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Page 165 of 176

September 9, 2014

Don Langford, former chief credit officer and senior vice president of Nebraska-based TierOne Bank, pleaded guilty for his role in a scheme to defraud TierOne’s shareholders and regulators. Specifically, Langford conspired with others to hide losses at the bank by cooking the bank’s books and reporting falsified information to stakeholders, regulators, external auditors, and the investing public. The bank even made an unsuccessful attempt to get taxpayer TARP funds in November 2008. TierOne filed for bankruptcy shortly after the Office of Thrift Supervision shut the bank down in June 2010. DOJ

August 29, 2014

Former CEO of ArthroCare Corporation Michael Baker and former ArthroCare CFO Michael Gluk were sentenced to serve 20 years and 10 years in prison, respectively, for their leading roles in a $750 million securities fraud scheme. On June 2, 2014, they were convicted by a jury of wire fraud, securities fraud, and conspiracy to commit wire and securities fraud in connection with their scheme to artificially inflate the share price of ArthroCare stock through sham transactions. DOJ

August 25, 2014

Former Hanover Corporation CFO Robert Haley and former Hanover salesman Daryl Bornstein were sentenced to serve 60 months and 70 months in prison, respectively, and ordered to pay $14.5 million in restitution for their roles in an $18 million Ponzi scheme. Hanover’s former CEO was previously sentenced to 14 years in prison and ordered to pay $14.7 million in restitution in this case. DOJ

August 21, 2014

Bank of America agreed to pay $16.65 billion to resolve federal and state mortgage fraud claims against the bank and its former and current subsidiaries, including Countrywide Financial Corporation andMerrill Lynch. It is the largest civil settlement with a single entity in American history. And it includes a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), the largest FIRREA penalty ever. As part of the settlement, BofA acknowledged misrepresenting the quality of billions of dollars worth of risky mortgage loans. Whistleblower Insider

August 15, 2014

Former Hanover Corporation CEO Terry Kretz was sentenced to 14 years in prison and ordered to pay $14.8M in restitution for orchestrating an $18 million Ponzi scheme. According to court documents, Kretz offered clients the opportunity to invest in Hanover through promissory notes bearing high interest rates, however, more than half of the money invested in Hanover went to repay earlier investors, to pay Hanover’s salaries and overhead and to fund personal luxuries. Daryl Bornstein, a Hanover salesman, and Robert Haley, Hanover’s chief financial officer, previously pleaded guilty to similar charges. DOJ

August 14, 2014

Azzeddine El Amine of Costa Rica pleaded guilty to money laundering and operating an unlicensed money transmitting business in connection with his role in running Liberty Reserve, a company that operated one of the world’s most widely used digital currency services. Liberty Reserve was created to help users conduct illegal transactions anonymously and launder the proceeds of their crimes, and it emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store, and launder the proceeds of their illegal activity. El Amine served as a principal deputy to Liberty Reserve founder Arthur Budovsky. Before being shut down by the government in May 2013, Liberty Reserve had more than one million users worldwide, including more than 200,000 users in the United States, who conducted approximately 55 million transactions through its system and laundered more than $6 billion in suspected proceeds of crimes, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography and narcotics trafficking. DOJ

July 24, 2014

An $80M False Claims Act judgment was entered against BNP Paribas for submitting false claims for payment guarantees issued by the U.S. Department of Agriculture. The judgment resolves government charges that from 1998 to 2005 the French bank participated in a scheme to defraud the USDA’s Supplier Credit Guarantee Program under which American agricultural companies are encouraged to sell their products abroad. DOJ

July 21, 2014

Jing Wang, the former Executive Vice President and President of Global Business Operations for Qualcomm Inc., pleaded guilty to insider trading in shares of Qualcomm and Atheros Communications. He also pleaded guilty to laundering the proceeds of his insider trading using an offshore shell company. DOJ

July 14, 2014

Citigroup agreed to pay $7B to resolve government claims related to the bank’s packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) which, according to the government, “contributed mightily to the financial crisis that devastated our economy in 2008.” The settlement includes a $4B civil penalty — the largest penalty to date under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). Whistleblower Insider

June 2, 2014

A federal jury convicted Michael Baker and Michael Gluk, the former CEO and former CFO of Texas-based medical device manufacturers ArthroCare Corp., for orchestrating a fraud scheme that resulted in shareholder losses of over $400M. Evidence at trial demonstrated that Baker and Gluk masterminded a scheme to artificially inflate sales and revenue through a series of end-of-quarter transactions involving several of ArthroCare’s distributors beginning in 2005 and continuing until 2009. Baker, Gluk and other ArthroCare employees determined the type and amount of product to be shipped to distributors based on ArthroCare’s need to meet Wall Street analyst forecasts, rather than distributors’ actual orders. ArthroCare then reported these shipments as sales enabling the company to meet or exceed internal and external earnings forecasts. DOJ
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