Three Orlando area lawyers suspended, including former Cay Clubs attorney

Three Orlando area lawyers have been suspended in the most recent action by the Florida Bar, including one that provided legal advice to the Cay Clubs Ponzi scheme in the Florida Keys.

The following details were provided by the Florida Bar and court records:

William Scott Callahan, Winter Park, was suspended for one year, retroactive to April 20. Callahan was subpoenaed and agreed to cooperate in a federal fraud investigation involving the Cay Clubs vacation rental scheme. He had been a partner at a law firm that handled closings for the company. In the course of his duties supervising the closing agents, Callahan violated Bar rules.

According to court records, Callahan made misleading statements, and when he learned the principals of the company were omitting pertinent information from the closing documents, he failed to warn them, failed to obtain additional legal opinions and failed to withdraw from further representation. Callahan received immunity from prosecution in return for providing information. (Florida Supreme Court Case No. SC17-539)

Michael Kevin Rathel, Orlando, suspended for one year. According to the Florida Bar and court records, Rathel bought a house after persuading the seller to hold a second mortgage for $100,000 needed by Rathel to pay the purchase price. Rathel promised to repay the seller and pledged his current home as security for the mortgage. Rathel sold his current home without telling the seller or repaying the seller’s second mortgage. Commencing in or about 2010, Rathel failed to file and pay his personal federal and corporate tax returns in a timely manner. In another matter, Rathel failed to timely respond to an inquiry about a Bar complaint. Suspension is effective 30 days from a March 23 court order. (FSC Case No. SC16-1024)

http://www.orlandosentinel.com/business/brinkmann-on-business/os-bz-florida-bar-suspensions-20170530-story.html

Photo: Florida Bar

 

South L.A. charter school founder charged with embezzlement, money laundering

The head of a now-defunct South L.A. charter school has been charged with embezzlement and money laundering, accused of funneling roughly $200,000 from the school to a company she owned, prosecutors said Thursday.

Kendra Okonkwo, 51, was charged with misappropriation of public funds, grand theft by embezzlement, money laundering and keeping a false account, according to a news release issued by the Los Angeles County district attorney’s office. Her son, 29-year-old Jason Okonkwo, is accused of approving fake invoices to further the plot and faces the same charges, prosecutors said.

Kendra Okonkwo founded the Wisdom Academy for Young Scientists near the Watts neighborhood in 2006, but the school quickly became a target of regulators and lost its charter in 2016. She and her son were arrested in Los Angeles on Thursday morning and remain jailed in lieu of $145,000 bail, according to Deputy Dist. Atty. Dana Aratani, who is prosecuting the case.

From January 2012 to March 2014, approximately $201,000 was transferred from the school to an unnamed business run by Okonkwo, according to the district attorney’s office. The money was then transferred to her personal bank account, prosecutors said.

Her son approved a number of fake invoices, purportedly for the purchase of school supplies and food from his mother’s “shell company,” that documented the transfer of money, prosecutors said.

Okonkwo did not immediately return a call seeking comment, and it was not immediately clear if she or her son have retained attorneys.

Both face up to six years in prison if convicted. A court date has yet to be scheduled.

The school operated under the authority of the Los Angeles Unified School District until 2011, when the district declined to renew the school’s charter, citing violations of education code and conflicts of interest.

Okonkwo agreed to step down as the school’s director as part of an agreement with the county to stay in operation, but she named several relatives and associates to key positions at the school.

That move, according to the findings of a 2014 state audit, allowed her to retain control and benefit from transactions at the academy.

According to the audit’s findings, Okonkwo, her family members and close associates received about $2.6 million in payments from the school. None of the employees in question indicated any financial interest in school affairs on required conflict-of-interest statements, the audit said.

Among the audit’s findings, the organization leased two properties owned by Okonkwo’s holding company, paying more than $1 million in rent over six years. The school also paid Okonkwo $228,665 in severance, unused vacation and a vehicle lease despite a lack of documents to support the amount.

The audit also found the school had paid more than $158,800 to a company owned by a relative of Okonkwo. The payments were supposedly for school supplies, but state auditors could not confirm that the school received any of the materials for which it paid.

Aratani said prosecutors began reviewing Okonkwo’s conduct and business dealings after the audit results were released. An arraignment could take place as early as Friday, he said.

Last year, Okonkwo agreed to pay $16,000 in fines as part of a settlement with the state’s Fair Political Practices Commission after she was found to have established leases for the school at buildings she owned and used public funds to renovate those properties.

“In this matter, Okonkwo engaged in a pattern of violations in which she made, used or attempted to use her official position to influence governmental decisions involving real property in which she had a significant financial interest,” the commission said last year.

When the county began the process of revoking the school’s charter in 2014, Okonkwo claimed she was being “slandered.”

“I’m not a soldier; I’m not a politician. I’m just an educator,” she said at the time.

http://www.latimes.com/local/lanow/la-me-ln-charter-school-founder-charged-20170518-story.html

Photo: My News LA 

U.S. judge approves $2.6 billion fine for Odebrecht in corruption case

A U.S. judge on Monday sentenced Brazilian engineering company Odebrecht SA to pay $2.6 billion in fines in a massive criminal corruption case, signing off on a plea deal between the company and U.S., Brazilian and Swiss authorities.

U.S. District Judge Raymond Dearie said at a hearing in Brooklyn federal court that about $93 million will go to the United States, $2.39 billion to Brazil and $116 million to Switzerland.

Odebrecht, along with affiliated petrochemical company Braskem SA, pleaded guilty to U.S. bribery charges in December. U.S. authorities charged Odebrecht with paying about $788 million in bribes to officials in 12 countries, mostly in Latin America, to secure lucrative contracts.

Some of those bribes flowed through U.S. banks, the prosecutors said.

Monday’s order comes as Odebrecht tries to negotiate plea deals with other countries, including Argentina, Chile, Colombia, Ecuador, Mexico, Peru, the Dominican Republic, Venezuela, Panama and Portugal.

A public relations executive working for Odebrecht in São Paulo declined to comment, as did William Burck, a lawyer for Odebrecht in the United States.

The charges against Odebrecht stemmed from a nearly three-year investigation in Brazil into corruption at the state-run oil company Petrobras, which has led to dozens of arrests and political upheaval in Brazil.

Brazilian President Michel Temer said on Monday he expects some of his ministers to resign after they were accused of wrongdoing by Odebrecht executives in plea bargain testimonies and placed under investigation by a Supreme Court justice.

http://www.reuters.com/article/us-brazil-corruption-usa-idUSKBN17J1A7

Photo: Reuters 

 

Argentina ex-leader Cristina Fernandez charged with money laundering

A judge in Argentina has brought charges of money laundering and corruption against former President Cristina Fernandez de Kirchner and her two children.

Two business associates have also been charged in the case and all five are barred from leaving Argentina.

Ms Fernandez, 64, already faces other charges including fraudulently administering state funds.

She has denied wrongdoing and says she is the victim of political persecution.

In a statement on Tuesday, legal officials said Federal Judge Claudio Bonadio had brought formal charges against Ms Fernandez for alleged money laundering in property dealings.

Her daughter, Florencia, and son, Maximo, have also been charged along with businessmen Cristobal Lopez and Lazaro Baez.

About $8m (£6.4m) of Ms Fernandez’s assets have been frozen, the statement added.

Last month, a judge ruled that Ms Fernandez, who governed from 2007 to 2015,should stand trial on charges of financial mismanagement while in office.

She is accused of ordering the central bank to sell dollars on the futures market at artificially low prices ahead of a widely expected devaluation of the Argentine peso.

Ms Fernandez also faces separate corruption charges alleging that her government steered public contracts to Mr Baez – a businessman close to her family.

She insists that all the allegations against her are politically motivated and has accused current President Mauricio Macri of plotting against her.

http://www.bbc.com/news/world-latin-america-39499004

Photo: Getty Images 

 

Ex-South Korean president Park Geun-hye arrested in corruption probe

Ousted South Korean President Park Geun-hye has been arrested and taken into custody over a corruption scandal that led to her dismissal.

The 65-year-old was driven to a detention centre south of Seoul after a court approved her arrest.

She is accused of allowing her close friend Choi Soon-sil to extort money from companies, including Samsung, in return for political favours.

Ms Park, who was removed from office earlier this month, denies the claims.

She is the third former president of South Korea to be arrested over criminal allegations, Yonhap reports.

The Seoul Central District Court earlier issued a warrant to detain Ms Park while she is investigated on charges of bribery, abuse of authority, coercion and leaking government secrets.

It followed a nearly nine-hour court hearing on Thursday that Ms Park attended.

“It is justifiable and necessary to arrest [Ms Park] as key charges were justified and there is risk of evidence being destroyed,” the court said in a statement.

Live television footage showed a black sedan carrying her to the detention facility from the prosecutor’s office where she had been waiting.

Despite the early hour, some 50 supporters, waving national flags and demanding her release, were at the gate to greet her, the AFP news agency reports.

Ms Park can be held for up to 20 days before being formally charged.

If convicted she could face more than 10 years in prison.

http://www.bbc.com/news/world-asia-39449681

Photo: EPA

Navy bribery scandal widens as more sordid details emerge

Officers in a burgeoning Navy bribery scandal called themselves the Lion King’s Harem, the Wolfpack, the Cool Kids and the Brotherhood. They scouted for others who might also accept sex, trips and other lavish perks from a Malaysian defense contractor known as “Fat Leonard” in exchange for classified information.

Allegations outlined in an indictment unsealed in San Diego on Tuesday give more details in the 3-year-old scandal that had appeared to be fading before re-emerging even bigger and more sordid than before.

Nine current and former military officers were charged in the latest indictment, including a recently retired rear admiral who collected foreign intelligence for the Navy’s Seventh Fleet.

It gives an extensive list of bribes to the officers from 2006 to 2012 from Leonard Francis in exchange for classified shipping schedules and other information to help his company, Glenn Defense Marine Asia. In one example, a party with prostitutes at the Manila Hotel’s MacArthur Suite during a 2007 port call to the Philippines included sex acts using historic MacArthur memorabilia.

One meal during a 2006 port visit to Hong Kong cost $20,435. A dinner during a port call to Singapore that year featured foie gras, oxtail soup, cognac that cost about $2,000 a bottle and cigars at $2,000 a box.

Prosecutors say Francis, who is nicknamed Fat Leonard for his wide girth, bilked the Navy out of nearly $35 million, largely by overcharging for his company’s services supplying Navy ships in the Pacific with food, water, fuel and other necessities.

Navy officers provided classified information to Francis that helped him beat competitors and, in some instances, commanders steered ships to ports in the Pacific where his company could charge fake tariffs and fees, prosecutors said.

The latest indictment raises the number of current and former officials charged to 20 in one of the Navy’s worst corruption scandals. Bruce Loveless, who recently retired, became the second admiral charged in the investigation.

Adm. John Richardson, the Navy’s top officer, vowed Tuesday to repair damage caused by the scandal.

“This behavior is inconsistent with our standards and the expectations the nation has for us as military professionals,” he said. “It damages the trust that the nation places in us, and is an embarrassment to the Navy.”

http://abcnews.go.com/US/wireStory/navy-bribery-scandal-widens-sordid-details-emerge-46137785

Photo: Associated Press

Hong Kong’s money laundering fight is a fig leaf

Hong Kong is under pressure to step up the fight against money laundering. The city is considering forcing private firms to disclose their true owners. That would shed light on a lucrative web of shell companies. The proposed reforms may be just enough to avoid international censure – and steer clear of embarrassing Beijing.

The Panama Papers leaked last year exposed Hong Kong as a major manufacturer of offshore structures that companies can abuse to hide assets and evade taxes. Finding ways to track the beneficial owners of opaque corporate vehicles is also a G20 priority. In reaction, Hong Kong is looking to demand its 1.3 million unlisted companies to keep a register of their effective owners and make it available upon request. This might ensure Hong Kong ticks all the boxes in time for a review expected next year by the Financial Action Task Force, a global anti-money laundering body with the power to blacklist jurisdictions. Hong Kong appears to be aiming to meet the letter not the spirit of the global crackdown. For example, it would not grant free and easy access to the new set of data, as Britain does. This will maintain a high barrier for investors or journalists seeking information or trying to hunt down malfeasance.

Local players, concerned about rising costs and privacy, argue only law enforcers need to access this information. Also, at up to HK$25,000($3,220), sanctions for failing to record the beneficial owners or responding to a request for information seem mild. Hong Kong’s proposed rules for more disclosure may also be just enough to help Beijing in its own war against corruption and its attempt to stem the illicit transfer of money abroad without upsetting the country’s leaders.

A record $725 billion flew out of China last year. The Panama Papers, which covered an earlier period, showed relatives of powerful mainland officials linked to some shell companies. That suggests there are big vested interests in maintaining the status quo – and allowing Hong Kong to take baby steps on the road to financial transparency.

http://www.nasdaq.com/article/breakingviewshong-kongs-money-laundering-fight-is-a-fig-leaf-20170314-00009#ixzz4bIzSNtIP

Photot: Reuters

Criminals expand avenues for money laundering in Kenya, US report says.

A US report has named Kenya among countries classified as money laundering hotspots. The report by the Bureau for International Narcotics and Law Enforcement Affairs on International Narcotics Control Strategy names Kenya among countries whose financial institutions engage in currency transactions involving significant amounts from international narcotics trafficking.

The report covering 2016 says laundering occurs in the formal and informal sectors and derives from both domestic and foreign criminal operations including transnational organized crime, cyber-crime, corruption, smuggling, trade invoice manipulation, illicit trade in drugs and counterfeit goods, trade in illegal timber and charcoal, and wildlife trafficking.

It adds although banks, wire services, mobile payment and banking systems are increasingly available, there are also thriving unregulated networks of ‘hawala’ and other unlicensed remittance systems that lack transparency and facilitate cash-based, unreported transfers that the Government cannot track.

According to Interpol, ‘hawala’ is where money is transferred without actually being moved.

https://www.standardmedia.co.ke/business/article/2001231595/criminals-expand-avenues-for-money-laundering-in-kenya-us-report-says

UK to open money laundering trial of ex-Nigerian oil minister in June

The trial of a former Petroleum Minister of Nigeria, Diezani Alison-Madueke, has been scheduled for June this year, local media portals are reporting. The Minister is expected to be tried along with four other accomplices for alleged corrupt practices.

Mrs Alison-Madueke was arrested in October 2015, in London, as part of a UK investigation into suspicions of corruption and large-scale laundering. At the time, she was undergoing treatment for breast cancer.

Two weeks ago, a Federal High Court in Nigeria’s commercial capital, Lagos, issued an order allowing the country’s anti-graft body to confiscate over $150m belonging to her. According to Judge Muslim Hassan, the Economic and Financial Crimes Commission (EFCC) had proven beyond reasonable doubt that the monies were proceeds from illegal activity.

Ms Alison-Madueke, 56, has already been implicated on several occasions in corruption cases. Under her watch, the former Central Bank governor, Lamido Sanusi – now the emir of Kano, had revealed that there was a shortage of $20 billion in oil revenues in the state coffers.

A reporter with the Nation quoted an anonymous source at the EFCC as saying, they were ready with overwhelming evidence to support the trial, he also dismissed reports that they were negotiating a settlement with the ex-Minister.

http://www.africanews.com/2017/02/27/uk-to-open-money-laundering-trial-of-ex-nigerian-oil-minister-in-june/

Hong Kong human trafficking case leads to landmark court ruling

He needed help.

It was 2012 and he had just returned to Hong Kong, smuggled in illegally by boat.
The man — who goes by the court-assigned pseudonym ZN — says he had spent four years, working seven days a week in a Hong Kong cell phone store, sleeping on the floor and suffering beatings at the hands of his employer. Then his boss sent him back to his native Pakistan without a cent in pay. When he demanded his money, he says, his boss’ associates back in Pakistan threatened to kill him and his family.
So he came back, determined to get his money.
“Even after I came back to Hong Kong all I was asking for was my wages,” he says. “I went to several government departments but no one would listen.”
ZN’s case was the basis for a landmark judicial review that has the potential to change the way Hong Kong deals with cases of human trafficking.
In his 150-page ruling, high court judge Kevin Zervos found that Hong Kong’s immigration, labor and police departments failed to identify ZN as a possible victim of human trafficking and provide him with support or protection.