A Colorado medical device company admitted to orchestrating an elaborate health care fraud scheme that resulted in the overbilling of patients and insurers by hundreds of millions of dollars.
Zynex Inc., an Englewood-based firm that manufactures and sells medical devices used for pain management and rehabilitation, entered into an agreement Tuesday with the U.S. Department of Justice to avoid prosecution.
The company, as part of the deal, agreed to pay between $5 million and $12.5 million in penalties — the final tally will depend on its earnings and profit during the settlement period — and will forfeit millions of dollars in unpaid claims.
Zynex admitted to participating in a conspiracy to commit health care fraud, securities fraud, mail fraud and other violations, the U.S. Attorney’s Office for the District of Rhode Island announced in a news release.
Zynex, in its deal with the government, also admitted to collecting more than $873 million for its products, including more than $600 million for supplies, “the vast majority of which were the result of fraud,” investigators said.
The company acknowledged that it shipped and billed for medically unnecessary supplies in excess quantities and misled investors who were unaware of the fraudulent billing practices.
Zynex agreed to implement enhanced compliance and corporate governance reforms “designed to prevent future misconduct,” the DOJ said, and will cooperate with the government’s ongoing investigations.
“This resolution addresses the seriousness of the fraud committed by Zynex while recognizing the substantial turnaround in conduct implemented under new management,” U.S. Attorney Charles C. Calenda said in the news release.
The company, in a subsequent news release, said the resolution “represents the fulfillment of the commitments we made as a new management team when we arrived in August 2025: to break from the past, rebuild the company as compliant-by-design and create a new future for the company, its customers and employees.”
Zynex leaders say they have completely overhauled their billing and supply replenishment practices, and enacted new marketing policies to ensure the company remains compliant with the U.S. Food and Drug Administration.
The Attorney General’s disrespect for opponents is matched by her gushing praise for Trump, however off topic; for Bondi, who has been reported to be on thin ice with the President, there is no ignoring the audience of one. “The Dow is over fifty thousand right now, the S. & P. at almost seven thousand, and the Nasdaq smashing records, Americans’ 401(k)s and retirement savings are booming,” Bondi said on Wednesday. “That’s what we should be talking about.” At another point, Bondi insisted that her questioners should apologize to Trump for having impeached him twice during his first term. “You-all should be apologizing,” she said. “You sit here, and you attack the President, and I am not going to have it.”
Wednesday’s hearing, like so much else in Washington these days, was consumed by questions about Epstein—in this case the Justice Department’s handling of the release of the files and its treatment of Epstein’s victims. The Administration has been criticized both for redacting too much information in the documents and for exposing victims’ identities. (The department has removed thousands of documents in response to victims’ complaints.) Lawmakers had invited a dozen victims and their family members to attend the hearing, and they were wearing white shirts with blacked-out text and the message “The truth is—Epstein survivors are still waiting.” Democrats did not refrain from introducing them like so many useful props.
Pramila Jayapal, a Democrat from Washington, asked the survivors to stand and raise their hands if they had not been able to meet with the Justice Department. Their hands went up. Jayapal asked Bondi, “Will you turn to them now and apologize for what your Department of Justice has put them through with the absolutely unacceptable release of the Epstein files and their information?” Bondi invoked Garland, and then, not surprisingly, demurred. “I’m not going to get in the gutter for her theatrics,” Bondi said, waving her hand dismissively. Jayapal, along with a number of other legislators, had viewed the unredacted Epstein files. Photographers at the hearing captured shots which appeared to show that the Attorney General had a document with Jayapal’s search history. Jayapal later described such surveillance as “totally inappropriate.”
As a political matter, the demands for the full release of the Epstein files, which were a rallying cry for Republicans during the 2024 election season, have now become an even more effective cudgel for Democrats. Bondi botched her handling of the matter from the outset, by claiming that she had an Epstein “client list,” releasing little to nothing, and announcing that the investigation was complete. Even after the congressionally mandated release of a searchable database of millions of documents, questions remain about whether the Justice Department is continuing to protect Trump or other friends of Epstein’s by imposing unwarranted redactions or failing to pursue avenues of inquiry.
But Democrats’ focus on Epstein also distracts attention from the deeper problems of the department under Bondi—ones that go to the core of its mission and that threaten its ability to operate even after Trump leaves office. Most alarming is Trump and Bondi’s overt weaponization of the department to pursue Trump’s political enemies. In September, 2025, Trump used a Truth Social post to demand that she bring charges against James Comey, Letitia James, and the California senator Adam Schiff, insisting, “We can’t delay any longer, it’s killing our reputation and credibility.” Shortly after, Bondi secured indictments of Comey and James—both of which were ultimately dismissed by a federal judge. As Raskin told Bondi in his opening remarks, “Trump orders up prosecutions like pizza and you deliver every time. . . . Nothing in American history comes close to this complete corruption of the justice function and contamination of federal law enforcement.”
Lawmakers, however, dealt with these and other instances of Justice Department overreach only glancingly. They did not mention the threatened indictments of the Federal Reserve’s Jerome Powell and Lisa Cook. They did not ask Bondi about the latest embarrassment for the department, which had occurred the day before the hearing, when a federal grand jury in the District of Columbia took the rare step of rejecting the proposed indictment of six members of Congress for reminding servicemembers that they do not have to obey unlawful orders. Lawmakers spent little time on the Justice Department’s refusal to investigate an ICE agent’s killing of Renee Nicole Good in Minneapolis, or on the reported resignation of six federal prosecutors there after the office was tasked with investigating Good’s widow instead. Bondi was not asked directly about the department’s raid on the home of the Washington Post reporter Hannah Natanson, or about the F.B.I.’s seizure of voting records from the 2020 election in Georgia. According to Trump, Bondi instructed the director of National Intelligence, Tulsi Gabbard, to take the extraordinary step of going to the scene, but Bondi was not asked to confirm that. Also unaddressed: the evisceration of the department’s Civil Rights Division and the debilitating vacancies in U.S. Attorneys offices nationwide.
The most notable reaction in Congress came from North Carolina senator Thom Tillis, a Republican who serves on the Senate Banking Committee, who took a shot at the Justice Department’s investigation and said the agency’s credibility is now “in question.” Tillis, who has been more outspoken since he announced plans to retire at the end of his term, vowed to block any of the Trump administration’s nominations to the Federal Reserve.
Senator Lisa Murkowski said she spoke to Powell Monday morning and that it was clear that the Justice Department’s investigation was “nothing more than an attempt at coercion.” The Alaskan senator echoed her colleague Tillis and said that the Senate should refuse to confirm any Trump nominations to the Federal Reserve.
In a statement, House Committee on Financial Services chairman French Hill noted that he’s known Powell since they both worked at the Treasury Department during the George H.W. Bush administration. The Arkansas congressman said that he knows Powell as a “man of integrity with a strong commitment to public service.”
“Pursuing criminal charges relating to his testimony on building renovations at a time when the nation’s economy requires focus and creates an unnecessary distraction. The Federal Reserve is led by strong, capable individuals appointed by President Trump, and this action could undermine this and future Administrations’ ability to make sound monetary policy decisions,” he wrote.
Senate Majority Leader John Thune said that he hasn’t seen the allegations against Powell, but told reporters Monday that “they better be real and they better be serious.”
“It needs to be resolved quickly because the Fed’s role and the Fed’s independence in shaping monetary policy in the country is something we need to ensure proceeds without political interference. Hopefully they’ll be able to get this thing, whatever it is — dealt with & resolved quickly,” he said per Punchbowl News.
Other Republicans expressed some skepticism of the federal government’s investigation even if they held their own criticisms of Powell. New York congressman Mike Lawler, a member of the House Financial Services Committee, did not appear in favor of the move in an interview with Politico. “While I fundamentally believe Chairman Powell was late in addressing inflation under Joe Biden and has been woefully slow in lowering interest rates over the past year, the independence of the Federal Reserve is paramount and I oppose any effort to pressure them into action,” he said.
Senator Kevin Cramer of North Dakota criticized Powell’s handling of the bank but said in a statement that he doesn’t believe the chairman is a criminal.
“I hope this criminal investigation can be put to rest quickly along with the remainder of Jerome Powell’s term. We need to restore confidence in the Fed,” Cramer said.
Senator Dave McCormick of Pennsylvania echoed Cramer’s sentiment in a statement to Politico. “I also agree with President Trump that Chairman Powell has been slow to cut interest rates,” he said. “I think the Federal Reserve renovation may well have wasted taxpayer dollars, but the proper place to fix this is through Congressional oversight. I do not think Chairman Powell is guilty of criminal activity.”
In an interview with Fox Business’ Maria Bartiromo, Senator Roger Marshall of Kansas suggested the president might be trolling Powell. “We’ll let the system play through here. I think there’s other issues we should be focused on,” he said.
Caracas (CNN) — President Donald Trump announced Saturday that the US will “run” Venezuela after capturing President Nicolás Maduro and his wife in a large-scale military operation, a stunning development that plunged the country into uncertainty after weeks of spiraling tensions.
“The United States of America has successfully carried out a large scale strike against Venezuela and its leader, President Nicolás Maduro, who has been, along with his wife, captured and flown out of the Country,” he wrote on Truth Social early Saturday morning.
Trump later said the US would play a central role in running the country indefinitely until a formal transition of power can take place, while declining to rule out the possibility of longer-term military involvement in Venezuela.
“We’re going to be running it,” he said from his Mar-a-Lago club in Florida.
Venezuela requested an urgent meeting of the United Nations Security Council in response to the attack, Foreign Minister Yván Gil Pinto said.
“No cowardly attack will prevail against the strength of this people, who will emerge victorious,” he said on Telegram, sharing the letter sent to the UN.
Venezuelan Vice President Delcy Rodríguez demanded the “immediate release” of Maduro and his wife, Cilia Flores. Rodríguez, who Trump said earlier was sworn in as president, said Venezuela’s territorial integrity was “savagely attacked” by the US operation.
Trump on Saturday morning posted a photo of Maduro aboard the USS Iwo Jima, where the Venezuelan president and his wife were held before being transported to New York, where they face charges. The ousted leader and his wife were brought to New York on Saturday evening, and Maduro is being held in the Metropolitan Detention Center in Brooklyn.
A new indictment filed in the US District Court for the Southern District of New York and shared by Attorney General Pam Bondi alleges that Maduro ran “state sponsored gangs” and facilitated drug trafficking in the country.
Trump said he did not notify members of Congress until after the strike, saying at his news conference at Mar-a-Lago that “Congress has a tendency to leak. It would not be good if they leaked.”
Democratic lawmakers demanded an immediate briefing and criticized the administration for not seeking congressional authorization before the attack, while Republican lawmakers largely applauded the action.
Here’s what we know:
What happened?
A CNN team witnessed several explosions and heard the sounds of aircraft early Saturday in the Venezuelan capital of Caracas, and reported that some areas of the city were without electricity.
Videos verified by CNN showed helicopters roaring over Caracas, with plumes of smoke rising into the night sky. Footage also showed a large blaze and explosions at an airport in the city of Higuerote.
Hours after the strikes, CNN’s Mary Mena said from Caracas that the capital was calm.
“We listened to many airplanes and helicopters passing by, but right now the city remains quiet, for the past two hours,” she said. “We haven’t heard people for example coming to the streets, and the state channel keeps repeating this message from the ministry of defense saying they want people to remain calm and they will deploy military forces across the country.”
The first blast witnessed by the CNN team was recorded at approximately 1:50 a.m. local time (12:50 a.m. ET).
“One was so strong, my window was shaking after it,” CNN en Español correspondent Osmary Hernández said.
US Joint Chiefs Chairman Gen. Dan Caine later described an extensive overnight operation to capture Maduro and his wife that involved more than 150 aircraft launching from bases across the Western Hemisphere.
Among them were helicopters carrying an extraction force that entered Venezuela at low altitude before arriving at Maduro’s compound around 1 a.m. ET. The US soldiers came under fire, spending several hours on the ground before successfully capturing Maduro and his wife and flying out of Venezuela about 3:29 a.m. ET, Caine said.
Two sources familiar with the matter said Maduro and his wife were dragged from their bedroom by US forces during the raid. The couple was captured in the middle of the night as they were sleeping, the sources said.
The raid, carried out by the US Army’s elite Delta Force with the assistance of an FBI unit, did not lead to any US deaths. However, a handful of troops sustained bullet and shrapnel wounds, a source briefed on the matter told CNN. Caine also said that one aircraft “was hit, but remained flyable” and was able to make it out of Venezuela.
Maduro and his wife were then transferred to the USS Iwo Jima, beginning a trip that ultimately ended in New York, where they’re expected to stand trial on drug-trafficking charges.
Smoke raises at La Carlota airport after explosions and low-flying aircraft were heard in Caracas, Venezuela on January 3, 2026. Credit: Matias Delacroix / AP via CNN Newsource
Why is it happening?
The Trump administration has for years said that Maduro was a criminal and has sought to prosecute him through the US legal system.
In 2020, during Trump’s first term, the Department of Justice charged Maduro in the Southern District of New York for “narco-terrorism,” conspiracy to import cocaine, and related charges.
The Trump administration offered a $15 million bounty for Maduro’s arrest. That bounty was increased to $25 million in the waning days of the Biden administration, in early January 2025, and was increased again, to $50 million, in August 2025 after Trump took office for a second term and designated Cartel de los Soles as a foreign terrorist organization. The administration has claimed that Maduro is the leader of that group, which it describes as a criminal organization.
Trump had repeatedly warned for months that the US was preparing to take new action against alleged drug-trafficking networks in Venezuela and that strikes on land would start “soon.”
Trump’s pressure campaign on Maduro has included strikes destroying more than 30 boats in the Caribbean Sea and eastern Pacific Ocean in what the US has described as a counter-narcotics campaign. Trump last month ordered a blockade of sanctioned oil tankers coming to and leaving Venezuela, and the US has seized multiple vessels since the announcement.
The CIA carried out a drone strike in December on a port facility on the coast of Venezuela, CNN reported last month, citing sources, marking the first known US attack on a target inside that country.
Trump said Saturday he also directly urged Maduro to surrender voluntarily.
“I said, ‘You got to surrender,’” he said. “And I actually thought he was pretty close to doing so, but now he wished he did.”
Pedestrians run after explosions and low-flying aircraft were heard in Caracas, Venezuela on Saturday. Credit: Matias Delacroix / AP via CNN Newsource
Several world leaders, including US allies, have reacted with concern to the US operation.
British Prime Minister Keir Starmer said he “wants to establish the facts” and speak to Trump about the military operation in Venezuela, according to the UK’s PA Media news agency.
“I always say and believe we should all uphold international law,” Starmer said, adding that Britain was “not involved in any way” in the strike on Caracas, PA Media reported.
Ursula von der Leyen, the president of the European Commission, said in a post on X that the commission “stand(s) by the people of Venezuela and support(s) a peaceful and democratic transition. Any solution must respect international law and the UN Charter.”
Many leaders across Latin America expressed concern to the US attack on Venezuela, with Cuban President Miguel Díaz-Canel slamming what he called a “criminal” attack by the US. Meanwhile, Argentine President Javier Milei, a Trump ally, appeared to welcome the capture of Venezuela’s leader with a message on X: “Freedom advances! Long live freedom, damn it!”
Venezuela’s allies Russia and Iran condemned the US attack.
The Russian Foreign Ministry denounced what it called an “act of armed aggression against Venezuela” by the US, calling any “excuses” given to justify such actions “untenable.”
“We reaffirm our solidarity with the Venezuelan people and our support for the Bolivarian leadership’s course of action aimed at protecting the country’s national interests and sovereignty,” a statement from the foreign ministry said.
Similarly, the Iranian Foreign Ministry said the attack violates Venezuela’s sovereignty and territorial integrity as well as the UN Charter, Iranian state news outlet Press TV reported.
What comes next?
What happens next in Venezuela is far from clear. The country’s constitution states that power passes to Maduro’s vice president, Rodríguez.
Trump said that Rodríguez spoke with Secretary of State Marco Rubio and that “she’s essentially willing to do what we think is necessary to make Venezuela great again.”
However, in a defiant address broadcast from Caracas, Rodríguez asserted that Maduro is “the only president of Venezuela” and that Venezuelans “must not become slaves again.”
Trump said he planned to have the US effectively run Venezuela for an indefinite period as it works toward a formal transition of power. Top US officials, including Rubio and Defense Secretary Pete Hegseth, will work with a “team” to assist in leading the country, he said, without offering specifics.
Trump could not say how long the US would be centrally involved in Venezuela’s governance, but suggested that he was open to a longer-term process that could include a US military presence.
He repeatedly asserted that his administration would partner with US energy companies to take control of Venezuela’s oil infrastructure, arguing that the US was owed oil as “reimbursement for the damages” that he alleged had been inflicted on the country by Venezuela.
“We’re going to take back the oil that, frankly, we should have taken back a long time ago,” Trump said.
That leaves the future of the current Venezuelan regime in serious doubt, yet little clarity on whether its opposition — within and outside the country — will be positioned to capitalize on the opportunity.
If the US ultimately follows Venezuela’s constitutional path, elections are supposed to be held within 30 days. The newly elected president then serves a full six-year term.
The most likely opposition candidate is Edmundo González Urrutia, who ran in the 2024 election. González, an academic and longtime diplomat, is now in exile in Spain. He is supported by the recent winner of the Nobel Peace Prize, democratic activist María Corina Machado.
On Saturday, Machado said the time has come for “popular sovereignty” in Venezuela and the installation of González as the country’s leader.
“Nicolás Maduro from today faces international justice for the atrocious crimes committed against Venezuelans and against citizens of many other nations,” she said in a letter posted on X. “Given his refusal to accept a negotiated solution, the government of the United States has fulfilled its promise to enforce the law.”
But Trump declined to endorse any immediate successor or lay out a plan for holding elections and restoring stability in Venezuela, while rejecting the possibility that Machado could serve as an interim leader.
“She doesn’t have the support within or the respect within the country,” he said. “She’s a very nice woman, but she doesn’t have the respect.”
Instead, Trump appeared comfortable in the immediate aftermath of Maduro’s ouster with maintaining control over Venezuela for as long as he deemed fit.
“It’s not going to cost us anything,” he said. “We’re going to be rebuilding.”
This story has been updated with additional information.
CNN’s Osmary Hernández, Mary Triny Mena, Tim Lister, Jennifer Hansler, Alejandra Jaramillo, Isaac Yee, Michael Rios, Billy Stockwell and Laura Sharman contributed to this report
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Stefano Pozzebon, Simone McCarthy, Adam Cancryn and CNN
A Colorado man who pretended to be a teenager online will spend more than eight decades in federal prison for sexually exploiting children on the internet, federal officials said.
Austin Ryan Lauless coerced, exploited and threatened at least 84 children on social media into producing thousands of sexually explicit images and videos between 2019 and 2023, according to a news release from the Indiana U.S. Attorney’s Office.
The victims include children between the ages of 13 and 17 from nearly every state and at least five other countries, federal officials said in the release. Investigators believe there may still be more undiscovered victims.
Lauless pleaded guilty in September to 13 counts of sexual exploitation of a child, five counts of sex trafficking of a minor, two counts of advertising child sexual abuse material and possession of child sexual abuse material, court records show.
He was sentenced Wednesday to 84 years in federal prison, which will be followed by a lifetime of supervised release, according to court records.
Lauless posed as “Cason Fredrickson” and “APOPHIS” on the internet, pretending to be a teenager from New York and other cities, federal officials said. He used photos from public Instagram pages to conceal his real identity: a man in his late 20s who lived in hotels and motels across Colorado and Texas.
The man misrepresented his age, identity, background and likeness to groom minors and create a false sense of safety, federal prosecutors said. He also used voice modulators and third-party image and video apps to edit content and keep up his disguise.
“He feigned romantic interest in victims, told them they were attractive and pretended to be in online relationships,” the news release stated. “He purchased items for many victims through Amazon — including fishnet stockings, sexual devices and customized t-shirts — which he instructed them to wear while producing sexually explicit material.”
Lauless threatened to publicly release the images and videos if his victims failed to comply with his demands or if they tried to tell their parents or law enforcement, federal prosecutors said.
He sold child sex abuse material at least 141 times and admitted to federal investigators that his collection included thousands of photos and videos, including videos of sadomasochistic abuse and bestiality.
“This case represents one of the most egregious forms of exploitation the FBI investigates,” Special Agent in Charge Timothy J. O’Malley of the FBI’s Indianapolis field office said in a statement. “This was not an isolated crime — it was a nationwide and international campaign of exploitation.”
The case was prosecuted as part of Project Safe Childhood, a national initiative from the U.S. Department of Justice that focuses on battling child sex exploitation and abuse.
Anyone who believes they were, or who believes they know someone who was, a victim of Lauless should contact their local FBI office, call the FBI tip line at 1-800-225-5324 or submit information online at tips.fbi.gov.
CHARLOTTE, N.C. (AP) — An economist testified in Michael Jordan’s federal antitrust trial against NASCAR that the racing series owes a combined $364.7 million in damages to the two teams suing it over a revenue-sharing dispute.
Edward Snyder, a professor of economics who worked in the antitrust division of the Department of Justice and has testified in more than 30 cases, including “Deflategate” involving the NFL’s New England Patriots, testified on Monday. He gave three specific reasons NASCAR is a monopoly participating in anticompetitive business practices.
Using a complex formula applied to profits, a reduction in market revenue, and lost revenue to 23XI Racing and Front Row Motorsports from 2021-24, Snyder came up with his amount of damages owed. Snyder applied a 45% of revenue sharing he alleged Formula 1 gives to its teams in his calculations; Snyder found that NASCAR’s revenue-sharing model when its charter system began in 2016 gave only 25% to the teams.
The suit is about the 2025 charter agreement, which was presented to teams on a Friday in September 2024 with a same-day deadline to sign the 112-page document. The charter offer came after more than two years of bitter negotiations between NASCAR and its teams, who have called the agreement “a take-it-or-leave-it” ultimatum that they signed with “a gun to their head.”
A charter is similar to the franchise model in other sports, but in NASCAR it guarantees 36 teams spots in the 40-car field, as well as specific revenue.
Jordan and three-time Daytona 500 winner Denny Hamlin for 23XI, along with Front Row Motorsports and owner Bob Jenkins, were the only two teams out of 15 to refuse the new charter agreement.
Snyder’s evaluations found NASCAR was in fact violating antitrust laws in that the privately owned racing series controls all bargaining because “teams don’t have anywhere else to sell their services.” Snyder said NASCAR controls “the tracks, the teams and the cars.”
Snyder repeatedly cited exclusivity agreements NASCAR entered into with racetracks after the charter system began. The agreements prevent tracks that host NASCAR from holding events with rival racing series. Prior to the long-term agreements, NASCAR operated on one-year contracts with its host racetracks.
The Florida-based France family founded NASCAR in 1948 and, along with Speedway Motorsports, owns almost all the tracks on the top Cup Series schedule. Snyder’s belief is that NASCAR entered into exclusivity agreements with tracks to stave off any threats of a breakaway startup series. In doing so, he said it eliminated teams’ ability to race stock cars anywhere else, forced them to accept revenue-sharing agreements that are below market value, and damaged their overall evaluations.
Snyder did his calculations for both teams based on each having two charters — each purchased a third charter in late 2024 — and found 23XI is owed $215.8 million while Front Row is owed $148.9 million. Based on his calculations, Snyder determined NASCAR shorted 36 chartered teams $1.06 billion from 2021-24.
Snyder noted NASCAR had $2.2 billion in assets, an equity value of $5 billion and an investment-grade credit rating — which Snyder believes positions the France family to be able to pivot and adjust to any threats of a rival series the way the PGA did in response to the LIV Golf league. The PGA, Snyder testified, “got creative” in bringing in new revenue to pay to its golfers to prevent their defections.
Snyder also testified NASCAR had $250 million in annual earnings from 2021-24 and the France family took $400 million in distributions during that period.
NASCAR contends Snyder’s estimations are wrong, that the 45% F1 model he used is not correct, and its own two experts “take serious issue” with Snyder’s findings. Defense attorney Lawrence Buterman asked Snyder his opinion on NASCAR’s upcoming expert witnesses and Snyder said they were two of the best economists in the world.
Slow pace of trial
Snyder testified for almost the entirety of Monday’s session — the sixth day of the trial — and will continue on Tuesday. The snail’s pace has agitated U.S. District Judge Kenneth Bell, who heard arguments 30 minutes early Monday morning because he was annoyed that objections had been submitted at 2:55 a.m. and then 6:50 a.m.
He needed an hour to get through the rulings, and testimony resumed 30 minutes behind schedule. When the day concluded, he asked the nine-person jury if they were willing to serve an hour longer each day the rest of the week in an effort to avoid a third full week of trial. He all said all motions must be filed by 10 p.m. each evening moving forward.
Bell wants plaintiff attorney Jeffrey Kessler to conclude his case by the end of Tuesday, but Kessler told him he still plans to call NASCAR chairman Jim France, NASCAR commissioner Steve Phelps and Hall of Fame team owner Richard Childress, who was the subject of derogatory text messages amongst NASCAR leadership and has said he’s considering legal action.
NASCAR has a list of 16 potential witnesses and Bell said he wanted the first one on the stand before Tuesday’s session concludes.
NEW YORK (AP) — Paramount on Monday launched a hostile takeover offer for Warner Bros. Discovery, initiating a potentially bruising battle with rival bidder Netflix to buy the company behind HBO, CNN and a famed movie studio along with the power to reshape much of the nation’s entertainment landscape.
Emerging just days after top Warner managers agreed to Netflix’s $72 billion purchase, the Paramount bid seeks to go over the heads of those leaders by appealing directly to Warner shareholders with more money — $77.9 billion — and a plan to buy all of Warner’s business, including the cable business that Netflix does not want.
Paramount said its decision to go hostile came after it made several earlier offers that Warner management “never engaged meaningfully” with following the company’s October announcement that it was open to selling itself.
In its appeal to shareholders, Paramount noted its offer also contains more cash than Netflix’s bid — $18 billion more — and argued that it’s more likely to pass scrutiny from President Donald Trump’s administration, a big concern given his habit of injecting himself in American business decisions.
AP AUDIO: Paramount goes hostile in bid for Warner Bros., challenging a $72 billion offer by Netflix
AP’s Lisa Dwyer reports on a hostile bid for Warner Bros. Discovery.
Over the weekend, Trump said the Netflix-Warner combo “could be a problem” because of the size of the combined market share and that he planned to review the deal personally.
For its part, Netflix says it is confident Warner will reject the Paramount bid and that regulators, and Trump, will back its deal, citing multiple conversations that co-CEO Ted Sarandos has had with him about the streaming company’s expansion and hiring.
“I think the president’s interest in this is the same as ours, which is to create and protect jobs,” Sarandos said Monday at an investor conference.
Battle draws political attention in Washington
The fight for Warner drew strong reaction in Washington, with politicians from both major parties weighing in on the likely impact on streaming prices, movie theater employment and the diversity of entertainment choices and political views.
Paramount, run by David Ellison, whose family is closely allied with Trump, said it had submitted six proposals to Warner over a 12-week period before the latest offer.
“We believe our offer will create a stronger Hollywood. It is in the best interests of the creative community, consumers and the movie theater industry,” the Paramount CEO said in a statement. Ellison added that his deal would lead to more competition in the industry, not less, and more movies in theaters.
A regulatory document released Monday suggested another possible Paramount advantage to win over Trump: An investment firm run by Trump’s son-in-law Jared Kushner would be investing in the deal, too.
Also participating would be funds controlled by the governments of three unnamed Persian Gulf countries, widely reported as Saudi Arabia, Abu Dhabi and Qatar. Trump’s family company has struck deals this year for buildings and resorts that bear his name in Saudi Arabia and Qatar, partnering in the former with a company closely tied to the government and in the latter with the government fund itself.
Also possibly in Paramount’s favor are recent changes at CBS News since its October purchase of the news and commentary website The Free Press. The site’s founder, Bari Weiss, who has a reputation for fighting “woke” culture, was then installed as editor-in-chief in a signal Ellison intended to shake up the storied network of Walter Cronkite, Dan Rather and “60 Minutes,” long viewed by many conservatives as the personification of a liberal media establishment.
Trump is a wild card
Still, Trump is a wild card given his tendency to make decisions based on gut and his personal mood.
On Monday, he lashed out at Paramount for allowing “60 Minutes” to interview his ally-turned-enemy Rep. Marjorie Taylor Greene, writing on social media that “THEY ARE NO BETTER THAN THE OLD OWNERSHIP.”
The drama surrounding control of Warner began Friday when Netflix made the surprise announcement that it had struck a deal with its management to buy the Hollywood giant behind “Harry Potter,” HBO Max and DC Studios.
The cash and stock proposal was valued at $27.75 per Warner share, giving it a total enterprise value of $82.7 billion, including debt that will be assumed in the deal. By contrast, the Paramount offer is for $30 per Warner share, and worth $108 billion, included assumed debt. Paramount’s offer is set to expire on Jan. 8 unless it’s extended.
But comparing the two deals is complicated because they are not buying the same thing. The Netflix offer, if it goes through, will only close after Warner completes its previously announced separation of its cable operations. Not included in the deal, which is unlikely to close for at least a year, are networks such as CNN and Discovery.
The federal government has the authority to kill any big media deals if it has antitrust concerns, but such matters are usually left to experts at the Department of Justice. In his decision to get involved personally, Trump has decided, as he has with other government norms, to make a sharp break with precedent.
That worries Usha Haley, a Wichita State University specialist in international business strategy, who noted that Ellison is the son of longtime Trump supporter Larry Ellison, the world’s second-richest person.
“He said he’s going to be involved in the decision. We should take him at face value,” Haley said of Trump. “For him, it’s just greater control over the media.”
But others are uncertain how big a role Trump will play.
John Mayo, an antitrust expert at Georgetown University, said the scrutiny will be serious whichever offer is approved by shareholders and goes before the DOJ, and that he thinks experts there will keep partisanship out of their decisions despite the politically charged atmosphere.
“That may affect at least the rhetoric that occurs in the press,” he said, “though I doubt it will affect the analysis that occurs at the Department of Justice.”
Shares of Paramount surged 9% on Monday while Netflix fell 3.4%, and Warner Bros. closed up 4.4%.
___
Associated Press writers Matt Sedensky, David Bauder and Charles Sheehan in New York and Michael Liedtke in San Francisco contributed to this report.
Landlords could no longer rely on rent-pricing software to quietly track each other’s moves and push rents higher using confidential data, under a settlement between RealPage Inc. and federal prosecutors to end what critics said was illegal “algorithmic collusion.”
The deal announced Monday by the Department of Justice follows a yearlong federal antitrust lawsuit, launched during the Biden administration, against the Texas-based software company. RealPage would not have to pay any damages or admit any wrongdoing. The settlement must still be approved by a judge.
RealPage software provides daily recommendations to help landlords and their employees nationwide price their available apartments. The landlords do not have to follow the suggestions, but critics argue that because the software has access to a vast trove of confidential data, it helps RealPage’s clients charge the highest possible rent.
“RealPage was replacing competition with coordination, and renters paid the price,” said DOJ antitrust chief Gail Slater, who emphasized that the settlement avoided a costly, time-consuming trial.
Under the terms of the proposed settlement, RealPage can no longer use that real-time data to determine price recommendations. Instead, the only nonpublic data that can be used to train the software’s algorithm must be at least one year old.
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“What does this mean for you and your family?” Slater said in a video statement. “It means more real competition in local housing markets. It means rents set by the market, not by a secret algorithm.”
RealPage attorney Stephen Weissman said the company is pleased the DOJ worked with them to settle the matter.
“There has been a great deal of misinformation about how RealPage’s software works and the value it provides for both housing providers and renters,” Weissman said in a statement. “We believe that RealPage’s historical use of aggregated and anonymized nonpublic data, which include rents that are typically lower than advertised rents, has led to lower rents, less vacancies, and more procompetitive effects.”
However, the deal was slammed by some observers as a missed opportunity to clamp down on alleged algorithmic price-fixing throughout the economy.
“This case really was the tip of the spear,” said Lee Hepner, senior legal counsel for the American Economic Liberties Project, whose group advocates for government action against business concentration.
He said the settlement is rife with loopholes and he believes RealPages can keep influencing the rental market even if they can only use public, rather than private, data. He also decried how RealPages does not have to pay any damages, unlike many companies that have paid millions in penalties over their use of the software.
The governors of California and New York signed laws last month to crack down on rent-setting software, and a growing list of cities, including Philadelphia and Seattle, have passed ordinances against the practice.
Ten states — California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee and Washington — had joined the DOJ’s antitrust lawsuit. Those states were not part of Monday’s settlement, meaning they can continue to pursue the case in court.
President Donald Trump faced two major legal setbacks on Monday as courts in New York and Tennessee moved to constrain key parts of his domestic enforcement agenda.
Within hours, a federal judge upheld New York’s limits on courthouse immigration arrests, while a state judge in Nashville blocked the deployment of Tennessee National Guard troops to Memphis.
Newsweek contacted the DOJ and the office of the governors of the states for comment via email outside of normal office hours on Tuesday.
Why It Matters
Within the span of a few hours on Monday, President Donald Trump’s domestic enforcement agenda was hit by two separate court rulings that underscored growing judicial resistance to the administration’s attempts to expand federal authority in states that push back.
A federal judge in New York upheld a state law restricting civil immigration arrests at courthouses, while a Tennessee judge blocked the deployment of National Guard troops to Memphis, finding the move likely violated state constitutional limits.
Together, the decisions highlight the legal constraints confronting Trump as he seeks to intensify immigration operations and broaden the use of military force in U.S. cities over state objections.
What To Know
I. Judge Upholds New York Law Barring Immigration Arrests at Courthouses
President Donald Trump’s immigration agenda encountered a significant legal setback on Monday after a federal judge rejected the administration’s attempt to strike down a New York law restricting civil immigration arrests in and around state courthouses.
U.S. District Judge Mae D’Agostino dismissed the Justice Department’s lawsuit challenging the 2020 Protect Our Courts Act (POCA) and related state executive orders.
In a 41-page ruling, D’Agostino concluded that the federal government’s suit amounted to an improper effort “to commandeer New York’s resources to aid in federal immigration efforts” according to the decision.
The court held that New York acted within its rights in limiting where federal agents may conduct civil immigration arrests.
The Trump administration had argued that the state law violated the Constitution’s Supremacy Clause and unlawfully restricted federal enforcement authority.
Federal lawyers also sought to compel state and local law enforcement agencies to share information with federal immigration officials. D’Agostino rejected those claims, writing that New York was exercising “its permissible choice not to participate in federal civil immigration enforcement.”
POCA, enacted in 2020 in response to a sharp rise in courthouse arrests under Trump’s first term, prohibits civil immigration arrests of individuals traveling to, attending, or leaving state court proceedings unless agents hold a judicial warrant.
The measure was intended to limit disruptions to court operations and ensure that parties and witnesses could appear in court without fear of apprehension.
In recent months, federal immigration agents had intensified courthouse operations in New York and other cities as part of the administration’s broader strategy to increase removals of undocumented immigrants.
That posture led to renewed friction with states that maintain restrictions on local cooperation with federal immigration authorities.
Monday’s ruling marks a notable setback for the administration’s efforts to expand civil immigration arrests in sensitive locations.
The case, United States v. New York, challenged both POCA and executive ordersissued during former Governor Andrew Cuomo’s administration that limited state and local cooperation with federal immigration enforcement.
D’Agostino dismissed the suit in its entirety.
The ruling is likely to serve as a reference point for similar disputes arising in other states where federal immigration enforcement priorities clash with local laws or policies restricting cooperation with federal agencies.
II. Nashville Judge Blocks Memphis National Guard Deployment
Just hours after the New York ruling, the Trump administration suffered a second legal blow—this time in Tennessee, where a state court halted the deployment of National Guard troops to Memphis.
Davidson County Chancellor Patricia Head Moskal issued a temporary injunction blocking Republican Governor Bill Lee from continuing the activation of Tennessee National Guard personnel for participation in President Trump’s Memphis Safe Task Force.
The deployment, requested by the administration under Title 32 authority, was intended to supplement federal and local law enforcement operations in response to high violent-crime rates in the city.
In her order, Moskal found that the plaintiffs—including Shelby County Mayor Lee Harris, local commissioners, and several state lawmakers—had demonstrated sufficient immediate harm to justify halting the deployment.
The judge wrote that the state’s militia law requires the Tennessee General Assembly to authorize National Guard activation for public-safety purposes and that crime conditions in Memphis did not constitute a “grave emergency” or “disaster” that would permit unilateral deployment by the governor.
The order temporarily restrains Governor Lee and Major General Warner Ross III “from implementing and continuing the activation and deployment of Tennessee National Guard personnel” under the presidential memorandum.
The injunction does not affect the presence of federal law enforcement officers already operating in the city.
In a public statement, Mayor Harris called the ruling “a positive step toward ensuring the rule of law applies to everyone, including everyday Tennesseans and even the governor.”
The state has five days to appeal the ruling.
The lawsuit argues that deploying National Guard troops for routine law-enforcement functions violates both the Tennessee Constitution and state statutes, which strictly limit the circumstances under which the militia may be mobilized.
The Memphis Safe Task Force, created by a September presidential memorandum, aims to increase law-enforcement presence and coordinate multi-agency operations across Memphis.
Plaintiffs contend that the National Guard deployment exceeded both federal and state legal authority.
The Tennessee ruling adds to a series of mounting legal challenges to the Trump administration’s domestic troop deployments, several of which are already moving through federal courts.
What People Are Saying
Kathy Hochul (Governor of New York) said: “Masked ICE agents shoved and injured journalists today at Federal Plaza. One reporter left on a stretcher. This abuse of law-abiding immigrants and the reporters telling their stories must end. What the hell are we doing here?”
Bill Lee (Governor of Tennessee) who had approved the deployment of an undetermined number of Tennessee National Guard troops to Memphis, said: “I think [AG] General Skrmetti’s a brilliant lawyer who understands constitutional law, and I suspect he’s got the right answer on it.”
What Happens Next
Both rulings are likely to move quickly into appeals, with the Trump administration expected to challenge the New York decision in the Second Circuit and Tennessee Governor Bill Lee poised to seek an emergency stay and appellate review of the injunction blocking his National Guard deployment.
New York’s courthouse-arrest restrictions will remain in effect during the federal appeal, while the Memphis deployment is paused unless a higher state court reverses the ruling.
Together, the cases set up parallel legal battles over the limits of federal immigration enforcement and the circumstances under which state-controlled military forces can be used for domestic policing—disputes that could ultimately reach the Supreme Court.
WASHINGTON (AP) — President Donald Trump says his $300 million White House ballroom will be paid for “100% by me and some friends of mine.”
The White House released a list of 37 donors, including crypto billionaires, charitable organizations, sports team owners, powerful financiers, tech and tobacco giants, media companies, longtime supporters of Republican causes and several of the president’s neighbors in Palm Beach, Florida.
It’s incomplete. Among others, the list doesn’t include Carrier Group, which offered to donate an HVAC system for the ballroom, and artificial intelligence chipmaker Nvidia, whose CEO, Jensen Huang, publicly discussed its donation.
The White House hasn’t said how much each donor is giving, and almost none was willing to divulge that. Very few commented on their contributions when contacted by The Associated Press.
A senior White House official said the list has grown since it was first released in October, but some companies don’t want to be publicly named until required to do so by financial disclosure regulations. No foreign individuals or entities were among the donors, according to the official who spoke on condition of anonymity to discuss details that haven’t been made public.
Here’s a look at the divulged donors:
Tech giants (8):
Amazon Background: Trump was once highly critical of company founder Jeff Bezos, who also owns The Washington Post, but has been much less so lately. Amazon donated $1 million to Trump’s inauguration, an event attended by Bezos. Its video streaming service paid $40 million to license a documentary about first lady Melania Trump. Its cloud-based computing operation, Amazon Web Services, is a major government contractor.
Apple Background: After an up-and-down relationship during Trump’s first term, CEO Tim Cook has sought to improve his standing with the president this time. Before returning to the White House, Trump hosted Cook at his Palm Beach estate, Mar-a-Lago, and said he had spoken with Cook about the company’s long-running tax battles with the European Union. Cook also donated $1 million to Trump’s inauguration fund. In the spring, Trump threatened the computing giant with tariffs after Apple announced plans to build manufacturing facilities in India. In August, Cook presented the president with a customized glass plaque with a gold base as the CEO announced plans to bring Apple’s total investment commitment in U.S. manufacturing over four years to $600 billion.
Google Background: During his first term, Trump’s administration sued Google for antitrust violations. While a candidate last year, Trump suggested he might seek to break up the search engine behemoth. Once Trump won the election, Google donated $1 million to his inauguration, and its CEO, Sundar Pichai, joined other major tech executives in attending the ceremony. Google’s subsidiary, YouTube, agreed in September to pay $24.5 million to settle a lawsuit with Trump after it suspended his account following the Jan. 6 riot at the U.S. Capitol. According to court filings, $22 million of that went to the Trust for the National Mall, which can help pay for ballroom construction.
HP Background: An original Silicon Valley stalwart, the company donated to Trump’s inaugural fund. HP ‘s CEO, Enrique Lores, participated in a White House roundtable event in September. Lores also previously met with President Joe Biden at the White House on multiple occasions as top CEOs endorsed that administration’s economic plans.
Meta Background: Founder and CEO Mark Zuckerberg had been critical of Trump going back to 2016, and Facebook suspended Trump for years after the Jan. 6 insurrection. This time around, Meta contributed $1 million to Trump’s inauguration, and Zuckerberg attended.
Micron Technology Background: The producer of advanced memory computer chips announced an April 2024 agreement with the Biden administration to provide $6.1 billion in government support for Micron to make chips domestically. Then, in June, Micron pledged $200 billion for U.S. memory chip manufacturing expansion under Trump. But at least $120 billion of that involved holdovers first announced during Biden’s administration.
Microsoft Background: The company donated $1 million to Trump’s inauguration, twice what it spent for Biden’s or for Trump’s first inauguration. CEO Satya Nadella has also met with Trump numerous times, as Microsoft has supported the administration’s relaxation of regulations on artificial intelligence. He met previously with Biden, too. Trump has called for Microsoft’s president of global affairs, Lisa Monaco, to be fired because she was a deputy attorney general under Biden when the Justice Department led several investigations against Trump.
Palantir Technologies Background: Co-founded by billionaire libertarian Peter Thiel, the firm concentrates on artificial intelligence and machine learning. It has seen profits soar thanks to lucrative defense and other federal contracts.
Ripple Background: In March, the Securities and Exchange Commission dropped a lawsuit filed during Trump’s first term, which accused the company of violating securities laws by selling XRP crypto coins without a securities registration. In his second term, Trump has eased regulations on digital assets, repealing an SEC accounting rule and a previous presidential executive order mandating more federal study and proposed changes to crypto regulations.
Tether Background: A cryptocurrency company and major stablecoin issuer, Tether paid fines for misleading investors. CEO Paolo Ardoino has been to Trump’s White House, and, in April, the company hired former Trump administration crypto policy official Bo Hines to lead its domestic expansion efforts.
Cameron Winklevoss and Tyler Winklevoss Background: Each Winklevoss twin is listed as a separate donor. Best known as Zuckerberg’s chief antagonists in “The Social Network,” the brothers founded the Gemini cryptocurrency exchange. Biden’s SEC sued Gemini for selling unregistered securities, but the case has been paused under Trump.
Energy and industrial (4):
Caterpillar Background: The equipment maker ‘s PAC has donated to candidates from both parties, but given more to Republicans. It has also said publicly that Trump’s tariffs, some of which the administration has now eased, could increase its costs and hurt earnings.
NextEra Energy Background: NextEra is the world’s largest electric utility holding company. Trump says he’ll work to ensure tech giants can secure their own sources of electricity to power data centers, especially as they expand energy-hogging artificial intelligence operations. Google recently entered into an agreement to buy power from a shuttered nuclear power plant in Iowa owned by NextEra, which the company plans to bring back online in 2029.
Paolo Tiramani Background: An American industrial designer who has donated to Trump’s political campaigns. Tiramani, with his son, runs BOXABL, a firm specializing in modular, prefabricated homes.
Union Pacific Background: Trump has endorsed the company’s proposed $85 billion acquisition of Norfolk Southern, which would be the largest-ever rail merger. It also will be up to the president to appoint two more Republican members of the Surface Transportation Board, who will ultimately decide whether to approve the merger. In August, Trump fired one of the two Democratic members of the board.
Philanthropy (3):
Adelson Family Foundation Background: Founded to strengthen the state of Israel and the Jewish people, the foundation was created by Miriam Adelson, the majority owner of the NBA’s Dallas Mavericks, close Trump ally and longtime GOP megadonor. She’s also the widow of Sheldon Adelson, the billionaire founder and owner of Las Vegas Sands.
Betty Wold Johnson Foundation Background: Based in Palm Beach, the foundation supports health, arts and culture initiatives, as well as environmental and educational programs. It’s named in honor of the mother of New York Jets owner Woody Johnson, who served as Trump’s ambassador to the United Kingdom during his first term.
Laura & Isaac Perlmutter Foundation Background: The nonprofit based in Lake Worth Beach, near Palm Beach, focuses on promoting health care, social justice, the arts and community initiatives. Isaac is an Israeli American businessman and financier and former chair of Marvel Entertainment. He and his wife have donated to Trump’s presidential campaigns and affiliated PACs.
Trump administration officials (3):
Benjamin Leon Jr. Background: The Cuban American founder of Miami-based Leon Medical Centers is Trump’s nominee for U.S. ambassador to Spain.
Kelly Loeffler and Jeffrey Sprecher Background: A former Republican senator from Georgia, Loeffler heads Trump’s Small Business Administration. Her husband is CEO of the energy market Intercontinental Exchange Inc. and chairs the New York Stock Exchange. The couple faced scrutiny in 2020 for dumping substantial portions of their portfolio and purchasing new stocks, including in firms making protective equipment, after Congress received briefings on the severity of the coming coronavirus pandemic.
Lutnick Family Background: Howard Lutnick is Trump’s commerce secretary. A crypto enthusiast, he once headed the brokerage and investment bank Cantor Fitzgerald.
Communications/entertainment (3):
Comcast Background: The mass media and telecom conglomerate has often been criticized by Trump, including in April, when the president posted that Comcast was a “disgrace to the integrity of broadcasting.” The company owns NBC and is spinning off MSNBC. It could be interested in acquiring Warner Bros. Discover, and that would leave Comcast looking for government approval.
Hard Rock International Background: A Florida-based gaming and tourism concern owned by the Seminole Tribe, the company operates a number of casinos, including the former Trump Taj Mahal casino in Atlantic City, New Jersey. Trump has for decades criticized federal exemptions allowing tribes to operate casinos.
T-Mobile Background: The wireless carrier is indirectly linked to Trump Mobile, which the president’s family controls and offers gold phones and cell service in a licensing deal. Trump Mobile uses Liberty Mobile Wireless, a small, Florida-based network that T-Mobile says runs its operations on T-Mobile’s network. T-Mobile says that is unrelated to its decision to donate to Trump’s ballroom, which it says is meant to “restore and enrich the historic landmarks that define our nation’s capital.”
Big Tobacco (2):
Altria Group Background: The tobacco giant controls Philip Morris USA, maker of Marlboro. It has pressed for federal crackdowns on counterfeit and illegal vaping products. The company donated $50,000 to Trump’s inauguration.
Booz Allen Hamilton Background: A major defense and national security technology firm with extensive government contracts, it paid fines to settle lawsuits with the Justice Department under Biden. Booz Allen Hamilton agreed to pay more than $377 million in 2023 to settle allegations that it improperly billing costs to its government contracts. In January, it paid nearly $16 million to settle allegations that it submitted fraudulent claims in connection with government contracts.
Lockheed Martin Corporation Background: The massive defense contractor has huge government contracts. It said in a statement that it “is grateful for the opportunity to help bring the President’s vision to reality and make this addition to the People’s House.”
Individuals (7):
Stefan E. Brodie Background: A biotech entrepreneur and co-founder of the chemical manufacturing company Purolite, Brodie and his family donated to Trump’s 2024 presidential campaign and affiliated committees. Brodie and his brother, Donald, were convicted in 2002 of circumventing U.S. sanctions on Cuba.
Charles and Marissa Cascarilla Background: Charles Cascarilla is co‑founder of the blockchain firm Paxos. He and his wife are philanthropists who have advocated for financial technology sector deregulation.
J. Pepe and Emilia Fanjul Background: Longtime Republican donors and Palm Beach residents, the couple controls U.S. sugar refining interests that includes the Domino brand.
Edward and Shari Glazer Background: Members of the family that owns the NFL’s Tampa Bay Buccaneers and has a controlling stake in the Manchester United football club, the couple donated to Trump’s campaign. Edward is the founder and CEO of US Property Trust, which operates shopping centers, and the car dealership company US Auto Trust.
Harold Hamm Background: The billionaire oil tycoon and pioneer of hydraulic fracturing heads the oil producer Continental Resources. He’s praised the Trump administration for aggressively moving to purchase oil to replenish the Strategic Petroleum Reserve stockpile.
Stephen A. Schwarzman Background: A Palm Beach resident and chair and CEO of the Blackstone Group, a global private equity firm he helped establish in 1985. Schwarzman has donated to Trump and his PACs previously and led his first-term President’s Strategic and Policy Forum.
Konstantin Sokolov Background: Born in Russia, he immigrated to the U.S. and now heads the Chicago-based private equity firm IJS Investments. Sokolov has donated to many educational and charitable causes in the past, and to Trump’s political campaigns.
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Associated Press writer Darlene Superville contributed to this report.
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This story has been updated to correct the first name of an individual who donated to the White House ballroom. He is Harold Hamm, not Howard Hamm.
Two Denver-area companies face federal wire fraud charges in a scheme to sell imported Chinese forklifts to the federal government as American-made equipment, according to an indictment released Tuesday.
Endless Sales and Octane Forklifts, along with current executives Brian Firkins and Jeffrey Blasdel and former executive J.R. Antczak, were indicted by a federal grand jury in Denver on Aug. 21, Department of Justice officials announced this week.
According to the indictment, Octane’s main business was buying forklifts made in China, rebranding them as American-made and selling them through Endless Sales to local, state and federal government clients.
The scheme started in Aug. 2018 and continued until at least July 2024. Investigators say the companies and executives also worked with a Chinese manufacturer to create fake invoices that undervalued the imported forklifts to avoid paying more than $1 million in tariffs and fees.
In a statement, Department of Homeland Security Inspector General Joseph V. Cuffari said the companies told the forklifts to the Federal Emergency Management Agency and the Department of Defense while claiming to comply with the Buy American Act.
“It is especially reprehensible that this alleged fraud involved a FEMA contract using disaster funds,” Cuffari said.
Both companies and Firkins, Blasdel and Antczak were indicted for conspiring to commit wire fraud and conspiring to enter goods into the United States by means of false or fraudulent statements, federal officials said.
Firkins, Blasdel and Antczak also face charges of wire fraud, and Blasdel is charged with making false statements to the government.
(CNN) — Former FBI Director James Comey has been indicted by a federal grand jury, an extraordinary escalation in President Donald Trump’s effort to prosecute his political enemies.
Comey, a longtime adversary of the president, is now the first senior government official to face federal charges in one of Trump’s largest grievances: the 2016 investigation into whether his first presidential campaign colluded with Russia.
“JUSTICE IN AMERICA! One of the worst human beings this Country has ever been exposed to is James Comey, the former Corrupt Head of the FBI,” Trump wrote in a Truth Social post.
Comey has been charged with giving false statements and obstruction of a congressional proceeding, and he could face up to five years in prison if convicted.
Both charges are connected to his September 30, 2020, testimony to the Senate Judiciary Committee. A source told CNN’s Jake Tapper that the indictment for lying to Congress is related to the FBI’s “Arctic haze” leak investigation, related to classified information that ended up in four different newspaper articles.
Appearing by Zoom, Comey testified that “he had not authorized someone else to be an anonymous source in news reports,” the indictment said. “That statement was false.”
Comey responded to the indictment in an Instagram video, saying, “Let’s have a trial. And keep the faith.”
“My heart is broken for the Department of Justice but I have great confidence in the federal judicial system and I’m innocent,” he added.
“Today’s indictment reflects this Department of Justice’s commitment to holding those who abuse positions of power accountable for misleading the American people,” Bondi wrote. “We will follow the facts in this case.”
Inside the courthouse
The charges were presented by Lindsey Halligan, Trump’s former personal attorney and the new top prosecutor in the Eastern District of Virginia. She was not accompanied by any career prosecutor and is the only Justice Department official who signed the charging documents.
During a brief hearing, a judge announced the new case against Comey and said publicly that 14 jurors agreed to indict on the counts of false statements in the jurisdiction of a congressional proceeding and obstruction of a congressional proceeding.
Halligan, who had never presented to a grand jury, did a crash course to prepare with DOJ attorneys and FBI officials ahead of Thursday, a source familiar with the matter told CNN. Halligan participated in a number of “practice runs” and spent hours going through the material in preparation.
Comey was charged for an alleged false statement he made to the Senate Judiciary Committee in September 30, 2020, though he had been asked the same question years earlier under oath.
Prosecutors say Comey authorized a leak to the media about an FBI investigation via an anonymous source, but he then told the Senate he had not.
In his 2020 Senate hearing, appearing by Zoom, Sen. Ted Cruz read to Comey an exchange he had with a different senator, Chuck Grassley, during congressional testimony three years prior.
Cruz said to Comey in 2020:
“On May 3rd, 2017, in this committee, Chairman Grassley asked you point blank, ‘Have you ever been an anonymous source in news reports about matters relating to the Trump investigation or the Clinton investigation?’ You responded under oath, ‘Never.’ He then asked you, ‘Have you ever authorized someone else at the FBI to be an anonymous source in news reports about the Trump investigation or the Clinton administration?’ You responded again under oath, ‘No.’”
Comey then said to Cruz: “I can only speak to my testimony. I stand by the testimony you summarized that I gave in May of 2017.”
Grand jury rejected third charge against Comey
A court record made public on Thursday certified that the grand jury voted “no” on indicting Comey on another alleged false statement to Congress — a very unusual occurrence in the federal court system.
That other false statement allegation, which is not part of the indictment of Comey, according to this record, appears to pinpoint Comey’s answer when he was asked about an alleged plan from Hillary Clinton during the 2016 campaign.
“That doesn’t ring any bells with me,” Comey testified in 2020 in response to a question from Republican Sen. Lindsey Graham.
In the Senate Judiciary Committee testimony, Graham told Comey about an alleged plan in 2016 where Clinton wanted to distract the public from her use of a private email server and fuel the 2016 Russia investigation around Trump and Russian hackers hurting the US elections.
That question and answer has long fed conservative theories about Comey wanting to hurt Trump and assist Clinton during the campaign and into Trump’s first presidency.
The grand jury did not have a majority of 12 yes votes, out of a possible 23, to indict Comey for that exchange with Graham, according to the court record.
Comey’s son-in-law resigns
Comey’s son-in-law, Troy A. Edwards, Jr., resigned Thursday from his position as a senior national security prosecutor shortly after the former FBI director was indicted, according to a letter obtained by CNN.
In a one-sentence letter to Halligan, Edwards wrote: “To uphold my oath to the Constitution and country, I hereby resign as an Assistant United States Attorney for the Eastern District of Virginia in the Department of Justice effective immediately.”
Previous concerns about charges
The indictment Thursday evening comes as CNN previously reported concerns Bondi and prosecutors have had about the case.
Bondi is facing pressure from Trump, who is demanding his political enemies face criminal charges as he once did. But attorneys inside the Eastern District of Virginia recently wrote a memo detailing their reservations over seeking the indictment, ABC News first reported.
Bondi had concerns about the case, which focuses on whether Comey made false statements during congressional testimony involving the 2016 investigation into Russian interference in the US presidential election, according to a person familiar with her thinking, though she believes it would be possible to bring an indictment.
Late Thursday, Bondi replied to CNN’s reporting, stating, “That is a flat out lie.”
The attorney general had dinner at the White House Rose Garden with Trump and others Wednesday evening.
‘I just want people to act’
Publicly and privately, Trump has complained that prosecutors were willing to bring numerous criminal cases against him while he was out of office, noting that in those instances he was charged with whatever they had at the time, according to a person familiar with the discussions. The person added that Trump has repeatedly said that the Justice Department should bring the best case it can when it comes to his political opponents and let the court decide the rest.
“I just want people to act. And we want to act fast,” Trump told reporters Saturday as he departed the White House. “If they’re not guilty, that’s fine. If they are guilty, or if they should be charged, they should be charged, and we have to do it now.”
Some inside the White House view Halligan’s willingness to bring the case as her jumping on a grenade to please Trump – though that is why she was picked to take on the role of leading the Eastern District of Virginia. While several Justice Department officials are worried about the strength of any case against Comey, multiple political aides share a different view: they prosecuted Trump, so people like Comey deserve to be prosecuted, too.
Comey is expected to be arraigned in federal court in Alexandria, Virginia, on October 9, according to the court record.
CNN’s Britney Lavecchia, Casey Gannon and Holmes Lybrand contributed to this report.
This story has been updated with additional developments and details of the charges from the Justice Department.
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Hannah Rabinowitz, Evan Perez, Aileen Graef, Katelyn Polantz, Kaitlan Collins, Kristen Holmes and CNN
A coastal Georgia man was convicted after a two-day trial after making threats to kill staff at the Department of Veterans, other federal employees and Americans, at large.
The U.S. Department of Justice said 44-year-old Alexis Beatles was arrested in January by members of the Savannah Police Department SWAT Team and the FBI.
“VA personnel and the veterans they serve should feel safe while working and receiving care within VA facilities,” Special Agent in Charge David Spilker, with the Department of Veterans Affairs Office of Inspector General’s Southeast Field Office, said in a statement.
At trial, prosecutors described how Beatles made threats by phone to the VA hotline in December 2024, making demands and threatening to kill VA staff and other federal workers if they were not met.
TRENDING STORIES:
During these calls, federal officials said Beatles threatened to crash his car into the Savannah VA Clinic, “destroy” U.S. citizens, rig his home with explosives to harm police officers, and kill the children of officers attempting to arrest him.
“Those who make threats against members of our community in violation of federal law will be held accountable,” Margaret E. Heap, United States Attorney for the Southern District of Georgia, said.
Beatles now faces up to 10 years in prison, followed by supervised release and is not eligible for parole.
“Threats of violence against federal employees and our communities will never be tolerated,” said Paul Brown, Special Agent in Charge of FBI Atlanta.
MARTIN COUNTY — A registered sex offender from Louisiana who was convicted by a federal jury in Fort Pierce on May 20, was sentenced to life in prison followed by a consecutive 10-year term for multiple child exploitation crimes, including internet sex crimes involving a 15-year-old girl from Martin County.
Nicolas James Palmisano, 45, of Destrehan, Louisiana was convicted of attempted enticement of a minor, attempted production of visual depictions involving sexual exploitation of a minor, receipt of visual depictions involving sexual exploitation of a minor, the transfer of obscene material to a minor, and offense by a registered sex offender, according to a news release from the U.S. Department of Justice on May 29.
U.S. District Judge Jose E. Martinez enforced the sentence on Aug. 25. In addition to the prison sentence, Palmisano was ordered to serve 20 years of supervised release upon release from custody, according to a news release from the U.S. Department of Justice on Aug. 29. He was also ordered to pay restitution.
In May 2024, the Martin County Sheriff’s Office found sexually explicit images on a 15-year-old girl’s phone. A computer forensic examiner found messages, images, and recordings from Palmisano. He had sent explicit images, audio and video recordings of himself to the 15-year-old between Feb. 22 and May 6, 2024, according to the news release.
Palmisano was taken into custody in August 2024 by the FBI and the Martin County Sheriff’s Office while he was at the St. Charles Parish Sheriff’s Office for his annual sexual offender registration review and update. A search warrant was executed on Palmisano’s home, and his cell phone, which contained sexually explicit material between him and the 15-year-old, was recovered during the search.
Olivia Franklin is a breaking news reporter for TCPalm. Follow Olivia on X @Livvvvv_5 or reach her by phone at 317-627-8048. E-mail her at olivia.franklin@tcpalm.com.
MIAMI (AP) — Smartmatic, the elections-technology company suing Fox News for defamation, is now contending with a growing list of criminal allegations against some of its executives — including a new claim by federal prosecutors that a “slush fund” for bribing foreign officials was financed partly with proceeds from the sale of voting machines in Los Angeles.
The new details about the criminal case surfaced this month in court filings in Miami, where the company’s co-founder, Roger Pinate, and two Venezuelan colleagues were charged last year with bribing officials in the Philippines in exchange for a contract to help run that country’s 2016 presidential elections. Pinate, who no longer works for Smartmatic, has pleaded not guilty.
To buttress the case, federal prosecutors are seeking to introduce evidence they argue shows that some of the nearly $300 million the company was paid by Los Angeles County to help modernize its voting systems was diverted to a fund controlled by Pinate through the use of overseas shell companies, fake invoices and other means.
Smartmatic itself hasn’t been charged with breaking any laws, nor have U.S. prosecutors accused Smartmatic or its executives of tampering with election results. Similarly, they haven’t accused Los Angeles County officials of wrongdoing, or said whether they were even aware of the alleged bribery scheme. County officials say they weren’t.
But the case against Pinate is unfolding as Smartmatic is pursuing a $2.7 billion lawsuit accusing Fox of defamation for airing false claims that the company helped rig the 2020 U.S. presidential election. Fox says it was legitimately reporting newsworthy allegations.
Smartmatic said the Justice Department’s new filing was filled with “misrepresentations” and is “untethered from reality.”
“Let us be clear: Smartmatic wins business because we’re the best at what we do,” the company said in a statement. “We operate ethically and abide by all laws always, both in Los Angeles County and every jurisdiction where we operate.”
Fox questions Smartmatic’s dealings in LA
Still, Fox has gone to court to try to get more information about L.A. County’s dealings with Smartmatic. The network has long tried to leverage the bribery allegations to undermine Smartmatic’s narrative about its business prospects – a key component in calculating any potential damages — and portray it as a scandal-plagued company brought low by its own legal problems, not Fox’s broadcasts.
South Florida-based Smartmatic was founded more than two decades ago by a group of Venezuelans who found early success working for the government of the late Hugo Chavez, a devotee of electronic voting. The company later expanded globally, providing voting machines and other technology to help carry out elections in 25 countries, from Argentina to Zambia.
It was awarded its contract to help with Los Angeles County elections in 2018. The contract, which Smartmatic continues to service, gave the company an important foothold in what was then a fast-expanding U.S. voting-technology market.
But Smartmatic has said its business tanked after Fox News gave President Donald Trump’s lawyers a platform to paint the company as part of a conspiracy to steal the 2020 election.
Fox itself eventually aired a piece refuting the allegations after Smartmatic’s lawyers complained, but it has aggressively defended itself against the defamation lawsuit in New York.
“Facing imminent financial collapse and indictment, Smartmatic saw a litigation lottery ticket in Fox News’s coverage of the 2020 election,” the network’s lawyers said in a court filing.
Smartmatic has disputed Fox’s characterization in court filings as “lies” and “another attempt to divert attention from its long-standing campaign of falsehoods and defamation.”
LA clerk deposed about trip, gifted meal
As part of its effort to investigate Smartmatic’s work in Los Angeles, Fox has sued to force LA County Clerk Dean Logan to hand over public records about his dealings with Smartmatic’s U.S. affiliate.
Fox’s lawyers also questioned Logan in a deposition about a dinner a Smartmatic executive bought for him at the members-only Magic Castle club and restaurant in Los Angeles and a Smartmatic-paid trip that Logan made to Taiwan in 2019 to oversee the manufacturing of equipment by a Smartmatic vendor. U.S. prosecutors claim that vendor was deeply involved in the alleged kickback scheme in the Philippines. The five-day trip included business class airfare, hotel and numerous meals as well as time for sightseeing, Fox said.
“The trip’s itinerary demonstrates that the trip was not a financial inspection or audit. It was a boondoggle,” Fox said in court filings.
Logan, who did not report the gifts in his financial disclosures, said in his 2023 deposition that the meal at the Magic Castle was a “social occasion” unrelated to business and that he was not required to report the trip to Taiwan because his visit was covered by the contract.
Mike Sanchez, a spokesman for Logan’s office, said in a statement that the bribery allegations are unrelated to the company’s work for L.A. County and that the county had no knowledge of how the proceeds from its contract would be used. All of Smartmatic’s work has been evaluated for compliance with the contract’s terms, Sanchez added, and as soon as Pinate was indicted he and the other defendants were banned from conducting business with the county.
As for the trip to Taiwan, Sanchez said another county official joined Logan for the trip and the two conducted several on-site visits and conducted detailed reviews of electoral technology products that were required prior the start of their manufacturing. Logan’s spouse accompanied him on the trip, but at the couple’s own expense, the spokesman added.
“Unfortunately, this is an attempt to use the County as a pawn in two serious legal actions to which the County is not a party,” Sanchez said.
Smartmatic has settled two other defamation lawsuits it brought against conservative news outlets Newsmax and One America News Network over their 2020 U.S. election coverage. Settlement terms weren’t disclosed.
Prosecutors claim bribe paid in Venezuela
U.S. prosecutors in Miami have also accused Pinate of secretly bribing Venezuela’s longtime election chief by giving her a luxury home with a pool in Caracas. Prosecutors say the home was transferred to the election chief in an attempt to repair relations following Smartmatic’s abrupt exit from Venezuela in 2017 when it accused President Nicolas Maduro ‘s government of manipulating tallied results in elections for a rubber-stamping constituent assembly.
Smartmatic has denied the bribery allegations, saying it ceased all operations in Venezuela in 2017 after blowing the whistle on the government and has never sought to secure business there again.
“There are no slush funds, no gifted house,” the company said. Instead, it accused Fox of engaging in “victim-blaming” and attempts to use “frivolous” court filings “to smear us further, twisting unproven Justice Department allegations.”
WASHINGTON (AP) — A child psychiatrist who altered a first-day-of-school photo he saw on Facebook to make a group of girls appear nude. A U.S. Army soldier accused of creating images depicting children he knew being sexually abused. A software engineer charged with generating hyper-realistic sexually explicit images of children.
Law enforcement agencies across the U.S. are cracking down on a troubling spread of child sexual abuse imagery created through artificial intelligence technology — from manipulated photos of real children to graphic depictions of computer-generated kids. Justice Department officials say they’re aggressively going after offenders who exploit AI tools, while states are racing to ensure people generating “deepfakes” and other harmful imagery of kids can be prosecuted under their laws.
“We’ve got to signal early and often that it is a crime, that it will be investigated and prosecuted when the evidence supports it,” Steven Grocki, who leads the Justice Department’s Child Exploitation and Obscenity Section, said in an interview with The Associated Press. “And if you’re sitting there thinking otherwise, you fundamentally are wrong. And it’s only a matter of time before somebody holds you accountable.”
The Justice Department says existing federal laws clearly apply to such content, and recently brought what’s believed to be the first federal case involving purely AI-generated imagery — meaning the children depicted are not real but virtual. In another case, federal authorities in August arrested a U.S. soldier stationed in Alaska accused of running innocent pictures of real children he knew through an AI chatbot to make the images sexually explicit.
Trying to catch up to technology
The prosecutions come as child advocates are urgently working to curb the misuse of technology to prevent a flood of disturbing images officials fear could make it harder to rescue real victims. Law enforcement officials worry investigators will waste time and resources trying to identify and track down exploited children who don’t really exist.
Lawmakers, meanwhile, are passing a flurry of legislation to ensure local prosecutors can bring charges under state laws for AI-generated “deepfakes” and other sexually explicit images of kids. Governors in more than a dozen states have signed laws this year cracking down on digitally created or altered child sexual abuse imagery, according to a review by The National Center for Missing & Exploited Children.
“We’re playing catch-up as law enforcement to a technology that, frankly, is moving far faster than we are,” said Ventura County, California District Attorney Erik Nasarenko.
Nasarenko pushed legislation signed last month by Gov. Gavin Newsom which makes clear that AI-generated child sexual abuse material is illegal under California law. Nasarenko said his office could not prosecute eight cases involving AI-generated content between last December and mid-September because California’s law had required prosecutors to prove the imagery depicted a real child.
AI-generated child sexual abuse images can be used to groom children, law enforcement officials say. And even if they aren’t physically abused, kids can be deeply impacted when their image is morphed to appear sexually explicit.
“I felt like a part of me had been taken away. Even though I was not physically violated,” said 17-year-old Kaylin Hayman, who starred on the Disney Channel show “Just Roll with It” and helped push the California bill after she became a victim of “deepfake” imagery.
Hayman testified last year at the federal trial of the man who digitally superimposed her face and those of other child actors onto bodies performing sex acts. He was sentenced in May to more than 14 years in prison.
Open-source AI-models that users can download on their computers are known to be favored by offenders, who can further train or modify the tools to churn out explicit depictions of children, experts say. Abusers trade tips in dark web communities about how to manipulate AI tools to create such content, officials say.
A report last year by the Stanford Internet Observatory found that a research dataset that was the source for leading AI image-makers such as Stable Diffusion contained links to sexually explicit images of kids, contributing to the ease with which some tools have been able to produce harmful imagery. The dataset was taken down, and researchers later said they deleted more than 2,000 weblinks to suspected child sexual abuse imagery from it.
Top technology companies, including Google, OpenAI and Stability AI, have agreed to work with anti-child sexual abuse organization Thorn to combat the spread of child sexual abuse images.
But experts say more should have been done at the outset to prevent misuse before the technology became widely available. And steps companies are taking now to make it harder to abuse future versions of AI tools “will do little to prevent” offenders from running older versions of models on their computer “without detection,” a Justice Department prosecutor noted in recent court papers.
“Time was not spent on making the products safe, as opposed to efficient, and it’s very hard to do after the fact — as we’ve seen,” said David Thiel, the Stanford Internet Observatory’s chief technologist.
AI images get more realistic
The National Center for Missing & Exploited Children’s CyberTipline last year received about 4,700 reports of content involving AI technology — a small fraction of the more than 36 million total reports of suspected child sexual exploitation. By October of this year, the group was fielding about 450 reports per month of AI-involved content, said Yiota Souras, the group’s chief legal officer.
Those numbers may be an undercount, however, as the images are so realistic it’s often difficult to tell whether they were AI-generated, experts say.
“Investigators are spending hours just trying to determine if an image actually depicts a real minor or if it’s AI-generated,” said Rikole Kelly, deputy Ventura County district attorney, who helped write the California bill. “It used to be that there were some really clear indicators … with the advances in AI technology, that’s just not the case anymore.”
Justice Department officials say they already have the tools under federal law to go after offenders for such imagery.
The U.S. Supreme Court in 2002 struck down a federal ban on virtual child sexual abuse material. But a federal law signed the following year bans the production of visual depictions, including drawings, of children engaged in sexually explicit conduct that are deemed “obscene.” That law, which the Justice Department says has been used in the past to charge cartoon imagery of child sexual abuse, specifically notes there’s no requirement “that the minor depicted actually exist.”
The Justice Department brought that charge in May against a Wisconsin software engineer accused of using AI tool Stable Diffusion to create photorealistic images of children engaged in sexually explicit conduct, and was caught after he sent some to a 15-year-old boy through a direct message on Instagram, authorities say. The man’s lawyer, who is pushing to dismiss the charges on First Amendment grounds, declined further comment on the allegations in an email to the AP.
A spokesperson for Stability AI said that man is accused of using an earlier version of the tool that was released by another company, Runway ML. Stability AI says that it has “invested in proactive features to prevent the misuse of AI for the production of harmful content” since taking over the exclusive development of the models. A spokesperson for Runway ML didn’t immediately respond to a request for comment from the AP.
In cases involving “deepfakes,” when a real child’s photo has been digitally altered to make them sexually explicit, the Justice Department is bringing charges under the federal “child pornography” law. In one case, a North Carolina child psychiatrist who used an AI application to digitally “undress” girls posing on the first day of school in a decades-old photo shared on Facebook was convicted of federal charges last year.
“These laws exist. They will be used. We have the will. We have the resources,” Grocki said. “This is not going to be a low priority that we ignore because there’s not an actual child involved.”
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The U.S. Department of Justice is considering asking a federal judge to break up Google after its ubiquitous search engine was declared an illegal monopoly, but it is just one of many possible remedies under review, according to a court filing.
In court papers filed late Tuesday, government lawyers outlined a series of potential remedies it may pursue, including restrictions on how Google’s artificial intelligence mines other websites to deliver search results, and blocking Google from paying companies like Apple billions of dollars annually to ensure that Google is the default search engine presented to consumers on gadgets like iPhones.
Tuesday’s filing is the first step in a monthslong legal process to come up with remedies that could reshape a company that’s long been synonymous with online search.
“For more than a decade, Google has controlled the most popular distribution channels, leaving rivals with little-to-no incentive to compete for users,” the antitrust enforcers wrote in the filing. “Fully remedying these harms requires not only ending Google’s control of distribution today, but also ensuring Google cannot control the distribution of tomorrow.”
U.S. District Judge Amit Mehta r uled in August that Google’s search engine has been illegally exploiting the dominance of its search engine to squash competition and stifle innovation. He has outlined a timeline for a trial on the proposed remedies next spring and plans to issue a decision by August 2025.
The court filing is the first time that the government has given any indication of the types of remedies it will pursue, but under the meticulous approach ordered by Mehta, the government may ultimately opt not to pursue remedies like divestiture.
The Justice Department will conduct discovery over the coming weeks and put forth a more detailed proposal next month.
Lee-Anne Mulholland, Google’s vice president of regulatory affairs, said in response to the filing that the Department of Justice was “already signaling requests that go far beyond the specific legal issues” in this case. “Government overreach in a fast-moving industry may have negative unintended consequences for American innovation and America’s consumers.”
Google has already said it plans to appeal Mehta’s ruling, but the tech giant must wait until he finalizes a remedy before doing so. The appeals process could take as long as five years, predicts George Hay, a law professor at Cornell University who was the chief economist for the Justice Department’s antitrust division for most of the 1970s.
During a lengthy trial in Washington, much of the evidence centered on deals Google made with other tech companies to ensure that Google is the default search engine on consumer technology. In 2021 alone, Google spent more than $26 billion to lock in those default agreements, according to trial testimony.
As a result, much of the speculation about potential remedies has focused on whether Google would be barred from making such deals. In Tuesday’s filing, lawyers referred to those distribution deals as a “starting point for addressing Google’s unlawful conduct.”
To that end, the department said it is also considering asking for structural changes to stop Google from leveraging products such as its Chrome browser, Android operating system, AI products or app store to benefit its search business.
“We’ve invested billions of dollars in Chrome and Android,” Mulholland wrote. “Breaking them off would change their business models, raise the cost of devices, and undermine Android and Google Play in their robust competition with Apple’s iPhone and App Store.”
Another proposal floated by the government allowing companies to opt out of having their information used by Google when it delivers AI-enhanced responses to consumers’ search queries.
“Google’s ability to leverage its monopoly power to feed artificial intelligence features is an emerging barrier to competition and risks further entrenching Google’s dominance,” government lawyers wrote.
Google’s blog post response noted that artificial intelligence is a rapidly emerging technology that is the subject of fierce competition in the commercial market.
“There are enormous risks to the government putting its thumb on the scale of this vital industry,” Mulholland wrote.
After the government submits its more detailed proposal next month for how to tackle Google’s anticompetitive practices. Google in turn will offer its own ideas for how to make fixes in December. Prosecutors will then make their final proposal in March 2025.
Google has been facing intensifying regulatory pressure on both sides of the Atlantic, with European Union antitrust enforcers also suggesting that breaking up the company is the only way to satisfy competition concerns about its digital ad business.
MOBILE, Ala. (AP) — Executives with military shipbuilder Austal said settling an accounting fraud investigation, which included an agreement to pay a $24 million penalty, is the best outcome for the company and that new controls are in place.
Austal USA, a subsidiary of Australia-based Austal Limited, pleaded guilty to one count of securities fraud and one count of obstruction of a federal audit to settle an accounting fraud case. Austal USA agreed to pay a penalty of $24 million, according to the U.S. Justice Department.
Restitution will also be paid to Austal shareholders. However, the restitution will be paid from the penalty, so the company will pay a total of $24 million.
“Settling this action is the best outcome for Austal. Upon learning of this issue, Austal conducted its own independent investigation. The responsible individuals are no longer with the Company, and we have made numerous governance changes to prevent similar issues from occurring again,” John Rothwell, the former chairman of Austal Limited who now serves as non-executive director of the board, said in a statement issued by the company.
Austal builds littoral combat ships that are designed to operate in shallow coastal waters.
“The investigations focused on conduct that occurred over 8 years ago, and with a large order book of work ahead of us, we need to concentrate on the future — not the past,” Rothwell added.
The Justice Department said that from 2013 through July 2016, Austal USA misled shareholders and investors about the company’s financial condition. The Justice Department said Austal USA artificially lowered cost estimates, despite rising shipbuilding costs, to meet its revenue budget and projections. That had the impact of falsely overstating Austal USA’s profitability on the ships and Austal Limited’s earnings reported in its public financial statements.
The U.S. Securities and Exchange Commission will handle the distribution of funds to harmed investors, the Justice Department said.
Austal USA has also agreed to retain an independent compliance monitor for three years and implement a compliance and ethics program.
Three former Austal USA executives were indicted last year on accounting fraud charges. They are awaiting trial.
LOUISVILLE, Ky. (AP) — Kentucky is likely violating federal law for failing to provide community-based services to adults in Louisville with serious mental illness, the U.S. Department of Justice said in a report issued Tuesday.
The 28-page DOJ report said the state “relies unnecessarily on segregated psychiatric hospitals to serve adults with serious mental illness who could be served in their homes and communities.”
The Justice Department said it would work with the state to remedy the report’s findings. But if a resolution cannot be reached, the government said it could sue Kentucky to ensure compliance with the Americans with Disabilities Act.
“People with serious mental illnesses in Louisville are caught in an unacceptable cycle of repeated psychiatric hospitalizations because they cannot access community-based care,” Assistant Attorney General Kristen Clarke said in a release Tuesday. Clarke, who works in the Justice Department’s Civil Rights Division, also led an i nvestigation into civil rights violations by the city’s police department.
The report said admissions to psychiatric hospitals can be traumatizing, and thousands are sent to those facilities in Louisville each year. More than 1,000 patients had multiple admissions in a year, and some spent more than a month in the hospitals, the report said.
“These hospitals are highly restrictive, segregated settings in which people must forego many of the basic freedoms of everyday life.” the report said.
The lack of community and home-based services for the mentally ill in Louisville also increases their encounters with law enforcement, who are the “primary responders to behavioral health crises,” the report said. That often leads to people being taken into custody “due to a lack of more appropriate alternatives and resources.”
The Justice Department acknowledged the state has taken steps to expand access to services, including crisis response initiatives and housing and employment support.
“Our goal is to work collaboratively with Kentucky so that it implements the right community-based mental health services and complies with the (Americans with Disabilities Act),” a Justice Department media release said.
A spokesperson for Gov. Andy Beshear’s office said state officials were “surprised by today’s report.”
“There are sweeping and new conclusions that must be reviewed as well as omissions of actions that have been taken,” James Hatchett, a spokesperson for the governor’s office, said in a statement to AP Tuesday. “We will be fully reviewing and evaluating each conclusion.”
Kentucky has worked to expand Medicaid coverage and telehealth services along with launching a 988 crisis hotline, Hatchett said. The governor also attempted to implement crisis response teams, but that effort was not funded in the 2024 legislative session, Hatchett said.
The report also acknowledged an effort by the city of Louisville to connect some 911 emergency calls to teams that can handle mental health crises instead of sending police officers. A pilot program was expanded this year to operate 24 hours a day.
“The lack of community-based mental health services is a nationwide problem that leaves far too many individuals without critical, lifesaving care,” Kevin Trager, a spokesperson for Louisville Mayor Craig Greenberg, said in statement. The mayor hopes to work with state government to improve care in Kentucky “but ultimately, cities like Louisville need our federal partners to help provide comprehensive resources and investments if we are to make the meaningful progress we all want,” Trager said.
WASHINGTON (AP) — A Missouri woman has been arrested on charges she orchestrated a brazen scheme to defraud Elvis Presley’s family by trying to auction off his Graceland mansion and property before a judge halted the mysterious foreclosure sale, the Justice Department said Friday.
Lisa Jeanine Findley, 53, of Kimberling City, falsely claimed Presley’s daughter borrowed $3.8 million from a bogus private lender and had pledged Graceland as collateral for the loan before her death last year, prosecutors said. She then threatened to sell Graceland to the higher bidder if Presley’s family didn’t pay a $2.85 million settlement, according to authorities.
Finley posed as three different people allegedly involved with the fake lender, fabricated loan documents, and published a fraudulent foreclosure notice in a Memphis newspaper announcing the auction of Graceland in May, prosecutors said. A judge stopped the sale after Presley’s granddaughter sued.
Experts were baffled by the attempt to sell off one of the most storied pieces of real estate in the country using names, emails and documents that were quickly suspected to be phony.
Graceland opened as a museum and tourist attraction in 1982 and draws hundreds of thousands of visitors each year. A large Presley-themed entertainment complex across the street from the museum is owned by Elvis Presley Enterprises. The announcement of charges came on the 47th anniversary of Presley’s death at the age of 42.
“Ms. Findley allegedly took advantage of the very public and tragic occurrences in the Presley family as an opportunity to prey on the name and financial status of the heirs to the Graceland estate, attempting to steal what rightfully belongs to the Presley family for her personal gain,” said Eric Shen, inspector in charge of the U.S. Postal Inspection Service Criminal Investigations Group.
AP correspondent Jackie Quinn reports an arrest had been made in an effort to steal away the ownership of Elvis Presley’s Graceland property.
An attorney for Findley, who used multiple aliases, was not listed in court documents. A voicemail left with a phone number believed to be associated with Findley was not immediately returned, nor was an email sent to an address prosecutors say she had used in the scheme.
She’s charged with mail fraud and aggravated identity theft. The mail fraud charge carries up to 20 years in prison. She remained in custody after a brief federal court appearance in Missouri, according to court papers.
In May, a public notice for a foreclosure sale of the 13-acre (5-hectare) estate said Promenade Trust, which controls the Graceland museum, owes $3.8 million after failing to repay a 2018 loan. Riley Keough, Presley’s granddaughter and an actor, inherited the trust and ownership of the home after the death of her mother, Lisa Marie Presley, last year. An attorney for Keough didn’t immediately respond to a message seeking comment on Friday.
Keough filed a lawsuit claiming fraud, and a judge halted the proposed auction with an injunction. Naussany Investments and Private Lending — the bogus lender authorities now say Findley created — said Lisa Marie Presley had used Graceland as collateral for the loan, according to the foreclosure sale notice. Keough’s lawsuit alleged that Naussany presented fraudulent documents regarding the loan in September 2023 and that Lisa Maria Presley never borrowed money from Naussany.
Kimberly Philbrick, the notary whose name is listed on Naussany’s documents, indicated she never met Lisa Marie Presley nor notarized any documents for her, according to the estate’s lawsuit. The judge said the notary’s affidavit brings into question “the authenticity of the signature.”
The judge in May halted the foreclosure sale of the beloved Memphis tourist attraction, saying Elvis Presley’s estate could be successful in arguing that a company’s attempt to auction Graceland was fraudulent.
The Tennessee attorney general’s office had been investigating the Graceland controversy, then confirmed in June that it handed the probe over to federal authorities.
A statement emailed to The Associated Press after the judge stopped the sale said Naussany would not proceed because a key document in the case and the loan were recorded and obtained in a different state, meaning “legal action would have to be filed in multiple states.” The statement, sent from an email address listed in court documents, did not specify the other state.
After the scheme fell apart, Findley tried to make it look like the person responsible was a Nigerian identity thief, prosecutors said. An email sent May 25 to the AP from the same email as the earlier statement said in Spanish that the foreclosure sale attempt was made by a Nigerian fraud ring that targets old and dead people in the U.S. and uses the Internet to steal money.
