being done to stop such massacres. The failure of a gun control bill in the months after Sandy Hook was another hard loss.

    But U.S. Sen. Chris Murphy, a Connecticut Democrat, said the shooting gave new energy to the movement, with numerous groups forming to demand action.

    “In the 10 years leading up to Sandy Hook, the gun lobby controlled Washington. Anything they wanted they got,” said Murphy.

    “After Sandy Hook happened, we started building what I would describe as the modern anti-gun violence movement,” he said. “During the next 10 years, there was essentially gridlock. The gun lobby no longer got what they wanted, but unfortunately in Washington we weren’t getting what we wanted either.”

    After mass shootings last spring killed 21 people at an elementary school in Uvalde, Texas, and 10 people at a supermarket in Buffalo, New York, Congress passed the Bipartisan Safer Communities Act, the first major federal gun control law in decades. The law expands background checks for younger gun buyers, boosts school mental health programs and promotes “red flag” laws to temporarily confiscate guns from people deemed dangerous.

    “I think this summer marked the tipping point, where finally the gun safety movement has more power than the gun lobby,” Murphy said.

    “It’s going to be a hard December for those families, but I hope they know what a difference that they have made in the memory of their children in these 10 years.”

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  • FTX Founder Sam Bankman-Fried Arrested In The Bahamas

    FTX Founder Sam Bankman-Fried Arrested In The Bahamas

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    Sam Bankman-Fried, the founder and former CEO of Bitcoin and cryptocurrency exchange FTX, has been arrested in the Bahamas by local authorities.

    The arrest followed receipt of formal notification from the U.S. that it had filed criminal charges against SBF, per a statement from the Attorney General of the Bahamas. SBF’s extradition to the U.S. will likely be requested.

    SBF has been on the news for a couple of years, but it wasn’t until recently that such coverage turned a dark corner. The Jane Street alumni turned crypto founder ultimately led his creations, FTX and Alameda Research, to insolvency as SBF’s severe mismanagement of users’ funds came to light. He then filed for Chapter 11 bankruptcy protection and resigned as CEO.

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    Namcios

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  • Crypto Kingpin Sam Bankman-Fried Arrested In The Bahamas [Update]

    Crypto Kingpin Sam Bankman-Fried Arrested In The Bahamas [Update]

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    Image for article titled Crypto Kingpin Sam Bankman-Fried Arrested In The Bahamas [Update]

    Photo: Bloomberg (Getty Images)

    Sam Bankman-Fried, the central figure in the collapse of crypto exchange FTX, has just been arrested in The Bahamas, and is likely to be quickly extradited to the United States to face criminal charges.

    As CNBC reports, authorities in The Bahamas have released a statement which reads:

    The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law. While the United States is pursuing criminal charges against SBF individually, The Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere.

    US authorities issued a statement shortly afterwards:

    Bankman-Fried, who sucked ass at League of Legends by the way, ran FTX. In just a few short years, the crypto exchange went from nothing to plastering its name across all manner of sporting events and magazine covers. It was considered super-valuable because it charged customers fees to buy and bet on crypto, but also because Bankman-Fried was considered the next tech whiz who was going to use FTX to launch a “super app” for finance that would make crypto legit.

    Earlier this year, however, the entire thing collapsed, partly because crypto itself is a scam, but mostly because FTX in particular was very much a scam, down to the fact senior members of the exchange had a chat group called “Wirefraud. Bankman-Fried, who was in The Bahamas in part to avoid having to testify before the House Financial Services Committee (FTX also moved its headquarters to the Caribbean nation last year), is now facing criminal charges in two countries. Meanwhile, his successor in charge of what’s left of FTX has already publicly said the company spent “$5 billion…buying a myriad of businesses and investments, many of which may be worth only a fraction of what was paid for them, and claimed that Bankman-Fried had engaged in “unacceptable management practices.”

    UPDATE 8:20pm ET: The New York Times reports that Bankman-Fried is being charged by US authorities with wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering.

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    Luke Plunkett

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  • Trump Organization Found Guilty On All Counts Of Tax Fraud

    Trump Organization Found Guilty On All Counts Of Tax Fraud

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    Donald Trump’s real estate company has been found guilty on all 17 charges of tax fraud and other crimes related to a 15-year-long criminal scheme to defraud tax authorities. What do you think?

    “It’ll take more than that to tarnish the Trump name.”

    Ana Patterson, Classifieds Editor

    “There’s no way the Trump Organization can run for president now.”

    Micha Burkes, Unemployed

    “We can’t let Hunter Biden get away with this.”

    Louis Graves, Jig Dancer

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  • Ex-Wirecard boss on trial in fraud case that shamed Germany

    Ex-Wirecard boss on trial in fraud case that shamed Germany

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    BERLIN — The former chief executive of financial services company Wirecard and two other ex-managers went on trial Thursday over the firm’s collapse in what has been described as the biggest case of fraud in post-war Germany.

    Wirecard was long the darling of Germany’s fintech scene until it filed insolvency proceedings in 2020, saying 1.9 billion euros that had been on its balance sheet could not be found.

    The case exposed flaws in Germany’s financial oversight bodies and embarrassed then-Chancellor Angela Merkel, who had lobbied on behalf of the company during a visit to China.

    Prosecutors in Munich allege that ex-CEO Markus Braun signed off on financial reports he knew were false. The firm allegedly booked nonexistent revenue it attributed to multiple partnerships in other countries and used fake documents to show it had funds that it did not, they said.

    The firm’s former head of accounting and the managing director of a Dubai-based subsidiary are also on trial.

    The fraud cost banks 3.1 billion euros in loans and writedowns, according to prosecutors.

    One of the central figures in the case, the company’s former chief operating officer Jan Marsalek, remains on the run.

    Braun’s lawyers has said the charges against his client are “seriously flawed” and “assumed a false picture of the facts.” They claim Braun was unaware of machinations by others.

    The complex trial is expected to run for more than a year.

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